Swiss Water Decaffeinated Coffee Q1 2026 Earnings Call Transcript

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Provided by Quartr
May 7, 2026

Key Takeaways

  • Positive Sentiment: The coffee market is showing signs of stabilization — the NYC futures fell from recent highs (peaked ~$3.75 US/lb in Jan to $2.98 at March-end) and the futures curve is less inverted, and management says customers are beginning to refill pipelines with bookings into late summer.
  • Positive Sentiment: Operations recovered quickly from a 10-day unplanned downtime in January that drove a 2% volume decline; March was the company's strongest production month and the Delta facility is performing consistently with capacity to support growth.
  • Positive Sentiment: Profitability and balance-sheet metrics improved — Q1 adjusted EBITDA rose 113% to CAD 4.3M, gross profit increased 9%, net income improved to CAD 1.4M, and the company made CAD 6.4M of debt repayments, reducing leverage.
  • Negative Sentiment: Near-term headwinds remain — Q1 revenue fell 8% to CAD 57.5M (driven by lower green coffee prices), operating expenses rose 27% (stock‑based comp and professional fees), foreign-exchange revaluation caused losses, and cash declined to CAD 4.8M.
AI Generated. May Contain Errors.
Earnings Conference Call
Swiss Water Decaffeinated Coffee Q1 2026
00:00 / 00:00

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Operator

Good day, everyone. Welcome to the Swiss Water Decaffeinated Coffee Inc. Q1 2026 conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. Before Swiss Water Decaffeinated Coffee Inc. conference call starts, they are required to remind you that there are certain information in today's presentation that is forward-looking in nature. Any such forward-looking information or statements are based on assumptions that they consider reasonable at the time that the information was prepared. Such information involves known and unknown risks, uncertainties, and other factors outside of our control that could cause actual results to differ materially from those expressed in the forward-looking information. Swiss Water Decaffeinated Coffee Inc. does not assume responsibility for the accuracy and completeness of the forward-looking information.

Operator

Similarly, they do not undertake any obligation to publicly revise this forward-looking information to reflect the subsequent events or circumstances, except as required by law. Please refer to Swiss Water Decaffeinated Coffee Inc.'s management discussion and analysis posted on SEDAR and Swiss Water's website for a full discussion regarding forward-looking statements and the risk therein. It is now my pleasure to turn the floor over to your host, Frank Dennis, the CEO of Swiss Water. The floor is yours.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Thank you, Kelly. Good afternoon, everyone. Thank you for joining us today. I'm Frank Dennis, President and CEO of Swiss Water Decaffeinated Coffee. Joining me on the call is Iain Carswell, our CFO. We're here today to discuss our environment. Iain will then walk through the financial results in more detail, and I'll come back with a few closing thoughts before we open the line for questions. The coffee market remained complex through the first quarter, but we're beginning to see some of the most extreme dynamics ease. Forecasts are pointing to a very strong Brazilian harvest this year, which has been a significant driver in the movements we've seen in the NYC.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

C came off its record highs, peaking around $3.75 US per pound in January and ended March at $2.98 US per pound, compared to a high of $4.23 US and an average of $3.83 US in 2025. The futures curve has become less inverted, while the overall cost environment remains elevated, the direction is encouraging. As we've been consistent about saying throughout 2025, that shift in market structure matters. When prices are rising sharply and the curve is heavily inverted, customers stay lean. When prices stabilize and the inversion eases, customers begin to refill pipelines, we're starting to see that. Against that backdrop, Swiss Water delivered a solid first quarter.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Total volumes were down 2% year-over-year, but that really comes down to one discrete event, an unplanned 10-day downtime in January on one of our production lines following an equipment failure. The disruption was contained, it was resolved quickly, and it's behind us. Once we were back online, the facility operated at or near full capacity for the balance of the quarter. In fact, March was the strongest production month we've had. From a customer perspective, what we're seeing is encouraging. We are almost fully booked for the second quarter and booking new business out into late summer. That's a very different picture from last year when customers were staying lean and keeping forward coverage short. Roasters are restocking, extending their booking horizons, and that gives us good visibility in the back half of the year. On tariffs, the situation has evolved significantly.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

The tariffs that created so much uncertainty through 2025 have been removed. Like the rest of the industry, we are now working through the process of recovering tariffs that were paid while they were in place and returning them to our customers. That process takes time, we're engaged in working through it. Operationally, the Delta facility continues to firm-perform well into Q2. We're seeing continued improvements in consistency, quality, and throughput. We have the capacity to support growth as demand rebuilds without near-term constraints. Our spot inventory position remains deliberate. We wanna be in place where we can respond quickly to customers in a market that still has volatility in it. We continue to make progress on the balance sheet, reducing debt and improving our financial flexibility. Those fundamentals haven't changed.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

More broadly, the long-term fundamentals of our business remain intact and continue to strengthen. The decaf category itself is growing. More consumers are making deliberate choices to reduce caffeine, driven by a broader focus on health, sleep, and overall wellness. That's expanding the total market. Within Decaf, we're seeing a continued shift toward chemical-free processes as consumers become more label-conscious and more aware of how their coffee is made. As a leading chemical-free decaffeinator, we're well-positioned to capture that demand as market conditions continue to normalize. With that, I'll turn the call over to Iain to walk through the financials. Iain.

Iain Carswell
Iain Carswell
CFO at Swiss Water Decaffeinated Coffee

Thank you, Frank. Just a reminder that all the figures that I'm gonna talk about are in Canadian dollars, unless otherwise stated. As Frank mentioned, Q1 results reflect solid underlying performance and improved profitability compared to the same period last year, despite an unplanned downtime on one of our production lines in January. Total volume shipped decreased by 2% in the first quarter compared with Q1 2025. As noted, that decline is largely attributable to the 10-day downtime on one of our production lines in January. Once the line was back up, throughput was strong for the remainder of the quarter, and customer demand held up well. Looking at volumes by customer type, shipments to importers, those customers who resell our coffees to roasters where and when they need it, were up 6% in the quarter.

Iain Carswell
Iain Carswell
CFO at Swiss Water Decaffeinated Coffee

Shipments to roasters, those customers who roast and package coffee to sell to consumers in their own coffee shops or for home and office consumption, were down 10% in the first quarter. Looking at customer channels another way, specialty volumes were down 4% in Q1. These accounts serve the out-of-home consumer primarily in cafes and restaurants in our key geographic markets. Commercial volumes were flat in the quarter. Q1 revenue was down 8% to CAD 57.5 million compared to CAD 62.3 million in Q1 2025. The primary driver of the decrease in revenue in the quarter is the NYC, which flows through our green coffee revenue. With the NYC declining through the quarter, the year-over-year revenue comparison looks different than what we saw through much of 2025 when elevated prices were a driver of revenue growth.

Iain Carswell
Iain Carswell
CFO at Swiss Water Decaffeinated Coffee

As we have said consistently, we are careful not to overinterpret revenue movements in either direction. What matters more is how we are executing and what we are generating at the profitability and cash flow level. Looking at our costs. Q1 cost of sales was CAD 49.5 million, down 10% year-over-year. The primary drivers in the quarter were lower green coffee costs reflecting the declining NYC, partially offset by an increase in activity at Seaforth. On the cost side, the Delta facility continues to deliver efficiency is up and underlying cost structure remains stable. For green coffee costs, at an average of $3.16 US per pound in the first quarter, the NYC was down 15% from $3.73 per pound in Q1 last year.

Iain Carswell
Iain Carswell
CFO at Swiss Water Decaffeinated Coffee

The declining price environment, while still elevated relative to historical averages, is encouraging for the industry and is influencing customer purchasing behavior, as Frank mentioned previously. Customer ordering patterns in the quarter reflect the gradual normalization we have been expecting. We saw roasters beginning to extend inventory coverage and importers returning to more active purchasing positions, which is consistent with a less inverted declining price environment. That shift in behavior, while still early, is encouraging. Change rates between the U.S. and Canadian dollar continue to influence our reported results and cash flows. As a reminder, our revenues are primarily earned in US dollars while a meaningful portion of our costs are incurred in Canadian dollars. We also carry US dollar receivables and payables on our balance sheet.

Iain Carswell
Iain Carswell
CFO at Swiss Water Decaffeinated Coffee

This quarter, fluctuations in exchange rates led to a foreign exchange loss, largely reflecting the revaluation of those US dollar balances at period end. We continue to monitor this exposure and hedge to manage our underlying currency risk. In Q1, the US dollar averaged CAD 1.37 compared to CAD 1.44 in Q1 2025. This depreciation had a negative impact on our revenues when converted to Canadian dollars. Q1 gross profit was CAD 7.9 million, up CAD 600,000 or 9% year-over-year. Turning now to operating expenses. Q1 operating expenses were CAD 4.3 million, up 27% year-over-year. Led by administrative expenses, which increased by 33% to CAD 3.2 million, reflecting non-cash stock-based compensation movements driven by changes in our share price and in addition, higher professional fees.

Iain Carswell
Iain Carswell
CFO at Swiss Water Decaffeinated Coffee

Sales and marketing expenses were up 10% in the quarter to CAD 1.1 million, broadly reflecting the timing of marketing activities. Q1 net income was CAD 1.4 million compared to CAD 515,000 in Q1 2025. Aside from the items we've discussed, the improvement in net income reflects lower risk management losses. On risk management, with the NYC declining through the quarter and the curve becoming less inverted, the losses associated with rolling hedge positions forward were significantly lower than we saw through much of 2025. We recorded a loss on risk management activities of CAD 600,000 in the quarter, compared to a loss of CAD 2.8 million in Q1 2025.

Iain Carswell
Iain Carswell
CFO at Swiss Water Decaffeinated Coffee

As we've been consistent about saying, we price for the cost of inversion in line with the rest of the industry, and we continue to recover those costs through customer collections. We also recorded mark-to-market adjustments reflecting commodity price movements and US dollar fluctuations, consistent with our structured approach to managing pricing volatility and staying aligned with our supply commitments. Last year, we reached an agreement with Mill Road Capital to repurchase and cancel their outstanding warrants. The repurchase price was CAD 675,000. As a result of that cancellation, we no longer recognize a gain or loss on the fair value of the embedded option. There was a CAD 300,000 decrease in finance expenses, primarily reflecting continued principal repayments on our long-term borrowings and lower interest rates compared to Q1 2025.

Iain Carswell
Iain Carswell
CFO at Swiss Water Decaffeinated Coffee

Q1 adjusted EBITDA was CAD 4.3 million, up 113% compared to CAD 2 million in Q1 2025. The improvement was driven by stronger gross profit and a lower loss on risk management activities compared to the same period last year. Turning now to inventories. Our inventory balance decreased by CAD 5.4 million in the first quarter. With the NYC declining, the value of green coffee held on our balance sheet is beginning to reflect lower replacement costs, which over time will support a reduction in working capital as volumes flow through. Inventory management remains a core part of how we operate. We continue to take a deliberate forward-looking approach to holding stock in order to support anticipated customer demand and ensure delivery continuity.

Iain Carswell
Iain Carswell
CFO at Swiss Water Decaffeinated Coffee

At quarter end, Swiss Water held CAD 4.8 million in cash compared to CAD 6.6 million at year-end 2025. Net working capital was CAD 38.3 million. During the quarter, we made total debt repayments of CAD 6.4 million, made up of CAD 5 million of repayments on our operating credit facility and CAD 1.4 million of principal repayments of long term borrowings related to construction of our Delta facility. This represents continued progress toward reducing interest expense and improving our leverage position over time. With that, I turn the call back to Frank.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Thank you, Iain. Before we open the line for questions, I'll share a few closing thoughts. The coffee market remains complex. Our business is performing well. The 10-day outage in January was a real disruption in the context of a single quarter. The team managed through it and the facility was back operating at or near full capacity quickly. The underlying business delivered solid results, improved net operating income and EBITDA, and continued progress on debt reduction. We're also encouraged by the direction of the market. The NYC has come off its highs, the curve is less inverted. We're seeing customers begin to refill pipelines and extend their booking horizons. We're moving in the right direction. The business is well positioned for what comes next. Our focus remains on what we can control, consistent operations, disciplined working capital management, and continued strengthening of the balance sheet.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

We believe we're well positioned to support our customers as conditions continue to normalize to build on the progress we've made. With that, Operator Kelly, please open the line for questions.

Operator

Certainly. The floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold for just a few moments while we pull for questions. Your first question is coming from Marla Marin with Zacks Investment Research. Please pose your question. Your line is live.

Marla Marin
Analyst at Zacks Investment Research

Thank you. It's very encouraging to see that the NYC looks like it's finally starting to stabilize. You also said, I think in your prepared remarks, operating, you know, near or at full capacity. Do you think that you can continue to try to develop new in existing markets and open, you know, new geographic markets, which I think had been part of the strategy in the past with the kind of production capacity you currently have online?

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Yes. Thanks for that question. Good question. What we're seeing, I think, is some pipeline refill into Q1 and into Q2, as we're looking at our order book. Inventories were super lean, especially with importers last year, who didn't want to suffer the cost of inversion, and reduce their inventories. That's, I think, partially why we see the importer number and the segmented numbers come back so much and roasters maybe a little bit less. We absolutely have room for growth. I think we are just seeing kind of a reversion, hopefully directionally back to normal through kind of the first half of the year. Absolutely, we have room to continue to look for new business.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

I think as we've mentioned in the past, we have for somewhat limited amounts of capital expense, the ability to expand our operation here in situ. You know, we continue to evaluate when and where we might execute that, but it's a reasonably simple process. Some debottlenecking needs to be done.

Marla Marin
Analyst at Zacks Investment Research

As the, you know, NYC is starting to stabilize, there's a sense that there'll be a record harvest out of Brazil, and some customers are starting to feel a little bit more confident, about, you know, extending their booking horizon. Can you put that in context? You know, you're seeing some visibility into, you know, the back half of this year before all of the noise that we've seen over the past several quarters with the tariffs and with really, you know, skyrocketing NYC prices.

Marla Marin
Analyst at Zacks Investment Research

When the industry was, you know, operating under a more, I guess I would call it normalized basis, would that be considered, you know, what you would have expected being able to see in May visibility on what demand would be through the back half of the year or, you know, shorter or longer time horizon, you know, under normal circumstances?

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Yeah. That's also a good viewpoint to contemplate. Yes, I mean, last year we talked and our team internally talked constantly about customers, roasters purchasing hand to mouth. I mean, we would be, you know, midway through the month and not exactly sure what the numbers were gonna be two weeks later. That was extremely abnormal. Just because of the length of the supply chain for coffee, we do typically see longer horizons.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

It's much more, or sorry, it's much less expensive to purchase forward, to book coffees forward, and, you know, plan in a way that's much more thoughtful than buying, you know, for immediate delivery on the spot market, as you can imagine. We're absolutely starting to see that return to, you know, just some forward visibility of customers going, "Yeah, I can book some spreads. Why don't we look at some deliveries across these two or maybe even three futures periods?" We price those costs in, we execute those, we execute the coffee for them. They know their costs coming forward, they aren't as, you know, worried about where the market might go.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

You know, there is some differential pressure, short term right now, in Colombia, and so those types of things will continue to happen. Absolutely, we're seeing better visibility.

Marla Marin
Analyst at Zacks Investment Research

Okay, great. Thanks. If I may just ask one last question, and then I'll hop out of the queue.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Sure.

Marla Marin
Analyst at Zacks Investment Research

In the past, you've cited the grocery prices, you know, supermarket prices for coffee, just sort of as a benchmark.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Yeah

Marla Marin
Analyst at Zacks Investment Research

I can imagine that there's a lag between seeing NYC come down and seeing any kind of impact on prices, you know, at the grocery. To what extent do we actually see, that, you know, give back to the end consumer at the retail level? I would think that there'd be some stickiness at the higher price point, but I just, you know, am wondering what you see.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Yeah, that's another good question and good insight. Experience tells us that we'll see, six months, nine months of kinda elevated prices just because of the length of supply chain. Still, the market is pricing for inversion. That's still in place. That brings with it additional risk that's being priced into the market. Although the C is down, certainly, inversions are absolutely being priced for going forward. Looking if I think back to 2014, when there was a big run up in the C, and roasters were able to ultimately price for that.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

It was, you know, a good amount of time before, you know, there was a real kind of drift back in terms of, in terms of pricing. On the front side, I think roasters are, you know, always kind of caught out when the C runs up and they haven't been able to price through. There's a, I guess, a rebalancing, if you will, of how they view it. Again, I'm not a roaster. I don't know it. I don't price to the end grocer. That's just kind of experientially what we've seen.

Marla Marin
Analyst at Zacks Investment Research

Okay. Thanks very much.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

You're welcome. Thank you.

Operator

Your next question is coming from Richard Rudgley with Glenbrook Capital. Please pose your question. Your line is live.

Richard Rudgley
Analyst at Glenbrook Capital Management

Oh, hi, guys. Yeah, the quarter obviously. I just wanted to ask about caffeine as a bioproduct in terms of how likely it is that you would pursue that, and if so, what kind of costs are involved, and over what period of time would we look at that unfolding? Thank you.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Well, the recovery and the sale of caffeine from a water process is notoriously difficult. I think we've thought about this for about 40 years, honestly. The ability to execute is developmental at this point, at best. To be able to point directionally with certainty to capital cost and timing, I think is simply too early. We continue to work on it as an ongoing project, and that's really all I can comment on at this point.

Operator

Your next question is coming from Mark Prince with CoffeeGeek. Please pose your question. Your line is live.

Mark Prince
Analyst at CoffeeGeek

Hi, Frank. It's good to connect with you again. Hello, Iain. We haven't met yet, but I've been following the transition to Delta closely. I have a primary question, and then a follow-up. Frank, I remember touring the old Burnaby facility with you and seeing everything now consolidated and running at a such high level, and Delta is a notable change, especially seeing the adjusted EBITDA double this quarter was really good. A previous caller touched on the expansion, which was gonna be my original question, so let me shift to the conversion pipeline. We've seen significant movement lately, including petitions filed at the FDA just this past March and April to remove a methylene chloride as a permitted solvent in other food related categories.

Mark Prince
Analyst at CoffeeGeek

Given the regulatory heat, what happened with the EPA last year, are you seeing an increase in trial runs on, and onboarding inquiries from major MCUs and roasters now that the Delta facility is fully operational? After the brief downtime in January, you're confident the facility is now kind of battle tested enough to flip the switch on these large scale commercial conversions immediately?

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Hi, Mark. Great to hear from you again. To answer kind of the big question, which, you know, impacts the broader decaf universe, there was something filed in March around oleoresins, methylene chloride being used for, I think, turmeric and paprika and one other. Basically, powder. I can't remember what it was. In any case, I don't know if that's going to extend into decaffeination. Certainly it's not that far away, is it really, to be thinking about, you know, removing methylene chloride from, you know, common household spices, to think about that extending into the decaffeinated segment.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

I think that our view going forward is that those types of filings will concern some roasters, you know, increasingly over time. You know, I think that we have, for several years, Mark, had increased interest and conversion because of the noise that's coming through consumers. It's being picked up by the EPA, as you mentioned. It's being picked up by the FDA in other categories. It's certainly, it's buoying, it's supporting long term, the conversion from a methylene chloride and potentially even ethyl acetate over to, you know, clean decaffeination that we've said forever the consumer prefers. It's pretty simple. Yeah, we are seeing increased demand, and we have a view to how we can add additional capacity.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

I think that the, you know, coming back to the January thing, I think we already were battle tested. I mean, you know, when a small little motherboard goes on a blower, you know what went on. Basically, it was a very small issue that just had, you know, a bit of an outage on one line. It doesn't fuss us at all. Those things over the past, you know, 25 years, work right through them. That's what's great about having two operating lines, for sure.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

The big answer is, yeah, we are absolutely tracking and being as close as we possibly can, as close as we can get to the FDA, which isn't very close at all, but, you know, certainly tracking, you know, what they are looking at. You know, I'd certainly like the National Coffee Association in the U.S. to be a little bit more forthright with the industry in terms of what they're seeing. I think that would be positive, and it behooves them to do that. From here, yeah, we watch and we prepare for additional capacity expansion.

Mark Prince
Analyst at CoffeeGeek

Perfect.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Yeah.

Mark Prince
Analyst at CoffeeGeek

Yeah, that's really helpful. For my follow-up, it's on branding. Swiss Water really is the only decaf process that consumers actually recognize by name. It's a brand name that you folks have been developing for well over 25 years. We're now seeing sugarcane process, which is the main process out of Colombia, and other natural sending methods popping up everywhere. My second question is this: How do you plan to really lean into the Swiss Water brand to make sure that you are staying ahead and capturing new market potential? I just heard Iain mentioning a 10% increase in marketing budget in his talk on this call.

Mark Prince
Analyst at CoffeeGeek

Is there a push to get the logo on more bags or do more to let the average person know that Swiss Water is the actual gold standard compared to these other processes? Part of the reason why I'm asking this question is I'm right now staring at a bag of coffee from Social Coffee out of Ontario, the Insomniac Decaf, processed Swiss Water. There's no logo on the bag for Swiss Water.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Yeah. Yeah, we want to have our logo as well as the wordmark. You know, am I as satisfied with wordmark as I am logo? No. Can I convince every roaster to use the logo, even though they are, you know, spending more for it? We do our very best. We've relaunched an online marketplace for our customers' decaffeinated coffee, and that has taken some time. The reason we wanted to do that is because the biggest difficulty has always been, well, you can maybe go to this store or go to that store or whatever, but they really couldn't find out. We've created excellent online marketplace.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Here we are going to be building that marketplace and advertising the brand/marketplace to help consumers understand that we are the best, the highest quality clean decaffeination process. Through doing that's how we encourage roasters to use the brand, use the logo. They're paying more for it, and often they won't "Oh, it's too hard," or, "I don't wanna change my packaging. I don't wanna change my film." We encourage them to do that. Depending on the size of the roaster, we will actually provide support, dollar support for that, as we always have. It's not just a contractual basis, but we will, in fact, provide marketing support to do conversions as and when necessary and as and when they come to us.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

As you can imagine, Mark, there's hundreds, if not thousands, of roasters in the United States/Canada. Managing with a small marketing team of five people, thousands of roasters, all we can do is essentially try to provide the online services and access, and licensing agreement, there is a licensing agreement that's necessary, to enable them to use our brand. Certainly, we encourage that. The most important thing is in fact to get to the U.S. consumer about our brand, and that will be ramping up in the back part of this year. We've been sitting tight on that because a couple of reasons. We didn't have the marketplace completely developed and in good shape in 2025. We also had a bit of a difficult year.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Now we're looking at a much more kind of positive outlook and looking forward to getting back to rebuilding that brand.

Mark Prince
Analyst at CoffeeGeek

Okay. Just one tiny little follow-up. The 10% increase in marketing that Iain mentioned, is that primarily involving the website or is there actual marketing towards the end consumer?

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

The 10% is basically a timing thing. The back part of this year is when we're gonna be heavy up direct to consumer.

Mark Prince
Analyst at CoffeeGeek

Okay, perfect. Thank you.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

Yeah.

Mark Prince
Analyst at CoffeeGeek

That was helpful.

Frank Dennis
Frank Dennis
President and CEO at Swiss Water Decaffeinated Coffee

All right, Mark. Nice talking to you.

Operator

There are no further questions in queue at this time. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.

Executives
    • Frank Dennis
      Frank Dennis
      President and CEO
    • Iain Carswell
      Iain Carswell
      CFO
Analysts
    • Mark Prince
      Analyst at CoffeeGeek
    • Marla Marin
      Analyst at Zacks Investment Research
    • Richard Rudgley
      Analyst at Glenbrook Capital Management
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