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Commitments and Contingencies | 12 Months Ended
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Dec. 25, 2021
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | N. Commitments and Contingencies Contractual Obligations As of December 25, 2021, projected cash outflows under non-cancellable contractual obligations for the remaining years under the contracts are as follows:
|  | Payments Due by Period |
|  | Total |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |  |  | 2026 |  |  | Thereafter |
|  | (in thousands) |
Ingredients (excluding hops and malt) |  | $ | 158,044 |  |  | $ | 123,662 |  |  | $ | 34,382 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Brand support |  |  | 86,503 |  |  |  | 65,284 |  |  |  | 9,778 |  |  |  | 6,722 |  |  |  | 4,639 |  |  |  | 80 |  |  |  | — |
Equipment and machinery |  |  | 44,542 |  |  |  | 44,542 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Hops and malt |  |  | 45,353 |  |  |  | 34,047 |  |  |  | 6,241 |  |  |  | 3,461 |  |  |  | 1,604 |  |  |  | — |  |  |  | — |
Other |  |  | 14,766 |  |  |  | 9,790 |  |  |  | 2,594 |  |  |  | 1,696 |  |  |  | 686 |  |  |  | — |  |  |  | — |
Total contractual obligations |  | $ | 349,208 |  |  | $ | 277,325 |  |  | $ | 52,995 |  |  | $ | 11,879 |  |  | $ | 6,929 |  |  | $ | 80 |  |  | $ | — |
The Company’s accounting policy for inventory and non-cancellable purchase commitments is to recognize a loss by establishing a reserve to the extent inventory levels and commitments exceed forecasted needs. The computation of the excess inventory requires management to make certain assumptions regarding future sales growth, product mix, cancellation costs and supply, among others. Actual results may differ materially from management’s estimates. The Company continues to manage inventory levels and purchase commitments in an effort to maximize utilization. However, changes in management’s assumptions regarding future sales growth, product mix and hops market conditions could result in future material losses. The Company utilizes several varieties of hops in the production of its products. To ensure adequate supplies of these varieties, the Company enters into advance multi-year purchase commitments based on forecasted future hop requirements, among other factors. These purchase commitments extend through crop year 2025 and specify both the quantities and prices, denominated in U.S. Dollar, Euros, New Zealand Dollars and British Pounds, to which the Company is committed. Hops purchase commitments outstanding at December 25, 2021 totaled $22.5 million, based on the exchange rates on that date. The Company does not use forward currency exchange contracts and intends to purchase future hops using the exchange rate at the time of purchase. These contracts were deemed necessary in order to bring hop inventory levels and purchase commitments into balance with the Company’s current brewing volume and hop usage forecasts. In addition, these contracts enable the Company to secure its position for future supply with hop vendors in the face of some competitive buying activity. Currently, the Company has entered into contracts for barley and wheat used in the Company’s malt with four major suppliers. The contracts cover the Company’s barley, wheat, and malt requirements for 2022 and extend through crop year 2024. These purchase commitments outstanding at December 25, 2021 totaled $22.9 million. Certain of the Company’s arrangements with other brewing companies require it to periodically purchase equipment in support of brewery operations. As of December 25, 2021, there were no significant equipment purchase requirements outstanding under existing contracts. Changes to the Company’s brewing strategy or existing production arrangements, new production relationships or the introduction of new products in the future may require the Company to purchase equipment to support the contract breweries’ operations. Additionally, the Company anticipates paying shortfall fees at certain of its third-party brewing locations. See Note J for further discussion of the Company's third-party brewing arrangements. The Company continues to review the impact the COVID-19 pandemic will have on its future commitments and contingencies but does not believe that the future commitments will be materially impacted. Litigation The Company is and in the future may be party to legal proceedings and claims, including class action claims, where significant damages are asserted against it. Given the inherent uncertainty of litigation, it is possible that the Company could incur liabilities as a consequence of these claims, which may or may not have a material adverse effect on the Company’s financial condition or the results of its operations. The Company has contingencies, for which it may record provisions if in the opinion of management and its legal counsel, the risk of loss is probable and able to be estimated. The most significant contingencies are discussed below. Securities Litigation. On September 14, 2021, a purported class action lawsuit was filed by an individual shareholder in the United States District Court for the Southern District of New York against the Company and three of its officers. The complaint alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 between April 22, 2021 and September 8, 2021. The plaintiff claims that defendants made materially false and/or misleading statements or failed to disclose material adverse facts about the Company’s business, operations, and prospects. A second, nearly identical purported class action lawsuit was filed by another individual shareholder in the same court on October 8, 2021. The two cases were consolidated on December 14, 2021, and an amended complaint was filed on January 13, 2022.The Company intends to vigorously defend against this lawsuit. A range of potential loss is not estimable at this time. False Advertising. On August 26, 2021, a proposed class action lawsuit was filed by two individuals in the United States District Court for the Southern District of California against the Company. The complaint alleges claims for false advertising, breach of warranty, unlawful business practices, unfair competition, and violations of certain California and New York consumer protection acts. The plaintiff claims that the Company falsely or misleadingly labelled its Truly products with respect to the ingredients contained therein. The Company intends to vigorously assert and defend its rights in this lawsuit. A range of potential loss is not estimable at this time.

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