An incredible thing happened shortly after the GI’s returned home from fighting in Europe and the Pacific during WWII. What happened was a population explosion as all those returning GI’s got married, and had their children. Those Kids were named “Baby Boomers”. Not because they could yell loud, or in a booming voice, no, they were so named because there was a “baby boom”. Millions of children were born to the thousands of service men coming home. The war was over, it was time to settle down and start a family.
The Boomers have driven virtually every significant economic trend in America since the Late 60’s. This group is so powerful that when they latch onto a Fad, the Fad becomes self fulfilling. Look at the Hula Hoop or the Pet Rock. As soon as silly ideas were latched onto by the hordes of baby boomers, a fad was born.
Well the Baby boomers have grown old now. In fact, starting from about 2008 right on through about 2015, a wave of retiring baby boomers is going to reshape the face of America. How? By the way they have always done it, through their spending patterns. Think of it like this, when the boomers were young, they were into a “new thing”, the hippy movement. From there they went onto forge the major moves in fashion, whether it be the Preppy movement and then the Urban Cowboy look right back into the Yuppie movement. Yes it’s true, when a block of tens of millions of people all decide to make a move in unison, things are going to happen. Well, something’s happening right now.
The boomers are getting older now and facing retirement. But unlike their own parents who grew up and aged quietly the boomers will have nothing of the sort. They aren’t going to take getting older laying down and they’ve voted with their pocket books about the issue. All manner of self improvement from plastic surgery through exercise programs, to healthy eating has become the new “fad”. This is simply perfect for Reed’s Inc, maker of some truly unique all natural beverages and specialty candies and ice creams.
Although Reed’s would have seen good growth in their business at any time in history, since good ingredients and great flavor always spells success, it’s been amplified by the changing attitudes of the baby boomer generation. Out of style is the sugary, syrupy, flavor blended “soda”, and in is a new wave of healthy, tasty drinks coined “new age” drinks. This encompasses such offerings as glacial water, and energy drinks, through China style green teas. Well Reed’s ginger based soft drinks, Brewed from fresh ingredients rather than blended with flavorings at a bottling plant, is exactly the type of healthy alternative that the boomers have been looking for.
Growth along all of Reed’s product lines is fairly brisk, but as they forge more and more distribution pacts, and baby boomers get to see it on their store shelves, the growth rate will increase even faster. Boomers not only want great taste, they have a lifetime of learning that all natural, and organic type foods is their best bet for a longer, more active life. As we see such indulgences as plastic surgery grow by an estimated 20% per year, as boomers strive to stay young, is it hard to imagine Reed’s own predictions of 30 to 40% growth? Not at all.
To accomplish this, Reed’s has taken in some new players on the management and sales team, and as any investor knows, a great product without great management is going nowhere fast. Recent inductee’s bring strong marketing and management backgrounds with them from such hallowed names as CocaCola, Red Bull, Coors and Heineken. As this new team settles in and becomes more and more confident and comfortable, this pace of growth will seem more routine than spectacular.
When an investor looks at a company for a “reason” to become invested in it, he naturally has to look at the market for the product. If there is no market, then it goes without saying that there is little reasonable sense in any form of investing in the company. But on the other hand, if you have a wave of consumers who have proven themselves as trend setters for some 40 years now, beginning to look at your product in a whole new light, your “market” has not just expanded it has ballooned. The Baby boomers want high quality, a healthier lifestyle, and products that will offer them both. Reed’s innovative drinks and specialty items do just that. Consider it being in the right spot at the right time.
With the help of the baby boomer generation, Reed’s Inc. has every possibility of attaining it’s self stated goals for growth and could surpass them in the not so distant future. A wise investor will consider the extra impact that an entire generation of aging “kids” will impart on great producers. Reed’s stands to be that producer.
