In the world of advertising, there are some things that work and some that obviously don’t. Any investor with a high school education can rattle off one of a dozen company “jingles”, and some can even recite entire commercials because they’ve made such an impression. Yet research conducted by the Center for Brain and Cognition at the University of California, shows that although “brand recognition” through a catchy jingle or commercial is good, there’s still a decided lack of loyalty based on just name association. In other words, you might be singing the funny jingle about General Motors’ cars, while happily driving down the highway in your BMW.
One of the single most successful advertising campaigns ever created was for alka-seltzer in the early 70’s. Their approach of “try it, you’ll like it” was an instant hit, not because they were imploring you to try alka-seltzer, but because of the stomach relief their medicine gave you after you “tried” all the things people insisted you should eat that they had made. It was clever, and it worked well for them.
Yet, the single most successful advertising strategy of all times is still the humble “free sample”. All the research compiled in 100 years of learning what makes people buy things, still suggests that the best way is to let them try it. Feel it, wear it, touch it, use it, and most importantly, taste it. When it comes to foodstuffs, the jingles work to some extent, the pretty packaging works to some extent, but if you really want to get the product in their hands, let them taste it. Nothing has been proven to produce sales as rapidly as letting people taste the product. This is where Reed’s has come up with a “tasty” solution.
Reed’s Inc. is a growing developer, manufacturer, marketer, and seller of New Age beverages, as well as candies and ice creams. New Age beverages is a category that includes natural soda, fruit juices and fruit drinks, ready-to-drink teas, sports drinks, and water. They realized early on that their unique beverages were so good that once people tried it, they’d buy it. So as part of their new direct distribution, they have started to offer in-store “draught displays”, or Kegerators.
The Kegerator is an unattended, in-store draught display that allows a consumer to sample their products at an extremely low cost per demonstration. There are no sales people necessary, and thus the consumer gets to sample the beverage without the pressure of having someone asking questions. Stores offer premium locations for these new, and unique, draught displays. While Reeds management believes that packaging is an important part of making successful products, they also believe that the products themselves need to be exceptional to survive in today’s marketplace; and allowing people to taste these beverages is paramount.
Product sales in most of the stores that have displayed a Kegerator have increased significantly from the exposure of the premium locations and product taste trials. As Reed’s gains even more shelf and aisle space via relationships with major retailers and distributors, expect to see more and more self serve Kegerators appear. As a consumer looking for a great all-natural beverage, you should “try it, you’ll like it”. As an investor, you’ll come to find that as more and more people try it and like it, Reed’s Inc, seems to “taste just right” for your portfolio too.
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