For Reeds, Inc. (NASDAQ: REED), an amazing recipe for ginger brew paired with a strategic business plan, produce a cocktail of growth and success. Reed’s dedication to rapidly grow top line results, work at becoming cash flow positive and move toward bottom line profitability, and marketing of its high sale products, are all in an effort to maximize shareholder value while enhancing the overall strength of the company.
The company’s California facility has reached about 50% capacity over the last two quarters, up 40% from the first quarter of 2007. While the hike is partially attributed to an increase in production of the Virgil product line, even more utilization is expected to lead to improvements in gross margin. To reach this goal, the company purchased adjacent land and building next to the California facility that will allow for governance of inventory and freight costs.
When its primary co-pack production facility increased its prices, Reed’s began pursuing arrangements with alternative co-pack facilities and hopes to retain the services of other co-pack facilities by the first quarter of 2008.
By increasing its national direct sales and distribution, the company announced a distribution agreement with Burke Distributing Corporation to circulate Reed’s beverage products throughout the Boston area. Additionally, the company hired sales professionals in the fall of 2007, and publicly stated it remains on track to infiltrate 10 new markets during the second half of 2007.
To increase consumer awareness, Reed’s, Inc. markets to retail stores via trade shows, trade advertising, telemarketing and direct mail pieces. To establish a working relationship, sales managers and representatives visit retail stores directly. These efforts result in in-store draught displays, proprietary coolers, and an on-draught program which is currently installed in various locations at Fox Studios commissaries and about 12 restaurants in Southern California.
To extend its consumer reach and become a global brand, Reed’s attended the world’s largest food fair, the Anuga Food Fair in Cologne, Germany, in October 2007. More than 6,000 food and beverage companies from roughly 100 countries were exposed to 150,000 international trade visitors. In a statement, the company said investors should take notice that the company is currently involved in international sales efforts in Mexico, Latin America, Europe, India and the Asia Pacific region.
By setting and working toward these strategic goals and advancements, Reed’s is positioning itself as a competitive, key player the in world’s growing beverage market.
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