With the growing trend toward healthy food and beverages it’s easy to see the exponential growth opportunities of Reed’s Inc. The current estimated value of their target markets is $45 billion, and being that some are emerging markets, they could see significant growth in the future. The targeted arkets can be broken up into three categories, “New Age Beverages”, Ice Cream and Candies, and confectionary goods. Reed’s beverage product lineups offer the unique competitive advantage of being brewed with fresh ingredients unlike competitors that are mixed with flavors at bottling plants. Many of the company’s products can already be found on the shelves of major retailers such as: Whole Foods, Wild Oats, Trader Joes, Kroger’s, Safeway, and Costco.
To accelerate the growth of Reed’s market share the management has assembled a strategic sales and marketing team. Sales team members come from a variety of well known beverage producers including: Coke, Pepsi, Red Bull, Coors and Heineken. Many beleive Reed’s success hinges on their ability to sell and market the Reed’s brand. It appears this is also the view of Reed’s as well as they have assembled an experienced sales team. They sell through direct sales, in-house distribution, and through independent distribution partners. Currently they are also pursuing print and internet advertising as well. Sales are broken up into three channels presently, independent distributors (72%), direct sales (18%) and in-house distributor (10%).
CEO and Founder Chris Reed holds 36.6% of the outstanding shares; the rest are held by individual investors although 4.4% is held by a Mutual Fund. At present there is 11.5 million shares outstanding.
Profits of Reed’s over the past few years have seen continued growth. Sales for twelve months ending June 2007 were $11.8 million with 35% growth expected in year 2008. Reed’s also reported $2.4 million in Cash and $9.3 million in working capital as well as $3.3 million in inventory. This is a huge asset as they expect fast growth and need to be able to deliver products in order to keep up with demand.
Reaching 2008 sales goals could bring Reed Inc’s earnings to the break-even point. As Reed’s expands their market share they will continue to drive down their fixed costs and raise their profit margins. The company has high potential to reach this important milestone as its skilled Sales and Marketing team strive to deliver strong sales for 2008.
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