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Reeds -- >>> Snoop Lion Partners With Reed's Ginger Brew and Causes.com to Raise Awareness for the Mind Gardens Project in Jamaica
Entertainment Icon Creates Self Sustainable Organic Gardens Throughout Kingston and Creates Mind Gardens Project Pledge at Causes.com/MindGardens
Press Release: Reed's, Inc.
Nov 13, 2012
LOS ANGELES, CA--(Marketwire - Nov 13, 2012) - Today, pop culture icon Snoop Lion is excited to announce a new partnership in support of the Mind Gardens Project, his latest non-profit initiative to establish sustainable, organic community gardens that will provide fresh fruits and vegetables to school aged children in Jamaica. Beverage maker Reed's Ginger Brew has joined the effort to give back to Jamaica, adding momentum as they prepare to launch a massive Mind Gardens awareness campaign on Causes.com. ( NASDAQ : REED )
Earlier this year, Snoop Lion unveiled his latest project, Reincarnated, which consists of a soon-to-be released album, a photo book, and a feature length documentary by VICE Films and Snoopadelic films illustrating Snoop's evolution and transition from rap to reggae. This dramatic change came about as a result of Snoop's recent personal journey to Jamaica and his time spent with the culture and people of the land. Wanting to give something back in return, Snoop partnered with entrepreneur and philanthropist John Paul DeJoria of Paul Mitchell and Patrón Spirits for the Mind Gardens Project.
"When I went to Jamaica we took time to visit these communities in Kingston, and I was deeply affected by the poverty and lack of good food available to the children," says Snoop Lion. "No child should go hungry. After all the inspiration Jamaica had provided me, I felt compelled to create a program to give back to the community."
The Mind Gardens Project has already begun work in Kingston, Jamaica with locations in the neighborhoods of Trench Town and Tivoli Gardens. Here, local residents are provided with tools and resources to help them effectively grow their own food. Plans for additional domestic and international locations are in the works for the future.
As a first step to help raise awareness for the initiative, the Mind Gardens Project, with the support of Reed's Ginger Brew, has launched a campaign on Causes.com, which empowers people to take the Mind Gardens Pledge and make an effort to learn more about their own local community gardens. Everyone who takes the pledge will have the chance to win a year's supply of Reed's Ginger Brew by visiting www.causes.com/mindgardens. As the Mind Gardens Project launches, the partnership with Reed's Ginger Brew brings a new element of positive synergy and perfectly complements Snoop Lion's efforts to provide children with proper nutrition. Reed's Ginger Brews, founded in 1989, is based on traditional Jamaican style ginger ales or "ginger beers" as the locals call it. When Reed's CEO and Founder, Chris Reed, learned of Snoop Lion's Mind Gardens Project, he knew he wanted to get involved.
"We've been looking for a way to give back to Jamaica," says Chris Reed. "Nothing is more basic than food in helping people help themselves. Snoop helping to educate the world on how to eat better, and encouraging communities to grow their own organic food -- this is very positive change. We are also excited about rolling out this project to many U.S. cities. My company has always tried to offer people better, healthier options when it comes to what they drink. Our larger goal is about helping people live better, healthier lives. Snoop's Mind Gardens Project is in line with our vision. We have committed a percentage of our sales this year to help fund the program."
"This is just the start, we have some big plans to roll out Mind Gardens stateside in the year to come," says Snoop Lion. "We can all do our part to help people eat healthier and live better. Bless up! Jah Rastafari!"
For more information about the Mind Gardens Project, please visit MindGardens.org and Causes.com/MindGardens.
About The Mind Gardens Project
Launched in Kingston, Jamaica in late 2012, Mind Gardens is a non-profit initiative started by Snoop Lion and John Paul DeJoria, with the goal of establishing sustainable, organic community gardens that will provide fresh fruits and vegetables to school aged children in the community. Bringing these communities the proper tools and resources to cultivate their own nutritional alternatives not only makes for healthy bodies, but also healthy minds. With two gardens already underway, we need your help to spread the word, build more gardens and take this project worldwide. Together we can plant a seed, grow a garden, and change a life. For more information, please visit MindGardens.org
About Snoop Lion
Snoop Lion is the new moniker of multi-platinum artist and entertainment icon, Snoop Dogg, whose ability to stay at the forefront of popular culture and new technology has resulted in unwavering relevance. Snoop Lion, in conjunction with VICE Media and Stampede Management, are set to release Reincarnated, a project that grew from Snoop's recent trip to Jamaica where the people and culture positively affected him. The project includes a reggae album produced by Diplo and the Major Lazer production team, a feature-length documentary of his life and career, which premiered at the 2012 Toronto Film Festival to rave reviews, as well as a photo book. The full Reincarnated project is set to release early 2013. For more information, please visit SnoopLion.com
About Reed's Ginger Brew
Reed's, Inc. ( NASDAQ : REED ) makes the top-selling natural sodas in the natural foods industry sold in over 13,000 natural and mainstream supermarkets nationwide. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. The Company owns the top-selling root beer line in natural foods, the Virgil's Root Beer product line, and the top-selling cola line in natural foods, the China Cola product line. In 2012, the Company launched Reed's Culture Club Kombucha line of organic live beverages. Other product lines include: Reed's Ginger Candies and Reed's Ginger Ice Creams. In 2009, Reed's started producing private label natural beverages for select national chains. Reed's products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada, as well as through private label relationships with major supermarket chains. For more information about Reed's, please visit ReedsInc.com
About Causes
Causes.com is an online platform that provides tools for driving change. With 180 million users and over 500,000 campaigns for change, Causes is the world's largest platform for activism and philanthropy. Causes enables grassroots organizers, nonprofits and companies to run online, social impact campaigns that raise brand awareness, engage targeted audiences, and build dynamic communities. For more information, please visit Causes.com/about
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Contact:.
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MEDIA CONTACTS:
Snoop Lion Contact
Brianne Pins
Email Contact
(323) 928-5003
Kristen Tambara
Email Contact
(323) 928-5005
Reed's Ginger Brew Contact
Julie Pantiskas
Email Contact
(310) 527-1340
Causes.Org Contact
Jessica Dahl
Email Contact
(202) 680-2073
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Reeds -- >>> Kombucha article with comments from Chris Reed -
>>> Soaring sales in the West for another super-premium Asian drink
Thursday, 08 November 2012
http://foodstuffsa.co.za/food-trends-mainmenu-119/new-nutrition-business-mainmenu-121/2510-soaring-sales-in-the-west-for-another-super-premium-asian-drink
Sales of Kombucha, a traditional Asian fermented beverage, are surging, both in its original form and in formats that have been modified to better suit Western tastes. Despite a weak economic backdrop and super-premium pricing, US sales of kombucha leapt by 22% to $327 million (€270 million) in the year to April 2012, driven by the positive health halo around anything that has “live and active” bacteria, largely resulting from the dairy industry’s marketing of yoghurt. Could kombucha be the next coconut water, asks New Nutrition Business.
As so often with innovative new categories, surging sales of kombucha drinks are being driven not by a major beverage company but by an entrepreneurial start-up, which holds a 50% share of the category.
“Kombucha has been one of the fastest growing segments in beverages for several years,” said Rafael Bratman, a product analyst at SPINS. “They’re perceived as a healthier alternative to sodas and juices, with more eclectic and unusual flavour options than other beverage options provide.”
In fact, beverages with kombucha as the primary ingredient enjoyed a 39% jump in sales in US supermarkets and natural-food outlets combined for the 52 weeks ended April 14, up to about $65 million (€54 million) from nearly $47 million (€39 million) a year ago, according to SPINS, a San Francisco-based tracker of sales data in the better-for-you market.
Encompassing a broader category of beverages that combine fruit juices and kombucha, US sales were up by about 22% over the same period, to more than $400 million (€330 million) from about $326 million (€270 million) a year earlier.
Reflecting the ever-broadening appeal of kombucha beverages and the efforts of beverage brands to reach mainstream American consumers, sales even grew strongly in conventional supermarkets, drug stores and mass merchants measured by SPINS – by 56% during the period for the narrow category of kombucha drinks, and by 21% for the wider definition. Both categories grew by 31% over the period in the natural-foods channel.
The pioneer brand in the kombucha business is Synergy Drinks, based in Beverly Hills, California. It was founded in the mid-90s by GT Dave after he credited a home-brewed kombucha beverage with halting his mother’s advanced breast cancer.
Today Synergy makes 17 different varieties of kombucha, maintains close to a monopoly on the ready-to-drink kombucha trade in the natural foods channel – and has reached annual revenues that industry sources estimate at more than $150 million (€124 million) a year.
No other brand comes close, especially after both Coca-Cola’s Honest Tea unit and Hain Celestial briefly experimented with the kombucha trade and then dropped out. Either brand would have had the wherewithal to challenge Synergy Drinks, an independent, over the long haul. As it is now, a number of startups, including Reed’s Inc and Clearly Kombucha, are scrambling to establish themselves as the number two in the market.
“The obvious opportunity right now is to just grow the category and have the number 2 or number 3 position,” Caleb Kargle, president of Top Shelf Beverages, owner of the Clearly Kombucha brand, told New Nutrition Business. “But then you look at the entire beverage industry and what coconut waters and enhanced waters have done, and this is just the tip of the iceberg. Even Synergy isn’t really that big a company yet.”
What is kombucha?
Kombucha originated in north-east Asia and parts of Russia, where the cultured-tea drink is a traditional and fairly widely-consumed beverage. Kombucha is typically produced by fermenting a culture in a sweetened tea (usually black tea, but green tea is also used). Kombucha may be fermented with many different sugar sources, including refined white sugar, evaporated cane juice, brown sugar, glucose/fructose syrups, but it cannot be fermented with stevia, xylitol, lactose or any artificial sweetener.
Kombucha is a symbiotic culture of bacteria and yeasts, which ferments the alcohols produced by the yeast into acetic acid. It has what Bratman called “a refreshing sweet-sour balance” that can be flavoured with fruit juices or spices to add layers of taste complexity. It’s often sold as a fermented-tea product, raw and unpasteurized, and also has some currency as a cocktail mixer, providing subtle flavouring and carbonation to drinks.
Surging sales of kombucha drinks are made all the more impressive by the absence of any human clinical studies to support any claims of health benefits for kombucha.
All sorts of specific health benefits are alleged for kombucha, some with research documentation, some based on folk understandings, some of unknown origin. Among claims made for kombucha are:
• probiotic effects
• energy-boosting properties
• detoxification
• boosting mental clarity
• helping shed or keep off weight
• fortifying the immune system
• liver-detoxifying effects – which make it a popular alcohol-recovery drink.
And while Dave, the founder of Synergy Drinks, tells the story on his company’s website crediting heavy kombucha consumption for his mother’s recovery from breast cancer, the company doesn’t currently claim cancer-mitigation properties for its products. “Still, that is stuck in the public’s mind,” said Chris Reed, CEO of Reed’s Inc, a new-age soda company that has just plunged into the kombucha market with Reed’s Culture Club.
Many health claims made for kombucha have focused on the alleged presence of glucuronic acid, a compound used by the liver for detoxifi cation. However, more recent and thorough analysis of kombucha found no evidence of glucuronic acid.
Instead, the active component is thought to be glucaric acid, which helps eliminate the glucuronic acid conjugates produced by the liver. When these conjugates are excreted, normal gut bacteria can break them up using a bacterial form of the enzyme beta-glucuronidase. Glucaric acid is an inhibitor of this bacterial enzyme, so the waste stored in the glucuronic acid conjugates is properly eliminated
the first time, rather than being reabsorbed and detoxifi ed over and over.
Glucaric acid is commonly found in fruits and vegetables.
WESTERNISED VERSION OUTSELLS THE AUTHENTICALLY ASIAN
The kombucha market has evolved into a couple of different segments mainly because of how strongly Americans feel about drinking full-effect kombucha.
There are what Angela Medearis, a food expert for online supplement retailer Vitcost, called “purists” who are willing to pay for kombucha, often imported from Germany, which includes some of the “mother” culture; purchasing dry kombucha tea is an alternative for this cohort, as are supplement pills.
But many in the consumer mainstream instead prefer a diluted kombucha consumption experience in a beverage that mixes the cultured tea with fruit juices.
“One reason people prefer these fruit-based drinks, like Synergy, is that the purer forms taste sort of like drinking apple-cider vinegar,” Medearis said. “And also some people are just as passionate about the fruit-juice form of kombucha.”
One factor that remains murky about kombucha is whether it’s an alcoholic beverage or not. Some early kombuchas skirted federal regulations which call for any drink above 0.5% alcohol to be marketed and retailed as an alcoholic beverage. Kombucha easily can fall just on either side of that threshold – either intentionally or accidentally, because of poor controls on the activity of the living culture in the drink.
“If you control your process,” said Reed, who has a handful of chemical and industrial engineers on the staff of his company, “you don’t have to have a lot of alcohol formed. A lot of times it’s Amateur Day in the kombucha field. You just have to pay your dues and spend time to develop a good system for keeping stuff non-alcoholic. We spent our time and brewed a phenomenal number of variations so that we could do just that.”
“It’s a naturally energizing beverage, very refreshing, and you definitely get a sense of wellbeing as well as general excitement and energy from it,” Kargle said. “It’s not like taking caffeine or coffee where you become jittery; the buzz people talk about getting from kombucha is from the organic acids and nutrients that are detoxifying your body. It’s also breaking down the antioxidants in the tea and making them available to your body. Once people get a taste of kombucha they want more – they want that feeling again.”
Kargle said that the need to control the alcohol factor was the main reason that his startup company decided to invest in building its own expensive processing plant for kombucha rather than have its products co-packed by a microbrewery or winery, of which there are plenty around Top Shelf ’s headquarters in Fairfield, Calif.
“We found that if you’re truly going to make non-alcoholic kombucha, you need to build your own facility,” Kargle said. “You must be able to have the product do the entire fermentation before it goes into the bottle, otherwise you’re risking secondary fermentation. That’s when you have an alcohol problem.”
The alcohol-formation challenge was enough to trip up Honest Tea despite its own expertise and, potentially, the resources of Coca-Cola behind its kombucha initiative. Honest Tea launched a new kombucha line in January 2010 and “it was very popular,” said Dan Forman, a spokesman for the Coca-Cola-owned company.
But “after a rash of confusion about the alcohol level in kombucha products across the category,” he said, and an “evolving regulatory environment”, Honest Tea concluded that it “could not be a part of the exciting but ultimately challenging category”. It ceased production of kombucha late in 2010.
Synergy’s product line includes 100% raw and organic kombucha, its regular line, in 16oz bottles that retail for about $3.50 (€2.89) apiece, as well as its Enlightened line that includes 5% fruit juices. Executives of Synergy declined requests for an interview for this story.
Reed’s and Clearly Kombucha are two of the companies with credible shots at grabbing on to the No. 2 position – far behind Synergy, at this point. “But we’re actually going after the No 1 spot,” Reed insisted. “We think we do a better job of kombucha than the No. 1 guy.”
Reed’s bravado is based in part on his assertion that “we have more skill in the area of brewing”. He noted that “it’s a very diffi cult project” to set up a kombucha-brewing operation. That’s a good reason a lot of people haven’t jumped in. “We ourselves had a big gamble with it because the technical details of what we were doing weren’t solved until a month before we launched.”
His Los Angeles-based company is a fast-growing, stock market-quoted company, founded in 1992, that has been built on its Reed’s and Virgil’s brands of “natural” sodas and a variety of ginger-based products including candy and ice cream. First-quarter corporate sales rose by 27%, to $6.5 million (€5.36 million).
Despite its challenges, Reed told analysts recently that he was attracted to the kombucha category in part because he believes it can become a much larger category than specialty sodas and, while it costs no more to make than the company’s core ginger-based brews, it can be sold for twice the price.
COMMENT: MAKING INNOVATION WORK
It seems that we always need risk-taking entrepreneurs to show us how to innovate - because most directors at major corporates simply aren’t up to the task of innovation.
The idea of taking a difficult-tasting, odd-smelling traditional Asian cultured beverage - one with which 99% of western consumers have no familiarity - and bringing it to the west to create a new category would have been rejected by most established companies. Indeed any employee who strongly advocated such a course of action could expect to it jeopardise their career.
Yet this is exactly what an entrepreneur has done with kombucha. Over many years, he has created a new category and a new business, called Synergy Drinks, with $150 million in retail sales.
It’s worth remembering that probiotic dairy drinks (Yakult) and energy drinks (Red Bull) were also once both strange, odd-tasting Asian beverages which successfully transitioned to western markets and created some of the most successful - and profitable - categories in the history of food and beverage.
And it was an Indian-born entrepreneur who brought another Asian idea - an energy drink in a 110ml shot - to the west and created the 5-Hour Energy brand which today holds a 70% share of a category worth over $1.2 billion - and earns its owner around $500 million a year in operating profits, making it one of the most successful and profitable innovations in the history of our industry. Every year the senior managements of big companies kill tens, even hundreds of similar concepts.
Senior management at most established companies is too fearful and too lacking in skills to take entrepreneurial risks - which is the type of risk-taking you must follow if you are to make any innovation succeed. Unless established businesses can change their cultures, then the biggest prizes will always go only to the brave new category creators.
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Reeds -- >>> Reed's Inc. 3rd Quarter 2012 Revenues Increase 23%
Earnings Release Wednesday, November 14, 2012
Press Release: Reed's, Inc.
Fri, Nov 9, 2012 6:15 PM EST
http://finance.yahoo.com/news/reeds-inc-3rd-quarter-2012-231500400.html
LOS ANGELES, CA--(Marketwire - Nov 9, 2012) - Reed's, Inc. ( NASDAQ : REED ), maker of the top-selling sodas in natural food stores nationwide, today announced its revenues for its third quarter ended September 30, 2012, and its earnings release date of November 14, 2012.
Revenues for the third quarter of 2012 increased 23% to $7.9 million. Year to date revenues were $22.3 million, an increase of 26% from 2011.
"The third quarter continues to see our top line growth expand at over 20% per quarter for the last three years. In addition, we launched Reed's Culture Club Kombucha, which has become one of our most successful product launches in company history. We spent aggressively on the Kombucha launch and the start up costs have resulted in minimal net income this quarter, however, we have still maintained profitability. In 2012, our two big growth drivers for the company were our branded and private label business. We have now created a third, and possibly the strongest, growth driver in our new line of Kombucha," stated Chris Reed, Founder and CEO.
The Company will conduct a conference call @ 4:15PM EST on November 14th to discuss its 2012 third quarter results and outlook for the future. To participate in the call, please dial the following number 5 to 10 minutes prior to the scheduled call time (866) 240-5139. International callers should dial (713) 481-0091.
A replay will be available within a few days after the meeting in the investor relations section of the Company's website at: http://www.reedsinc.com/investor-relations/.
About Reed's, Inc.
Reed's, Inc. makes the top-selling natural sodas in the natural foods industry sold in over 13,000 natural food markets and supermarkets nationwide. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. The Company owns the top-selling root beer line in natural foods, the Virgil's Root Beer product line, and the top-selling cola line in natural foods, the China Cola product line. In 2012, the Company launched Reed's Culture Club Kombucha line of organic live beverages. Other product lines include: Reed's Ginger Candies and Reed's Ginger Ice Creams. In 2009, Reed's started producing private label natural beverages for select national chains. Reed's products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada, as well as through private label relationships with major supermarket chains.
For more information about Reed's, please visit the Company's website at: http://www.reedsinc.com or call 800-99-REEDS.
Follow Reed's on Twitter at http://twitter.com/reedsgingerbrew
Reed's Facebook Fan Page at https://www.facebook.com/ReedsGingerBrew
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Reeds -- >>> Reed’s, Inc. is “One to Watch”
Small Cap Network
November 6, 2012
11:23:30 AM PST
http://www.smallcapnetwork.com/Reed-s-Inc-REED-is-One-to-Watch/s/via/19047/blog/view/p/mid/1/id/54/
Reed’s is an all-natural artisan beverage and confection company leveraging the freshest ingredients, natural sweeteners, and a penchant for ginger root to bring the world a wide variety of delicious, healthy products. From the kind of home-brewed ginger beverages made for ages in the Caribbean represented by their award-winning non-alcoholic Ginger Brews, to exceptional quality candies and ice creams, as well as an array of specialty drinks, Reed’s is serving up some of the best there is to offer and has gained a huge following among natural food consumers (a rapidly growing segment).
The company has put together an impressive lineup of specialty beverages like Virgil’s Root Beer (an all natural no caffeine or preservatives connoisseur root beer) and the Virgil’s natural soda line of drinks, as well as China Cola (a top seller in natural foods stores which is packed with Szechwan Peony Root, as well as cassia bark, cardamom, licorice, and orange peel), and even a proprietarily cultured, raw organic Culture Club Kombucha (or fermented tea), using the finest Oolong and Yerba Mate teas (probiotic nutrition together with beneficial enzymes and organic acids helps detoxify and revivify). Newer offerings like the champagne-quality Sonoma Line of 100% pure, sparkling juices made in a traditional fashion and the “Flying Cauldron” Butterscotch Beer, a wizard-themed brew, show that the company even has a product development mindset that can be likened to Ben & Jerry’s. Clearly the company is unafraid to pioneer new areas that fall within their purview, look profitable, and offer an opportunity to really engage the choice customers.
One of the things which has led to the company’s success amid a growing move towards natural and healthy foods, not just here in the U.S., but all over the world (with Asian markets being a strong, continuous trend driver), is the emphasis on the broad spectrum benefits of ginger which have been long recognized in the East. Ginger has long been known to have multiple health benefits, but research at the University of Minnesota’s Hormel Institute has even shown the potential of ginger as a chemopreventive and/or chemotherapeutic agent in combating cancer. The nausea treating benefits of ginger have been used to create Reed’s Nausea Relief, a powerful herbal tonic packed with natural Vitamin B6, also known for its anti-nausea effects. This kind of ingenious brewing by REED is also evident in Reed’s Natural Energy Elixir drink, which takes the company’s Extra Ginger Brew formula (with an extra 26 grams of fresh ginger root) to the next level, infusing it with camu camu and goji berry, green tea, and jiaogulan (a ginseng-like herb common in Asia), as well as natural L-Theanine and B vitamins.
The therapeutic ability of ginseng due to ginsenosides, the active ingredient, has shown widespread function in modulating multiple physiological activities and this fact, combined with the company’s strong move into stevia-based sweetener for their flagship, six-flavor, Reed’s Ginger Brew line and other beverages like Virgil’s (with the Virgil’s ZERO line that is every bit as good as the originals but without calories or fat), has placed the company ahead of the sector curve considerably (stevia is a zero-calorie, zero-carb herb from South America which has been used for centuries and is now gaining widespread industry attention). Ginseng has shown potential in modulating immune system function, and in use as an anti-inflammatory or anti-allergy preventative, with benefits against atherosclerosis, hypertension, and diabetes, as well as in helping the body de-stress because of how it eases the central nervous system.
Emerging health risks associated with high fructose corn syrup and synthetic sweeteners like aspartame (Monsanto), neotame (NutraSweet), and sucralose (Tate & Lyle), which have even recently garnered nationwide attention as actually having the potential to cause weight gain and disrupt the body’s natural metabolic cycle, spell huge future dynamics for REED, despite the stock’s already excellent movement for the year (up by 460% to $8.15 from Nov 7, 2011, touching pre-2008 highs). Strong sales of the premium soft drink Virgil’s line, which includes cream, orange cream, and black cherry cream sodas, in addition to the Dr. Better and Real Cola sodas, has shown profitability for REED in Q2 2012 and the company is moving to secure territory ahead of the massive shift towards the kinds of stevia and real cane sugar-based drinks increasingly demanded by consumers across the board. Reed’s Crystallized Ginger is a superb cane sugar (not white sugar) candy, custom-made in the South Pacific Islands and a perfect example of how management has logistically realized an important product vector in quality, health-conscious, artisan consumables, at the perfect time to coincide with mounting demand.
Much of this sector is about consumer loyalty anyways and getting people to come back for more. This natural emphasis on a high-quality product serves REED very well given the delivered product mix and target markets. Founder and CEO of the company, Chris Reed, is a visionary in many respects and has called the push to healthier beverages well ahead of the actual move, capturing tremendous market space, brand recognition, and investor upside. With big beverage sector players like Starbucks moving into stevia-based energy drinks and Monster Beverage Company continuing to move into and through stevia and stevia-derived inputs, REED is a smaller-scale play with much greater potential energy/momentum.
The company is not resting on its laurels either; they are pushing through to higher sales projections and making all the right distribution connections. The company announced last month that they gained authorization for deploying the Reed’s and Virgil’s brands in the hugely successful Williamsville, NY, supermarket chain, Tops Friendly Markets (153-location and growing). Also in October, the company secured a distribution deal with Livermore, CA-headquartered, Geyser Beverage Co., a fully-integrated direct store distributor (DSD) with over three decades of boots on the ground in the greater San Francisco Bay Area, which possesses a strong sales network in 15 greater Bay Area counties that delivers highly-personalized sales service.
Most recently, the company was able to secure another key distribution deal in Chicago, pulling hard on the company’s runaway sales in natural food stores all over the country to land this huge market channel. The distribution agreement with Central Beverage, another fully-integrated DSD, which has traction with some 3,500 customers in the eight-county Chicago Metro area, gives the popular Reed’s and Virgil’s offerings an inside track in one of the nation’s biggest markets. It is this steadfast commitment to landing target market-oriented venues, combined with the impressive flavor, quality, and health benefits of the product mix, that makes REED an exciting play, especially as more and more consumers turn away from junk food and start looking for real food. Reed’s Ginger Ice Cream is a great example of the company executing along this vector. One taste of this blend of raw cane sugar, cream, raw ginger puree, and milk (with some Reed’s Crystallized Ginger Candy mixed in to make it pop), is enough to convince even the most stubborn investor of the raw fundamentals here. These products are clearly going places and management isn’t squeamish about innovating.
To learn more about this well-defined operator, please visit www.ReedsInc.com
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Reed's -- >>> Reed's, Inc. Announces New Distribution Partnership for Chicago
New Distribution Agreement Opens Up More Presence for Reed's & Virgil's Brands to the 3rd Largest City in the US
Press Release: Reed's, Inc.
Monday
Nov 5, 2012
http://finance.yahoo.com/news/reeds-inc-announces-distribution-partnership-133000867.html
LOS ANGELES, CA--(Marketwire - Nov 5, 2012) - Reed's, Inc. ( NASDAQ : REED ), maker of the top-selling sodas in natural food stores nationwide, announced today that it has reached a new distribution agreement with Central Beverage of Chicago, a full service beverage distributor headquartered in Broadview, IL. Central Beverage is a fully integrated direct store delivery (DSD) distributor serving all retail channels and over 3500 customers throughout the eight county Chicago Metro market. Central Beverage has successfully been distributing some the most popular alcoholic and non alcoholic national and regional brands in Chicago since 2002. Some of the brands within in their portfolio of products are Old Style, LaCroix, Pabst Blue Ribbon, Arizona Iced Tea, Sweet Leaf, Marleys, Zico Coconut Water, San Pellegrino and many more.
Chris Reed, Founder and CEO, stated, "We are excited to be partnered with a great distributor, in one of the largest markets in the country and to start moving our Reed's and Virgil's brands into the Chicago marketplace. We've had a presence in Chicago for years in the natural and gourmet channels. This will allow us to target the rest of the accounts including mainstream markets, restaurants and up and down the street business in general. We anticipate the continued roll out of our products into mainstream distribution throughout the US."
About Central Beverage Company
Central Beverage Company is a direct-store-delivery (DSD) beverage distributor servicing over 3500 retailers in the eight county Chicago metro area with beer and other malt based alcoholic products as well as teas, juices, energy drinks, functional beverages, sodas and bottled water.
We service all retail channels, from national mass merchandiser and grocery chains to local grocery stores, convenient chains and local independent retailers as well as bars, restaurants, hotels and sports and entertainment venues. Our on-premise team is 100% Cicerone Certified. For many products, we are one stop shopping to local and national chain retailers in our market.
Central Beverage Company began in November 2002 as the successor business to Central Distributing Company, a beverage distributor who had been in operation since 1985. Central Beverage Company is owned and operated locally by Mark Muench, Patrick Savaiano and Donna Spagnola. We operate out of a distribution and office facility in the western Chicago suburb of Broadview, Illinois.
The Company's goal is to continue to build its reputation as a leading customer oriented DSD distributor for beverage products in the Chicago market while it looks for opportunities to expand its product lines.
The Company locally employs over 100 people, both union and non-union and we are ethnically and gender diverse. Central Beverage Company and its ownership are unique in that they are not a family owned business by historical definition, as most beverage distributors are. Central's predecessor company was investor owned and operated. As key management for that Company, Donna, Mark and Pat were able to become minority owners of that business and as a result, had the opportunity to establish Central Beverage Company. Although not related, Donna, Mark and Pat have a strong partnership and work well together; they have thus created their own "Central Beverage" family. They each have 20+ years of experience and success in the running of the Company, as well as a commitment and entrepreneurial spirit to see that the future of the business is as successful as its past.
About Reed's, Inc.
Reed's, Inc. makes the top-selling natural sodas in the natural foods industry sold in over 13,000 natural food markets and supermarkets nationwide. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. The Company owns the top-selling root beer line in natural foods, the Virgil's Root Beer product line, and the top-selling cola line in natural foods, the China Cola product line. In 2012, the Company launched Reed's Culture Club Kombucha line of organic live beverages. Other product lines include: Reed's Ginger Candies and Reed's Ginger Ice Creams. In 2009, Reed's started producing private label natural beverages for select national chains. Reed's products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada, as well as through private label relationships with major supermarket chains.
For more information about Reed's, please visit the Company's website at: http://www.reedsinc.com or call 800-99-REEDS.
Follow Reed's on Twitter at http://twitter.com/reedsgingerbrew
Reed's Facebook Fan Page at https://www.facebook.com/ReedsGingerBrew
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Panera Bread, Caribou Coffee, Dunkin Brands -- >>> Buy the next Starbucks? 3 prospects -
10/30/2012
By Charley Blaine
MSN Money
http://money.msn.com/how-to-invest/buy-the-next-starbucks-3-prospects
Investing in the coffee giant's stock in 2008 could have given you a 500% return, but growth may now be hard to come by. Here are 3 alternatives with grande-size potential.
In the back of every investor's mind is the stock that got away and became an ungodly success.
Consider Starbucks (SBUX -0.07%, news), which grew from a small Seattle coffeehouse chain into a global powerhouse. If you'd invested $1,000 in Starbucks' initial public offering in June 1992, your stake would be worth $6.4 million today -- and that doesn't include dividends.
To make a bundle, though, you didn't have to predict 20 years ago that Starbucks would succeed in turning premium coffee into a daily habit for untold millions. Starbucks saw its stock decline 79.6% from November 2006 to November 2008. A savvy investor might have noticed that its coffee shops were still full of squatting students and online entrepreneurs, and bought at the 2008 bottom. The gain since then? 500%.
These days, of course, Starbucks is all grown up. So for the big gains that come with rapid growth, you might want to look for the next Starbucks among smaller companies with similar business traits, attractive stock prices and a lot more room to grow. I have three possibilities for you: Panera Bread (PNRA -0.27%, news), Caribou Coffee (CBOU +1.02%, news) and Dunkin' Brands (DNKN +0.13%, news).
Building another Starbucks
Few companies, of course, grow into the sort of giant Howard Schultz built. It's the world's largest coffeehouse chain and the second-largest restaurant chain, after McDonald's (MCD +0.01%, news).
Schultz joined Starbucks in 1981, left to start his own coffee-shop chain, then returned to buy Starbucks in 1987. He built an empire based on the Italian coffee bar model, featuring espressos, cappuccinos and edible treats, and a relaxed, relatively cozy environment where customers could schmooze with friends, talk business, read or do schoolwork. For its customers, Starbucks wasn't a workplace, and it wasn't home. It was, as Starbucks says, a third place. Yes, the coffee commanded a premium price, but the idea was that it could be a small luxury that wouldn't break the budget.
Starbucks required locations near where people lived or worked because, as Stephens Inc. analyst Will Slabaugh notes, a coffee shop needs lots of volume, which means lots of people. The idea worked in Seattle, then Vancouver and Chicago. By the time the company went public in September 1992, it had 165 outlets.
The rest is history.
Starbucks shops began appearing not just in the usual places, but also in airports, train stations and malls. It started selling coffee in grocery stores and roasted beans for Costco Wholesale (COST +1.41%, news). It developed an instant coffee, Via, and started packaging K-cups for Green Mountain Coffee Roasters' (GMCR -0.92%, news) Keurig coffee maker. Starbucks also recently launched its own one-cup machine, the Verismo.
This summer, the company paid $100 million for Bay Bread, a San Francisco operator of 19 La Boulange bakeries. Starbucks is expected to build that into a nationwide business that supplies all of its U.S. stores and offers products to companies like Whole Foods Market (WFM +0.58%, news) and Trader Joe's.
Starbucks now employs 149,000 people and operates in 61 countries.
Why it works
For Starbucks, the challenge has been maintaining the company's core ideas: a true love for coffee and the communal feel of its stores.
That's not always easy. In the early 2000s, Starbucks grew too quickly. With stores seemingly on every corner in some cities, Starbucks was no longer "your neighborhood coffee shop." Trendy buyers sought out alternatives. Then the recession hit, and consumers found they could live without their $4 daily lattes. Same-store sales, a key metric, fell 10%; there were worries the decline might reach 20%, according to The New York Times.
Schultz, who had stepped aside as CEO in 2000, returned in January 2008. Investors continued to panic, though, driving the stock down to an intraday low of $7.06 in November 2008. The company halted all new store openings, closed 977 stores and laid off 18,400 workers.
The situation stabilized in early 2009, and the company began expanding again. It plans to have 1,500 outlets in China by 2015. It expects to add a net of about 1,200 new stores globally in 2013 alone. At the end of June, it had nearly 18,000 outlets around the world, 55% of which are company-owned. In the Americas, Starbucks owns 61% of its 13,000 or so units.
The stock rebounded from its 2008 lows, helped, obviously, by the big stock market rally since 2009. Shares peaked in April at a record $62 before the latest global slowdown hit. The stock has since fallen around 25%.
Still, if you'd been smart enough to buy the shares at $7.06 in November 2008, you'd be up more than 530%.
This week, Starbucks should report more than $13 billion in revenue for fiscal 2012 and $1.3 billion in net income. Earnings for the year should hit $5.85 a share before one-time charges, and $6.98 in fiscal 2013.
With the stock priced in the $40s now, those numbers might make Starbucks a buy. If it's a brand name you've wanted to own, go for it. But remember that finding enough growth to move the needle is hard for a company this size. Stock gains of 500%, or even 100%, appear unlikely in the near term.
For outsize gains, you'll need to look elsewhere.
To find the next Starbucks, remember these keys: Trendy beverages, food that is often better than a fast-food restaurant's typical fare, and a welcoming, communal atmosphere. Which brings us to Panera Bread, Caribou Coffee and Dunkin' Brands.
Panera: It starts with the bread
Panera (PNRA -0.72%, news), based in St. Louis, was originally part of the Au Bon Pain chain. Its founders sold Au Bon Pain and other businesses to concentrate on Panera. The restaurants feature fresh-baked breads, salads and similar fare. The company has more than 1,500 restaurants in 41 states.. When you walk into one, you get a come-in-and-hang-out vibe that's similar to Starbucks'.
Panera differs from Starbucks in that its business starts with the food, and particularly with bread baked on location. (The dough is made at centralized processing facilities.)
So far, Panera has not seen its consumers pull back in the latest economic lull. In the fiscal third quarter, revenue jumped 17% to $529 million; same-store sales were up 6.2%, a healthy gain. Earnings hit $1.24 a share, up from 97 cents a year ago, and it boosted guidance for this year, to $5.86 to $5.88. In 2013, it expects $7 a share in earnings, 10 cents better than the Wall Street estimate.
The world's most expensive coffees
The stock is up 19% this year. Like Starbucks' shares, Panera's peaked in 2006. And Panera's had also fallen (by 51%) through November 2008. They're up 363% since.
But the difference for investors is that there's much more room to grow: Panera has only 13% of the number of outlets Starbucks boasts. Panera operates just three non-U.S. restaurants, all near Toronto.. In a way, Panera has barely gotten going. But the pace of expansion will be steady, with around 120 new company- and franchised-owned restaurants in 2012, and an additional 115 to 120 restaurants in 2013.
Caribou: Closer to coffee
An even closer parallel to Starbucks is Caribou Coffee.
Caribou Coffee (CBOU +0.85%, news) is the globe's second-largest coffee chain, after Starbucks. But the gap is huge: As of April, it had just 596 coffee houses, including 188 franchised locations, in 21 states and nine countries outside the U.S.
Founded in Minneapolis in 1992, Caribou was acquired by what is now Arcapita, a U.S. subsidiary of Bahrain's Arcapita Bank. The coffee chain went public in 2005, and Arcapita sold its stake in Caribou in 2011 for about $73 million.
Caribou's revenue tripled between 2002 and 2011. The company had a strong year in 2011, with sales up 15% to $326.5 million and earnings up 267% to $1.69. Its 2012 revenue hasn't been so robust, in part because its commercial business has sagged.
The stock was up as much as 29% for the year in April, but, like Starbucks, Caribou has since fallen back. As of Friday, the shares were down 15% for the year.
Still, "they have a lot of runway in front of them," says Stephens' Will Slabaugh.
Caribou's Midwest base provides plenty of opportunities, and the chain can expand across the Great Lakes. It also has a big advantage over Starbucks: It is much easier to double in size when there are just 596 outlets than when there are 18,000.
Dunkin' Brands: The quick-service alternative
And then there's Dunkin' Brands (DNKN +0.06%, news), which runs the Dunkin' Donuts and Baskin-Robbins chains. Dunkin' Donuts, which has more than 10,000 outlets, is increasingly focused on selling coffee, both in its own restaurants and in bags in stores around the country.
Unlike Starbucks, Panera and Caribou, Dunkin' Donuts is in the "quick service restaurant" business; it says it is the nation's top retailer of "ready-brewed hot, regular, flavored, decaf and iced coffee."
Further, Baskin-Robbins has nearly 7,000 outlets of its own. The chains, both founded after World War II, operate in 58 countries. Over the years, they have had several owners. In July 2011, then-owners Thomas H. Lee, Carlyle Group and Bain Capital (yes, that Bain Capital) took the company public. Carlyle still owns 11.6% of the stock. Fidelity Management is the largest current shareholder, with 17.1%.
Dunkin' Brands is definitely in growth mode. It has added 4,800 outlets since 2006 -- nearly all of them franchises. It makes its money primarily from franchise and marketing fees. Revenue in 2011 was up 21% from 2007. Earnings, adjusted for one-time charges, have grown 67%.
It also has more than 900 outlets in South Korea and 229 in the Middle East. It plans to have 500 outlets in India. And it has vowed to make Dunkin' Donuts, which now operates in 36 states, "America's favorite coffee" with some 15,000 U.S. outlets by 2031.
Dunkin' Brands sees its greatest opportunity in the Midwest and West, where it has scant presence in many markets. That means heavy competition with McDonald's, Starbucks and Caribou, not to mention many small chains. Dunkin' differentiates itself by being the blue-collar alternative to fancy coffee -- more like McDonald's than an Italian coffeehouse.
So while it lacks the boutique feel of the others I've mentioned here, that's a selling point. While Dunkin' Brands' shares are down 17% from their June peak, they are still up 24% for the year, besting Starbucks, Caribou and Panera.
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Flowers Foods -- >>> Flowers Foods To Acquire Sara Lee And Earthgrains Assets In California And Earthgrains Assets In Oklahoma City
Press Release: Flowers Foods, Inc.
Fri, Oct 26, 2012
http://finance.yahoo.com/news/flowers-foods-acquire-sara-lee-180000026.html
THOMASVILLE, Ga., Oct. 26, 2012 /PRNewswire/ -- Flowers Foods, Inc. (FLO) today announced that the United States Department of Justice has approved an agreement under which Flowers will acquire certain assets and trademark licenses from BBU, Inc., a subsidiary of Grupo Bimbo S.A. B. de C.V. The financial terms of the transactions were not disclosed.
(Logo: http://photos.prnewswire.com/prnh/20080530/CLF007LOGO )
Under the terms of the transactions, Flowers will receive perpetual, exclusive, and royalty-free licenses to the Sara Lee and Earthgrains brands for sliced breads, buns, and rolls in the state of California, which together account for annual sales of approximately $134 million. Flowers also will receive perpetual, exclusive, and royalty-free license to the Earthgrains brand for a broad range of fresh bakery products in the Oklahoma City, Okla., market area. The transactions will be completed in phases. The Oklahoma City license will be completed shortly, and the first phase of the California transaction is expected to close in the first quarter of fiscal 2013.
Commenting on the announcement, George E. Deese, Flowers Foods' chairman and CEO, said, "The acquisition strengthens our market presence in California, adding about 14.5 million people to the 70% of the U.S. population that currently has access to our fresh breads and rolls. This moves us closer to our goal of reaching 75% of the U.S. population through our direct-store-delivery system by 2016."
Flowers Foods has proven experience integrating acquisitions. The company has completed more than 100 acquisitions since listing publicly in 1968, including 13 in the past decade. Most recently, Flowers acquired Tasty Baking Company in 2011 and Lepage Bakeries, Inc. in 2012. Management will discuss the acquisition of the Sara Lee assets on its quarterly earnings conference call, which is scheduled for November 8, 2012.
Company Information
Headquartered in Thomasville, Ga., Flowers Foods, Inc. (FLO) is the second-largest producer and marketer of packaged bakery foods for retail and foodservice customers in the United States with 2011 sales of $2.8 billion. Flowers operates 44 bakeries that produce a wide range of bakery products. These products are sold through a direct-store-delivery network with access to approximately 70% of the U.S. population in the East, South, and Southwest as well as in certain markets in California. Select Flowers products are sold nationwide through customers' delivery systems. Among the company's top brands are Nature's Own, Tastykake, and Mrs. Freshley's. For more information, visit www.flowersfoods.com.
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Reeds - Kombucha article -
>>> a little old but still very relevant read.
http://finance.yahoo.com/mbview/threadview/?&bn=0a887164-c27c-36d9-95fc-a26ff0de2ef5&tid=1351045166745-d7bb81ce-9a6a-4496-a354-f5f2450a2e65&tls=la%2Cd%2C1
>>> The Kombucha Crisis: One Year Later
By Hannah Crum & Alex LaGory
One year later, last summer’s withdrawal proves more hiccup than handicap. For a nascent beverage category like Kombucha, there’s not a much bigger crisis than having all major brands disappear from store shelves, just as growth appeared headed for warp speed. Everything was lining up in favor of the category. With a clear market leader in GT’s Kombucha and Synergy, a number of creative brands and established beverage companies crafting their own offerings, swelling grassroots support for healthier beverage choices, including a strong home-brewing community, and a massive distribution pipeline via Whole Foods and UNFI, Kombucha seemed on the verge of a breakout.
Instead, it got a wake-up call. As rumors of boozy booch spread from producers and retailers to consumers, this functional beverage, long prized for its natural benefits was yanked off shelves and became subject to lab testing and regulatory scrutiny. Loyal Kombucha consumers, a group that had of late rejoiced at Kombucha’s increasing availability, suddenly found themselves scrambling to locate and stockpile any available cache of the stuff.
Now, a year later, what could have been disaster appears to have been only a blip on the radar. Much has changed in the Kombucha business, yet much looks the same. Having already roared back to once again become one of the biggest selling products in Whole Foods, Kombucha’s growth trajectory appears to be restored.
Despite last summer’s withdrawal, category sales grew by 28 percent in 2010 and, based on numbers through June 2011, are projected to jump a whopping 60 percent this year in the natural channel, according to data provided by SPINS (note: SPINS numbers do not include Whole Foods).
The ongoing proliferation of regional Kombucha bottlers, with products aimed at both the above-21 and all-ages demos, continues to reflect its growing popularity as a functional beverage. Though the industry faces clear challenges, the year-over-year growth numbers and the quantity of new brands appearing on shelves indicate that Kombucha’s breakout, while potentially delayed, has not been sidetracked.
HOW IT WENT DOWN
While GT’s Kombucha and Synergy brands are by far the most visible in the category and dominate the market, it is unclear which brand or brands caught the eye of Randy Trahan, a Consumer Protection Inspector for the Maine Department of Agriculture. Regardless, when conducting routine bottle audits at the Whole Foods in Portland, Maine in early 2010, Trahan noticed “some of the Kombucha bottles on the shelf were leaking. Being a public health official, I know that alcohol is a by-product of the fermentation process. I could immediately see that there might be a public safety issue,” he recalled. “Kids could get hold of this and get a buzz.”
Samples of at least four different brands of Kombucha were taken from those shelves and submitted to the Food Sciences Lab at The University of Maine. Tests showed alcohol levels ranging from slightly over .5 percent to over 2.5 percent ABV, each one in violation. The case was subsequently handed over to the Federal Government in February 2010, specifically the Alcohol and Tobacco Tax and Trade Bureau (TTB), the agency which regulates the sale of any beverage over .5 percent ABV.
On June 15, 2010 Whole Foods posted a notice on the Kombucha shelf: “Key suppliers and Whole Foods Market have elected to voluntarily withdraw Kombucha products in bottles and on tap from our stores at this time due to labeling concerns related to slightly elevated alcohol levels in some products. This is not a quality issue. Sorry for any inconvenience.” It would be months before many brands returned to shelves.
Indeed, once GT’s was off the shelf, for several smaller companies, the race was on. Upstart brand Vibranz out of Healdsburg, CA was one of the few companies to benefit from the timing of last summer’s withdrawal by shipping a lot of product and grabbing shelf space while others reformulated, yet paid a heavy price when GT’s came back. The company appears to have shuttered operations this summer under the weight of unsold product returned by the retailers, though no official announcement has been made. Vibranz declined to comment.
WITHDRAWAL SYMPTOMS
“The withdrawal has created confusion among consumers,” argues Will Savitri of Katalyst Kombucha (MA). Katalyst was poised to expand their keg program with Whole Foods when the withdrawal occurred. “Many consumers still don’t understand why Kombucha was removed from the shelves,” said Savitri.
That might be true, but many don’t seem to care, either. Most fans spent the summer wondering not why it was removed, but obsessing over how and when it would be coming back.
While some customers were satisfied with the re-appearance of other brands, an extremely loyal, and vocal, GT’s fanbase aired its frustrations with the withdrawal. Founder GT Dave himself stayed in close touch with his flock, even describing in detail the changes to the new Enlightened brand in a long and lively back-and-forth with customers on the company Facebook page: “The ratio of probiotics has been changed. The number has not been reduced, rather the probiotics that facilitated the increase in alcohol has been lowered while the ones that don’t were increased. This is achieved by a difference in the way the product is cultured (fermented). The taste will be slightly softer than our ‘Original’ line.”
Within that single Facebook thread can be seen the wild and varied reaction to the debut of the Enlightened line, including “does NOT nearly taste the same as before. Very very disappointed,” and the Enlightened “tastes very watered down.” Others defended the new formula, saying they “haven’t found the new batch to taste different at all,” and “It’s not the same … but it’s still a trillion times better than any of the other brands I’ve tried.”
Beyond consumers, however, the two-month interruption in these products’ route to market had reverberations for retailers and distributors as well. Removing Kombucha from the shelves constituted no small move for Whole Foods, which by industry research estimates sells about 110 cases per week/per store, amounting to $75M worth of the trendy fermented tea last year – almost 1 percent of the company’s total revenue.
This gives Kombucha, especially the market leader GT’s, a strong strategic position in the Whole Foods chain. It also means that Whole Foods was taking an especially big risk by pulling Kombucha off its shelves.
The withdrawal was not without casualties. Honest Kombucha, which had been gaining significant traction with retailers and consumers on a national level, halted production after the company was forced to take $1M+ in returns. Once the TTB got involved, Seth Goldman, CEO of Honest Tea, decided to discontinue the brand despite its growing popularity, citing an unstable regulatory environment. “We have never aspired to sell drinks that are labeled and distributed as alcoholic drinks,” Goldman said on the Honest Tea blog in Dec 2010. High Country Kombucha, one of the only other nationally distributed brands, must also be counted among the victims, as they had been enjoying an expanding co-packing relationship with Honest Tea Kombucha prior to the withdrawal. However the High Country brand continues to rebuild market share following the shake up with a new look and increased in-store demos.
In order to comply with federal law, most Kombucha makers have undergone “reformulation” or modification of their brewing processes in various ways, as well as attempting to more tightly control the natural continued fermentation in the bottle via additional temperature controls. While the exact specifics of each manufacturer’s process are often hush-hush, most are manipulating the yeast, either through filtration, centrifuge or other means. De-alcoholizers, pro-biotic boosting, altering of recipes (especially the sugar used) and many more techniques have been combined to tackle the problem of staying within government limits. “We have been fortunate to be able to work with the University of Wisconsin to help refine our fermentation process in order to keep our product in compliance,“ said Vanessa Tortolano of NessAlla Kombucha.
STEPS TOWARD RECOVERY
While last summer’s events presented challenges, many in the industry now believe they were a positive. “The withdrawal was good for the industry to bring everyone into compliance, to build intellectual capital, and to improve the product,” says Ron Lloyd, CEO of Búcha, a newer brand making a push for national distribution. Búcha was initially slated to enter the market in June 2010, but was delayed due to the withdrawal, even though their product was compliant.
Regional brands saw advantages to the recall as well. “Because we self-distribute, the national distribution withdrawal was a golden opportunity for us to introduce Buchi to Kombucha drinkers whose national brand was no longer available,” said Jeannine Bucher of Buchi. Nearly all Kombucha companies interviewed agreed that the difficulties of last summer generated more consumer interest and led to expansion rather than contraction.
An important part of that expansion is in the over-21 market, a new distinction for the beverage that could cause some confusion among consumers. Some regional Kombucha manufacturers, such as Deane’s (MN), Invisible Alchemy (OR), Unity Vibration (MI), CommuniTea (WA), & Beyond (NY) decided not to reformulate their brewing process and instead apply for beer or wine making licenses. By continuing to brew what they consider an “unadulterated” or “full-powered” Kombucha, the final beverage generally ranges between 1 – 3 percent ABV, depending on the maker. GT’s was first to market with an over-21 Kombucha in December 2010, now dubbed the “Classic” formula, and he remains the only brand with offerings in both over-21 and all-ages beverage categories.
Deane’s Kombucha, whose bottle lists 2.7 percent ABV, was a thriving local brand in Minnesota, so they decided not to alter their brewing process and instead make the shift to an over-21 product. But a big hurdle exists for the over-21 products: educating health food store retailers.
The concept of “healthy low alcohol” beverages is one many people have difficulty understanding. Bryan Bertsch of Deane’s Kombucha recently posted a blog exhorting others to tell GT’s to bring the Classic line to Minnesota, stating, “…granted I have an ulterior motive…Because let’s face it, (GT’s) following is HUGE.”
Dylan Goldsmith, owner of Captured by Porches, an indie beer brand out of Oregon, echoed a similar sentiment. CBP started its own brand of Kombucha – Invisible Alchemy – in response to the “tasteless reformulated products” that began showing up after the withdrawal. “Kombucha should have been grandfathered in as a non-inebriating beverage because it predates Prohibition,” says Goldsmith. Demand for their over-21 Kombucha has steadily increased yet their difficulties highlight the problem for all brands offering an above .5 percent ABV product: sales are robust when their product is displayed with other Kombucha brands but once it moves to the “beer” section, it’s a tougher sell.
These types of challenges aren’t exactly a surprise. When the Classic line was launched in Dec 2010, GT Dave had this to say, “We have to convince retailers, who don’t really know how to handle this, that (the Classic line) can be sold side by side (with the Enlightened version).“ Bertsch and Goldsmith couldn’t agree more.
Dave, however, acknowledges frustration with the hurdles and misinformation involved in distributing the Classic line to various states and retailers, including Whole Foods. “Unlike our Enlightened line, our Classic cannot be reviewed or approved nationally, therefore they must be presented on a state-by-state level,” Dave saida. “This means we have to treat each state as if it is a separate region and present to them individually. It involves changing the way people think: retailers, regulators and distributors.”
Whole Foods specifically employed a “wait and see” approach with the Classic formula, concerned about potential liability and that confusion over alcohol content may plague customers. “Some retailers expressed concern that if Kombucha returned as an over-21 beverage, the public’s perception that it’s healthy or nutritious would change and it would be grouped with a wine cooler or a malt beverage-like product.”
However, after taking time to assess how the withdrawal affected the industry, Whole Foods stores in some regions of the country have recently expressed interest in carrying the Classic line. Multiple companies also confirmed that the national food chain has required any Kombucha company that sells product through their stores to sign a full indemnification regarding the issue.
DISSENT AMONG THE FAITHFUL
Alcohol levels are not the only controversial issue in the Kombucha category. Many manufacturers have taken issue with health claims that are made on some Kombucha products. Others are upset with some competitor’s labels that they say do not accurately reflect levels of sugar, what types of bacteria and which organic acids may or may not be present in that bottle Kombucha. A few harbor the belief that other Kombucha companies are “cheating” by using forced carbonation but do not list that on the label. Without a legal definition of for “Kombucha,” or a trade group to self-regulate the industry, divergent viewpoints on industry standards will likely grow.
“There is a responsibility on the part of the manufacturer to disclose what’s actually in the product,” says Adam Goodman, founder of Kombucha Botanica. His product returned to shelves after perhaps the most dramatic reinvention. Partnered with Kefi-Plant, a Canadian bio-tech company specializing in kefir ferments, Kombucha Botanica posits that the original Kombucha culture actually derived from the kefir grain. Utilizing a lab induced fermentation process, they create a concentrate that is subsequently shipped to the US and mixed as the final drink, producing what Goodman believes is a Kombucha that is superior in health benefits and taste, but which is dramatically different from his pre-withdrawal beverage.
So is Kombucha a fad or is it here to stay? “The Kombucha ‘fad’ may not have even started yet as many people still have not heard about it,” said Mike Brady of BAO Kombucha, a New York City brand. “It is very early in the category, similar to coconut water.” And that small size may have ultimately been what shielded the entire category from disaster. Adherents don’t seem concerned about the presence of alcohol – they just want their drink, and whoever makes the best product will continue to win them over.
Growth seems inevitable: market researcher SPINS projects $110M in Kombucha sales this year, not including Whole Foods, meaning the entire category is expected to top $200M. Meanwhile, privately commissioned research by industry insiders shows Kombucha sales moving north of $500M by 2015.
And that seems to be why, for his part, GT Dave is intent on innovating to stay ahead. “We don’t want to focus on the past but rather are looking toward the future,” said Dave. His company has just released the first Kombucha with chia seeds, in grape, raspberry and cherry flavors, and he has hinted at a couple of “very different flavors to debut very soon.”
GT’s Kombucha has also expanded to the Canadian market and recently began appearing in convenience stores and at airports, new distribution channels that could mean a lot of new Kombucha consumers for a nascent category. As American consumer tastes shift from sedentary to active, and as the public’s interest in products perceived as unhealthy continues to wane, expect Kombucha’s star to rise – even while it carries the baggage of the past.
TEA BY THE NUMBERS
Kombucha might be getting all the headlines and the celebrity controversy (hello, LiLo) but it’s good old iced tea that remains one of the stalwart growth categories for the beverage business – to the tune of a 5.35 percent increase in dollar sales last year, according to IRI (not including Wal-Mart, as well as many delis and mom-and-pops, a key element for the tea biz).
With low-cost and high end options and an easily-understood functional premise, tea seems to fit most of the key areas for health and energy while still landing gently on the consumer wallet. The Tea Council projects overall tea sales at $15 billion in 2012.
That money includes dry tea, but the increase is indicative of the still-rising profile of tea in the U.S. – as does the more than $500 million IPO of Teavana stores earlier this summer. Teavana sells dry tea varieties and tea equipment, and has the potential to give a Starbucks-like push into increased category visibility.
Investors aren’t just looking at the hot stuff, either. There’s plenty of activity on the venture and growth capital side in the tea space, with placements coming from BYB brands and other incubator capital sources in recent years, along with two of the biggest investment takeouts in the past year: Sweet Leaf Tea and Honest Tea.
Still, the robust growth of all-natural products like independent brand Xing Tea and Hansen’s Natural-owned Peace Tea, combined with Honest and Sweet Leaf begs the question of how much room there is for other products in the category to push into a cohesive national footprint – particularly in light of the growth of tea subcategories like yerba mate and Kombucha, both of which seem to offer less-crowded routes to the shelf. In fact, many tea companies seeking growth have turned as much to lemonade and lemonade blends as much as they have to new tea varieties.
We’ll have more on that next issue, when we explore the overlap between tea, juice and lemonade. But right now, you can see that the numbers tell the story, and that story is largely driven by big distribution organizations like Coke, Pepsi, Dr Pepper/Snapple and AriZona’s independent network.
With those key routes to market largely locked down, and with Sweet Leaf leveraging Nestle’s distribution system, the battle to be the strong independent on the shelf remains the brass ring for too many brands. The natural channel offers them the opportunity to establish themselves regionally – and tea itself is a product that encourages tasting around as well – but until DSD momentum begins to center around one or two brands (and Xing has been pushing hard in that respect) expect there to be plenty of variety in the category. Call it simultaneously the oldest category there is, as well as one of the newest.
<<<
PepsiCo -
http://seekingalpha.com/article/918031-3-companies-that-could-soar-on-massive-stevia-market-opportunities?source=yahoo
>>> Another company to watch closely in this space is PepsiCo , which has to address health concerns because it has substantial business in foods, snacks, and beverages. PepsiCo has made a move into stevia-based sweeteners by joining hands with Chicago- based Merisant's subsidiary, The Whole Earth Sweetener Company, in developing a stevia-based product called PureVia, which it is using it for some of its products. PepsiCo is focused on providing healthier foods and beverages, and has made a number of moves in this area. The company is well aware that consumers are becoming much stricter about what they eat and drink. Over the years, PepsiCo has acquired companies like Quaker Oats and Sabra, and has introduced a number of health-conscious products, including healthier Frito-Lay options, whole grain products, and low sodium items along with beverages that have lower sugar content.
PepsiCo has recently made a major move away from its traditional beverages by setting up a joint-venture with the Theo Muller Group, a large German dairy company, which will be called Quaker Dairy. The joint venture will sell yogurt and dairy products in the U.S., and this is an important strategy in developing a health food portfolio. The U.S soft drink market has been shrinking over the past several years, but yogurt sales have grown from under $5 billion in 2006 to $6.4 billion in 2011, and could reach almost $10 billion by 2015. This move will allow PepsiCo to go head on with General Mills (GIS), the producer of Yoplait, and Dannon, which combined account for nearly 60% of all yogurt sold in the U.S. Driven by the expected revenues from the joint-venture, Pepsi wants to generate revenues of $30 billion from its health product portfolio, but it will take some time for results from Quaker Dairy to materialize. In the continuation of this strategy, PepsiCo has already acquired a 66% stake in Wimm-Bill-Dann Juice Company, based in Russia, for $3.8 billion, and has cemented a partnership with Saudi Arabia's Almarai. Both of these companies are the largest dairy producers in their respective countries.
PepsiCo has been very proactive in growing its businesses, and this is evident from its operations in two major emerging markets, India and Brazil. PepsiCo has not been afraid to diversify its products and modify them to suit local tastes. Revenues in India grew 30% last year to $2 billion, primarily due to Pepsi's ability to market products that cater to local tastes. Products for the highly price sensitive rural markets had appropriate price points such as the snack Lehar Iron Chusti in the state of Andhra Pradesh at a price of Rs 2 (<4¢). PepsiCo is now planning a national launch of the snack as well as the introduction of Quaker Oats in affordable snack pack sizes. Brazil is the second largest producer of crackers and cookies in the world, and Pepsi has acquired Mabel, the country's second-biggest cookie maker, in a deal worth $520 million.
Unlike its giant rival Coca-Cola, whose sales have been relatively flat, PepsiCo has lots of growth potential, and there is a considerable upside to its stock price as a result. The stock has been trading around $71.11 recently, between a 52-week range of $61.50 and $73.66. The dividend yield of around 3% is an added bonus, and I highly recommend this stock to investors.
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Stevia First, Senomyx -- >>> 3 Companies That Could Soar On Massive Stevia Market Opportunities
October 11, 2012
by: Ang Nguyen
includes: PEP, SNMX, STVF.OB
http://seekingalpha.com/article/918031-3-companies-that-could-soar-on-massive-stevia-market-opportunities?source=yahoo
Obesity is becoming such a major problem in many parts of the world that health care experts have suggested that it should be tackled with war-like intent, much like battling an epidemic. The problem arises out of the combination of unhealthy eating habits and the lack of exercise. Sugar and high fructose corn syrup can be found in everything from beverages to seemingly "harmless" food items and have become a permanent part of people's diets. The average American consumes 150 pounds of sugar every year, and there is obviously a large market for healthier natural replacement sweeteners.
Extracts from the stevia plant have been used in some countries for centuries as natural sweeteners and have now started to grab attention, especially when there are some safety concerns about the use of artificial sweeteners. Japan's concerns in this respect led to the approval of the use of stevia in the early 1970s, with commercial production commencing in 1971. The U.S. approved the use of a stevia extract rebaudioside A (reb A) in 2008, and the European Union followed suit in 2011. Reb A is one of the four major steviol glycosides found in stevia's leaf tissues that produce its sweet taste, and is the sweetest component at hundreds of times sweeter than sugar. It is also considered to have the least bitter aftertaste.
This compound is available in the U.S. in the form of Truvia, which comes from a joint partnership between Cargill and Coca-Cola (KO), and as Purevia, through a partnership with PepsiCo (PEP) and the Whole Earth Sweetener Company. Pepsi and Coke have already started using stevia-based sweeteners for some of their products. Stevia-based sweeteners have started taking away market share from sucralose (Splenda), aspartame (Equal), and saccharin (Sweet N' Low). The Wall Street Journal says that Truvia is now a major branded sugar substitute, second only to Splenda in sales.
One small early-stage company, Stevia First (STVF.OB), which is headquartered in the Central Valley region of California, is ready to give the existing players a run for their money. Stevia First is not only focused on refined product sales, but also on supplying its customers with an affordable and steady supply of stevia leaves of consistent quality. Because it is a natural product, supplying steady, consistent quality is not going to be easy to achieve; but such an achievement can provide a substantial competitive advantage. The company intends to overcome the need for continuous laboratory testing to fine tune parameters for manufacturing to compensate for inconsistent levels of Reb A. Stevia First intends to operate an integrated agri-bio business model that takes advantage of a talented pool of farmers, agronomists, and agricultural innovators based in the Central Valley region of California. Stevia First also hopes to establish biotech research partnerships with neighboring universities, which could provide access to government funding for research and development of stevia.
Stevia First has made huge progress in the implementation of its business plan by leasing 1,000 acres of land (leasing has the advantage of conserving capital). The company is building research and manufacturing facilities on the land. Stevia First is also working on multiple methods of stevia production, including farm-based stevia production and fermentation-based stevia production. Both methods are quite complex, and the production and marketing of California-based stevia products on a large commercial scale is not expected for 2 to 3 years. This is also the time frame to develop preparatory stevia plants. The company has licensed intellectual property rights from Vineland Research and Innovation Centre, and the license includes compositions and methods for preparing steviol glycosides and steviol through fermentation-based processes. There is also a separate consulting contract under which the two companies will work jointly on developing stevia.
Stevia First's business model is impressive and it has made satisfactory progress in implementing its plan so far. The company is currently trading around $0.54, between a 52-week range of $0.23 and $3.58. If you are looking to gain exposure to the huge market potential of stevia, you should certainly consider an investment in Stevia First. With a market cap of $27.7 million, it is considered a micro cap company and the risks associated with micro caps is considered to be higher. An investor must weigh the greater risk associated with the potential reward before investing in any company.
Another interesting company that is taking a completely different approach to the sweetener business is Senomyx (SNMX). This company is not attempting to replace sugar, high fructose corn syrup, or other sweeteners. Instead, it is building a portfolio of taste modifiers. The company currently has more than 300 patents pending approval. These taste modifiers increase the sensitivity of the consumer's taste to existing sweeteners so that smaller quantities of the sweetener can be used in products. The company is developing diverse modifiers for different sweeteners, and the market potential is considerable. Consumers benefit from the lower caloric consumption due to a reduced intake, while the manufacturer saves on cost for the same reason.
S6973 and S6932, which are sucrose modifiers, could potentially be really big for sales or licensing, or even as a basis for acquisition by other companies. The two modifiers allow a reduction of up to 50% in the quantities of sucrose used in order to have the same perceived level of sweetness as unmodified sucrose. Sucrose is used in many beverages and foods, and there could be huge upside here if food or drink manufacturers begin to use these modifiers in their products. S52617 (S-617) also has a lot of potential because it has resulted in a very substantial reduction of high fructose corn syrup and sucrose in taste tests with prototypes of various products. Because of the high levels of high fructose corn syrup used in many soft drinks, success with this product could produce huge volumes of business for Senomyx.
Another flavor modifier, called S2383, also has a valuable application. It improves the potency of sucralose (which is already hundreds of times sweeter than sucrose) and allows for a 75% reduction in the amount of the expensive sweetener that is normally used. Two other flavor modifiers, S6821 and S7958, are designed as "bitter blockers," which means that they take away the bitter aftertaste of some sweeteners, such as aspartame. Since stevia has a slightly bitter aftertaste, these bitter blockers can help improve the flavor, which would also give it additional potential in the market. Senomyx has already received international regulatory approvals for many of its flavor modifiers, and regulatory filings are now commencing for the S52617 modifier for sucrose and high fructose corn syrup.
Senomyx is collaborating with companies like Ajinomoto, Firmenich International, Nestle, and PepsiCo, and this could make it an attractive acquisition target. The company is already generating revenues (just over $15 million in the first half of 2012), and nearly 80% are earned from its collaboration with PepsiCo and Firmenich International. The company's cash burn rate has been limited to $6 million for the first half of 2012. Senomyx ended the first quarter of 2012 with $51.3 million in cash and liquid assets. While Senomyx's products have yet to prove themselves in the market, this company is showing a lot of potential. Senomyx is currently trading around $1.95, between a 52-week range of $1.72 and $5.25. If you believe in the approach of modifying existing sweeteners and its market potential, you should consider investing in Senomyx.
Another company to watch closely in this space is PepsiCo , which has to address health concerns because it has substantial business in foods, snacks, and beverages. PepsiCo has made a move into stevia-based sweeteners by joining hands with Chicago- based Merisant's subsidiary, The Whole Earth Sweetener Company, in developing a stevia-based product called PureVia, which it is using it for some of its products. PepsiCo is focused on providing healthier foods and beverages, and has made a number of moves in this area. The company is well aware that consumers are becoming much stricter about what they eat and drink. Over the years, PepsiCo has acquired companies like Quaker Oats and Sabra, and has introduced a number of health-conscious products, including healthier Frito-Lay options, whole grain products, and low sodium items along with beverages that have lower sugar content.
PepsiCo has recently made a major move away from its traditional beverages by setting up a joint-venture with the Theo Muller Group, a large German dairy company, which will be called Quaker Dairy. The joint venture will sell yogurt and dairy products in the U.S., and this is an important strategy in developing a health food portfolio. The U.S soft drink market has been shrinking over the past several years, but yogurt sales have grown from under $5 billion in 2006 to $6.4 billion in 2011, and could reach almost $10 billion by 2015. This move will allow PepsiCo to go head on with General Mills (GIS), the producer of Yoplait, and Dannon, which combined account for nearly 60% of all yogurt sold in the U.S. Driven by the expected revenues from the joint-venture, Pepsi wants to generate revenues of $30 billion from its health product portfolio, but it will take some time for results from Quaker Dairy to materialize. In the continuation of this strategy, PepsiCo has already acquired a 66% stake in Wimm-Bill-Dann Juice Company, based in Russia, for $3.8 billion, and has cemented a partnership with Saudi Arabia's Almarai. Both of these companies are the largest dairy producers in their respective countries.
PepsiCo has been very proactive in growing its businesses, and this is evident from its operations in two major emerging markets, India and Brazil. PepsiCo has not been afraid to diversify its products and modify them to suit local tastes. Revenues in India grew 30% last year to $2 billion, primarily due to Pepsi's ability to market products that cater to local tastes. Products for the highly price sensitive rural markets had appropriate price points such as the snack Lehar Iron Chusti in the state of Andhra Pradesh at a price of Rs 2 (<4¢). PepsiCo is now planning a national launch of the snack as well as the introduction of Quaker Oats in affordable snack pack sizes. Brazil is the second largest producer of crackers and cookies in the world, and Pepsi has acquired Mabel, the country's second-biggest cookie maker, in a deal worth $520 million.
Unlike its giant rival Coca-Cola, whose sales have been relatively flat, PepsiCo has lots of growth potential, and there is a considerable upside to its stock price as a result. The stock has been trading around $71.11 recently, between a 52-week range of $61.50 and $73.66. The dividend yield of around 3% is an added bonus, and I highly recommend this stock to investors.
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Stevia First -
http://seekingalpha.com/article/945181-investors-take-note-dr-oz-touts-stevia-as-the-best-of-the-sugar-alternatives?source=yahoo
Excerpt from previously posted article -
>>> Almost all of the stevia harvested today is grown outside of the U.S. on small farms predominantly in China, Vietnam, and Central America. Given that the World Health Organization estimates stevia could eventually replace 20-30% of all dietary sweeteners, clearly a consistent and reliable supply line would be necessary to meet those demands. An emerging nano-cap company hopes to be one of those future supply lines. Stevia First (STVF.OB), an early-stage agribusiness based in Yuba City, California (the state's most fertile agricultural region) is focusing on developing and producing stevia on an industrial scale. The $28.81 million market cap company recently licensed a new fermentation process developed by Vineland Research and Innovation Centre out of Canada. The license allows the manufacturer to consistently produce the sweet steviol glycoside, rebaudioside A, (Reb A), the sweetest and most desirable part of the leaf, without the need to necessarily grow the plant. If this process can work on a large scale, it should cut the costs of producing the sweet Reb A by as much as 70%. On August 29th, when Stevia First announced that it had bought the rights of this fermentation-based process from Vineland, its stock price soared from $0.40 up to $0.94 before settling in the mid $0.70s by the end of the trading day. Today the stock trades in the $0.50 to $0.57 range. These swings are consistent with micro-cap development-phase companies, especially those with no current sales. Share prices in develop-phase companies swing up or down based on perceptions of their future earnings or the possibility of future earnings. Stevia First is no different.
At this time, Stevia First is strictly a development-phase company developing one of the hottest products on the market today, stevia. That alone should make the company worth a look. However, if its fermentation-based process turns out to be successful, that reality could put it on the forefront as an inexpensive and consistent supplier of stevia, and the company could be primed for a buyout by any of the many larger bottlers who are now adding stevia to its products. But caution must be taken, as this is a volatile company with high risks along with the potential high rewards. Considering that Dr. Oz broadcasted his pick of stevia as the best of the sugar substitutes to millions of viewers, this indicates a new awareness and helps to solidify the product's validity and demand. The odds are that stevia usage will continue to grow, and Stevia First might be one of the companies that could rise along with the stevia boom.
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Reeds, Stevia First -- >>> Investors Take Note: Dr. Oz Touts Stevia As The Best Of The Sugar Alternatives
October 24, 2012
by: Henry Kawabe
includes: MNST, REED, STVF.OB
http://seekingalpha.com/article/945181-investors-take-note-dr-oz-touts-stevia-as-the-best-of-the-sugar-alternatives?source=yahoo
The stevia industry recently got a big boost when cardiothoracic surgeon and television personality, Dr. Mehmet Oz, on his top 25 rated Dr. Oz show aired, "Should You Give Up Artificial Sweeteners?" In the opening segment he "set the record straight" on artificial sweeteners, and millions of people were introduced to his choice for the best sugar substitute available today, naturally-derived stevia. Given the near $60 billion spent on television advertising in 2011 to get products noticed, stevia, at no cost, was introduced as the best sugar substitute to millions of viewers by a doctor who is considered by Esquire Magazine as one of the 75 most influential people of the 21st century. To better understand that television has a great influence on getting a product into the hands of millions of people across the world, one needs to look no further than Oprah Winfrey's frequently-televised book club which would guarantee a writer as a best seller. However, it wasn't only that stevia was touted as the best sugar substitute that opened people's eyes, but it was explained to millions of viewers that, according to Dr. Oz, new research has shown that artificial sweeteners, such as Monsanto's (MON) aspartame, Tate & Lyle's (TATYY.PK) sucralose, and NutraSweet's neotame could actually cause weight gain. These sweeteners may also be the cause of metabolic syndrome, an epidemic sweeping the country. Metabolic syndrome is a combination of high blood pressure, excess belly fat, and insulin resistance-and per Dr. Oz, it has been shown that just one soda with artificial sweeteners is enough to lead to this syndrome.
According to Dr. Oz, stevia appears to be the only major sweetener with no ascertainable side effects. That may come to a surprise for users of the reduced calorie sugar alcohol products such as xylitol, a popular alcohol sugar-based sweetener developed by the DuPont Company's (DD) subsidiary, Danisco, and labeled "natural". According to The People s Chemist, Shane Ellison, xylitol is derived from the crushed fibers of sugar cane, which uses a multi-step chemical reaction "that involves the use of sulfuric acid, calcium oxide, phosphoric acid, and active charcoal. The end product is a bleached, powdery blend of sugar alcohols that taste sweet on the tongue, but are not absorbed by the body." He further stated when asked if xylitol is a natural product, "I don't consider anything natural if it's processed with man-made chemicals." Dr. Oz pointed out the two main issues he has with sugar alcohol sweeteners. One, it is basically a laxative, and after 10 grams-or half a sugar free cookie-bloating, gas, and other digestion issues may occur. The other is that the chemicals in sugar alcohol are causing the bladder muscle to be stimulated when the bladder is not full, thus causing the user to go to the bathroom when they normally wouldn't need to-and worse, the excess stimulation wears out the bladder.
Given that stevia has Dr. Oz's support, there is a good chance that the use of stevia could increase, and this bodes well for investment potential. The question is, which companies selling, manufacturing, or growing have the best chance at increased profits? Obviously, Coca Cola (KO) and PepsiCo (PEP) are two companies that have added stevia in their products worldwide and probably will continue to do so as the popularity of stevia continues to increase. But, as an investor, can you see big profits investing in either company on a stevia play? You probably cannot. However, there are some smaller bottlers and growers that might have better upside potential as more main stream media outlets, like the Dr. Oz show, continue to tout the benefits of stevia, and the public continues to demand more stevia products.
Monster Beverage Company (MNST), the second largest sellers of energy drinks, is also one of the leaders in zero and low-calorie stevia-based drinks with its Hanson's Natural Lo-Cal juice cocktails, and Blue Sky Zero sodas, both sweetened with Truvia, a stevia extract developed jointly by Cargill and Coca-Cola. Blue Sky Zero sodas come in seven flavors: Cherry Vanilla Creme, Lemon Lime, Lemonade, Jamaican Ginger Ale, Creamy Root Beer, and Cola. Monster also carries a lesser-known line of energy drinks, Blue Energy, including a zero-calorie stevia-based product. At this point it seems that Blue Sky Sodas are a niche market for those consumers who are looking for a more natural beverage with no preservatives or artificial colors. But as trends have been changing and natural products have gone more mainstream, given Monster's distribution outlet, the company has the ability, if it so desires, to mass produce and distribute Blue Sky and Blue Energy to outlets across the country. Considering that Starbucks (SBUX) is now in the low-cal stevia-sweetened energy drink business with its Refreshers line, one might see Monster add a stevia-based sugar free energy drink to its Monster line to combat Starbucks. To get a better idea of that potential impact on stevia sales, it should be noted that Monster energy drinks accounted for over 91% of the company s sales in 2011.
Monster lost momentum in August when the company announced it missed the street estimated quarterly profits. Earlier this month, investment services company, Stifel Nicolaus, downgraded MNST from a buy to a hold as it expects a larger drop in sales growth through first quarter of 2013. The firm says Monster Beverage's sales growth missed expectations in second quarter of 2012 and subsequent U.S. scanner data has showed further slowdown. Stifel Nicolaus sees earnings multiples not likely to rise until sales increase and/or expectations are reduced. Monster has a market cap of $10.36 billion and is trading at $56.68 per share, down from its mid-June 52 week high of $83.96 per share, which still gives it a very high P/E ratio for its sector at 31.65. This may have also squashed the rumors of a possible buyout by Coca-Cola. On a positive note, if the demand for sugar-free stevia products continues to increase as it appears, Monster has put itself in a great position with its stevia-sweetened products already on the market shelves to continue to expand, and perhaps once again, catch the eye of a suitor such as Coca-Cola.
Reed's Inc. (REED), a small boutique, natural, new age beverage company based out of Los Angeles, CA has seen its stock skyrocket with a 650% increase year to date. The company has also rolled out its line of natural, sugar free sodas using stevia as the sweetener. Reed's Ginger Brews come in six varieties, all brewed with fresh ginger root, spices, and fruit juices, with no flavor crystals or chemicals as many of the major bottlers use. It also owns Virgil's, with its line of natural sodas including a brewed root beer, and a real cola. Reeds offers a low-calorie ginger brew, and Virgil's has a zero-calorie line featuring root beer and Dr. Better, each sweetened with stevia. In 2011 Reed's had sales of $25 million, a 23% increase over 2010. The company turned a profit in the second quarter of 2012, for the first time, and has an excess of $3.1 million in working capital. Revenue continues to increase into 2012, with its zero-calorie Virgil's stevia beverages increasing sales by 50% over last year. Reed's beverages, with sales increasing, are still a small niche market for those who want a quality, flavorful, natural soda, and are willing to pay a premium. However, given that the stevia craze is probably in its infantile stage, Reed's might be in the right place at the right time, with its products already on the market, ready for expansion. On Tuesday the company announced it had gained authorization for Reed's and Virgil's brands to be placed in the Tops Friendly Markets. Tops Friendly Markets, headquartered in Williamsville, NY, has 153 locations, and is another step for Reed's products into the mainstream channels. The one question is, given the stiff competition in the beverage industry; does Reed's stock have the gas to continue its amazing run that it's seen this year? The stock price shot up, from $1.10 per share in January to $8.18 per share today. Reed's might no longer be a sleeper, but it is still a true budding growth stock. However, it might be wise to wait for a good dip in the price before buying-if that dip comes.
Almost all of the stevia harvested today is grown outside of the U.S. on small farms predominantly in China, Vietnam, and Central America. Given that the World Health Organization estimates stevia could eventually replace 20-30% of all dietary sweeteners, clearly a consistent and reliable supply line would be necessary to meet those demands. An emerging nano-cap company hopes to be one of those future supply lines. Stevia First (STVF.OB), an early-stage agribusiness based in Yuba City, California (the state's most fertile agricultural region) is focusing on developing and producing stevia on an industrial scale. The $28.81 million market cap company recently licensed a new fermentation process developed by Vineland Research and Innovation Centre out of Canada. The license allows the manufacturer to consistently produce the sweet steviol glycoside, rebaudioside A, (Reb A), the sweetest and most desirable part of the leaf, without the need to necessarily grow the plant. If this process can work on a large scale, it should cut the costs of producing the sweet Reb A by as much as 70%. On August 29th, when Stevia First announced that it had bought the rights of this fermentation-based process from Vineland, its stock price soared from $0.40 up to $0.94 before settling in the mid $0.70s by the end of the trading day. Today the stock trades in the $0.50 to $0.57 range. These swings are consistent with micro-cap development-phase companies, especially those with no current sales. Share prices in develop-phase companies swing up or down based on perceptions of their future earnings or the possibility of future earnings. Stevia First is no different.
At this time, Stevia First is strictly a development-phase company developing one of the hottest products on the market today, stevia. That alone should make the company worth a look. However, if its fermentation-based process turns out to be successful, that reality could put it on the forefront as an inexpensive and consistent supplier of stevia, and the company could be primed for a buyout by any of the many larger bottlers who are now adding stevia to its products. But caution must be taken, as this is a volatile company with high risks along with the potential high rewards. Considering that Dr. Oz broadcasted his pick of stevia as the best of the sugar substitutes to millions of viewers, this indicates a new awareness and helps to solidify the product's validity and demand. The odds are that stevia usage will continue to grow, and Stevia First might be one of the companies that could rise along with the stevia boom.
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Monster Beverage -- >>> Safety Becomes a Concern With High-Caffeine Drinks
Red Bull is among the popular brands of high-caffeine energy drinks.
By BARRY MEIER
October 23, 2012
http://www.nytimes.com/2012/10/24/business/safety-becomes-a-concern-with-energy-drinks.html?pagewanted=2&_r=0&partner=yahoofinance
Among the latest entrants in the energy industry’s caffeine race is a pocket-size squeeze bottle called Mio Energy.
Monster Energy Drink Cited in Deaths (October 23, 2012)
Each serving of MioEnergy, an additive sold by Kraft Foods, contains 60 milligrams of caffeine, as much as is in a six-ounce cup of coffee.
Each half-teaspoon serving of Mio, which is sold by Kraft Foods, releases 60 milligrams of caffeine in a beverage, the amount in a six-ounce cup of coffee, the company says. But one size of the bottle, which users can repeatedly squeeze, contains 18 servings, or 1,060 milligrams, of caffeine — more than enough, health specialists say, to sicken children and some adults, and even send some of them to the hospital.
Several countries are reining in sales of energy drinks, pointing to the risks of excessive caffeine consumption by teenagers and even some adults. By year’s end, Canada will cap caffeine levels in products like Monster Energy, Red Bull and Rockstar. Also countries like Mexico, France and India have or are considering steps including taxing the drinks more heavily to discourage their use.
As consumption of energy drinks soars in the United States, some members of Congress have called for a review of the industry, and the New York State attorney general is investigating the practices of several producers. However, critics say the Food and Drug Administration has allowed the drinks to languish in a regulatory gray area and does not require companies to disclose how much caffeine their products contain.
“Their approach has been laissez-faire,” said Dr. Bruce A. Goldberger, a toxicologist at the University of Florida in Gainesville, who has been an industry critic. “The question is, what is it going to take to cause them to take action?”
F.D.A. officials say they lack sufficient evidence to act on caffeine levels in energy drinks, but continue to study the issue. Also, producers can market an energy drink as either a beverage or a dietary supplement, differing regulatory categories with different labeling and ingredient rules.
“We don’t have energy drinks defined by any regulation,” said Daniel Fabricant, the director of the F.D.A.’s dietary supplement division. “It is a marketing term.”
Agency officials, however, may soon face more pressure to regulate the products after the disclosure Monday that the agency had received reports of five deaths since 2009 that could be linked to Monster Energy, a top-seller. The drink’s manufacturer, Monster Beverage, disputed any suggestion that its products are unsafe.
The fatalities are also raising broader questions about whether companies monitor reports of deaths and serious injuries that may be tied to their products. A spokeswoman for Monster Beverage said Monday that the company was unaware of four of the five deaths reported to the F.D.A., even though such incident reports were part of an agency database.
The mother of a 14-year-old Maryland girl who died last December from a heart arrhythmia after drinking two large cans of Monster Energy in 24 hours obtained the records by requesting them under the Freedom of Information Act. Last week, she filed a lawsuit against Monster Beverage, a publicly traded company based in Corona, Calif., seeking unspecified damages.
Under the new Canadian rules, the big, 24-ounce size of Monster Energy that the Maryland teenager, Anais Fournier, drank will be banned because it contains 240 milligrams of caffeine, 60 milligrams more than the limit set by the new standards. Companies there will also track the types of consumers using their products and compile data about any health problems linked to them.
In the United States, a report last year by the federal Substance Abuse and Mental Health Services Administration found that the annual number of emergency room visits in this country linked to energy drinks rose to over 12,000 in 2009, the latest year for which data is available. The figure represents a tenfold jump from the number of such visits reported in 2005.
The caffeine used in the beverages, which are also high in sugar, can come from a variety of sources, like synthetic caffeine, the guarana plant and tea extracts. Producers can mask the caffeine levels by including it among other ingredients as part of a drink’s “energy blend.”
The issue of how, or whether, to restrict levels of caffeine in energy drinks sold here is being raised as a seismic shift is occurring in beverage consumption. In some stores, sales of energy drinks now outpace those of sodas.
Overall, sales of energy drinks in the United States grew an estimated 16 percent last year to $8.9 billion, a record level, according to Beverage Digest, a trade publication.
Safety Becomes a Concern With High-Caffeine Drinks
Even industry critics acknowledge that the boom represents a triumph of sleek packaging and promotion that centers on advertising the drinks to young people with appealing images and claims. While many 16-ounce energy drinks sell for $2.99 a can, over-the-counter drugs like NoDoz that contain about the same amount of caffeine cost about 30 cents a tablet.
By year’s end, Canada will cap caffeine levels in products like Rockstar.
On a company Web site promoting Mio Energy, Kraft says that the black cherry flavor of the additive is “so wild it could get you arrested on a plane, but it’s worth the lawyer fees.” The bottle’s label notes on the side that it is “not for children,” a category that the beverage industry usually defines as those under 12.
Medical specialists say that healthy adults can safely consume 400 milligrams or more of caffeine daily. The drug, which acts as a stimulant, also provides benefits, like increased alertness.
Far less is known, however, about the impact of high caffeine use on teenagers, and specialists say the drug can pose dangers to those with undiagnosed health conditions like heart problems.
Roland Griffiths, a caffeine specialist at Johns Hopkins University and an industry critic, said that high caffeine use by young people can cause a cycle of rushes and crashes that can add “a degree of variance to their moods and psychological well-being that they don’t really need.”
Officials in Canada said they decided to take a uniform regulatory approach to energy drinks since they are sold alongside beverages. “If it looks like a duck and quacks like a duck, it ought to be regulated like a duck,” said Anatole Papadopoulos, an official of Health Canada, that country’s counterpart to the F.D.A.
The new Canadian rules do not affect small energy “shots” like 5-hour Energy, a top-selling brand. But the rules cap the level of caffeine in cans of energy drinks at 180 milligrams. Along with the 24-ounce can of Monster Energy, other products like the 20-ounce Red Bull, popular in the United States, would run afoul of the rules.
The Canadian action is a step back from the recommendations of a scientific panel there, which urged that, among other things, energy drinks be labeled “stimulant drug containing drinks.” Still, the move may also create a public relations conundrum for the industry.
While the Canadian Beverage Association, which represents energy drink makers like Coca-Cola and PepsiCo, has endorsed the new rules there, , a sister trade group here, the American Beverage Association, that represents many of the same companies, said through a spokeswoman it will fight caffeine caps in this country.
Wendy Crossland, the mother of the 14-year-old girl who died in Maryland, said that the F.D.A. needs to require energy drink producers to disclose how much caffeine the beverages contain.
In Canada, the death in 2008 of Brian Shepard, 15, of an irregular heartbeat after drinking a can of Red Bull, helped spur calls for regulations. His father, James Shepard, said he could not believe that nothing was being done in America.
“In the States, the amount of caffeine in some of those cans is huge, and you are drawing kids to it,” said Mr. Shepard, an automobile mechanic in Toronto. “It is disgusting.”
<<<
Monster Beverage -- >>> Monster Beverage sell off on FDA probe deepens
Monster share decline deepens as Goldman Sachs, citing FDA prove, strips 'Conviction Buy' tag
Associated Press
Oct 23, 2012
http://finance.yahoo.com/news/monster-beverage-sell-off-fda-170911928.html
NEW YORK (AP) -- The sell-off of Monster Beverage shares deepened Tuesday after Goldman Sachs removed it from its "Conviction Buy" list following the FDA's confirmation that it is investigating reports of people dying after drinking its energy drinks.
THE SPARK: Goldman Sachs analyst Judy Hong said Tuesday it was removing Monster from the list, a group of stocks the company considers the most potentially profitable for a buyer. But she kept a "Buy" rating, saying that after Monster Beverage's big decline, regulatory and legal risks are already reflected in the stock price.
THE BACKGROUND: The FDA confirmed Monday it is investigating reports dating back to 2004 that claim that people had adverse reactions after they consumed Monster Energy Drink. The drink, which comes in 24-ounce cans, contains 240 milligrams of caffeine. That's seven times the amount of the caffeine in a 12-ounce cola.
The company puts labels on cans that state that the drinks are not recommended for children and people who are sensitive to caffeine.
The inquiry came to light after a wrongful death suit was filed against Monster Beverage Corp. last week in Riverside, Calif., by the parents of a 14-year-old girl who died after drinking two 24-ounce Monster Energy Drinks in 24 hours.
Monster said in a statement Tuesday it is "saddened by the untimely passing of Anais Fournier, and its sympathies go out to her family," It added that it does not believe its products are in any way related to her death and said it "intends to vigorously defend the lawsuit."
"Neither the science nor the facts support the allegations that have been made," Monster added. "Monster reiterates that its products are and have always been safe."
The FDA report comes on the heels of other scrutiny. In August, New York state Attorney General Eric Schneiderman issued subpoenas to energy drink makers, including Monster, as part of the state's investigation of the industry. And in September, Senators Dick Durbin, D-Ill., and Richard Blumenthal, D-Conn., asked the FDA to take another look at the effect that caffeine and other ingredients in energy drinks have on children and adolescents.
THE ANALYSIS: More attention from regulators and politicians on energy drinks make it harder to predict what Monster Beverage's stock will do over the next few months, and could weigh on shares in the near future, said Hong.
Still, she added that she doesn't believe these issues will affect the company's U.S. sales growth. Additionally, she doesn't believe that any potential regulatory or legal changes will be "significantly onerous" to Monster Beverage.
SHARE ACTION: After a 14 percent drop on Monday, shares fell $4.65, or 10.2 percent to close at $41.08 on Tuesday. Shares have lost almost a quarter of their value in October. They're down about 11 percent this year.
<<<
Reeds -- >>> Reed's, Inc. Announces New Distribution for Greater San Francisco Bay Area Market
New Distribution Agreement Opens Reed's, Virgil's and New Reed's Culture Club Kombucha Brands to Specialty & Natural Food Stores Throughout the Greater Bay Area
Press Release: Reed's, Inc.
Oct 23, 2012, 8:30 AM
http://finance.yahoo.com/news/reeds-inc-announces-distribution-greater-123000639.html
LOS ANGELES, CA--(Marketwire - Oct 23, 2012) - Reed's, Inc. ( NASDAQ : REED ), maker of the top-selling sodas in natural food stores nationwide, announced today that it has reached a new distribution agreement with Geyser Beverage Co, a full service beverage distributor headquartered in Livermore, CA, just outside the city of San Francisco. Geyser Beverage is a fully integrated direct store delivery distributor specializing in the distribution of refrigerated and non refrigerated non alcoholic brands, including Orangina, Nantucket Nectars, and Evian Water, just to name a few.
Neal Cohane, Senior Vice President of Sales & Marketing for Reed's, Inc., commented, "Geyser Beverage Co has been specializing in the distribution of premium, specialty soft drink brands in the greater San Francisco market for more than 30 years. Our partnership with Geyser will ensure consumers will not only be able to find our Reed's and Virgil's brands in the city of San Francisco, but our new Reed's Culture Club Kombucha will soon be found in many specialty stores and eateries throughout the Bay Area. Demand for Reed's and Virgil's Premium Craft soda continues to intensify, while our new kombucha launch gains distribution traction throughout the US."
About Geyser Beverage Co.
Geyser Beverage Co is a beverage distribution company that has been serving the greater San Francisco Bay Area for over 30 years. Geyser has been involved in pioneering many products within their geographic territory, including Evian Water, Orangina, Nantucket Nectars and many more. Geyser has continued to grow and evolve as the industry has changed, always seeking products that are current, introducing something new to the industry, while continuing to deliver favorites to new and different channels of business.
Geyser operates a fully refrigerated distribution warehouse, headquartered out of Livermore, CA and operates a fleet of refrigerated delivery trucks for direct store delivery distribution. The sales force operates in over 15 greater Bay Area counties, specializing in personalized service to all stores.
About Reed's, Inc.
Reed's, Inc. makes the top-selling natural sodas in the natural foods industry sold in over 13,000 natural food markets and supermarkets nationwide. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. The Company owns the top-selling root beer line in natural foods, the Virgil's Root Beer product line, and the top-selling cola line in natural foods, the China Cola product line. In 2012, the Company launched Reed's Culture Club Kombucha line of organic live beverages. Other product lines include: Reed's Ginger Candies and Reed's Ginger Ice Creams. In 2009, Reed's started producing private label natural beverages for select national chains. Reed's products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada, as well as through private label relationships with major supermarket chains.
For more information about Reed's, please visit the Company's website at: http://www.reedsinc.com or call 800-99-REEDS.
Follow Reed's on Twitter at http://twitter.com/reedsgingerbrew
Reed's Facebook Fan Page at https://www.facebook.com/ReedsGingerBrew
<<<
Monster Beverage -- >>> How Will Monster Deal With This Serious Charge?
By Aabha Rathee
October 23, 2012
http://wallstcheatsheet.com/stocks/how-will-monster-deal-with-this-serious-charge.html/
The family of a teenaged Maryland girl, who died of a cardiac arrest last December, is suing Monster Beverage Corp. (NASDAQ:MNST) after alleging that her death was caused by “caffeine toxicity” brought on by the consumption of the company’s energy drink.
The parents of 14-year-old Anais Fournier said in their filing with the California Superior Court in Riverside that the teenager drank two cans of Monster Energy within a 24-hour period. Each 24-oz. can of the drink contains 240 milligrams of caffeine, the equivalent of seven 12-oz. cans of Coca-Cola (NYSE:KO), according to the filing. Three hours after she had the second drink on December 23, 2011, Fournier suffered a fatal heart attack. The autopsy cited “cardiac arrhythmia due to caffeine toxicity” as the cause of death. Fournier reportedly also had a harmless heart condition called mitral valve prolapse.
The filing claims Monster Beverage has “successfully avoided meaningful regulation of its product by the U.S. Food and Drug Administration” by classifying the drink as a “dietary supplement” and not a “food” product. It also claims that the drink has inadequate labeling that “does nothing to attempt to warn of these severe health risks.”
Fournier’s family is seeking punitive damages for product liability, failure to warn, negligence, fraud, and wrongful death.
Last week, it was reported that Monster had increased its energy drink market share during the month of September, with a sales increase of 17.8 percent. The energy drink market has continued to grow despite increased efforts by traditional beverage giants such as Coca-Cola and PepsiCo (NYSE:PEP) to attract consumers with alternatives.
<<<
Reeds - Options, other info -
December 31,--- 2011
Warrants --- 2,006,870
Series A Preferred Stock --- 186,484
Series B Preferred Stock --- 562,905
Options --- 1,172,000 (50,000 of these expired)
Total --- 3,928,259
_____________________________________________
Options -
Options Outstanding at December 31, 2011 -
(approx)
1.122 mil options outstanding
Priced - $ 0.01 - $4.99
Avg Life remaining - 4 - 4.69 years,
Avg exercise price - $ 1.00 - $2.16
Number exercisable - 617,000, avg price - $0.92 - $2.05
http://www.sec.gov/Archives/edgar/data/1140215/000101968712001062/reed_10k-123111.htm
Reeds -- >>> Reed's, Inc. Expands Into Tops Friendly Markets
Reed's Brands Gain Distribution in the 153 Store Chain in the Upstate NY Marketplace
Press Release: Reed's, Inc.
http://finance.yahoo.com/news/reeds-inc-expands-tops-friendly-162605963.html
LOS ANGELES, CA--(Marketwire - Oct 16, 2012) - Reed's, Inc. ( NASDAQ : REED ), maker of the top-selling sodas in natural food stores nationwide, announced today that it has recently gained authorization for Reed's and Virgil's brands in Tops Friendly Markets, a 153 store supermarket chain headquartered in Williamsville, NY.
"The new authorization of Reed's and Virgil's brands at Tops Friendly Markets increases our availability in the upstate NY marketplace. Our brands will be going into their newly expanded craft soda section in the mainstream beverage aisle. This partnership with Tops is yet another significant move into mainstream channels for Reed's. For more than 50 years, Tops Friendly Markets have been recognized for having strong brand recognition and retail presence, driving solid market share in the areas that they operate. We are proud to be partnered with a supermarket chain that seeks premium, quality brands, like Reed's and Virgil's, to be made available to their loyal consumers. We look forward to creating marketing programs and promotions that will further enhance the consumer reach for our brands in Tops," stated Chris Reed, Founder and CEO of Reed's, Inc.
About Tops Friendly Markets
Tops Markets, LLC is headquartered in Williamsville, NY and operates 153 full-service supermarkets -- 148 company-owned and five franchise locations. With more than 14,000 associates, Tops is a leading full-service grocery retailer in upstate New York and northern Pennsylvania and western Vermont. For more information about Tops Markets, visit the company's website at www.topsmarkets.com.
Tops Friendly Markets has still been working hard after 50 years to be "tops" for their customers. At Tops, they are proud of their history and remain true to their roots as a store that has a passion for food and people. Today, Tops stores retain the neighborhood feel of the original family-owned grocery stores. Real butchers, a rarity in modern grocery chains, are in store every day at Tops to offer the freshest cuts of best quality meat and seafood. They're always happy to trim to your specifications (free) or provide cooking and recipe tips.
About Reed's, Inc.
Reed's, Inc. makes the top-selling natural sodas in the natural foods industry sold in over 13,000 natural food markets and supermarkets nationwide. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. The Company owns the top-selling root beer line in natural foods, the Virgil's Root Beer product line, and the top-selling cola line in natural foods, the China Cola product line. In 2012, the Company launched Reed's Culture Club Kombucha line of organic live beverages. Other product lines include: Reed's Ginger Candies and Reed's Ginger Ice Creams. In 2009, Reed's started producing private label natural beverages for select national chains. Reed's products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada, as well as through private label relationships with major supermarket chains.
For more information about Reed's, please visit the Company's website at: http://www.reedsinc.com or call 800-99-REEDS.
Follow Reed's on Twitter at http://twitter.com/reedsgingerbrew
Reed's Facebook Fan Page at https://www.facebook.com/ReedsGingerBrew
<<<
Reeds - warrants - updated info -
The following table summarizes the outstanding warrants to purchase Common Stock at December 31, 2011:
Number -- Price -- Expiration Dates
400,000 -- $1.20 ---May 2014
200,000 -- $1.35 ---May 2013
33,796 -- $1.79 ---December 2014
3,575 -- $1.79 ---February 2015
83,208 -- $2.10 ---August 2015
162,454 -- $2.25 ---April 2015
121,952 -- $2.77 ---February 2016
62,500 -- $3.00 ---April 2016
24,390 -- $3.08 ---August 2016
165,000 -- $6.60 ---June 2012 -- expired
749,995 -- $7.50 ---June 2012 -- expired
Total = 2,006,870
(1,091,875 warrants potentially exercisable)
Reeds - warrant landscape -
http://www.sec.gov/Archives/edgar/data/1140215/000101968711000925/reeds_10k-123110.htm
The following table summarizes the outstanding warrants to purchase Common Stock at December 31, 2010:
Number -- Exercise Price -- Expiration Dates
400,000 ---- $1.20 ---- May 2014
200,000 ---- $1.35 ---- May 2013
33,796 ---- $1.79 ---- December 2014
3,575 ---- $1.79 ---- February 2015
83,208 ---- $2.10 ---- August 2015
173,454 ---- $2.25 ---- April 2015
200,000 ---- $6.60 ---- December 2011 -- expired
749,995 ---- $7.50 ---- June 2012 -- expired
165,000 ---- $6.60 ---- June 2012 -- expired
Total =
2,009,028 warrants
Of these, 894,033 warrants still potentially active
Reeds - 5 Stocks With Insider Buys Filed On October 15 To Consider
October 16, 2012
by: Markus Aarnio
>>> 4. Reed's, Inc. (REED) makes the top-selling natural sodas in the natural foods industry sold in over 13,000 natural food markets and supermarkets nationwide. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. The company owns the top-selling root beer line in natural foods, the Virgil's Root Beer product line, and the top-selling cola line in natural foods, the China Cola product line. In 2012, the company launched Reed's Culture Club Kombucha line of organic live beverages. Other product lines include: Reed's Ginger Candies and Reed's Ginger Ice Creams. In 2009, Reed's started producing private label natural beverages for select national chains. Reed's products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada, as well as through private label relationships with major supermarket chains.
Insider buys
James Linesch purchased 62,338 shares on October 11. James Linesch serves as CFO of Reed's.
Thierry Foucaut purchased 41,299 shares on October 11. Thierry Foucaut has been Reed's Chief Operating Officer since May 2007.
Financials
The company reported the second-quarter financial results on August 13 with the following highlights:
Revenue $7.8 million
Net income $0.4 million
Cash $1.4 million
Outlook
Chris Reed, Founder and CEO of Reed's, Inc., commented on August 13:
"This is our 11th quarter of double-digit revenue growth and has resulted in the company moving into a profitable position. The second quarter results are confirmation that our 2012 business plan remains on track. Our branded and private label categories continue expand. We believe our momentum will continue in the second half of the year. Our new Kombucha line continues to roll out nationally. Early results are positive."
My analysis
The stock has a $10.5 price target from the Point and Figure chart. There have been two insider buy transactions and there have not been any insider sell transactions this year. The stock is trading at a forward P/E ratio of 60.69. The stock has not traded at $10 since 2007. I am cautiously bullish on the stock currently. <<<
Reeds -- >>> Reed's, Inc. Announces New Entry Into the Fast-Growing Kombucha Category
Press Release: Reed's, Inc.
Wed, Jun 27, 2012 8:30 AM EDT
http://finance.yahoo.com/news/reeds-inc-announces-entry-fast-123000558.html
LOS ANGELES, CA--(Marketwire -06/27/12)- Reed's, Inc. (REED), maker of the top-selling sodas in natural food stores nationwide, announced today the introduction of its new, organic Reed's Culture Club Kombucha into natural foods and mainstream supermarket channels, initially targeting the west coast, with the rest of the United States shortly thereafter. Kombucha is a natural food industry phenomenon and is significantly larger than the natural soda category. Reed's Culture Club Kombucha will be introduced in four, ginger based formulas: Goji Ginger, Cranberry Ginger, Lemon Raspberry Ginger and Hibiscus Grapefruit Ginger.
Chris Reed, Founder and CEO of Reed's, Inc., stated, "Over the last year we have engaged some of the best kombucha brewing experts within the industry today to help us co-develop what we consider to be the best, raw organic kombucha on the market. Each flavor extension is enhanced with our trademark fresh ginger root, the finest organic specialty teas, fresh pressed juices, spices, all brewed in spring water. We really out did ourselves with the creation of the new packaging and design, which should generate significant product trial."
About Reed's, Inc.
Reed's, Inc. makes the top-selling natural sodas in the natural foods industry sold in over 13,000 natural food markets and supermarkets nationwide. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. The Company owns the top-selling root beer line in natural foods, the Virgil's Root Beer product line, and the top-selling cola line in natural foods, the China Cola product line.
Other product lines include: Reed's Ginger Candies and Reed's Ginger Ice Creams. In 2009, Reed's started producing private label natural beverages for select national chains. Reed's products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada, as well as through private label relationships with major supermarket chains.
For more information about Reed's, please visit the Company's website at: http://www.reedsinc.com or call 800-99-REEDS.
Follow Reed's on Twitter at http://twitter.com/reedsgingerbrew
Reed's Facebook Fan Page at https://www.facebook.com/ReedsGingerBrew
<<<
Reeds -- >>> 3 Small Caps That Got Away And May Keep Running
August 1, 2012
http://seekingalpha.com/article/768191-3-small-caps-that-got-away-and-may-keep-running?source=yahoo
My final miss was again in the food and beverage industry. Reeds, Inc. (REED) is a brewer of natural sodas, including its flagship Ginger Brew and Virgil's Root Beer. The company has additional products including other naturally brewed soft drinks, candies, ice cream, health drinks and most recently, Kombucha.
Since the beginning of the year, the stock has shot up nearly 350% lead by significantly increased revenues and gross profit margins. In addition, the company has been aggressively expanding its distribution through several new agreements across the U.S.
Reeds, Inc. 1-Year Chart (click to enlarge)
Reeds has a lineup of very unique and high-quality products, but the beverage industry is highly competitive going up against companies like Coca-Cola (KO), which has been battling it out with PepsiCo since before many of us were even born. Reeds does try to separate itself from the competition by offering a higher quality product than the major producers and marketing that product to natural and gourmet food stores in addition to large retailers.
Is Reeds the next Hanson's Natural (now Monster Beverage Corporation (MNST))? It is too soon to tell, but it is certainly worth continuing to follow the stock . It is important to note that while Reeds has had a good run, it is still well off its historic highs. The company seems to be moving in the right direction, but is still losing money with a balance sheet that is far from rock solid. Given the first big move has been missed, it is probably worth sitting on the sidelines for another quarter or two and see if revenues continue to grow and turn into a positive bottom line.
<<<
Reeds -- >>> 10 Stocks for Foodies: Public Companies Making 'Artisanal' Goods
By Jonah Loeb
Aug 22, 2012 2:15 pm
http://www.minyanville.com/sectors/consumer/articles/food-stock-public-food-companies-consumer/8/22/2012/id/43280?camp=syndication&medium=portals&from=yahoo
In a world where everything is local and handmade, who are the real winners (and losers) when it comes to marrying quality and profitability?
MINYANVILLE ORIGINAL If menus are anything to go by, the best thing to be in the food industry right now is an artisan chef. America’s health food obsession has led to words like “artisan,” “gourmet,” and “organic” getting tossed around with such frequency that they’ve ceased to mean what they once did. In the midst of faux-artisan breakfast sandwiches from places like Starbucks (SBUX) and the garlic-butter-gourmet options from Domino’s (DPZ), a few publicly-traded companies are still churning out the good stuff…more or less. A handful of brands have managed to keep their heads up and continue producing high-quality food and drink, and the financial bump that public trading gives them has allowed little companies to compete handily with the big names. When big numbers get thrown around, though, companies cut corners, and consumers and watchdog organizations are constantly on the lookout for brands that cry "artisan" when their products are merely ordinary.
Chipotle
Chipotle Mexican Grill (CMG) has been perhaps the greatest financial success story of all the let’s-do-this-right restaurants. Steve Ells’ burrito empire has become one of the loudest voices in support of organic farming and anti-antibiotic legislation. While not quite a foodie paradise (any restaurant with over 1,200 locations is hardly going to appeal to those heavily invested in their own culinary hipsterdom), the Denver-based chain gets points for making real food out of real ingredients and exploring ways in which sustainable farming can yield real money. Before its recent well-publicized drop, Chipotle stock had been rising and rising in recent years. As America's love of burritos and its desire to eat healthy both increase, it could come back even stronger.
Panera
Another big-name chain with foodie roots is Panera Bread (PNRA), the ubiquitous St. Louis-based sandwich shop that has been recognized as the healthiest fast-casual restaurant in the country. Panera’s shares have returned 230% since 2007, and it’s the best-performing growth stock in the restaurant industry. The company that shares its chickens with Chipotle is actually outperforming them in most major categories while retaining its commitment to quality ingredients. Is the 17-year-old kid making your panini really an artisan, though? Plenty of its Yelp reviews compare Panera Bread favorably with Subway and Quiznos, but setting the bar high that ain't.
Whole Foods
When foodies cook at home, chances are Whole Foods (WFM) is where they get their ingredients. Probably the biggest company in this industry that still has a unified face, Whole Foods has made headlines by outperforming über-chains Safeway (SWY) and Supervalu (SVU) while standing firm in its support for farms that treat workers fairly. Its claim to foodiness (it’s a word now) is a strong one, and this might be the best place to get your tomatoes if farmers' markets make you nervous. Then again, some organic-farming hardliners have come out boldly against Whole Foods' admitted practice of sometimes selling genetically modified produce, so purists may prefer the mom-and-pop natural food store on the corner, or an actual farmers' market.
Innovative Food, Artisanal Brands, Hain Celestial
When there’s as much demand as there is now for natural, organic foods, the industry’s going to start getting bigger than its devotees would like it to be. Innovative Food Holdings (IVFH), Artisanal Brands Inc. (AHFP), and Hain Celestial Group (HAIN) are snapping up artisan and organic food companies like whole-wheat hotcakes, to the chagrin of foodies. Gourmet blogs grumbled when Artisanal Brands purchased Artisanal Cheese LLC recently; Real Filling claimed outright that “when you’re buying artisanal foods from a publicly traded company, something is wrong.” As the organic food business continues to boom (whatever that means for the quality of the products themselves), profits will continue to rise. Hain, which has its fingers in perhaps the most pies, exceeded analyst expectations in the third quarter, posting a profit increase of 43.7% over the previous year.
Crumbs
Manhattan-based cupcake shop Crumbs Bake Shop, Inc. (CRMB) has only been around since 2003. But in those nine years, it has become the biggest cupcake retailer in the United States and gone public with a market value of over $50 million. According to its Yelp reviews, though, Crumbs has suffered a big drop in quality since its IPO, and its lovingly-crafted confections have gotten sweeter and less subtle as the chain has expanded. "Since Crumbs has gone public, and more stores have opened on the island, the quality has gone down," writes Taryn from New York. Hell hath no fury like an unsatisfied cupcake aficionado.
Annie's
Annie’s Inc. (BNNY) has been a staple on Whole Foods shelves for some time now, offering organic macaroni & cheese and various other natural foods of the kind that appeals both to college kids and yuppie moms. When it went public in December 2011, its IPO price was $19 per share -- but these days, it generally hovers around $40. With its powdered cheese and sometimes salty aftertaste, nobody would ever call this “craft” mac & cheese, but they wouldn’t call it Kraft, either.
Reed's, Jones Soda
On the hipster-approved side of things, we have Los Angeles-based Reed’s (REED) and Seattle-based Jones Soda Co. (JSDA), two publicly-traded small-cap companies that make truly artisan sodas. It’s almost unbelievable that these companies could be public, given that Jones flies in the face of soft-drink convention by using cane sugar in all of its products. Reed’s has even won awards at the wonderfully-named International Fancy Food & Confection Show. After Reed's bid to buy Jones Soda broke down, the companies have endured slightly different fortunes: Reed's has posted the best second-quarter numbers in their company's history, while Jones is struggling to hover around $0.36 per share.
Craft Brew Alliance
The flagship of all publicly traded craft food and beverage companies, Portland, Oregon's Craft Brew Alliance, Inc. (BREW) is doing very well. It has a snazzy new ticker (an improvement on its previous stock symbol, HOOK, which was a reference to Redhook Ale Brewery) and a good share of the west coast’s craft beer market, a consistently growing industry that has enchanted much of the drunk-but-sophisticated Millennial generation. The consummate hipster company in a competitive market, Craft Brew Alliance has carved out a niche (along with Boston Beer Co. (SAM)) that can serve as a beacon of hope for companies trying to maintain quality in the years following their IPO.
Read more: http://www.minyanville.com/sectors/consumer/articles/food-stock-public-food-companies-consumer/8/22/2012/id/43280#ixzz28m8Wlmij
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Food and Beverage sector -- >>> 10 Stocks for Foodies: Public Companies Making 'Artisanal' Goods
By Jonah Loeb
Aug 22, 2012
http://www.minyanville.com/sectors/consumer/articles/food-stock-public-food-companies-consumer/8/22/2012/id/43280?camp=syndication&medium=portals&from=yahoo
In a world where everything is local and handmade, who are the real winners (and losers) when it comes to marrying quality and profitability?
MINYANVILLE ORIGINAL If menus are anything to go by, the best thing to be in the food industry right now is an artisan chef. America’s health food obsession has led to words like “artisan,” “gourmet,” and “organic” getting tossed around with such frequency that they’ve ceased to mean what they once did. In the midst of faux-artisan breakfast sandwiches from places like Starbucks (SBUX) and the garlic-butter-gourmet options from Domino’s (DPZ), a few publicly-traded companies are still churning out the good stuff…more or less. A handful of brands have managed to keep their heads up and continue producing high-quality food and drink, and the financial bump that public trading gives them has allowed little companies to compete handily with the big names. When big numbers get thrown around, though, companies cut corners, and consumers and watchdog organizations are constantly on the lookout for brands that cry "artisan" when their products are merely ordinary.
Chipotle
Chipotle Mexican Grill (CMG) has been perhaps the greatest financial success story of all the let’s-do-this-right restaurants. Steve Ells’ burrito empire has become one of the loudest voices in support of organic farming and anti-antibiotic legislation. While not quite a foodie paradise (any restaurant with over 1,200 locations is hardly going to appeal to those heavily invested in their own culinary hipsterdom), the Denver-based chain gets points for making real food out of real ingredients and exploring ways in which sustainable farming can yield real money. Before its recent well-publicized drop, Chipotle stock had been rising and rising in recent years. As America's love of burritos and its desire to eat healthy both increase, it could come back even stronger.
Panera
Another big-name chain with foodie roots is Panera Bread (PNRA), the ubiquitous St. Louis-based sandwich shop that has been recognized as the healthiest fast-casual restaurant in the country. Panera’s shares have returned 230% since 2007, and it’s the best-performing growth stock in the restaurant industry. The company that shares its chickens with Chipotle is actually outperforming them in most major categories while retaining its commitment to quality ingredients. Is the 17-year-old kid making your panini really an artisan, though? Plenty of its Yelp reviews compare Panera Bread favorably with Subway and Quiznos, but setting the bar high that ain't.
Whole Foods
When foodies cook at home, chances are Whole Foods (WFM) is where they get their ingredients. Probably the biggest company in this industry that still has a unified face, Whole Foods has made headlines by outperforming über-chains Safeway (SWY) and Supervalu (SVU) while standing firm in its support for farms that treat workers fairly. Its claim to foodiness (it’s a word now) is a strong one, and this might be the best place to get your tomatoes if farmers' markets make you nervous. Then again, some organic-farming hardliners have come out boldly against Whole Foods' admitted practice of sometimes selling genetically modified produce, so purists may prefer the mom-and-pop natural food store on the corner, or an actual farmers' market.
Innovative Food, Artisanal Brands, Hain Celestial
When there’s as much demand as there is now for natural, organic foods, the industry’s going to start getting bigger than its devotees would like it to be. Innovative Food Holdings (IVFH), Artisanal Brands Inc. (AHFP), and Hain Celestial Group (HAIN) are snapping up artisan and organic food companies like whole-wheat hotcakes, to the chagrin of foodies. Gourmet blogs grumbled when Artisanal Brands purchased Artisanal Cheese LLC recently; Real Filling claimed outright that “when you’re buying artisanal foods from a publicly traded company, something is wrong.” As the organic food business continues to boom (whatever that means for the quality of the products themselves), profits will continue to rise. Hain, which has its fingers in perhaps the most pies, exceeded analyst expectations in the third quarter, posting a profit increase of 43.7% over the previous year.
Crumbs
Manhattan-based cupcake shop Crumbs Bake Shop, Inc. (CRMB) has only been around since 2003. But in those nine years, it has become the biggest cupcake retailer in the United States and gone public with a market value of over $50 million. According to its Yelp reviews, though, Crumbs has suffered a big drop in quality since its IPO, and its lovingly-crafted confections have gotten sweeter and less subtle as the chain has expanded. "Since Crumbs has gone public, and more stores have opened on the island, the quality has gone down," writes Taryn from New York. Hell hath no fury like an unsatisfied cupcake aficionado.
Annie's
Annie’s Inc. (BNNY) has been a staple on Whole Foods shelves for some time now, offering organic macaroni & cheese and various other natural foods of the kind that appeals both to college kids and yuppie moms. When it went public in December 2011, its IPO price was $19 per share -- but these days, it generally hovers around $40. With its powdered cheese and sometimes salty aftertaste, nobody would ever call this “craft” mac & cheese, but they wouldn’t call it Kraft, either.
Reed's, Jones Soda
On the hipster-approved side of things, we have Los Angeles-based Reed’s (REED) and Seattle-based Jones Soda Co. (JSDA), two publicly-traded small-cap companies that make truly artisan sodas. It’s almost unbelievable that these companies could be public, given that Jones flies in the face of soft-drink convention by using cane sugar in all of its products. Reed’s has even won awards at the wonderfully-named International Fancy Food & Confection Show. After Reed's bid to buy Jones Soda broke down, the companies have endured slightly different fortunes: Reed's has posted the best second-quarter numbers in their company's history, while Jones is struggling to hover around $0.36 per share.
Craft Brew Alliance
The flagship of all publicly traded craft food and beverage companies, Portland, Oregon's Craft Brew Alliance, Inc. (BREW) is doing very well. It has a snazzy new ticker (an improvement on its previous stock symbol, HOOK, which was a reference to Redhook Ale Brewery) and a good share of the west coast’s craft beer market, a consistently growing industry that has enchanted much of the drunk-but-sophisticated Millennial generation. The consummate hipster company in a competitive market, Craft Brew Alliance has carved out a niche (along with Boston Beer Co. (SAM)) that can serve as a beacon of hope for companies trying to maintain quality in the years following their IPO.
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Flowers Foods -- >>> This Flower Might Prove To Be a Beautiful One for Your Portfolio
By Himanshu Poddar
MF
August 28, 2012
http://beta.fool.com/justhimanshu/2012/08/28/flower-might-prove-be-beautiful-one-your-portfolio/10089/?ticker=GIS&source=eogyholnk0000001
Though overall spending in the economy has been picking up pace over the last few months, worries of retailers seem to be endless. The food industry has been struggling to fight many other problems apart from soft demand. The most significant one in this context has been the rising commodity cost which is playing the role of a major roadblock for the food industry.
Flowers Foods (NYSE: FLO), specializing in bakery products in the United States, posted results which were mixed owing to the concerns just mentioned. Let’s dig deeper.
A Snapshot of the Quarter
Increased input and packaging costs forced the retailer to push up its product prices. This move affected the overall volumes as consumers started avoiding its goods. Weak demand and higher costs worked together to pull down its second quarter performance. With earnings almost flat, revenue surged 6%, clocking $682 million. This might look quite attractive but it is deceptive. The top line’s driver was Flowers’ well known strategy of acquisitions. Its acquisition of Lepage Bakeries last month and Tasty Baking Company last year did the needful for a decent revenue growth. Definitely, the price hikes have also compensated for the volume declines during the period.
Flowers’ strategy of growth through acquisitions has always worked favorably. It has acquired almost 100 companies since its debut and has managed to work it out efficiently each time. Also, efforts in its Direct Store Delivery segment proved to be fruitful. The segment, which comprises 83% of the total revenue, registered a growth of 7.6% over last year.
As Against the Peers
Flowers’ peers such as Kraft Foods (NASDAQ: KFT) and B&G Foods (NYSE: BGS) have also been going through a similar phase. Both the companies experienced volume declines due to price increases which affected their top lines in the recent quarter. In the recent second quarter results of Kraft Foods it admitted the unfavorable effects of both the price rise and the effect of Early Easter which pulled its sales to the first quarter.
Also, Flowers’ strategy of inorganic growth has also been followed by its peers B&G Foods and General Mills (NYSE: GIS), who have managed to experience better days because of acquisitions. B&G drove its top line through the buyout of Culver Specialty Brands which nullified the negative effect of higher prices in the second quarter. Similarly, General Mills’ acquisition of Yoplait yogurt business enabled it to witness better days.
Hence, all the industry players have made up their minds to fight the monster of higher costs and weak consumer demand in their own way. Flowers is also taking cost saving measures and reducing marketing efforts in order to control costs and provide as much value to customers as possible.
Indeed a Smart Move
Flowers’ July acquisition of Lepage seems to be potential one with great benefits coming in the future. Lepage has a strong presence in the regions of New York and England with strong distribution and store delivery network. Hence, the buyout will not only expand its presence in the two regions but also help the bakery products provider to grow its existing brands in the Northern region.
Final Views
Flowers Foods look to have the potential to grow, given its actions taken to beat the prevailing situation. Since the company’s stock price hasn’t seen much upside, there is scope for investors reaping benefit out of its low price. Since the beginning of the year Flowers has provided 5% to its investors but with recent acquisitions and smart cost cutting strategies, it seems that the company has a potential upside which has not been factored in as yet. Flowers look to have a bright future especially with good retail and unemployment numbers coming in.
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WD-40 Company -
>>> WD-40 Company engages in the production and sale of consumer products. The company offers a multi-purpose maintenance product under the brand name of WD-40, which acts as a lubricant, rust preventative, penetrant, cleaner, and moisture displacer; multi-purpose drip oil and spray lubricant products, and other specialty maintenance products under the 3-IN-ONE brand name that are used in locksmithing, HVAC, marine, farming, construction, and jewelry manufacturing applications; and a line of industrial grade, specialty maintenance products that include lubricants, penetrants, degreasers, and cleaners under the brand name of Blue Works, which are designed for the needs of industrial users. It also provides homecare and cleaning products comprising a liquid mildew stain remover and automatic toilet bowl cleaners under the brand name of X-14; automatic toilet bowl cleaners under the 2000 Flushes brand name; a line of room and rug deodorizers sold as powder, aerosol foam, and trigger spray products under the brand name of Carpet Fresh; an aerosol carpet stain remover and a liquid trigger carpet stain and odor eliminator under the Spot Shot brand name; carpet and household cleaners, and rug and room deodorizers under the brand name of 1001; and heavy-duty hand cleaner products in bar soap and liquid form under the Lava and Solvol brand names. The company markets its multi-purpose maintenance products in Asia, Australia, the Pacific Rim, Europe, the Middle East, and Africa, as well as North, Central, and South America; and homecare and cleaning products in North America, the United Kingdom, Australia, and the Pacific Rim. It sells its products primarily through mass retail and home center stores, warehouse club stores, grocery stores, hardware stores, automotive parts outlets, and industrial distributors and suppliers. WD-40 Company was founded in 1953 and is headquartered in San Diego, California. <<<
Anheuser-Busch InBev -
http://finance.yahoo.com/q/pr?s=BUD+Profile
>>> Anheuser-Busch InBev SA/NV, a brewing company, engages in the production, marketing, and distribution of beer in Latin America, North America, Europe, and the Asia pacific. The company offers a portfolio of approximately 200 beer brands. Its global brands include Budweiser, Stella Artois, and Beck?s; multi-country brands consist of Leffe and Hoegaarden; and local brands comprise Bud Light, Michelob, Skol, Brahma, Antarctica, Quilmes, Jupiler, Hasseroder, Klinskoye, Sibirskaya Korona, Chernigivske, Harbin, and Sedrin. The company also produces and distributes soft drinks. Anheuser-Busch InBev SA/NV was founded in 1366 and is headquartered in Leuven, Belgium. <<<
Compania Cervecerias Unidas -
http://www.investopedia.com/stock-analysis/2012/3-Ways-To-Play-Chiles-Biggest-Conglomerate-BCH-CCU-ANFGY-GNAT-C0626.aspx?partner=YahooSA#axzz24hiwLShc
>>> CCU is the largest brewery and beverage producer in Chile. Quinenco owns 50% of Inversiones y Rentas S.A. and Heineken owns the other 50%. Together, they own 66.1% of CCU. The brewery's history dates all the way back to 1850, and with over 5700 employees in both Chile and Argentina it has an 80% market share for beer in Chile and 23% in Argentina. In 2011, revenues grew 15.7% to $1.9 billion with a 10.9% increase in net income to $236 million. Its revenues and EBITDA have increased in each of the past five years. Since 2006, it has increased net earnings 18.3% annually, yet its stocks only averaged an annual total return of 13.3%. Underperforming relative to its peers, I'd say the pace will pick up soon enough.
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>>> Compañía Cervecerías Unidas S.A., through its subsidiaries, produces, bottles, sells, and distributes beverages primarily in Chile and Argentina. It offers super-premium, premium, medium-priced, and popular-priced brands of alcoholic and non-alcoholic beer under nine proprietary brands and four licensed brands, such as Royal Guard; Royal Light; Heineken; Budweiser; Paulaner; Austral; Kunstmann; D'olbek; Cristal; Cristal Cer0,0°; Cristal Black Lager; Escudo; Morenita; Lemon Stones; and Dorada 6.0 brands. The company also produces and markets ultra-premium, reserve, varietal, and popular-priced wines under the brand families comprising Viña San Pedro, Viña Tarapacá, Viña Santa Helena, Viña Misiones de Rengo, Viña Mar, Casa Rivas, Viña Altaïr, Viña Leyda, Bodega Tamarí, and Finca La Celia. In addition, it provides non-alcoholic beverage consisting of mineral and purified water, nectars, tea, sports, and energetic drinks, as well as soft drinks, which include carbonated, cola and non-cola, and non carbonated beverages; and fruit juices. The company offers soft drinks under proprietary brands, such as Bilz and Pap and under license agreements with PepsiCo Schweppes, and Promarca; and waters under Cachantún and Porvenir brands and the licensed Nestlé Pure Life brand. Further, it offers pisco, rum, ready-to-drink cocktail, and sweet snacks products. The company also exports its products primarily to Europe, Latin America, the United States, and Canada. It sells its products to small and medium sized retail outlets for take-out consumption; retail establishments, such as restaurants, hotels, and bars for on-premise consumption; wholesalers; and supermarket chains. The company was founded in 1850 and is based in Santiago, Chile. Compañía Cervecerías Unidas S.A. is a subsidiary of Inversiones y Rentas S.A.
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http://finance.yahoo.com/q/pr?s=CCU+Profile
Boston Beer -- >>> Boston Beer Keeps It Fresh
By Robert Eberhard
August 25, 2011
http://www.fool.com/investing/general/2011/08/25/boston-beer-keeps-it-fresh.aspx
Despite coming up just short of analyst predictions for its recent quarterly earnings, Boston Beer Co. (NYSE: SAM ) , the brewer of Samuel Adams, is still a solid company in which to invest. (Not to mention, it provides a great product to help you deal with drunken swings of the market.)
Fresh beer is better ...
On Aug. 2, Boston Beer Co. released earnings for the second quarter of 2011. While not terrible, they didn't meet analyst predictions. Boston Beer posted earnings of $1.09 a share, versus expectations of $1.19 a share. Part of this difference was a result of its Freshest Beer Program, in which beer is held in its breweries until ordered based on what sold most recently. In the past, beer sales were projected over future months and then shipped to the distributor, resulting in a product that may have been at the distributor for four to five months before being shipped on to customers.
The new just-in-time system of distribution has raised costs, as new tanks and other upgrades had to be installed. Boston Beer expects 50% of its distributors will be on the program by the end of the year, allowing more and more customers to experience the flavor of Sam Adams as it is when served at the brewery.
... than fancy bottles and cans
As a craft brewer, Boston Beer has always relied on the taste of its beer over fancy packaging. Meanwhile, Anheuser-Busch InBev (NYSE: BUD ) recently announced that it will attempt to grow sales by redesigning the packaging of its leading Budweiser brand, making it redder and focusing on the bowtie logo. Molson Coors (NYSE: TAP ) now has two blue lines on its cans and bottles, making it possible to know when the beer is cold and really cold. Finally, with its new advertising campaign, SABMiller (OTC: SBMRY) has been insinuating that drinkers of light beers besides Miller Light are not "manly."
Personally, I ignore marketing gimmicks and purchase beer based on how well it tastes. Boston Beer's craft heritage and focus on good-tasting beer make it one of Wall Street's Best Hidden Stocks, according to fellow Fool Rich Duprey.
The top man
Boston Beer investors have to rely on the decisions of Chairman and Founder Jim Koch, who owns about one-third of the company's shares. This gives him a lot of power and also makes him truly invested in the success of the company.
The bottom line
As a customer and potential investor, I am excited about the Freshest Beer Program and think it will set Boston Beer apart from its competitors, including craft beer rival Craft Brewers Alliance (Nasdaq: HOOK).
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J&J Snack Foods -- >>> J & J Snack Foods Announces Acquisition of Kim & Scott's Gourmet Pretzels
Jun 8, 2012
http://finance.yahoo.com/news/j-j-snack-foods-announces-200000722.html
PENNSAUKEN, N.J., June 8, 2012 (GLOBE NEWSWIRE) -- J & J Snack Foods Corp. (JJSF) announced today that it has acquired the assets of Kim & Scott's Gourmet Pretzels, a small soft pretzel company based in Chicago which features all natural premium pretzels. Each Kim & Scott's all-natural pretzel is twisted by hand and made from scratch. The pretzels, which offer flavors including stuffed grilled cheese and stuffed pizza, are a great source of whole grains and free from trans fats, preservatives and hydrogenated oils.
Gerald B. Shreiber, J & J's President and Chief Executive Officer, commented, "We are delighted to acquire this prestigious brand and look forward to growing it further. Scott Holstein will remain with the company as Senior Vice President."
"For the past 16 years, we have put our heart and soul into this small business," says Scott Holstein, founder of Kim & Scott's Gourmet Pretzels. "We sought out this opportunity from J & J to ensure bigger and better for our brand, our company and our family."
J & J Snack Foods Corp.'s principal products include SUPERPRETZEL, PRETZEL FILLERS and other soft pretzels, ICEE and SLUSH PUPPIE frozen beverages, LUIGI'S, MAMA TISH'S, SHAPE UPS and MINUTE MAID* frozen juice bars and ices, WHOLE FRUIT sorbet and frozen fruit bars, MARY B'S biscuits and dumplings, DADDY RAY'S fig and fruit bars, TIO PEPE'S and CALIFORNIA CHURROS churros, THE FUNNEL CAKE FACTORY funnel cakes, MRS. GOODCOOKIE, CAMDEN CREEK, COUNTRY HOME and READI-BAKE cookies, PATIO burritos and HAND FULLS and HOLLY RIDGE BAKERY filled handheld products. J & J has manufacturing facilities in Pennsauken, Bridgeport and Bellmawr, New Jersey; Scranton, Hatfield and Chambersburg, Pennsylvania; Carrollton, Texas; Atlanta, Georgia; Moscow Mills, Missouri; Pensacola, Florida; Colton, Vernon and Norwalk, California; Holly Ridge, North Carolina; and Weston, Oregon.
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McCormick -- >>> McCormick Enters Agreement To Acquire Wuhan Asia-Pacific Condiments Co. Ltd., A Leader Of Bouillon In Central China
Aug 20, 2012
http://finance.yahoo.com/news/mccormick-enters-agreement-acquire-wuhan-120000271.html
SPARKS, Md., Aug. 20, 2012 /PRNewswire/ -- McCormick & Company, Incorporated (MKC), a global leader in flavor, today announced that it has signed an agreement to purchase 100% of the assets of Wuhan Asia-Pacific Condiments Co., Ltd. (WAPC), a privately held company based in China. The completion of the agreement is expected to occur in mid-2013 subject to regulatory approval.
WAPC manufactures and markets the well-known DaQiao and ChuShiLe brand bouillon products, which have a leading position in the central region of China. These products complement McCormick's current portfolio of flavor products in China that include spices, seasoning blends and sauces. Annual sales of WAPC's business are approximately Rmb 730 million (approximately $115 million in U.S. dollars). McCormick has agreed to acquire the company for approximately Rmb 900 million (approximately $141 million in U.S. dollars).
Alan Wilson, Chairman, President & CEO of McCormick stated, "McCormick first entered China more than 20 years ago to provide a local source of supply to industrial customers. From this foundation we launched the McCormick brand of flavor products for consumers. Today, McCormick is one of the leading brands of spices and seasonings, with particularly strong category share in the coastal regions. Across both our consumer and industrial business, we operate profitably in China and have grown sales at a 16% compound rate for the past five years.
"The addition of WAPC, extends our broad range of flavors in China with bouillon. In WAPC's top markets, more than half of consumers use chicken bouillon each day at every meal to enhance the flavor of their food. This business is strong in central China, which fits well with McCormick's presence in the coastal regions. The management and employees of WAPC have built a great business and are driving rapid growth. We look forward to working with them to achieve continued success."
WAPC was founded in 1998. The business has approximately 900 employees, a modern manufacturing facility located in Wuhan, China and a network of distributors that serves traditional markets as well as modern grocery stores. Sales of the business have grown at a 25% compound annual rate from 2007 to 2011 as a result of increasing demand, rapid distribution expansion and brand marketing. McCormick anticipates continued annual sales growth of at least 10%.
The purchase price for WAPC is approximately Rmb 900 million (approximately $141 million in U.S. dollars) subject to certain closing adjustments. The transaction multiple is expected to be 12 times EBITDA (earnings before interest, tax, depreciation and amortization). Transaction finalization is subject to regulatory approvals, including anti-monopoly clearance. McCormick expects the acquisition to increase earnings per share in 2014 and be fully accretive in 2015, once integration activity is completed. In 2013, the Company anticipates a slightly dilutive impact to earnings per share due to integration and financing costs, and an estimated $4 million in costs related to the completion of this transaction.
Mr. Wilson further stated, "McCormick has rapidly expanded its presence in emerging markets where consumers have an increased interest in new flavors and an increasing demand for the convenience and quality of branded packaged foods. With the addition of WAPC's business and acquisitions completed in the past 12 months, we expect approximately 15% of 2013 sales to come from emerging markets, a significant increase from 10% in 2011. We are well on our way toward achieving our 2015 goal to have 20% of sales in emerging markets."
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Monster Beverage -- >>> Monster Soda?
August 24, 2012
by: Seth Golden
http://seekingalpha.com/article/827191-monster-soda?source=yahoo
Monster Beverage Corp. (MNST) is not the leader in the energy drink category, but it is running a close second in a highly competitive market. Investors in MNST have been richly rewarded by the company's vast expansion plan which has proven to feed through to the bottom line earnings results over the last few years. As I have outlined before, and in a previous article concerning MNST, I would suggest to investors that the current quarter is the toughest the company has faced in quite a long time.
For the sake of saving readers time, I will list the obstacles the company is facing in the current quarter and for the foreseeable future.
Distributor issues in Central and Western Europe.
Distributor issues in Brazil.
Lofty comparison from Hungary pipeline build in Q3 2011 due to tax implementation.
Continuation of high costs associated with Asia Pacific expansion efforts i.e. Korea and Japan markets.
Lower sales in both Brazil and Australia while the company reduces A&P spend in the regions.
Ever increasing SG&A expenditures.
Expectations to continue opening new markets in the quarter such as Chile, Peru and Taiwan.
Pricing pressure brought on by an increase in competition for both majors and private label competitors.
The potential ceiling, created by the high input costs of goods and distribution, forcing the high costs imposed by energy drink makers through to consumers.
Normal slowing of sales as we head into the back half of the year.
Continuation of a change in drinking habits among consumers as they switch to more healthy alternatives.
Two active class action lawsuits with indeterminate expenses.
One class action settlement with indeterminate expenses.
If you have wondered why there hasn't been another major beverage distributor in the world over the last several decades, look no further than the above mentioned issues a potential major beverage company would have to face. The fact is that Coke (KO) and Pepsi (PEP) have dominated the beverage world due to their respective distribution strength which they created over the last 100 years or so. New comers to the industry are therefore forced to partner with the major's distributor or subject themselves to second and 3rd tier distribution partners whom have less resources and retail reach in the marketplace. As notated in Monster's 10Q filings, in several regions, they do utilize the major's distributor, but in those which they do not, they have seen the expected difficulties encountered by the alternative distributors in the different regions for which they operate. Reaching a fair and equitable profit in these specific regions has been and remains an obstacle for Monster as they toy with decreasing expenditures and increase retail reach in these regions. We believe that monster is on the precipice with several of these tier two and three distribution partners for which the company has to make more long lasting decisions that would propose to enhance profitability in these respective regions. If they fail to address these issues in a timely manner, the lofty multiple which investors have enjoyed, could all disappear. In a sense, these expected YOY gains through initial pipeline builds, in said regions, will have to be offset in other regions or realized with greater losses. The company does have several options with regards to addressing distributor issues which are outlined in the link posted above. However, each option requires the company to increase capital expenditures and take on subsequent margin contraction which will likely feed through to the stock price in a negative way.
Now for the positives which the company can expect in the future. Truth be told, if one does some serious analysis of the company's previous results and speculates forward into the future, there really aren't that many positives for shareholders and the stock valuation. The company has already begun seeing a moderated growth rate this year and expectations offered by analyst suggest further moderation of that growth rate in 2013 and beyond as the company penetrates the remaining markets left around the world. More specifically, Stifel Nicolaus' analyst now sees Monster's growth rate in the mid-teens going forward. The growth rate is naturally going to slow as a company matures, but this is where investors have to accept the potential for a more moderated growth rate in the stock price as well which is usually seen by a rather sharp correction in the direction of the stock price initially as the valuation is reset. It happens to almost every categorized growth company at some point in the stock's history and I think we may see it in MNST in the very near future. There are growth stocks, dividend stocks but have you ever heard of moderated growth stocks? I do hope that I'm wrong. The company does have a strong buyback plan in place, but it has yet to act upon it.
So what can the company do as it matures and achieves a more sustainable growth rate? It really is quite simple and as we understand at Capital Ladder Advisory Group, LLC. the company may be in talks with Soda Stream International (SODA) to create a co-branding deal. A co-branding deal, what's that? First, if you haven't heard of Soda Stream International, here are some details on what the company has to offer: Sodastream International, LTD. If one of the problems which Monster is encountering is distribution, Soda Stream can offer Monster a whole new channel of distribution for its product line. The Soda Stream system is an at-home carbonation system which allows the consumer to create their own carbonated drinks at home. Soda Stream has products in 43 countries around the world and is in many of the same markets as Monster. In fact, some of the countries which Monster struggles for profitability are widely penetrated by Soda Stream. SODA has over 150 different flavored syrups to offer the consumer and at least 4 energy drink syrups which are among the company's most popular flavored syrups.
All over the world, government bodies are finding themselves in the precarious position of needing to find additional funds. Tax implementation is on the rise and many countries have adopted soda beverage taxes while existing soda taxes in other countries have risen like in France earlier this year. France isn't the only country with a tax on soda beverages, Mexico has a tax on Soda products and the UK is also ready to introduce a tax on sugar sweetened soda beverages . In Q3 of 2011, Hungary passed a tax on sugar sweetened soda beverages. Monster's distribution partner in Hungary was moved to initiate an oversized order of Monster products ahead of the implementation of the tax by the government which caused a disruption in that market. Now, Monster will have to comp to this large order in Q3 2012. Have investors considered this little regarded fact as a part of their quarterly due diligence? If you have ever wondered why companies miss estimates unexpectedly, it is usually because of these lesser referenced points of interest, usually glanced over or completely forgotten over time.
So what does this taxation issue have to do with the Monster business as a whole? Well, simply put, as taxation increases for soda products Monster will have to offset this increased cost of goods by passing the cost onto the consumer. In many cases, as has been proven by recent quarterly reports from Pepsi and Coca Cola, price hikes can and have resulted in lower volume of sales. Energy drinks already sell at a premium to other carbonated beverages. How much higher can energy drink producers raise prices before the consumer seeks an alternative.
Did I mention that the Soda Stream energy drinks only costs about 30 cents a can when compared to the average energy drink which costs between $2 and $3 a can? In recent taste tests, most consumers polled could not tell the difference in the taste between a Red Bull energy drink and a Soda Stream energy drink. Don't think for a minute that the markets Soda Stream operates within haven't identified this cost-per-can benefit of the Soda Stream system. Soda Stream's energy drinks are among its highest grossing SKUs for the company. Monster Beverage Corp. has a very identifiable opportunity here to enter into a partnership with Soda Stream; the synergies are becoming ever clearer.
Now let's talk about Brazil. In Monster's most recently reported quarterly results, the company noted that its Brazilian distributor was having issues with procuring ingredients for production and scaling the business in the region to meet the needs of the marketplace. I can't stress enough how important and impacting a distributor can be on any particular market as the distributor is directly charged with driving sales of a company's products and creating brand recognition through marketing efforts. These distributor issues can go from bad to worse in a blink of an eye. Soda Stream entered the Brazilian market in Q2 of 2012 through its partnership with Grupo M. Cassab which distributes Soda Stream's products in the region. Grupo M. Cassab also distributes goods to Argentina which is another highly desired marketplace for both Monster Beverage Corp. and Soda Stream. And the synergies just keep on coming don't they?
It seems as though Soda Stream can really offer Monster a plethora of advantages through a co-branding relationship via an installed Soda Stream loyal user base in 42 countries and growing, a direct line to a cost conscience consumer and a new revenue stream void of potentially increased taxation hurdles. Soda Stream could also help Monster gain market share in the Nordics and Asia Pacific region. Soda Stream has already found success through its Soda Inside initiative. The company has an existing and thriving co-branding partnership in place with Kraft Foods (KFT). The partnership has proven to be so beneficial for both parties that the two companies recently expanded their deal to include additional Kraft brands which will be introduced for the Soda Stream system in the fourth quarter this year. What Soda Stream essentially did for Kraft was to take two brands of Kraft, Country Time and Crystal Light, and revive them by offering Kraft an additional revenue stream for these brands. Soda Stream can do the same thing for Monster Beverage, or for that matter, any beverage maker. Let's not just assume that Soda Stream is the "Superman" of the beverage industry here, ready to save companies from taxation and possible slowing growth. Soda Stream will reap the benefits of strategic co-branding relationships too, especially with "tier one" beverage companies such as a Monster Beverage. As Soda Stream gains global presence it could certainly attract new users to the product placement in stores with a highly identifiable and popular brand logo like a Monster Beverage logo or a Dr. Pepper Logo, shelved along with their proprietary brand products. Such tier one brands would also lend credence to the efficacy of the Soda Stream system and help to eliminate the "fad" cache that has plagued the company in newer markets. Essentially, Soda Stream will benefit from loyal brand consumers whom are not currently partners with Soda Stream. If all you drink is Monster Beverage or Dr. Pepper (DPS), you may not ever use a Soda Stream, but with a co-branding partnership that would offer these branded flavors through the Soda Stream system, you might very well change your mind. It happened for GMCR through its licensing relationships with Folgers, Dunkin Brands (DKND) and Starbucks. The same principals could apply and have been working with Soda Stream and Kraft through their partnership.
Soda Stream has recently found itself to be a highly sought after commodity as it further develops the home carbonation industry on a global scale, offering a new product segment and consumer base for additional partners to enjoy. The company recently signed another Soda Inside deal with Breville Group Limited to produce a new soda machine which will be powered by Soda Stream .
A deal is brewing, but who will be next to partner with Soda Stream is still up for debate. If you take the time to listen to Soda Stream's recent quarterly conference call, the company's management team discusses how they are in discussions with tier one beverage companies with regards to a co-branding deal. Additionally, the company also discussed their desire to aggressively participate in the energy drink market in the back half of the current fiscal year. Well, what does this last statement mean? Soda Stream already offers energy drink flavored syrups and newly developed vitamin enhanced syrups. At Capital Ladder Advisory Group, we put the two above mention statements together and draw our own conclusion. Could Monster be the next partner for Soda Stream or will it be Red Bull or Rock Star? It could also be Dr. Pepper Snapple Group which offers a variety of carbonated beverages which includes its Venom energy drink product.
I almost forgot to mention the synergy which is easily identifiable for the Korean market which Monster is eagerly trying to penetrate with a lack of success over the prior six month period. Much of the incurred costs of doing business in the Asia Pacific is coming from Japan's intense quality assurance procedures and the fact that Korea does not permit energy drinks with certain ingredients if at all. Monster continues to incur expenses in Korea while its products sit at the port of entry, needing to be stored and secured there, and at a cost to the company. Investors are looking for an update on Korea when the company reports in October.
So what does this expansion effort into Korea by Monster Beverage have to do with Soda Stream? Good question indeed. Soda Stream offers the consumer the ability to dose their beverage of choice and personalize the beverage to desired tastes via their home carbonating soda machine and flavored syrups. Because it is a self-dosing system, in many countries, Soda Stream's system is not exposed to the same regulations and/or taxation of certain governing bodies. There is another synergy we forgot to mention with regards to taxation. One of the main reasons Soda Stream flavored syrups don't fall under the realm of such government taxation is because its flavored syrups do not contain high fructose corn syrup. As a point of interest, Soda Stream offers several energy drink syrups around the world, and has a growing consumer base in Korea.
Monster Beverage Corp. will need to address all the issues noted in this article and Soda Stream has admittedly been talking with a number of the major beverage company's. The synergies certainly align themselves for Monster Beverage Corp. and Soda Stream International, but as SODA is so highly sought after in these uncertain economic times, whoever offers SODA the best deal will likely be the next co-branding partner announced by this rapidly growing company.
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Church & Dwight -- >>> Church & Dwight: Acquisition Of Avid Health Could Propel Shares To New Highs
August 22, 2012
by: Robert Broens
http://seekingalpha.com/article/821561-church-dwight-acquisition-of-avid-health-could-propel-shares-to-new-highs?source=yahoo
Church & Dwight Co Inc. (CHD) announced on Monday that it will acquire Avid Health in a deal valuing the firm at $650 million. In a reaction to the announcement, shares of Church & Dwight rose by more than 5.1% in Tuesday's trading session.
The Deal
Church & Dwight announced that it will acquire Avid Health in an all cash transaction, valuing the firm at $650 million. Avid Health is a leader in gummy-form vitamins and supplements, known from its brands VITAFUSION and L'IL CRITTERS.
CEO and Chairman James Cragie commented on the deal:
"The acquisition of Avid's gummy vitamins business represents a great addition to our existing portfolio and brings to our Company a new growth platform in one of the fastest-growing segments of the attractive vitamin / mineral / supplement category."
For its year ending on the 30th of June, 2012, Avid generated annual sales of $230 million. EBITDA came in at $58 million. Church & Dwight expects to leverage its distribution network, operating discipline and support function to achieve cost savings of approximately $15 million in 2014. The acquisition values Avid at 2.8 times annual revenues and 11.2 times annual EBITDA.
The acquisition is expected to finance the deal in a combination of cash and newly issued debt. The deal is expected to dilute 2012's earnings per share by $0.02. The deal is expected to be accretive to 2013's earnings, even when accounting for transaction costs and inventory step-up charges.
The transaction is subject to regulatory approval and is expected to close in the fourth quarter.
Outlook
For the full year of its 2012, Church & Dwight expects diluted earnings per share of $2.41-$2.43, excluding the $0.02 dilutive effect of the Avid acquisition.
For 2013, earnings per share are expected to come in between $2.73 and $2.78, up 13%-15% on the year. Growth is driven by existing businesses and the accretion from the acquisition.
After 2013, the company remains committed to delivering long-term shareholder return targets of 10%-12% per annum.
Valuation
Church & Dwight reported its second quarter results on August the 7th. The company operates with $184 million in cash, equivalents and securities. Church & Dwight operates with $282 million in short- and long-term debt, for a net debt position of $98 million.
The company reported a 3.2% increase in revenues to $696.4 million. It net earned $79.3 million, or $0.56 per share. For the first six months of 2012, the company generated revenues of $1.39 billion, on which it net earned $175.1 million, or $1.22 per share.
Shares of Church & Dwight rose over 5% in Tuesday's trading session, valuing the company at $7.8 billion. Based on the full year outlook, the company is valued at roughly 2.9 times annual revenues, and 23 times annual earnings. The valuation compares to a revenue multiple of 1.7 times for competitor Clorox (CLX). Clorox trades at 17 times annual earnings.
Currently, Church & Dwight pays a quarterly dividend of $0.24 per share, for an annual dividend yield of 1.7%.
Investment Thesis
Year to date, shares of Church & Dwight trade with gains of 22%. Shares rose steadily from a level of $45 in the beginning of this year, to peak at $59 in July.
Over the past five years, shares of Church & Dwight have traded with gains of 150%. Revenues rose from $2.4 billion in 2008, towards $2.8 billion for the full year of 2012. Net income rose from $1.39 per share, towards $2.42 per share for the full year of 2012. At the same time, dividends rose from $0.17 to $0.68 per share.
The acquisition of Avid Health will increase the leverage levels of Church & Dwight, although they will still be acceptable. Over the past years, the company has already significantly fortified its balance sheet, by reducing outstanding debt.
Church & Dwight made an excellent acquisition, which in the short term could boost the stock price to new all-time highs. Despite the premium brands, and stable growing business, I remain on the sidelines. Shares have already made a nice run-up in 2012, and over the past few years. This propelled valuation multiples to very high levels.
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Flowers Foods -- >>> Flowers Foods - Increasing The Dividend Butter On Your Bread
August 17, 2012
by: Guraaf
http://seekingalpha.com/article/813512-flower-foods-increasing-the-dividend-butter-on-your-bread?source=yahoo
Flower Foods (FLO) is a bakery goods manufacturer and marketer. It was founded in 1919 and is headquartered in Thomasville, Georgia. It operates 44 bakeries that produce breads, buns, rolls, snack cakes and other baked items. It has a strong presence in the Southeastern, mid-Atlantic and Southwestern states where its products are distributed to foodservice and retail customers.
Brands
The company's top brands include Nature's Own, Whitewheat, Cobblestone Mill, Tastykake, Mrs. Freshley's, European Bakers, BlueBird, and Mi Casa. Among the company's top regional brands are ButterKrust, Captain John Derst's, Sunbeam, Bunny, Mary Jane, Aunt Hattie's, and Holsum. Its biggest brand is Nature's Own which is expected to generate almost a $1 billion in revenue for 2012.
The company has two operating segments - the Direct Store Delivery (DSD) Segment and the Warehouse Segment. The DSD segment handles fresh breads, buns and snack cakes that reach almost 70% of the US population via a network of independent distributors. The Warehouse segment is responsible for distribution of snack cakes and frozen breads/rolls to customers' warehouses via contract carriers.
Competition
The bakery business is fragmented and there are no other bakery-only stocks listed on the US exchanges. Mexico's Bimbo Bakeries is the largest bakery in the US. It is a private company that owns some of the best known brands including Sara Lee, Arnold/Oroweat and Bimbo. Hostess Brands is another private company famous for its namesake branded bakery items. Other comparable companies include Annie's Inc. (BNNY), B&G Foods Holdings (BGS), ConAgra Foods (CAG), Farmer Brothers (FARM), General Mills (GIS) and Hillshire Brands (HSH) which is the new name for Sara Lee.
Financial Performance
The company has a long-term growth objective of growing organically by 3-5% and an extra 2-5% through acquisitions and mergers. It aims at an EBITDA margin of 11-13%. The company has projected an EPS growth of 4-8% for 2012. The company has been able to launch new products successfully over the last few years. This has helped the company to grow revenue and profits in the high single digits. Flower Foods has made more than 100 small-to-medium size acquisitions since it was founded. Some key acquisitions in the last 5 years include Lepage Bakeries in May 2012, Tasty Baking in May 2011, Leo's Foods in Oct 2009, Bakery Mix Plant in May 2009 and ButterKrust Bakery in August 2008 and Holsum Bakery also in August 2008. The management has indicated that it will continue to look for meaningful acquisition opportunities around the country.
Cash Distribution
The company has used cash quite effectively over the last few years. It pays a quarterly dividend of $0.16 per share which amounts to a future yield of approximately 3% at current market price. The dividend growth rate for the last year was 12.9%, and the compounded annual growth rate over last 3 years was 15% while the DGR for last 5 years was 22.5%. The dividend growth rate is definitely slowing down as the payout ratio has increased. I expect the company to maintain dividend growth in high-single digits over the next few years.
The company continues to use a smaller cash amount every year to buy back shares. It is always encouraging to see companies that pay a good dividend as well as buy back shares regularly. This is helps reduce the impact of equity dilution due to management stock options and acquisitions and often prevents the stock price from falling irrationally during a period of prolonged market mood swings.
Quarterly Results
First quarter results announced May 24 were very encouraging. Sales increased 12% to $898 million helped by a 7.9% increase due to Tasty Baking acquisition in 2011. However, due to increased input costs, the diluted EPS fell 6.7%. The company announced a $31 million expansion of its Oxford, PA bakery that would help bread production. Second quarter results announced August 14 were similar to first quarter results. Lepage Bakeries acquisition was completed in July which fueled a 6.1% increase in revenue over the second quarter of last year. However, the EPS was flat at $0.21. The company has given an indication of 7-9% increase in sales for the current year over 2011. The company expects an EPS of $0.96 for the current year which gives a forward P/E of approximately 21 at current market price of $20.
Concluding Remarks
The stock is not cheap but I expect the company to increase profits and dividend distributions in the coming years. I have faith in the company's management and believe that they will continue to make meaningful acquisitions while maintaining organic growth initiatives that will lead to faster growth than seen in the recent few quarters. I will add to my current position if the stock comes down to $18 at which point it will yield 3.5%. As a corollary, if the stock runs up to $26 then I will sell it to book profits. I will then look elsewhere for better yield and stronger dividend growth prospects.
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Name | Symbol | % Assets |
---|---|---|
Procter & Gamble Co | PG | 15.51% |
Coca-Cola Co | KO | 10.95% |
PepsiCo Inc | PEP | 9.55% |
Walmart Inc | WMT | 8.35% |
Costco Wholesale Corp | COST | 6.49% |
Philip Morris International Inc | PM | 6.29% |
Altria Group Inc | MO | 4.16% |
Mondelez International Inc Class A | MDLZ | 3.75% |
Colgate-Palmolive Co | CL | 2.78% |
Kimberly-Clark Corp | KMB | 2.27% |
Name | Symbol | % Assets |
---|---|---|
Procter & Gamble Co | PG | 15.15% |
Coca-Cola Co | KO | 10.44% |
PepsiCo Inc | PEP | 9.20% |
Walmart Inc | WMT | 8.01% |
Costco Wholesale Corp | COST | 4.78% |
Philip Morris International Inc | PM | 4.21% |
Mondelez International Inc Class A | MDLZ | 4.04% |
Altria Group Inc | MO | 3.84% |
Colgate-Palmolive Co | CL | 2.88% |
Kimberly-Clark Corp | KMB | 2.39% |
Name | Symbol | % Assets |
---|---|---|
Procter & Gamble Co | PG | 15.93% |
Coca-Cola Co | KO | 11.64% |
PepsiCo Inc | PEP | 10.39% |
Walmart Inc | WMT | 8.62% |
Mondelez International Inc Class A | MDLZ | 4.91% |
Philip Morris International Inc | PM | 4.69% |
Costco Wholesale Corp | COST | 4.67% |
Altria Group Inc | MO | 3.90% |
Colgate-Palmolive Co | CL | 3.74% |
Kimberly-Clark Corp | KMB | 2.90% |
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