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That wasn't exactly what I would call a gap, myself.
Hey. Gaps happen.
I saw. But didn't buy.
Too much time between now and the eoy.
Besides, I'm worried about the chart formation that could be forming.
Remeinds me of a certain dandruff shampoo. ( ;
Oye, vey, did you see the swing today? Worse than Mama's blintzes. :)
Didja buy sub six?
Trueheart
A possible problem I see is that there haven't been many opportunities for large shareholders to take profits on this run.
I wouldn't mind being able to reestablish a position here south of $6. But for the sake of everyone holding, I'm rooting against me being able to. ( :
This is a nasty one day drop. Volume is heavy but not that heavy. Also number of O/S shares went down to 11.3 M. Institutions are not selling it seems. It will kind of flatten out here it seems for some time before resuming an upward trend. It is closing below its 50 day MA which is at 7 currently.
True, True. This is a nasty one-day drop.
But spread out over a month or two, it won't be noticed nearly as much if it drops further.
Could be, Slo. At one time today it was down approx 15%. But jumping into REED with market conditions as they are may result in a severe headache. :)
Trueheart
So, sell on the news, eh? Or in this case, fins.
I wonder if it'll decline enough to warrant reentry.
Slo, my opinion is that it's year-end unloading after the spectacular gains of this year. Funds and major stockholders want to make their portfolios look good.
And, of course, the market's decline doesn't bode well.
Trueheart
No problem and thanks. I should have PM'd you.
Trueheart
New Institutional Investors
From http://www.nasdaq.com/symbol/reed/institutional-holdings
I've only included funds that have reported, more should be updated soon.
New Institutional Investors:
Driehaus Capital Management LLC bought 317,561 shares in Q3.
Bridgeway Capital Management bought 20,700 shares in Q3.
Spark Investment Management LLC bought 17,300 shares in Q3.
PNC Financial Services Group Inc bought in with 1,000 shares in Q3.
Previous Institutional Investors:
EAM Investors LLC sold 63,488 shares in Q3 and still own 324,930.
Blackrock Fund Advisors sold 1,730 shares and now own 13,760.
UBS AG bought 686 shares and now own 1,060.
Stockerzzz1, Thanks for the detailed notes. Kombucha is going gangbusters, and 2013 is going to be a phenomenal year for Reeds.
Listening to Chris Reed, he reminds me of Bill Gates. His voice is similar, and they have the same combination of business smarts and boundless enthusiam that you see in people who love what they do and are really good at it.
Q3 Call Notes (long)
(Chris at jury duty so speaking softly and keeps jumping in and out of call, with CFO and COO picking up at various points).
Private Label (PL) up due to better contract terms
Kombucha (K) responsible for gross margin decline (plant and labor intensive)
K margins higher than others
Paid down $77,000 in long term debt
Chris:
• Q3 usually has less YOY growth
• Main activity at HQ is the launch of K
• Data suggests that they have a winner in a tough category
• One company (GT Synergy) is dominating the Kombucha market with 90% of the business
o Estimated at $150-$200 million in wholesale sales with no defined #2 competitor.
• Reed’s still tinkering with plant efficiency, but Reed’s has pushed the limits with their technology because of things like the curved glass with a label on it
• Efficiencies are working themselves out and they expect that Q1 will smooth out completely
• Results of coming in of Kombucha
• Didn’t ignore others, new distribution agreements
• Geyser agreement came because of Kombucha
• Told sales team that their whole commission structure is going to be based for the next couple months on Kombucha
• Kombucha line dollars sales could anywhere from 33% to 200% of core business, too early to tell now.
• Bidding smarter on the private labels, anticipate better margins moving forward on that
• Lots of PL accounts have come back, lots of new business for 2013.
• Hopefully Kombucha is the biggest driver of growth for the company.
• K has over 800 new accounts, the universe is probably 10,000 accounts with reed’s that they could put K in, 3,500 whole foods type stores as well.
• They will be developing new K flavors, will most likely have some new ones in Q1. Already getting lots of requests. Chemical engineers have been developing them.
• PI helped with the development of K flavors because they have been knocking off sodas for the PI.
• It would be shocking to Chris if their prediction that they move into the #2 competitor slot as they believe they will.
• Going into 2013 is the most exciting time in the company’s history.
• Haven’t even tapped into convenience yet.
Question 1:
o Insider acquisition – Why did 2 insiders buy stock that is greater than their annual salaries?
• Undervalued tremendously to start the year, switched IR to in-house, Chris is on the road talking about the stock (5-6 days this Q) and would do more but too busy, Annie’s Natural went public and that had a effect because it opened peoples eyes to natural foods.
Question 2:
o Rollout of Kombucha into Trader Joe’s or Publix?
• Have already started picking up some supermarket chains, but initial rollout in the Southeast will be with Whole Foods. TJ’s has not made up their mind on if they will sell Kombucha.
Question 3:
o Spend to launch for Kombucha for the 800 stores? Margin?
• In a perfect world it’s a little bit more per bottle to produce than a bottle of ginger brew but you can charge twice as much. To morph plant into Kombucha production facility cost some money but it should level out. Believe they are producing it more efficiently than most because of their brewing experience.
• It would be disappointing if they didn’t have at least $5 million in K sales within the first 12 months of this launch.
Question 4:
o Rolled out aggressively with K, you will see some BOGO type offers but they will be specific. No big slotting expense with K which is great, it’s a one-time slotting fee.
o Secondary pull through with K, some stores have 3-4x pull through. It’s all about taste, not even because of marketing.
Question 5:
o How many people does Reed’s reach?
• Quite frankly, whole US.
• DSD, whole west coast is covered. Pretty much covered in Maine down to Florida.
• Working our way in.
? Just opened up Chicago. Got Utah.
• Won’t be long before they have the whole country covered.
o Chris:
• Sorry, I got dropped off the call 5 minutes ago, I have jury duty today.
• In 99% of natural food stores.
• Picky about distributors, it took us a while to get into San Fran and 18 months to get into Chicago.
Question 6
o Sorry I forgot and signed up for jury duty this weekend, for K we have it as a moving target but we’re feeling better about it all the time. PL has been increasing and we can get $2-3 million more next year. Branded does about $4 million more each year.
o We’re hoping to hit $40 million this year, that’s not guidance or anything but just generally on what we think we could do. We could spend more of the revenue to increase growth but don’t want to be unbalanced.
o Our K is premium because
o We we use spring water instead of city water, oylang tea, and we age it longer for more health properties.
Question 7:
o Some of the PL business in seasonal business in celebration bottles. Skew heavy in 4th Q. But now we have picked up some good summer business so we should see it level out soon.
o Generally, our PL runs 3-4% behind margins on branded business, the thing about PL is that you don’t have fees (?), K will be higher margins could be about 5-10% higher. PL contracts could be all over.
Question 8:
o We’re brewing it so it’s not alcoholic, our recipe is proprietary. We keep alcohol under the .5% max. We usually keep it under .2%. Our K is alive and some K companies dilute their K. Ours is not diluted so the taste is good.
o We’re not making this bottle for you (caller), we want to make it for the market that is out there worth $200 million. Some people say it tastes vinegary, but we are going after those K drinkers.
o No liability if people don’t refrigerate it because it’s like OJ, milk, etc.
Question 9:
o K probably only in 15% of their accounts.
o Went into a hard launch on Nov. 1
o It’s so young into the K launch but it’s not hard to sell.
o Probably bringing in 30ish accounts new day.
o Sometimes sell K for $3.99 at full price or 2 for $5. Other company is selling it for $3.50ish.
o New flavors are already being developed for the next round. Next bring trade show in March will likely get some new flavors.
Question 10:
o We’re not putting out our specific brewing processes but we are producing 20,000+ cases (12 per case) of K and we’re gearing up for 30,000+ cases per month.
Sorry, I sometines type way too fast!! There is always a possibility of a buy out.
CC reminder.
The Company will conduct a conference call @ 4:15PM EST today, 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.
Dark Lady, what is "There us akwats...?"
Thanks.
Trueheart
I am out on the sidelines right now. I thought it was fairly valuated near 8. I think they will have to show significant increases in quarterly profit to get it really going. If it does I may be back in. In the mean time I am comfortably in others. There us akwats the possibility of a buy out.
Pull up the one year chart. It's in the third stage of a very long run. I sold at $7, thinking it was due for some consolidation. DarkLady I think sold most of her holdings shortly after I did, but a little higher.
The "easy money" was made. Now, it gets a little harder. ( :
This stock is truly a Yo-yo. It is giving me a lot of heartburn. What's the prognosis here? Is it just to shake the weak hands? With 23% sales increase in the last quarter and quite a few new agreements in Oct. & Nov, sales projections should be higher.
What do you guys think? Are the charts breaking down now? slojab, DarkLady, stockerzzz1 - what are your thoughts on this stock?
Reed's and Snoop Dogg Join Forces to Help Jamaica (Video)
This company is rock solid!
Great Kombucha read comments from Chris Reed
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.
Q3 Call - 11/14 - 4:15 EST
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.
Reed's Inc. 3rd Quarter 2012 Revenues Increase 23%
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/.
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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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nice small cap network write up
http://www.smallcapnetwork.com/Reed-s-Inc-REED-is-One-to-Watch/s/via/19047/blog/view/p/mid/1/id/54/
That's what? 4 or 5 new distribution agreements they've announced in the past couple of months?
The results in sales won't show up for awhile, of course, but the company might make some projections.
The announcement yesterday just reversed the downslide that we were seeing. I did not see it break the 20 day EMA and held on. That was good. Hoping for a rally here on till the earnings when they, hopefully, make some bold predictions.
Reed's, Inc. Announces New Distribution Partnership for Chicago
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."
I sold most of my position, took profits. I think the stock is slightly overvalued above 8. They need additional profits to propel the price higher. I am sure it will come. I may be back in. I have it on my radar. I saw more profitable possibilities.
If you want my technical analysis. I trade weekly, not daily. The weekly have started to roll over. The Worden Brothers propietary indicators are still strong. It was OK to exit, cheap to get out of and back into. Chalkin is failing, the Trix and PPO are turning, Tne MACD and ADX are about to turn.
technically REED is sitting right at support. But it has hovered just above the 50 since March, and with the 50 above the lower bollinger and RSI with a little room before it's usual base, we could see the high 6s. Stock is in a wait and see mode, but it did try a near term triple bottom today. All of this is on such low comparative volume (which is a positive)that it is impossible to confirm. If you have been holding for a while, I wouldn't worry. I just got in, so I would like to add at a lower price.
The stock is not a value play -yet. So they are going to have to show something to keep people interested.
Yeah, earnings are slated for Nov. 13th. I confirmed that yesterday. But the price action on REED is disturbing. It has broken through its 5 day EMA and the 20 day EMA.
DarkLady, you there? What do you think of the technicals? We are in the quiet period so there won't be any updates.
Cheers....
I take that back, yahoo puts earning around Nov 13, which would fit the pattern of their previous releases.
REED has been smart making a better product and pricing it just under their main competitor. Chris said he had never seen anything sell like the Kombucha, couple that with all the other reviews I have seen... We have a winner.
He said in the webcast they did a while back they would be out shortly. It seems that earnings usually come around the second week of the month. Yahoo has no date listed.
They can't predict when a company will report earnings.
They have until Nov 14 (45 days after Q ends) to report.
Last year, for example, they reported Q3 earnings on Nov 14.
olddog.....,
It is not in the filings but E*trade shows earnings on the 2nd. I am assuming that is true.
Cheers...
Great Youtube video. Girl says Reeds Kombucha was the talk of the expo.
I am relatively new to REED, is there something in the company's filing history that leads you to believe we will see results Nov 2?
Thanks.
I am very bullish on Kombucha
Snoop Dogg Loves Reed's
Snoop Dogg has 1.3 million followers on Instagram. He just posted a picture of his refrigerator fully stocked with Reed's and Virgil's:
"Shout out to tha homies from @reedsgingerbrew for keepin me stocked!"
8,750 people have liked it so far, and 187 have commented on it.
It's also on Reed's Facebook page for those interested.
Knock, knock....Anyone home? No activity for a few days now on this board.
Seems like the MM are flushing the weak hands right before results on Nov. 2nd. Any inputs anyone? No news for some time as we are in the quiet period.
Cheers.
Good post, stockerzzz1.
Now Seeking Alpha is onto us as well. This is looking great!
Dr. Oz Touts Stevia
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.
>>> 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
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