They explained during the firm’s fourth quarter earnings call March 26 that until recently Reed’s beverages, including Ginger Brew, Komucha and craft sodas have sold predominately in the natural sector, but the company sees significant potential in other channels.
In particular, it is excited to announce soon partnerships with several large liquor companies in America that it hopes will increase awareness and sales by building on the emerging popularity of the Moscow mule, a vodka and ginger beer-based cocktail.
“The Moscow mule is probably the most successful or most popular, fastest growing cocktail in America” right now and it is driving sales of Reed’s Extra Ginger Brew, which is the firm’s No.1 selling and fastest growing product, said Chris Reed, CEO and founder of Reed’s.
Reed’s hopes to further capitalize on this trend by selling ginger brew with vodka to make Moscow mules through the partnerships with liquor companies, he explained.
He also hopes that the partnerships will boost sales of the company’s latest beverage – Reed’s Stronger Ginger Brew – which launched March 3 and has 50% more ginger than Reed’s Extra Ginger Brew.
“We’re very, very excited to launch a product that looks to have major legs and is dovetailing nicely into new relationships developing for Reed’s in the liquor industry,” Reed said, adding the firm will showcase it at the 2015 Nightclub and Bar show in Las Vegas March 31.
Reed is not worried that the partnerships with liquor companies could tarnish the firm’s image in the natural channel. He explained that Reed’s has teamed up unofficially with liquor companies in the past to promote dark and stormy cocktails that are made with ginger beer and rum and other mixed drinks. It has not seen a backlash from that, he said.
Plus, “while the natural food industry may seem very pure, they still party,” he said, noting that at Natural Products Expo West “we had a line out the door of people picking up vodka and ginger beer in our booth.”
Expanding in convenience
Reed’s also is exploring the convenience store channel, which consumers increasingly are shopping for foods and beverages.
The company attended the National Association of Convenience and Fuel Retailing show last October for the first time and was “pleasantly surprised that the products are not too advanced for the convenience store identity.”
Since the show, the firm gained distribution in 500 to 1,000 convenience stores out of 50,000 to 100,000 in the U.S.
“It is a very large new channel for growth for Reed’s,” Reed said.
Supermarket potential continues to grow
Finally, Reed’s is continuing to expand in mainstream supermarkets, where is sees great potential.
“Even though we’re in the supermarkets for five years, most of our new business in the supermarket trade has happened in the last two to three years,” Reed said. He noted that sales of its products have increased 30% in supermarkets in the last 52 weeks.
There are now 35,000 supermarkets with Reed’s products, or about 8% of all in the U.S., which is a 118% increase from a year ago, Reed said. (Read more HERE.)
This expansion helped net sales increase 16% to a record $43.4 million in fiscal 2014 from the previous year, the firm said. Gross profit also increased 20% to $13 million and gross margins improved from 29% in 2013 to 30% in 2014, it said.