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REEDS, Inc. Message Board

  • netprophecy2 netprophecy2 Mar 26, 2013 12:28 AM Flag

    why is the data for the quarter so obscured? seems like intentional confusion

    in the press release. reed is oddly not able to state they can make an actual profit selling soda. i do not get it. and the K margin is appears marginally better than soda, while they said it was much better. i think the stock sells off a little tomorrow, as this is just not all that impressive. it is a bit irritating. also strange is the company's turn from product announcements to financial and investor announcements over the last three months. seems desperate. but i have not listened to the cc yet. i just thought the PR was terribly written or obviously avoiding how they did for the quarter.

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    • Some replies to your post are in order-
      "surprised" the sodas sold well in January? but reeds is a soda company primarily, not a K company. the soda market is vast, and K market is tiny. why the fascination? the effort should be primarily in soda.

      The greatest effort should be focused on the markets that are growing the fastest and where the allocated dollars will yield the highest return. The Komb market is at its very infancy and surpassing the growth of what can be expected from RGB I.e CSD (that's obvious to anyone). Now, with a sole dominate player in that space, it makes sense to use your available resources and to go after those K market dollars. Reed's is a great brewer of quality tasting beverages. The products they put out in the marketplace are penalized because CR loves to pack the best (unfortunately costly to mfg and they take it down) ingredients in them. In all candidness RGB's are outstanding, but they will not return the highest ROI. However, if your a superior brew master at creating flavor beverages as CR is, then it makes perfect sense to get on a train that's has higher margins. If the plan is executed properly (followed to the T), they can easily take away share from the leader in the cat and even surpass them. CR loves his craft and that passion will win out in a shoot out in my op.

      sure they can be corrected over time. and it will just take a year or so correct the mistakes. good if you didn't just lose half your investment. not so good if you did.

      They corrected the bottle issue now and its a done deal. You're correct is was a mistake to keep them out in the stores if they deterred sales and were flawed. I don't know if those labels changed shape after the bottles were out the door or over time once they hit the stores. Tiny mistakes are costly- and the label was an example- live and learn.

      the roll-out really screwed up everything here.
      A roll-out is how you introduce your product and make sales.

      All will B fine!

      • 2 Replies to boardwalk97
      • Reed's could be in for more soda sales surprises, not just January's. Wegmans and Harris Teeter are really large upscale grocery stores that open new stores every few months in MD/VA/DC area and are very big Reed's/Virgil's soda customers. Maybe Reed's was caught off guard by the growth in the upscale grocery store segment.

      • It always seems as though Chris want's to try and reinvent the wheel when trying these new launches and instead of bringing in people with experience there are hiccups. The good news is that they always seem willing to learn as the process goes on and things get more efficient the longer they do something.It was probably very expensive to have to deal with and change the labels and deal with the return expenses of short dated product, but these are hopefully one time issues that will not be repeated.

        The margin on the Kombucha is higher than the soda, but the distribution expenses are also higher as the product needs to stay refrigerated from end of production to shopping cart.In addition inventory management of the Kombucha is much more important as it has a more limited shelf life than the soda and there is a higher potential for the need to write off/credit customers for spoiled product.

        It appeared as though the fourth quarter would have tough comps because the bump in last years holiday shipments seemed to be due to store brand sparkling juice orders. that type product did not seem to get as much placement in the fourth quarter of 2012 as 2011.Whether it was Reeds products or say the store brand at Trader Joe's.At Trader Joe's the placement went from multiple end caps through out the store to a few slots on a shelf. The sparkling soda at other retailers seemed to follow the same pattern.That being said I was a little surprised at how negative the effect on sales was in the fourth quarter.

        Needless to say , the products that slipped were more seasonal and should not have as much of an impact on the first quarter. Top line sales in the 8 to 8.5 million range does not seem out of the question with the roll out and sampling on f the new product. the initial roll out of the Kombucha should definitely help the numbers for the first 2 quarters but after that it will depend on the adoption rate of people who sampled the product.

    • If margins lower then any publicity traded company wouldn't want investors to know. If margins are really high then any company wouldn't want its competitors and especially customers to know. The only alternative left is to keep them confused.

 
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