Reed’s Soda Adds Pop to Its Offering

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An L.A.-based manufacturer of ginger soda, candies and ice cream is taking its public offering directly to consumers.


Reed’s Inc. is advertising 2 million shares of common stock at $4 a share on soda bottle hang-tags an approach that Chris Reed, the company’s founder and chief executive, estimates will generate 8,000 to 12,000 investors.


Reed speaks from experience. Two years ago, the company racked up $1 million from 174 investors who pitched in $50 to $500,000 after spotting tags and ads seeking capital.


That funding helped spur 20 percent annual growth at Reed’s, which reached about $10 million in sales for the year ended June 30. Reed plans to use money raised in the current public offering to take on competitors like Hansen’s Beverage Co. and Jones Soda Co.


Reed’s is already selling its soda to Whole Foods Inc., Trader Joe’s Co. Inc. and Albertson’s Inc. With additional distribution, Reed said the company should grow up to 400 percent in the next three to four years. “We don’t envision a problem in our next phase of growth,” he said.


Reed said the time is right for the offering because investors are looking favorably on the stocks of natural soda companies. Jones Soda Co.’s shares are trading in the $5 range after trading slightly above $3 earlier in the year.


Peter Sharma, a manager at underwriter Brookstreet Securities Corp., said Reed’s offering, at about two-and-a-quarter times current sales, is priced aggressively in the marketplace given the company’s loyal following.


The offering will leave Reed with a 46 percent stake in the company.

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