The mood is bubbly these days at ginger ale brewer Reed’s Inc. after a run of good news.
Improved quarterly earnings, an expansion of its bottling plant and new distribution agreements have the small Rosewood company riding high. Indeed, just last week Reed’s reached a deal with a Portland, Ore.-based pub chain to serve its beverages in 42 of its locations.
“It’s feels like we’re in the fastest growth period in the company’s history,” said Chief Executive Christopher Reed.
As part of its deal with pub chain McMenamins, Reed’s sodas will not only be sold in the restaurants, but Reed’s Extra Ginger Brew will also become an ingredient in a new mixed drink called the New Zealand Mule.
Last month, the company also announced a partnership with the Beverage Network of Maryland to distribute its line of drinks in supermarkets and convenience stores in the mid-Atlantic region. Shortly thereafter, Reed’s said it had expanded its shelf space in 300 A&P supermarkets in the Northeast.
Among the company’s top sellers are Reed’s Ginger Brew, Reed’s Natural Energy Elixir and Virgil’s Root Beer.
On top of all that, the company said it will begin shipping private-label drinks to two major supermarket chains in a major expansion of its product line beyond ginger brews.
The private-label beverages are in the style of fruit-based Italian sodas, which are generally distributed in odd-sized glass bottles, a logistical problem for other drink makers. The company’s plant is the only one in North America that can handle such unusual bottles, Reed said.
“So far, we have knocked down two (supermarket chains) and are in serious negotiations with another four or five,” he said. “Any one of these could dramatically change the company and our profitability. (Stores) are paying top dollar for this type of production.”
To handle the dramatic growth in business, Reed’s has doubled the capacity of its bottling plant, which will allow the company to realize as much as $7.5 million in additional annual profits.
Already, earnings are looking strong. Reed’s recently reported second quarter earnings of $134,000, a significant improvement over the $397,000 loss in the same quarter last year.
For all the good news, however, the company’s stock price has not fared as well. Last week, Reed’s said it would issue newly created common stock and warrants to a private investor in a deal that will net the company $621,057, according to a regulatory filing.
Reed said the new capital, which diluted outstanding stock by nearly 5 percent, was a move to ensure that the company could handle its current growth push.
Shares closed Oct. 8 at $1.81, down 9 percent since the announcement.
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