Reed's Stock

Reed's, Inc. (Reed's) owns a portfolio of handcrafted, natural beverages.

Reed's two core brands are Reed's, which includes Reed's Craft Ginger Beer and Reed's Real Ginger Ale, Reed's Mules, and Reed's Hard Ginger Ale, and Virgil's Handcrafted sodas. Reed's uses this same handcrafted approach in its Reed's Real Ginger Ale and Virgil's line of great tasting, bold flavored craft sodas, including its award-winning Virgil's Root Beer.

The company is the leading ginger beer in the U.S.; and Virgil's is the independent natural full line craft soda and is a leader in the craft soda category.

The company offers its portfolio of natural hand-crafted beverages in the craft specialty foods industry as natural alternatives to the mainstream carbonated soft drinks (CSD) market in the United States as measured by IRI Multi Outlet scan data. The company's products are sold across the country and internationally in the following major channels: natural food, specialty food, grocery, mass merchant, convenience, club, drug, liquor, and on-premises locations (bars and restaurants).

Products

The company makes its hand-crafted beverages with only premium, natural ingredients. Its products are free of genetically modified organisms (GMOs) and artificial preservatives. The company has developed several product offerings. In 2019, the company streamlined its focus to its core categories of Reed's Ginger Beverages and Virgil's Craft Sodas. In 2020, it launched its new line of Reed's Real Ginger Ales, in both Full Sugar and Zero Sugar varieties, made with fresh organic ginger. In 2021, the company extended its Ginger Ale offerings with Mocktails and it enters the alcohol space with the launch of its Ready-to-Drink (RTD) Classic Mule that is 7% alcohol by volume (ABV) and Zero Sugar and Hard Ginger Ale, which is 5% ABV and Zero Sugar.

Reed's Craft Ginger Beer

Reed's Craft Ginger Beer is set apart from other ginger beers by its proprietary process of brewing fresh ginger root, its exclusive use of natural ingredients, and its authentic Jamaican-inspired recipe. It offers different levels of fresh ginger content, ranging from its lightest-spiced Original, to its medium-spiced Extra, and finally to its spiciest Strongest. The company also offers three sweetener options: one with cane sugar, honey, and fruit juices; one with honey and pineapple juice; and another without sugar (Zero Sugar) made from a blend of natural sweeteners. In 2021, the company expanded its Extra Ginger Beer portfolio into cans offerings.

As of December 31, 2022, the Reed's Craft Ginger Beer line included five major varieties with a mix of bottles and cans:

Reed's Original Ginger Beer: The company's first to market product uses a Jamaican-inspired recipe that calls for fresh ginger root, lemon, lime, pineapple juice, honey, raw cane sugar, herbs, and spices.

Reed's Premium Ginger Beer: The company's Original Ginger Beer sweetened with honey and pineapple juice. (No cane sugar added.)

Reed's Extra Ginger Beer: Contains 50% more fresh ginger than Reed's Original recipe for extra spice.

Reed's Strongest Ginger Beer: Contains 115% more fresh ginger than Reed's Original for the strongest spice.

Reed's Zero Sugar Extra Ginger Beer: Launched in 2019, it uses a proprietary natural sweetening system for a zero-calorie version of the company's Reed's Extra Ginger Beer.

Reed's Real Ginger Ale

Reed's Real Ginger Ale is unique for the category because it combines real fresh ginger with the classic, refreshing taste. It contains nothing artificial and is non-GMO (genetically modified organism) project verified. The company offers two sweetener options: one with cane sugar and the other with its zero-calorie proprietary natural sweetening system.

Reed's Real Ginger Ale: Launched in April 2020 in standard and sleek 12-ounce cans. It is the only mass market ginger ale made with organic fresh ginger.

Reed's Zero Sugar Real Ginger Ale: Also launched in April 2020 in standard and slim cans. It uses proprietary sweetening system to match the taste of the cane sugar version in a zero-calorie drink.

Reed's Mocktails: In 2021, Reed's line extended its Zero Sugar Ginger Ale, with the launch of Mocktail Flavors. It uses the company's proprietary sweetening system to match the taste of the cane sugar version in a zero-calorie drink. The two flavors are Shirley Tempting and Transfusion.

Reed's Real Cranberry Ginger Ale: This seasonal product, launch in the fall of 2021 is the company's Real Ginger Ale with cranberry added. It is a consumer favorite during the holiday season and is available October through December.

Reed's Ready to Drink

Reed's Zero Sugar Classic Mule: Launched in 2020 and expanded to 42 states in 2022, Reed's alcoholic offering is packed with REAL, fresh ginger root and made through a handcrafted brewing and fermentation process. It contains 7% ABV, and a light-spice flavor profile with no artificial colors, gluten, GMOs or caffeine.

Reed's Zero Sugar Stormy Mule: Launched in 2022, the Stormy is the perfect companion to the company's Classic Mule, the Stormy Mule is the ultimate rum flavored alcohol and ginger beer. It contains 7% ABV, and a light-spice flavor profile with no artificial colors, gluten, GMOs or caffeine. It is the ultimate stormy, made with fresh ginger root, to be enjoyed anytime, anywhere.

Reed's Zero Sugar Hard Ginger Ale: Launched in late 2002, the company's line of light refreshing hard ginger ales are available in four flavors: Mango, Cherry Lime, Strawberry Watermelon and Pineapple Coconut. They contain 5% ABV, 100 calories and zero carbohydrates and have no added sugar, artificial colors, gluten, GMOs or caffeine. They are made with fresh ginger root, to be enjoyed anytime, anywhere.

Virgil's Handcrafted Sodas

Virgil's is a premium handcrafted soda that uses only natural ingredients to create bold renditions of classic flavors. The company don't use any artificial preservatives, any artificial colors, or any GMO-sourced ingredients, and its Virgil's line is certified kosher.

The Virgil's line includes the following products:

Handcrafted Line: Virgil's difference is using natural ingredients to craft bold, classic soda flavors. Virgil's Handcrafted line includes Root Beer, Vanilla Cream, Black Cherry, and Orange Cream.

Zero Sugar Line: Virgil's launched a new line of Zero Sugar, Zero Calorie craft sodas in 2019. Each Zero Sugar soda is sweetened with a proprietary blend of natural sweeteners with no added sugars and is certified Keto. This natural line of Zero Sugar flavors includes Root Beer, Cola, Black Cherry, Vanilla Cream, Orange Cream, Lemon-Lime, Ginger Ale, Grapefruit and Dr. Better.

Primary Markets

The company targets a smaller segment of the estimated $29 billion mainstream carbonated and non-carbonated soft drink markets in the United States. Its brands are generally considered premium and natural, with upscale packaging. They are loosely defined as the craft specialty bottled carbonated soft drink category.

The company sells to popular natural food and gourmet retailers, large grocery store chains, mass merchants, club stores, convenience and drug stores, liquor stores, industrial cafeterias (corporate feeders), and to on-premises bars and restaurants nationwide and in some international markets. It also sells its products and promotional merchandise directly to consumers via the Internet through its Amazon storefront, which can be accessed through the company's web site, www.drinkreeds.com.

Some of the company's representative key customers include the following:

Natural Stores: Whole Foods Market, Sprouts, Natural Grocers by Vitamin Cottage, Fresh Thyme Farmers Market, and Mother's.

Gourmet & Specialty Stores: Trader Joe's, Bristol Farms, Lazy Acres, The Fresh Market, and Central Market.

Grocery and Mass Chains: Kroger (and all Kroger banners), Albertson's/Safeway, Publix, Food Lion, Stop & Shop, H.E.B., Wegmans, Target, and Walmart.

Club Stores: Costco.

Liquor Stores: BevMo!, Total Wine & More and Spec's.

Convenience & Drug Stores: CVS Health and Rite Aid.

Distribution Network

The company's products are brought to market through a flexible and fluid hybrid distribution model, which is a mix of direct-store-delivery, customer warehouse, and distributor networks. Its product reaches the market in the following ways:

Direct to Natural & Specialty Wholesale Distributors: The company's natural and specialty distributor partners operate a distribution network delivering thousands of SKUs of natural and gourmet products to thousands of small, independent, natural retail outlets around the U.S., along with national chain customers, both conventional and natural. This system of distribution allows its brands far reaching access to some of the most remote parts of North America.

Direct to Store Distribution (DSD) Through Non-Alcoholic and Alcoholic Beverage Distributor Network: The company's independent distributor partners operate DSD systems, which deliver primarily beverages, foods, and snacks directly to retail stores where the products are merchandised by their route sales and field sales employees. DSD enables it to merchandise with maximum visibility and appeal. DSD is especially suited to products frequently restocked and responds to in-store promotion and merchandising. The company primarily focuses on expanding its DSD network on a national basis.

Direct to Store Warehouse Distribution: Some of the company's products are delivered from its co-packers and warehouses directly to customer warehouses.

Wholesale Distribution: The company utilizes a network of five independent distribution and consolidation centers across the United States to store and distribute its products. The company's Wholesale Distributor network handles the wholesale shipments of its products. These distributors have a warehouse and distribution center, and ship Reed's and Virgil's products directly to the retailer.

International Distribution: The company exports Reed's and Virgil's brands throughout international markets via the U.S. based exporters. International markets where its brands are present are France, the U.K., South Africa, portions of the Caribbean, Canada, Spain, the Philippines, Israel, and Australia.

The company is open to exporting and co-packing internationally and expanding its brands into foreign markets, and it has held preliminary discussions with trading companies and import/export companies for the distribution of its products throughout Asia, Europe, Australia, and South America.

New Product Development

Innovations include the company's compelling line of full flavor, natural, zero sugar, zero calorie sodas. The company has also begun to expand and broaden its product development capabilities by engaging and working with larger, experienced beverage flavor houses and innovative ingredient research and supply companies.

Licensing

During 2020, the company entered into a licensing agreement with Full Sail Brewery, Oregon to manufacture and sell its new line of Reed's Alcoholic Classic Mule in 4 and 12 pack 12-ounce cans, and 12 pack 16-ounce cans. Full Sail manages all aspects of production and distribution. The company subsequently amended that agreement to assume the distribution rights from Full Sail and instead utilizes Full Sail as a co-packer of its RTD Classic Mule line.

Seasonality

The sales of the company's nonalcoholic beverages are somewhat seasonal with higher than average volume in the warmer months (year ended December 31, 2022).

Proprietary Rights

Reed's ginger processing and brewing process finished beverage products and concentrate formulas are among its major trade secrets.

The company owns trademarks in the United States that it considers material to its business. Trademarks in the United States are valid as long as they are in use and/or their registrations are properly maintained. Pursuant to its manufacturing and bottling agreements, the company authorizes its bottlers to use applicable Reed's trademarks in connection with their manufacture, sale, and distribution of its products.

Regulation

The production, distribution and sale in the United States of many of the company's products are subject to the Federal Food, Drug, and Cosmetic Act; the Federal Trade Commission Act; the Lanham Act; state consumer protection laws; competition laws; federal, state and local workplace health and safety laws; various federal, state and local environmental protection laws; and various other federal, state and local statutes and regulations applicable to the production, transportation, sale, safety, advertising, labeling and ingredients of such products.

The company is also subject to various federal, state, and international laws and regulations related to privacy and data protection, including the California Consumer Privacy Act of 2018 (CCPA), which became effective on January 1, 2020, and its extension, the California Privacy Rights Act (CPRA), which will take effect on January 1, 2023.

Competition

Nonalcoholic Beverages: Competitors in the ginger beer category include Goslings, Fever Tree, Bundaberg, Cock 'n Bull and Q Tonic; in the craft soda category, the company competes with brands, such as Stewart's, IBC, Zevia, Henry Weinhard's, Boylan, Sprechers, and Jones Soda; in the Ginger Ale category it competes with Canada Dry, Schweppes, Seagram's, Vernor's, and Zevia.

History

The company was founded in 1987. In 1991, it incorporated its business operations in the state of Florida under the name of Original Beverage Corporation and changed its name to Reed's, Inc. in 2001.