Faced with shareholder revolt, Chris Reed, CEO and founder of the Reed’s Ginger Brew, Virgil’s Root Beer and more, decided he needed to bring in some heavy artillery. But Reed is kind of a peaceful fellow, so he meditated on the problem as part of his morning routine.
At the end of the meditation, a wartime consigliere came to mind: John Bello.
“It was a crazy day,” Reed said. “I called, and by noon it turned out he was in San Diego and we had lunch. We’re feeling excited.”
Fast forward to Expo East, and attendees could find the SoBe founder and self-described “Lizard King” jamming away on guitar with Reed and, as he said, performing due diligence on a potential board seat to help Reed right the ship in the face of shareholder pressure.
“I’m putting together my team,” Reed said. “John has the perfect experience for what we’re doing next.”
Famous for building SoBe and selling it to Pepsi for close to $400 million Bello is one of two or three potential strategic additions to the board that Reed is hoping will help him hold off a new slate of directors: activist investors met with the ginger brew and root beer maker on Monday, he said, discussing their own slate of board members. Reed’s has been under fire by shareholders who believe the existing board has provided inconsistent and feeble oversight while the company itself has struggled with supply chain issues and faced sales declines.
Bello wouldn’t be a firewall, Reed said, but potentially part of a board that would represent a compromise and provide the governance some shareholders seem to be bucking for.
For his part, Bello said he could bring operational, marketing, finance and deal structure, as well as some rhythm guitar to the operation, noting that the group — with Reed’s employees singing — had jammed through a variety of Rolling Stones and Beatles chestnuts earlier in the day.
“I want to help elevate this brand,” said Bello, who was looking preppy in a gingham shirt and khakis. “He’s got so much innovation in the pipeline and ginger is a hot herb.”
Reed’s company — REED on the New York Stock Exchange — went public in 2006. While the stock has been one that investors have gambled on recently as the ever-innovative alt-soda player brought a popular line of kombuchas to market while also trying to tie Reed’s into the growing movement toward classic cocktails via the Moscow Mule.
It might seem like strange bedfellows — the tie-dye wearing, new age Reed is known to expound on quantum physics and crystals while Bello is an ex NFL Properties executive and Donald Trump supporter — but Bello has teamed up with the long-haired crowd before, most famously on Adina Beverages with Odwalla and Califia founder Greg Steltenpohl. And SoBe itself grew with a hint of eastern mysticism baked into its branding.
Reed said a full board decision was due by October 10.