Jones Soda turned around roughly 18 months of declining sales this fall, with revenue up 17% to $3.5 million according to the company’s Q3 earnings report this week.
Gross profit as a percentage of revenue grew 430 basis points to 26% in the quarter, compared to 21.7% in Q2, while net loss improved to $450,000, compared to $476,000 previously.
“During the third quarter, we continued to focus on our core competencies and drive sales through our bottled soda products, which resulted in a return to year-over-year revenue growth after six consecutive quarters of decline,” said interim CEO Jamie Colbourne in a statement. “In fact, overall awareness and demand for our products continued to accelerate throughout the quarter as our digital marketing and social media initiatives drove strong engagement among both existing and new consumers.”
The rebound comes after a year of turnover and financial crunch for Jones, a result of the COVID-19 pandemic’s impact on on-premise sales. In April, longtime CEO Jennifer Cue resigned from her position (she remains a shareholder and consultant), followed by department wide layoffs and furloughs that impacted nearly its entire sales team. At the time, three former employees described the company as “dysfunctional” noting that the brand had been slow to adapt to changing trends and provided little support for its sales team.
In September, however, Jones brought on former JGC Foods president Mark Murray as President to oversee a revitalization of the brand. Murray, a 38-year veteran of the CPG industry, has previously held senior sales and marketing positions at Harry’s Fresh Foods, SOLO Cup Company, Campbell’s and Kraft Heinz Food Service.
Speaking to investors on a call yesterday, Murray said Jones’ core RTD business played “a key role” in driving the Q3 growth, noting that promotional plans helped increase sales in retailers such as Costco, Kroger, Walmart and Safeway-Albertsons among other accounts. He added that Jones is working to close distribution gaps in the U.S. and allocate more resources to the club channel, including growing the brand’s presence in Sam’s Club and BJ’s through products such as Lemoncocco and variety packs.
“We’re currently working to ensure we have the right products, the right price, and the right value proposition,” Murray said. “Although we have had some success in this channel there’s still tremendous upside.”
As well, Murray said Jones is investing in growing its food service presence, noting that though the channel has been hurt by the pandemic the company sees it as an important growth opportunity.
Long associated with skateboarding culture, Jones is also looking to reignite its sales with skaters by re-enlisting Tony Hawk as a brand ambassador. The pro skater, Murray said, has been an important influencer for Jones during the pandemic. The company is now looking to bring in Gen Z consumers through expanded social and digital marketing campaigns.
The company is expected to announce a permanent CEO to take over for Colbourne in the coming weeks. As well, Murray said Jones is seeking a line of credit from a traditional lender but that the company remains confident in its current financial position and does not intend to raise outside capital.