Up Close With... Jones Soda
With flavors such as Blue Bubblegum, Dirt and its newest Bacon variety, Jones Soda Co. continues to uphold its reputation as a fun brand, says Bill Meissner, president and chief executive officer of the Seattle-based premium craft soda company.
“We could not have better brand awareness or brand affinity for a company our size,” Meissner says. “We have a 48 percent un-aided brand awareness, which is way higher than any of the companies I have been with. And when asked about Jones, we hear customers associate us with tremendously positive attributes, which is a strong place for our brand to be.”
A beverage industry veteran with experience at SoBe and Fuze, Meissner joined Jones in April 2010 and has re-focused the company to improve its performance, while being careful not to lose its fun brand identity.
“The best thing we can do is continue to drive that fun and excitement into our brand while taking care of our business as a business,” he says. “I have placed a huge emphasis on maintaining that fun element of our brand, but keeping it focused on branding and marketing as opposed to having it kind of permeate everything we do here, which can be a problem.”
In November, Jones released a Bacon flavored soda, which was made in partnership with J&D’s Foods, a Seattle-based company that produces Bacon Salt, Baconnaise, BaconPOP popcorn and Bacon Gravy. The collaboratively developed flavor capitalizes on the buzz around the cured meat, Meissner says.
“The popularity of bacon is undeniable,” he says. “We have a bunch of foodies here in the office and between a collaboration of our marketing and operations teams, we came up with the idea because there are literally food shows dedicated to bacon. Some of the common things said are ‘Everything goes well with bacon’ or ‘Name something that’s not good with bacon.’ So we, as we do so well, wanted to push the boundaries of soda and see if even bacon was good with soda.”
Jones released the Bacon soda in a special edition gift pack available only online. The gift pack contains two bottles of Bacon soda, a bag of J&D’s Cheddar BaconPOP bacon and cheddar-flavored popcorn, Bacon Gravy and Bacon Lip Balm.
The company initially planned for its stock of the bacon-related gift pack to last through the holiday season, however, the product garnered more than 40 million media impressions and the gift pack sold-out before the end of November, Meissner says.
The online-only availability of the Bacon soda gift pack represents a change in the company’s tactics, he says. Jones’ past releases of unique flavors, including its Seattle Seahawks Collector Pack and Holiday Packs, focused on sales and execution at retail. Although the box sets created buzz, the unique flavors often did not sell out the inventory due to the one-of-a-kind flavors, Meissner says.
“You can really only have one of these things and then realize it’s not something you’re going to want every day,” he says. “It’s something that’s designed more for fun and from a branding perspective. So we would inherently wind up with all kinds of inventory of Turkey and Gravy, Tofurky and Gravy, Perspiration, Natural Field Turf and Dirt sodas – all the different things we’ve made. The gift pack allows you to create a finite amount of inventory.”
In addition to its innovative flavors, Jones also has been successful with limited-edition partnerships that leverage passionate fan bases, such as that of role-playing game “Dungeons & Dragons” and cult series “Buffy the Vampire Slayer.”
The company’s quirky releases frequently prompt fans as well as common consumers to share their passion for Jones on social media sites, such as Facebook. Jones has more than 600,000 fans on the social networking website, where it shares brand news and interacts with fans.
Energizing its portfolio
In addition to its line of premium crafted sodas, the company’s portfolio also includes WhoopAss Energy Drink. Meissner, who oversaw the launches of SoBe Adrenaline Rush and NOS Energy at Fuze, was inspired by the WhoopAss brand.
“There’s no better trademark in the energy category than WhoopAss,” Meissner says.
However, he thought the presentation of the brand was in need of a refresh in order to better appeal to a target demographic that Meissner calls “aggressive young males.”
“The problem is, the graphics did not match up with that demographic and the beverage was OK, but it had some real strong vitamin notes that weren’t being overcome by the flavor,” Meissner says. “It just needed a whole re-branding. The nature of going to market in an energy drink today, you need a unique story. There was a very strong under-served segment within that demographic. We found that a high-efficacy product that was about muscle recovery would allow us the unique hook to let the retailers say, ‘OK, this is different.’”
In September, Jones re-launched WhoopAss with a new formulation and packaging graphics. The reformulated liquid contains a blend of B vitamins for energy, amino acids to support metabolism, and polyphenols and catechins for muscle recovery, the company says. In addition, the product now has a deep purple color and a subtle exotic fruit flavor with notes of dragon fruit, it says.
The new WhoopAss is packaged in a tall, black 16-ounce can with a red and grey Iron Cross graphic, which is popular among skate, surf and mixed martial arts (MMA) cultures. The MMA and Ultimate Fighting Championship (UFC) community and its fans were a targeted demographic early on in the re-development process of WhoopAss, Meissner says.
“The term ‘Opening a can of whoop ass’ is already in the vernacular of the MMA and UFC,” he says. “It is the fastest growing sport, if not the fastest growing sport right now. And if you want to appeal to young males you have to find something that really defines what your brand is all about. We found that culture couldn’t be more closely tied to the energy drink use occasion and the ethos of the category in general.”
In October, the brand announced its sponsorship of UFC fighter Ryan Bader. A winner of Spike’s “Ultimate Fighter” reality TV show, Bader’s deal with WhoopAss made him a shareholder in Jones Soda, which allows the fighter to share in the success of the company and the brand, Meissner says.
In addition to the product releases, Meissner has reorganized the company since he joined last year. The company’s long-term goals include focusing on its 12-ounce Jones Soda, offering carbonated product lines that are incremental to its business, developing its management team, and driving long-term growth and sustaining shareholder value, he says.
In the short-term, Jones is focused on establishing a new level of commitment to its distributors, outpacing growth in the carbonated soft drink category and increasing its annual sales volume at retail chains, known as all commodity value (ACV).
“We have a very high sell-through rate,” Meissner says. “Probably the best sell-through rate, or the best velocity rate, in the category of premium and craft soda. Yet, we only have an 8 percent national ACV on glass bottles. Compare and contrast that to IBC Root Beer, which has a 65 percent ACV on their bottles, and that shows you how big our upside can be.”
The company hopes to boost its performance by better servicing its customers as well as growing its distribution presence. Jones added distribution of its sodas at Old Navy clothing stores nationwide in the fall. In May 2010, Jones expanded distribution of a six-bottle variety pack to 3,800 Wal-Mart stores nationwide. The agreement expands on a test that offered packages featuring two bottles each of Green Apple, Berry Lemonade and Cream Soda flavors in 600 stores. The availability increased Jones’ total retail outlet distribution by nearly 10 percent, the company says.
To continue its growth, Jones announced an equity financing facility. Jones set up the agreement with Glengrove Small Cap Value Ltd. that would allow the company to sell up to $10 million of its registered common stock. The equity financing can be drawn as needed to provide the necessary funds to secure larger distribution and national retail accounts, fund new marketing programs, and dedicate to working capital and other general corporate purposes, the company says.
“[The equity financing] is one of the key things that allowed us to get back on track and really start attacking our business opportunities,” Meissner says.
The company elected to use $1.1 million in financing in July and an additional $1 million in October. So far, the financing has helped Jones grow its sales force from six people to 16 employees nationwide.
Marketing is one of the company’s main priorities and the financing also allowed Jones to add two marketing employees. Jones also re-allocated a portion of its marketing budget by ending a three-year relationship with Qwest Field, which is home to the Seattle Seahawks professional football team. By exiting its agreement as the exclusive soft drink provider in the stadium, the company was able to redirect those funds to national consumer marketing programs, Meissner says.
“The best thing that happened to prepare me for this role was to have spent time at both Coke and Pepsi when they acquired SoBe and Fuze,” he says. “That helped me understand how to get a system moving with marketing to increase retailer awareness. It starts with a great plan, but solid communication and execution have to follow to make it work.”
As Jones refocuses the company around its carbonated beverages, it’s not discounting the value of innovation. Meissner hints that the company has a “big” innovation in the pipeline scheduled for mid-2011.
“From a new product perspective, we’ll be there, but what people need to know about Jones now is that we’re managing our business better,” Meissner says. “We’re going to take what is already a great brand set and start executing properly and fulfill the promise that the brands had always had but never delivered on.” BI