subject: Reed's Inc. (NASDAQ: REED) $21M (MarketCap) Hits South Korea [print this page] Reed's IncReed's Inc. (NASDAQ: REED) $21M (MarketCap) Hits South Korea
In order for investors to understand why this article is important, let's first consider a few numbers. According to a Wikipedia page that offers a list of the world's soft drink companies by their country of origin, there are thirty-one soda makers in South Korea compared with ninety-nine in the United States. Because the Koreans export so many products and the majority of the country's gross domestic products are supplied by exporting businesses, imports are common among all sectors and industries. But there's an economic barrier of entry into the Asian region for a small company like Reed's to hurdle, and yet they did.
Reed's makes the top selling natural sodas in the natural foods industry by marketing their products in over ten thousand food markets and supermarkets nationwide. The company owns the top selling root beer line in natural foods and brews a unique ginger soda distinguishing itself from the rest of the beverage industry. Other lines include private label candies, ice creams, and nausea-relief products.
Today the company announced that it has reached a distribution agreement with a specialty distributor of gourmet foods and beverages based in Seoul, South Korea that will begin carrying a few Reed's handcrafted ginger ales (Original Ginger Brew and Raspberry Ginger Brew), as well as Sonoma Sparklers, a recently acquired product line for direct store delivery.
Neal Cohane, Reed's Senior VP of Sales and Marketing, commented on the importance of the import business in South Korea by saying, "The majority of the country's food and beverages are imported, with overall imports to the country totaling $323.1 billion in 2009, and a rapidly growing market for organic products. This is an amazing opportunity for Reed's all natural premium products."
Coca-Cola hadn't even arrived in the country until June of 2000 when the U.S. lifted sanctions against Pyongyang, and to this day Koreans do not consume a wide variety of soda flavors or brands, much less natural and specialty sodas offered by small up and coming companies like Reeds. When the uquitous red and white can finally hit the lips of Korean consumers, even then Coca-Cola admitted it wasn't expecting to turn large profits by operating the country they just hoped to create a home advantage in the new battlefield for war against Pepsi. Reed's will likely have similar challenges but seem well-equipped to weather the political and economic storm that plagues the impoverished company.
