It’s hard to imagine the Jones Soda Co of Seattle, America’s most idiosyncratic beverage manufacturer, without Peter van Stolk. He launched the offbeat soft drinks line on an unsuspecting West Coast market in 1996, and for all Jones’ artsy labels and surprising flavours, van Stolk personally
gave the brand much of its distinctive identity.
Nevertheless, this January he steps down as Chairman and CEO of Jones, although he will remain as a Director. Control of the business is being shared on an interim basis by two other Board members, Scott Bedbury as Chairman and Steve Jones as Chief Executive, while a new CEO is sought.
According to van Stolk, he told the Board earlier in 2007 that he planned to quit at the end of the year, but this news was never made public. He goes at a crucial point in Jones’ fortunes. He boosted the brand from local to national celebrity, winning publicity with outrageous new flavours such as Turkey & Gravy for Thanksgiving, as well as more significant innovations such as switching the entire line to cane sugar sweetening rather than high fructose corn syrup.
Jones shares soared when van Stolk announced the company was climbing to the next level – packaging its drinks in cans rather than the brand’s signature glass bottles, and staging a full scale national rollout of the core flavours in retailers across the country. However, the rollout did not go as smoothly or rapidly as planned. As well as delays in distribution, Jones was hit by heavy costs including slotting fees. The company’s stock plunged in 2007 when Jones broke the bad news, reporting stark quarterly results.
Investors’ disappointment wasn’t softened when Jones’ local newspaper, the Seattle Post-Intelligencer, reported in August that van Stolk and other insiders, including Bedbury and Jones, sold company shares worth $6.5 million before the price fell. Although the Securities and Exchange Commission (SEC) apparently looked into the sales, and decided no action should be taken against Jones or its officers, the company still faces lawsuits brought by disgruntled shareholders.
In November, Jones reported further losses, despite evidence that the national rollout is gathering momentum. Sales in the third quarter more than doubled to 1.56 million 288oz (8.5 litre) cases, while net revenue after the deduction of $1.3 million in promotional allowances and slotting fees rose 15.1% to $11.7 million.
However, Jones’ gross margin declined to 28.6% from 35.3% in the third quarter of 2006, and the company finished with a net loss of $1.5 million or $0.06 per share, compared with a profit of $195,000 in 2006.
“During the third quarter, we decided to incur higher than planned promotional allowances and slotting fees associated with our significant expansion into the CSD market,” van Stolk explained. “While the results are below plan for the quarter, and we are disappointed with our recent performance, we believe that in the long term, these investments and initiatives support our strategy to achieve increased shelf space at retail, and heightened awareness of our brand and products.”
It was just one month later, at the beginning of December, that van Stolk’s abdication as CEO and Chairman was announced.
“I’ve worked hard this past year to lay the foundation for future growth, with an increased product line and national distribution at the retail level,” said van Stolk. “Recruiting a strong and seasoned CEO is the next step in that process and utilising the experience of Scott and Steve in that effort will help ensure a successful outcome.
“During the upcoming weeks, I’ll be focused on the transition, and look forward to working with the Board to continue to grow the company to bring it to its full potential. It has been a true honour being so intimately involved with such a special company like Jones Soda.”
Steve Jones, currently responsible for the day to day operation of Jones Soda, spent 17 years in senior management roles with The Coca-Cola Company, latterly as Chief Marketing Officer. He left Coke after a management reshuffle under Douglas Daft in 2003 and set up a consultancy. He joined the Board of Jones Soda in 2003.
Scott Bedbury is also an experienced marketer who now runs a consultancy. He formerly worked for Nike, where he launched the influential “Just do it” campaign, and then joined Starbucks as Senior Vice President of Marketing and Brand Development.
Both men plainly have the necessary business savvy to guide Jones through the present difficult phase. However, it seems unlikely that either will provide the same charismatic brand of leadership as van Stolk.
© FoodBev Media Ltd 2020