When Mark Murray took over as CEO of quirky beverage maker Jones Soda final yr, the seasoned 61-year-old meals govt would continuously get requested by associates and enterprise associates a easy query: Why?
Murray, who was “retired” however spent his time doing consulting work and reviewing companies for personal fairness corporations to “type of keep within the recreation,” confesses he “wasn’t actually anxious to leap into something” after practically 40 years within the meals house working for firms together with Campbell Soup and Kraft Meals. Issues shortly modified final April when Jamie Colbourne got here on as interim CEO amid an govt shakeup on the struggling 25-year-old firm. Colbourne, now Jones’ chairman, requested his pal and enterprise companion Murray to assist.
“A few of the folks would ask me, ‘What are you doing this for? It appears so small, ‘ ” Murray mentioned in an interview.
However after a number of months working with Jones — first as a marketing consultant beginning that Might, then as firm president earlier than including the CEO function in December — he was satisfied the once-trendy beverage upstart identified for its artistic flavors and hip labels might regain the notoriety that made it a stylish providing with customers greater than a decade in the past.
“This is a extremely good group of individuals, and so they haven’t been profitable for a really very long time however they will win with the proper steering and the proper management,” Murray mentioned. “We’re going to cease the bleeding and that is the trail ahead in getting folks to consider.”
Jones Soda has touted itself as a maker of premium soda, with a lot of its choices in distinctive flavors that Large Soda would not contact, together with Blue Bubblegum, Pineapple Cream and Strawberry Lime. Its bottles’ labels are adorned with pictures submitted by customers, creating an emotional connection to the model that Murray mentioned separates Jones from its massive cola rivals.
“After my second day on the job [as a consultant], I bear in mind calling [Colbourne] and saying, ‘This model is completely different,” he mentioned. ” ‘I can’t consider another model that I’ve been part of that truly welcomes the customers in and permits them to take part when it comes to constructing the model picture.’ ”
However the uniqueness of its choices hasn’t been sufficient to assist Jones Soda in a world the place client tastes and preferences are altering — particularly, the push to chop sugar consumption. In the meantime, the $32 million firm finds itself competing in opposition to soda titans like Coca-Cola and PepsiCo, every round $200 billion in worth. In 2007, Jones Soda’s inventory worth approached $30 a share. It has since fallen to simply 50 cents.
“It was a rising star, a decade or 15 years in the past. Now, it is simply attempting to attempt to dig itself out,” mentioned Anthony Campagna, director of analysis at ISS ESG. “It type of misplaced its aggressive edge as increasingly more gamers acquired into the market and the very, very massive gamers within the house tailored [by creating] new manufacturers or aggressive choices that simply eroded market share.”
After taking on, Murray mentioned he met with clients, distributors and brokers to be taught extra about their notion of Jones. The consensus: Jones was a fantastic firm that had misplaced its method when it got here to innovation and investing in its model.
“Now we’re in entrance of the purchasers and say, ‘We’re again, and we’re critical about being again,’ ” he mentioned.
Rethinking product innovation
Since Murray began working with the corporate, he debuted new value and administration controls, a revised gross sales technique specializing in core product choices and a brand new three-year strategic plan that included growth into foodservice and membership channels like Costco and Sam’s Membership.
Murray mentioned Jones had a minimal presence in eating places and membership shops earlier than he arrived, however these classes signify “large development alternatives that assist us diversify our enterprise.”
Eating places, particularly, had been a well-known channel for Murray, who labored carefully with them throughout his 22-year stint at Kraft. Inside a couple of weeks after taking on as president in September, Jones employed a dealer to succeed in out to the highest 200 restaurant chains on the earth. It later recognized 35 to 40 that might construct their beverage gross sales working with Jones, whereas concurrently giving the soda maker an even bigger presence in a extra worthwhile class.
“It is a actually good group of individuals, and so they haven’t been profitable for a really very long time however they will win with the proper steering and the proper management. We’re going to cease the bleeding and that is the trail ahead in getting folks to consider.”
CEO, Jones Soda
Even in grocery shops, the place Jones will get the lion’s share of its income, the corporate is doubling down on growth and figuring out gaps in its distribution. It is aiming to persuade retailers to hold its prime 5 SKUs as a substitute of simply two that many at the moment inventory. It is usually constructing out its presence within the South, Southeast and Northern California — the latter just some hundred miles from its headquarters in Seattle — all areas the corporate uncared for previously.
Jones has rolled out a mixer pack geared towards cocktails that will give it a presence in retail past the soda aisle, and supply one other income throughout the winter months when gross sales gradual. The soda maker is also extra proactively managing the shelf the place its flavors are stocked to ensure the correct mix of product is being carried earlier than retailers determine to make adjustments.
There’s proof that Murray’s efforts to revive the craft soda maker are beginning to repay. Within the final three quarters, Jones has elevated gross sales and trimmed losses. Within the fourth quarter alone, income elevated 14% to $2.5 million from the identical interval a yr following six consecutive quarters of declines. Losses for the final three months of 2020 improved to $918,000 from $930,000 a yr earlier.
Campagna mentioned whereas Jones “has a fairly steep hill to climb on their solution to breakeven or profitability,” the soda maker may gain advantage from the nostalgia wave that has gained momentum throughout the current pandemic or its push to get its merchandise into extra shops and improve the choices offered in those who already inventory it. If Murray is profitable in turning across the firm — a job that has flummoxed prior CEOs — it is doable Jones might grow to be a horny acquisition goal.
“The ahead outlook definitely just isn’t all sunshine and roses, however they’ve alternatives to proceed to enhance issues off of a really low and poor base,” Campagna mentioned.
Whilst customers in the reduction of on sugar consumption, Murray stays assured there’ll at all times be room for indulgent merchandise like a craft soda. Quickly after becoming a member of the corporate as a marketing consultant, he was collaborating in a style take a look at of a brand new model of its iconic Jones Root Beer that will minimize the calorie depend from 180 to 100.
Murray, satisfied Jones’s basic root beer was higher than the competitors, recalled the brand new selection fell flat on style. It did not take lengthy after turning into CEO earlier than he shut down work on the low-calorie drink.
“I mentioned, ‘You’ve gotten a winner right here. You’ve gotten a winner that we simply minimize it in opposition to all of the competitors. Is someone actually critical about ripping out the energy and dropping out on the style facet of it?’ It is senseless to me,” Murray mentioned. “These are indulgent merchandise and they need to be handled like a deal with.”
Watching the underside line
Just like different CEOs tasked with orchestrating a turnaround, Murray’s purpose just isn’t solely to show Jones right into a worthwhile firm but additionally one that may keep in enterprise lengthy sufficient for that to occur. When he first got here on as a marketing consultant, the very first thing Murray and others did was stabilize Jones’s spending.
“We’ve got to be very targeted and really disciplined when it comes to what we’re doing,” Murray mentioned. “We do not have some huge cash, so all the things we spend now we have to ensure we’re maximizing the efforts of each greenback.”
To do this means not spending $40,000 at a commerce present for a 20-foot sales space in favor of promoting partnerships, akin to one Jones Soda inked in Might 2020 with skateboarder Tony Hawk. And as a substitute of a nationwide promoting marketing campaign, Jones is investing in social and digital media to construct model consciousness, one thing the corporate had by no means carried out earlier than.
Murray is simply 4 months into his tenure as CEO and a yr into his time with the corporate, however he’s optimistic the sweeping adjustments put in place will place the soda maker to have a good time one other 25 years in 2056, even when his work to overtake Jones is simply starting to bear fruit. The corporate is constant to churn out novel flavors — about one each six months. And, it “is locked and loaded and able to go” on a CBD providing as soon as it will get extra regulatory readability from the FDA, Murray mentioned.
“I sit right here — and it might sound a bit of corny, man,” Murray mentioned, “however generally I simply sit and smile with the nice constructive issues we have been capable of do in a really brief time frame.”