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Reed’s Inc. (REED): Healthy, Earth-Friendly Soda and Bubbly Profits?

Reed’s, Inc. (REED) is a maker of sodas, candies and ice creams with natural ingredients targeted at health conscious consumers. Reeds product line includes various flavors of ginger-brewed beverages such as original, extra, premium, raspberry, spiced apple, and cherry ginger; root beer, cream soda, black cherry cream soda, diet root beer, diet black cherry cream soda, diet cream soda, and Bavarian nutmeg root beer; and original china cola and cherry china cola. The company’s products can be found primarily in specialty food stores and gourmet outlets, in addition to the company’s website.

California-based Reeds is following in the footsteps of other natural soda makers like Jones Soda and Hansen’s in targeting consumers that crave carbonated beverages, but demand choices beyond traditional colas like Coca-Cola and Pepsi. It is estimated that carbonated sodas had a total of almost $66 billion in global sales in 2007, but sales of traditional sodas have been experiencing stagnant growth, while demand for alternative beverages, such as those produced by Reed’s, has surged.

Reed’s brewed drinks, such as brewed ginger drinks, actually preceded the invention of regular soda. Some reports even claim Reed’s Ginger Brew is outselling natural soda leader Hansen at Whole Foods, Trader Joe’s and Wild Oats’ stores. In addition, ginger products are thought to have health benefits not offered by traditional carbonated beverages. Earlier this month, Reed’s said Big Y and Kroger supermarkets would begin offering some of its products to their shoppers.

Reed’s shares closed today at $2.68 on volume of about 5,700. The $24 million company usually averages more than 13,000 shares traded a day. The 52-week range for Reed’s shares is $1.50-$8.00.

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