Reed's, Inc. · AMEX:REED
Reed's — Roth Conference 2018
29 slides from Reed's's conference presentation, Mar 12, 2018
Slide 1: Reed's Inc. Investor Presentation
Reed’s Inc. Investor Presentation ROTH CONFERENCE 2018 MARCH 2018 REED’S INC.
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, in addition to historical information. All statements that are not statements of historical fact, including those that relate to matters such a
Slide 3: Leading Brands in Fast Growing Categories
CATEGORY Leading Brands in Fast Growing Categories Reed’s is the #1 Selling Ginger Beer* Virgil’s is the #1 All Natural Full Line Craft Soda** Total CSDs continue Diet CSDs declining Craft Sodas are Driven by Ginger to decline faster growing Beer 3% tf * Based on Spins MULO/Natural sales latest 52 w
Slide 4: Significant Value Creation Opportunity
VALUE CREATION Significant Value Creation Opportunity > We now have the right board, the right team and the right partners to drive success > Brand leadership positions in on-trend and growing beverage categories > Clear and defensible product superiority with strong macro consumer tailwinds > Busin
Slide 5: We use only Fresh Organic Ginger Root
We use only Fresh Organic Ginger Root Real Fruits & Spices, Cane Sugar & Honey NO Artificial Colors, Flavors or Preservatives -NaTU! 4 Rar SeE-NATURA, d HANDCRAFTED ACK CHERRY
Slide 6: Product Leadership: We Are Simply The Best
PRODUCT LEADERSHIP We Are Simply The Best Brewed from Fresh Organic Peruvian Ginger No other Ginger Beer compares! No Artificial Flavors, No Artificial Ingredients, No Artificial Coloring, No Preservatives BREWED Directly from Roots, Herbs, Spices Fruits 25% Juice & Significant amounts of FRESH GING
Slide 7: Product Leadership: Virgil's Root Beer
PRODUCT LEADERSHIP Virgil’s Root Beer Delicious and Made of The Highest Quality Natural Ingredients All-Natural Ingredients: Typical cihonated water Root Beer AuL-NATURA, oe ed cane “teeatn) Ingredients: Licorice (France) Vanilla (bourbon) (Madagascar) } Cinnamon (Ceylon) Clove (Indonesia) Wintergre
Slide 8: Broad Distribution Across Channels
DISTRIBUTION Broad Distribution Across Channels Distributed in nearly 30,000 doors nationally Costco ©TARGET Walmart >'< TRADER JOE'S Ctntial Market DeCicco (RESTA REALLY INTO FOOD SY WHO @ « SAFEWAY 69 ek: sine 6 sropaspopltatavbine pay thee wy -@- 9) EARTH FARE CVS pharmacy’ RITE AID Publix. OBri
Slide 9: Powerful Craft Soda Trends
CONSUMER TREND FOR CRAFT Powerful Craft Soda Trends Consumer trends that will drive continued On-Trend with Craft soda segment m Consumer underdeveloped vs. accelerated growth for Ginger Beer and Craft Sodas Preferences mainstream CSD ¢ Authentic/Distinct Brands — Broad, cross- Moving to craft Craft
Slide 10: Consumer Trends for Craft
REED’S o SGRONGER GINGER BREW _ Mule Mixer ZERO SUGAR ROOT BEER Ss *Source: New York Times, 7/18/16 are products growing ~10% a year and 4X-5X faster than mainstream counterparts. Consumers want with simple, natural ingredients without artificial colors, ingredients and preservatives. Consumers are
Slide 11: Business Transformation and Value Creation Plan
BUSINESS TRANSFORMATION Business Transformation and Value Creation Plan | New Leadership \ j REED’S INC.
Slide 12: New Leadership
BUSINESS TRANSFORMATION - LEADERSHIP New Leadership New Leadership New professional and experienced board, Chaired by John Bello SOBE/Izze beverage veteran New CEO and COO with deep beverage experience driving brand growth and profitability Leveraging Founder’s product development skills in new role
Slide 13: Enhanced Board and Management Team
BUSINESS TRANSFORMATION - LEADERSHIP Enhanced Board and Management Team Management Reed's CEO and director since June 28, 2017 over Coca-Cola and’ and Zola Acal ‘rom the College of Willam and Mary (0 of Reed's since May 12,2015 Over Current CPA & Former Emst & Young auditor and a Masters degree from
Slide 14: New Strategic Focus
BUSINESS TRANSFORMATION ~ STRATEGIC FOCUS New Strategic Focus * Directing 100% of all resources to grow Reed’s and Virgil’s beverage brands * Streamlined product categories and product line up by reducing SKUs from 111 to 28 and reduce working capital needs and operational efficiencies ¢ In 2016 top
Slide 15: Optimized Business Model
BUSINESS TRANSFORI Optimized Business Model * Shift from a capital intensive self-production model to an asset light sales and marketing driven business model ¢ Plant sale process underway; currently negotiating terms with multiple bidders ¢ Negotiating new strategic co-packing partnerships on both
Slide 16: Enhanced Capital Structure
BUSINESS TRANSFORI Enhanced Capital Structure * Completed recent capital raise to: ¢ Enhance financial flexibility and reduce debt and interest rates « Pay down stretched payables and secure improved commercial terms * Targeting to pay down Capex loan and reduce and Enhanced restructure current debt
Slide 17: Phase II: Investment in Sales & Branding
Phase II Investment in Sales & Branding Added marketing and sales resources to develop and execute sales driving brand building programs Open new retailer doors via added broker partners, invest in slotting and in-store trade programs Drive increased sell through velocity through digital pull and in
Slide 18: Zero Sugar Root Beer
—— AD ZERO SUGAR ROOT BEER ZERO SUGAR ROOT BEE 12 FL OZ (955 Mt ESE = — —==> ZERO SUGAR LEMON LIME ZERO SUGAR LEMON LIME -_ —— ZERO SUGAR BLACK CHERRY ZERO SUGAR 3LACK CHERRY —— Phase II
Slide 19: Launching Zero Sugar in April
Launching Zero Sugar in April Phase I ‘itt, ==, i ZERO SUGAR ZERO SUGAR ZERO SUGAR ZERO SUGAR ZERO SUGAR ZERO 5. ROOT BEER VANILLA CREAM ORANGE BLACK CHERRY LE MON LID ME COLA = = —s — — = BELIEVE 2 THE UNBELIEVABLE! p VzERO CALORIES VaLL-NATURAL Vorgar TASTE ® iene i REED’S INC. £9
Slide 20: Phase II
Phase II * “¢,4 MS | y te bie ai. : Ris 5
Slide 21: Sales and Marketing: Can Package
SALES AND MARKETING 12 Pack Can Package Phase Il 25RO. suca® COL’
Slide 22: Sales and Marketing: Field Support
SALES AND MARKETING Field Su pport Phase II aIREILs HANDCRAFTED SODAS HANDCRAFTED SODAS BELIEVE THE UNBELIEVABLE Mixed Shipper oot Beer, Cla, Lemon Line, Orange JEU,
Slide 23: Refreshed Virgil's
ND Refreshed V Phase II vy pLL-NATUR,, We've been busy hand www.vi rgils.com crafting our new Virgil's Zero Sugar line. Tasting is believing! Come by our booth at Expo West. Booth #748 — Hall A Vy ors Stat *_y Unasay BELIEVE THE UNBELIEVABLE! Introducing our handcrafted, zero-sugar sodas. ZERO CALOR
Slide 24: Refreshed Virgil's Social Media
SALES AND MARKETING Refreshed Virgil’s Social Media ry) https://www.instagram.com/drinkvirgils/ Handcrafted Sodas th Uke) Follow 4 Share» £ Proteivideo — @ FeelingyActv BELIEVE THE UNBELIEVABLE af 7 ills drinkvirgils — EditProfite ; Oposts follower 0 following Se 2 Drink Virgil's Virgi's is America’
Slide 25: May 2015: Operational Challenges & Significant Out of Stocks
May 2015 Operational Challenges & Significant Out of Stocks * Over-Invested in Production Capacity * SKU & Category Proliferation * Inferior Gross Margins and Operations + Profit Suffered * Debt Increased 2006 =. 2007S 200839 2009 2010 2011 «9 2012, 2013 2014) 2015 2016 * Sales Growth Suffered In 20
Slide 26: Forecast of Improvements Driven by Business Transformation
Forecast of Improvements Driven by Business Transformation Net Sales Gross Margin (includes idle plant) Operating Income (Excluding Impairments) Financial Position ¢«¢ 46 Phase One (10% -14%) Decline 16% - 20% ($5 - $6MM) Loss Weaker $2.5-$3.0MM (Debt Service) 13-15% (Average Interest Rate) Phase Tw
Slide 27: Driving Growth
GROWTH SUMMARY Driving Growth Phase II Our transformation will drive: * Increased retail distribution in take- home and on-premise doors via increased programing, added sales resources and new broker partners * Increased sell through velocity via improved marketing and in-store initiatives * Increas
Slide 28: Significant Value Creation Opportunity
VALUE CREATION Significant Value Creation Opportunity > We now have the right board, the right team and the right partners to drive success > Brand leadership positions in on-trend and growing beverage categories > Clear and defensible product superiority with strong macro consumer tailwinds > Busin
Slide 29: Reed's Inc.
REED’S INC. LA, CA 90061 800-99-REEDS www.reedsinc.com NYSE American: REED