Saving Jones Soda

In his quirky online corporate profile, CEO Stephen Jones says he joined soft-drink company Jones Soda because “it is the real deal, … not some corporate giant that hires a kid with a piercing and tattoo to be held out as a badge of cool.”

As a former executive with Coca-Cola, Jones (who has no relation to the name of the company) should know about corporate giants in the soft-drink industry. But what he may not have been prepared for was just how “real” his experience at Jones Soda was going to be. The fact is Jones Soda—the wild child of Seattle’s growing soft-drink industry—has gone flat and just may be in a fight for its retail life.

Best known for its unique advertising campaigns and outrageous holiday packs with flavors like Turkey & Gravy (yes, a soft drink that tasted like Thanksgiving dinner), Jones Soda exploded onto the investment radar in 2006 as its ambitious founder and CEO Peter van Stolk pushed to take the fringe company mainstream.

It was everything Wall Street wanted: both a potential demographic hit with the teen and young-adult crowd, as well as a cool, edgy appeal for the counterculture. The hype machine went into overdrive, stoked by van Stolk. Jones Soda was featured on all the investment shows and publications, and the company’s share price responded, jumping from about $8 in August 2006 to a high of $32.60 per share in April 2007.

But like most companies that benefit from a meteoric rise, Jones Soda ended up crashing just as fast. Hobbled by distribution and production problems, limited marketing and an inexperienced management team, Jones Soda never saw the jump in sales that it expected. The stock went into free-fall. Van Stolk was forced out and was replaced by industry veteran Stephen Jones as the business faced mounting losses and rising expenditures. By mid-September of this year, Jones Soda’s stock price hit a 12-month intra-day low of $1.25 a share.

While the quirky brand retains a strong following, and marketing ploys have generated almost unlimited free publicity, the problem appears to be that customers aren’t buying what Jones Soda has to sell.

Now, it’s up to Stephen Jones to stabilize the brand and bring much-needed structure to the organization before the company becomes just another in a long line of forgotten one-hit

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