In the world of soft drinks, Jones Soda has always
resembled a plucky Division II college
football team, winning fans through personality,
creative plays and a willingness to make the risky
deep throws that don’t always pay off. Riding its
growing popularity, Jones made the move from
the small-time crowd to the big-time arena. But
just as they got there, things changed for Team
Jones: they kicked their old quarterback to the
curb, unveiled new uniforms, and introduced a
whole new playbook. It’s a new day for Jones.
But not everyone is happy about that.
The quarterback in question, founder and
CEO Peter Van Stolk, formulated Jones’ first
six flavors in 1996 and subsequently cut the
brand’s off-beat reputation from his own quirky,
skate shop profile. The brand’s identity as an
“alternative soda” started with glass long-neck
bottles adorned with customer-submitted photos;
it grew through collectors’ packs that included
sometimes-undrinkable flavors. The
2003 Thanksgiving holiday pack featured a
Turkey and Gravy soda that BevNET taste testers
struggled to keep in their mouths. But the
flavor wasn’t about offering a pleasant taste, it
was about creating buzz. And it did: less than a
year later, Jones Soda –although not Turkey and
Gravy Jones Soda, thank God -- showed up in
Starbucks coolers across the U.S. Van Stolk had
created cachet.
Although he was primarily the brand’s buzz
man, Van Stolk also functioned as the face of
Jones on a more personal level. Joe Steele, the
co-owner of the Milford, Ohio-Based Tri-State
Juice Company, said in-person calls from Van
Stolk were one of the things he liked about the
company. But Steele isn’t holding his breath for
another visit. Van Stolk stepped down as CEO
at the end of 2007, taking the fall for stock prices
that, ironically, failed to live up to the buzz.
It’s got to be disappointing, because as a
scourge of the big boys, Van Stolk had just completed
a championship-caliber performance,
outbidding Coke and Pepsi for the soft-drink
contract for Qwest Field, home to the Seattle
Seahawks, and pushing the company to add aluminum
cans to its previously all-glass lineup.
Despite Van Stolk’s PR appeal, Jones’ stock
had skidded downward in 2007, dropping from
an April peak of $28 per share to less than $6 per
share in December, when Van Stolk announced
his intention to resign.
Van Stolk said in a written statement that he
arrived at the decision to hang up his cleats nearly
a year before he announced it. Jones’ Chief
Financial Officer Hassan Natha told the Seattle
Post-Intelligencer that Van Stolk had informed
the board of his intention early last year, but that
the decision had been kept “at the board level.”
Regardless of the back story, however, the issue
for Jones is clear: its ability, as a brand built
on its funky personality, to keep customers coming
back without its funkster-in-chief.
NEW PLAYBOOK
The company founder may have left the helm,
but Marketing Manager Seth T. Godwin said
Van Stolk remains a member of the Jones board
of directors and in regular contact with the company.
Jones has been different since Van Stolk
left, Godwin said, but added that “(Jones has)
kind of grown out of the little entrepreneurial
soda company that Peter started. We needed a
little bit of change.”
Regardless, Jones had already made what
most observers regard as its most significant
lineup change even before its long-time QB left,
reformulating all of its products to eliminate
high-fructose corn syrup in favor of pure cane
sugar.
Godwin said Jones chose to switch sweeteners
not because HFCS has been a lightning rod in
the debate over child obesity in America – Godwin
said the company wants to stay away from
that battle – but to create a point of difference
between Jones and other sodas.
The switch brought its share of growing
pains. The company needed new equipment to
go with the new ingredient, but Godwin called
the transition “exciting” and said customers appreciated
the cane-enhanced flavor profile.
While the move to sugar might very well resonate
with consumers searching for that sweetener’s
more virtuous aura, it’s still too early to
tell if it cuts the mustard with either new fans or
the brand’s old adherents.
But Joe Steele, the Ohio-based distributor,
said he doesn’t see much of a difference.
“They say it tastes better. I really can’t tell,”
Steele said. “I know it costs more.”
Steele added that he doesn’t think most Jones
fans – who skew young, demographically – care
about whether or not their soft drink uses HFCS.
“Those kids are typically eating Big Macs and
French fries,” Steele said.
Lately, Steele said, Jones makes him scratch
his head. They used to be about running with
the little guy, he said. Now, Steele said, he no
longer knows where Jones is headed.
MEET MARTHA STEWART
But Jones had little choice but to adapt and
change. Starbucks – the company that put Jones’
quirky glass bottles into the hands of millions of
consumers across the U.S. – scuttled their distribution
agreement last June to make room for
expanded menu offerings.
Jones hasn’t lost its toe-hold in national chains
altogether: you can still find them in Panera
Bread Bakery Cafes. And the company hasn’t
been content to stand still while the ground
shifts beneath it. Jones is taking new stabs at
building an independent network, and is also
being trumpeted by retailers like Wal-Mart and
K-Mart as one of those slightly upscale brands
that retailers now try to incorporate across all
categories. Martha Stewart, meet Jones Soda.
Meanwhile, Godwin said, the company has
big plans for the near future under the direction
of interim CEO Steve Jones, a former Coca-Cola
executive and Jones board member.
One bright light is 24c –the company’s response
to the vitamin-infused water phenomenon
– already making its way onto Whole
Foods’ shelves in powder form. The company
has also released a ready to drink version of 24c,
one that Godwin said entered the market at an
opportune time, as Coca-Cola’s purchase of glaceau has left a vitamin water-shaped hole in the
independent distributor system.
But Jones also has higher ambitions for 24c.
With more vitamins and minerals than anybody
else, he said, the company wants 24c to create a
premium fortified water segment, much like Perrier
created the premium bottled water segment.
Whether or not 24c cuts out new space for
Jones in the cooler case, Godwin said, the company
plans to make its entry into the functional
drink market later this year. The product is still
in the early stages of development, so it’s too
early for Godwin to discuss flavor profiles – or
much else, for that matter – but he said beverage
will likely be tea-based and will certainly include
an amino acid called Gamma Aminobutyric
Acid – or Gaba, for short. The substance is popular
in Japan, Godwin said, where golfers and
video game players consume it for mental clarity
and focus. If the additive is a hit, Jones will have
a jump on copy-cats, Godwin said, because the
company has an exclusive two-year contract to
use Gaba in beverages.
Despite all the big changes, Godwin said
Jones Soda wants to remain the same company
it has always been.
“We’re still trying to stay true to what our
brand is all about, which is self-expression,”
Godwin said.
But Steele remains unconvinced.
“To me, I guess they’re chasing everybody else,”
he said. “I’m not sure if that’s who they are.”
Maybe it isn’t, but scrappy little Jones Soda
has made it to Wal-Mart shelves, and the end
zone at Qwest Field. That represents an enormous
new arena with a lot of new seats to fill.
Jones needs to fill those seats, but can they do it
with the new lineup? Only time will tell.