Believers, Achievers, Industry Leaders

Chris Reed, CEO of Reed's Inc.

Reed's Inc. CEO Chris Reed stands in front of containers used to brew the company's six ginger beverages. Photo courtesy of Reed's Inc.

In his 20 years of selling natural soda, Reed's Inc. CEO Chris Reed has relied on a unique mix of grassroots marketing and savvy financing to keep his company profitable. The self-described "hippie from California," who raised $8 million last year in an initial public offering (IPO), has primed Reed's for growth, widening its distribution network and hiring seasoned professionals in 2007, all while staying true to his roots.

Reed, who began making his homemade-style ginger brew in Venice, CA, in 1987, seems to have avoided the venture capital financing route taken by many small- and medium-sized companies seeking to expand. According to a March 27, 2007, article in BusinessWeek, Reed's Inc. raised $400,000 in the early 1990s through a small corporate offering registration. To help generate the funds, Reed's advertised the offering directly to its consumers through the use of "tombstone" necktags on its bottles. The company repeated the technique again a few years ago, before eventually announcing its 2006 IPO.

In July 2007, ThinkEquity Partners LLC (San Francisco) added Reed's to its ThinkGreenLiving Index, which tracks publicly traded companies that sell natural, nutraceutical, and active lifestyle products. Good timing, considering the fact that the company entered into new distribution agreements in Mexico, New Hampshire, Oregon, and Washington earlier this year. Reed's also went on a hiring binge, securing a new CFO, COO, and sales team, including sales reps from competitors Red Bull North America (Santa Monica, CA) and Jones Soda (Seattle). The company also attempted to grab a foothold in Europe by displaying its products in October at this year's Anuga Food Fair in Cologne, Germany.

Despite the company's ambitious plans for expansion, Reed's doesn't seem interested in changing the way it makes beverages. In fact, the company sees its recipes, natural ingredients, and traditional brewing process as strong selling points. Reed's brews each of its six ginger beverages using 17–25 g of ginger, adding either fruit juice, honey, or fructose as flavoring. Its Premium Ginger Brew contains no fructose and is sweetened with just honey and pineapple juice.

Reed may be forging his own path by seeking out his own consumers as his shareholders, but his approach is paying off. In June, Reed's announced that its Ginger Brew Extra was the top-selling item in the sugar- and fructose-sweetened soda category, according to SPINS Inc. (Schaumburg, IL). Moreover, other Reed's beverages, including its Ginger Brew Premium, Ginger Brew Original, and Virgil's Root Beer, rounded out the top four spots. Tombstones, grassroots, and ginger may be a strange brew indeed, but it's one that's also making a splash among natural products consumers.

David Heber, Navindra Seeram,
and the UCLA Center for
Human Nutrition

UCLA's Center for Human Nutrition is a leading source of data about the effects of diet and lifestyle on disease. Led by founder David Heber, MD, PhD, the center runs several interdisciplinary programs that explore the complicated relationships between nutrition, obesity, and cancer.

At the center, Heber and his team conduct research on the beneficial effects of dietary supplements and functional foods. The center receives funding from a variety of sources, including the university, NIH, and private companies. Heber, a faculty member of UCLA's medical school since 1978, is a strong advocate of dietary intervention as a means of disease prevention.

Heber conducts outreach to both consumers and the scientific community. In media interviews, he encourages consumers to improve their diets by using a color-coded system that emphasizes foods rich in antioxidant pigments. At scientific conferences, he encourages scientists to consider how genes, culture, diet, and economics intertwine to affect disease.

Heber has been a prolific author, conveying his research to the public through books like What Color Is Your Diet and to scientists through more than 70 peer-reviewed papers, 25 book chapters, and several textbooks. He also works closely with the lab's assistant director, Navindra Seeram, PhD.

Seeram, who is also an assistant clinical professor at UCLA's medical school, has spent more than a decade uncovering the secrets of plant biochemistry. His latest paper, published in the September 17, 2007, issue of the American Journal of Agricultural and Food Chemistry, describes how metabolites of pomegranate ellagitannins, known as urolithins, travel to prostate tissue, where they may inhibit the growth of cancer cells.

The center has no doubt inspired many product developers, as research conducted there is helping convert pomegranates and other relatively common foods into leading supplement ingredients. But it's likely that the center also has inspired another important group as well: the students who work there as research assistants. Expect to see some interesting discoveries in the nutritional field from UCLA-educated scientists in the years ahead.

Joseph Betz, director of ODS's
Dietary Supplements Methods
and Reference Materials
Program

If any one thing could help ensure the quality and efficacy of dietary supplements, it might be the development of validated analytical methods that accurately describe botanical raw materials. And if any one person could be credited for shepherding that process along, that person might be Joseph Betz, PhD, director of the Dietary Supplements Methods and Reference Materials Program at NIH's (Bethesda, MD) Office of Dietary Supplements (ODS).

If anyone is qualified to head the program, it's Betz. Before joining ODS in 2001, Betz had worked for two years as vice president of scientific and technical affairs at the American Herbal Products Association (Silver Spring, MD) and 12 years as a research chemist at FDA's Center for Food Safety and Applied Nutrition.

Betz also served as FDA's representative to the United States Pharmacopeia's (USP; Rockville, MD) subcommittee on natural products, and as a general referee for botanical supplements at AOAC International (Gaithersburg, MD).

In 2006, Betz was the recipient of the American Botanical Council's (ABC; Austin, TX) first Norman R. Farnsworth Botanical Research Award, which recognizes outstanding efforts to advance knowledge of natural products. In its award announcement, ABC credited Betz for helping to establish a framework for analytical methods development at AOAC and praised him for "standing out as a leader in the field." ABC also acknowledged Betz for playing a key role as the government's "point man" in generating methods and reference materials.

In a September 2007 article in the journal Analytical and Bioanalytical Chemistry, Betz and several of his ODS colleagues noted that "an enormous challenge remains in developing, validating, and disseminating methods and reference materials for the 40,000 supplement products projected to be on the market by 2010." ODS, AOAC, private companies, and other industry leaders have been working diligently to fill in the gaps by sponsoring development of methods and materials.

As a sign of progress, the journal article noted that between the launch of ODS's Dietary Supplements Methods and Reference Materials Program and 2006, more than 100 dietary supplement methods graced the pages of the Journal of AOAC International, while in the two years before the program launched, none appeared. In the same issue, another article described a suite of three ginkgo-related standard reference materials (SRMs) developed by the National Institute of Standards and Technology (Gaithersburg, MD). SRMs for other ingredients, like green tea, bitter orange, omega-3s, and a variety of berries are also on the way.

Thanks to Betz and many other like-minded industry leaders, natural products manufacturers can look forward to a future filled with more reliable, effective, and safe products.

Franck Riboud, CEO of
Groupe Danone

Danone CEO Franck Riboud's approach to wellness includes providing active ingredients in addition to limiting harmful ingredients. Photo courtesy of Groupe Danone.

Franck Riboud has a vision for the future of healthy foods, and it looks a lot like the past. The company he leads, Groupe Danone (Paris) formed as a small yogurt factory in 1919, before expanding into one of the world's most profitable food companies through a series of strategic mergers and acquisitions. Today, the company is returning to its roots by shedding its biscuits and cereals line and concentrating on its dairy and probiotics business. Danone also obtained Royal Numico's nutrition business earlier this summer.

Currently, Danone sells its products in about 40 countries, but Riboud hopes to double that exposure within the next few years. Under his leadership, the company has prospered, realizing an organic growth rate of nearly 10% in 2006. Danone's North American business, Dannon (White Plains, NY), is prospering too. The company sold more than $100 million worth of its Activia yogurt since its U.S. debut in January 2006. Danone expanded the line in January 2007 to include a nonfat version, Activia light, as well as its new DanActive yogurt drink and a Danimals probiotic line for kids.

According to Riboud, wellness has been a core concern of Danone since its earliest days. A decade ago, Danone sold off its confectionery, packaging, ready-to-serve meal, and beer operations—approximately 30% of its sales—to focus on just three health-related businesses. In the company's 2006 annual report, Riboud claimed that the company's health focus is a core value.

"For Danone, this isn't about changing our advertising in response to social concerns that we've only just become aware of," he said. "It's a long-standing commitment that you can trace back to the discovery of the benefits of Evian water in 1789 and the first sales of Danone yogurts in pharmacies in 1911." Riboud added that the company's approach to health doesn't just involve limiting harmful ingredients—its new Danimals products, for instance, contain 30% less added sugar and eschew high-fructose corn syrup—it also involves adding active ingredients.

Riboud also believes his company should have a social conscience. Danone provides financial support to Grameen (Dhaka, Bangladesh), the community development bank created by Nobel prize–winning economist Muhammad Yunus. "The Grameen Danone Foods joint venture company shows that it is possible to do business differently," according to Yunus. "It sets an example that others will perhaps follow. Profit is no longer an end in itself, but the means to social ends. The money this business generates can be reinvested and maximized, and continue to serve a cause."