SEATTLE — Jones Soda Co. is looking to cannabidiol (C.B.D.) and a refreshed marketing strategy to regain profitability. The company has been accumulating losses for 12 consecutive quarters. Net loss for the third quarter was $476,000, which compared with a net loss of $425,000 in the same period a year ago. Revenue was $3,032,000, down 12% from $3,454,000.
The decline was primarily due to weakness in the company’s partnership with 7-Eleven, said Jennifer Cue, president, chief executive officer and acting chief financial officer of Jones Soda, during a Nov. 7 conference call with analysts. Revenues at Jones Soda’s private label 7-Select program dropped 48% in the third quarter, driven by a decrease in store-level promotions. The program now accounts for 8% of the company’s total business, down from 13% in the same period last year.
Production issues with the Lemoncocco business also contributed to the decline.
Ms. Cue said she is optimistic about the future despite current headwinds. Toronto-based hemp and C.B.D. company Heavenly Rx invested $9 million to buy 15 million shares of Jones Soda this summer, bringing its ownership stake to 25%. The agreement also allowed Heavenly Rx to acquire an additional 20% stake and acquire stock in the open market, bringing its total share to 51%.
Jones Soda is using the capital to develop a line of C.B.D.-infused beverages.
“Although we are waiting for guidance from the Food and Drug Administration before we contribute any products to market, we are very excited with the progress we have made on this front,” Ms. Cue said. “We have retained one of the top product development firms in the U.S., who is working closely with our team to create a completely unique Jones-branded C.B.D.-infused beverage.”
Jones Soda also is investing in growing and enhancing its current portfolio.
Ms. Cue provided analysts with an update on the company’s rebound sales plan, which will be spearheaded by newly appointed vice-president of marketing Maisie Antoniello.
Ms. Antoniello’s priority will be selling more core products in more core markets, Ms. Cue said. She also will focus on increasing awareness and consumption among millennials and Gen Z.
“We are focused on building partnerships in a range of cultural platforms including music, video gaming, sports and the arts,” Ms. Cue said. “We believe these marketing activities are necessary to capture the younger generations' attention and consumption.”