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Even as it revamps modern soda intro'd under Soda Smarter brand name, Reed's Inc is moving forward with Asia-targeted energizer called Reed's U-Oxygen that layers atop a ginger base the eastern herbs astragalus and ginseng. It's slated for intro tomorrow at Sugar & Alcohol Fair in Chengdu, China, and marks brand's expansion into Asian market. Recall that key investor, Shufen Deng, is based in Hong Kong with many ties to China trade. The news showed that innovation push is continuing even as leadership of struggling marketer of ginger beer and ginger ale has abruptly shifted. Context was Q4 earnings call hosted this morning by COO Neal Cohane, newly elevated to interim CEO role following departure announced yesterday afternoon of Cyrill Wallace, Pepsi lifer who'd been in top Reed's role only since last spring. No reason was given for change, tho as one sign of how sudden it was, Cohane hosted investor call while traveling in China to Chengdu show. That said, some close to co don't believe Wallace had been in daily mix for some time. Also departing was CMO he recruited 5 mos ago, Tina Reejsinghani, a Remy and Pernod vet.On call, Cohane and CFO Doug McCurdy made case that Q4 results, despite big drop in sales and narrowing of gross margin that we reported yesterday afternoon, had brought progress on several key fronts as they seek to weed out costs, shorten supply lines and build velocity at retail. But they're balancing needed sku reductions with continued flow of new innovation, including Cranberry & Blackberry flavor in Reed's Ginger Ale, a segment they were late to enter but which has surged to become top item in portfolio, which also includes Virgil's line of natural sodas.As we noted yesterday, topline contracted 23.1% to $7.5 mil in Q4. Among missteps we hear occurred under prior CEO, move to drop Virgil's longneck glass bottles in favor of tilt entirely to cans ran afoul of some retailers' preference for the more premium glass bottles. Gross margin narrowed to 20% from 30% due to inventory writeoffs and higher input costs, McCurdy said. But co continues to whack at costs, including slashing delivery & handling line by 35% to $1.1 mil in Q4. Operating loss narrowed slightly to $3.5 mil from $3.7 mil. Thanks to recent financing move, cash line is $10.4 mil. In trading early this afternoon, shares had retreated about 10%, but only after doubling in recent weeks, it's not clear on what basis.But co needs to grow topline, too. For now, at least, while he formulates longer-term plan, interim CEO Cohane reiterated familiar elements of earlier plan. It needs to enter modern soda segment, but not before working with flavor house to improve palatability of Soda Smarter, and go deeper into mixers. (Ginger beer, a core segment of Reed's, was cited yesterday by mixer co Fevertree as key growth driver in many markets.) It's also working to rebuild ties to key retailers that some believe were frayed over past year. Among key partners have been bricks & mortar banners Sprouts, Costco and Walmart and ecomm platforms Amazon and Shopify. Cohane said co is striving to amplify brands' visibility at digital shelf via moves with Instacart, Walmart.com and Albertsons.com. Cohane, recall, was longtime sales leader at Reed's who was brought back to co in enhanced COO role as things seemed to unravel under Wallace. Co said it's initiated search for permanent CEO.

On Heels of CEO Change, Reed's Targets Asia with U-Oxygen Energizer; More on Q4

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