Peter van Stolk doesn’t talk like a typical beverage company CEO. When discussing the phenomenal success of Jones Soda, the carbonated soft drink brand he started in 1996, he’s prone to using phrases like “that’s sick.” And, his response to a recent announcement that Jones Soda inked a five-year deal to be the official non-alcoholic beverage partner of the Seattle Seahawks at Qwest Field, the first small private soda label to get a major pouring contract, was equally irreverent—“that’s smoking crack.” But ask the former professional skier-turned-beverage-entrepreneur about distribution strategy, pricing or margins and it’s clear that this is a man who knows the business and is playing to win.

Van Stolk’s ability to straddle the line between corporate head and maverick—he maintains the attitude of a creative entrepreneur while steering an 11-year-old company to strong double-digit growth in a down CSD market—is reflected in the brand itself. With youthful flavors like Blue Bubble Gum and Fufu Berry and eccentric black-and-white photos of consumers on its labels, Jones Soda retains a quirky, scrappy image. Yet the brand that got its start in tattoo parlors and skate shops now can be found in Panera Bread and Barnes & Noble, retail environments more likely to attract soccer moms than fans of the X Games. So how does a brand that built its fan base on a simple premise—“Run with the little guy…create some change”—stay relevant when it has a highly publicized deal with a NFL team and is predicted to be a global company by the end of 2008? 

Photography by Kate Baldwin

Running with the Little Guy
Van Stolk started his career in the beverage world in 1987 as a distributor in Western Canada (it began as a summer job between ski seasons). In 2000, van Stolk changed the company name from Urban Juice and Soda Co. Ltd. to Jones Soda, a seemingly random choice involving a telephone book. (Van Stolk says he wanted a name that was “old school, but new school” and chose Smith as it was the most popular name in the phone book. A Smith Soda Company already existed, however, so he went with Jones instead.) In 1995, van Stolk decided to try his hand at creating his own beverage brands, starting with Wazu Natural Spring Water followed by six flavors of Jones Soda in 1996. Launched in glass bottles with indulgent flavors like Strawberry Lime and Grape, Jones Soda was aiming for the premium space on the CSD shelf, an area where van Stolk thought Pepsi and Coke were missing the mark.

“As a premium in any category, you have to create an emotional connection; that’s critical if you’re going to charge more than your competitor. People pay for emotions when they buy a brand,” he says.

Jones Soda forged that connection by simply listening to consumers and giving them what they want. The company solicits suggestions for the next off-beat flavor, the next wacky name, like Whoop Ass energy drink, and even the quotes found under the bottle caps usually come from Jones fans. Then, van Stolk and his team discovered the ultimate way to create an emotional connection with consumers—putting their pictures on the bottles. The popularity of the customized bottles, which the company now has a patent for, led van Stolk to establish myjones.com to allow consumers to create personalized labels for 12-packs of soda to be shipped directly to their homes.

“When we first started doing this 11 years ago, it was cutting edge and there was no clear indication that technology would transition into where it is today,” he points out. “Now people have cameras on their phones and you hear Pepsi say that they want kids to customize their cans. Well, we’ve been doing that for 11 years and we’re actually putting your photograph—your dog, your cat, your bike, your skis, your skateboard, your tattoo, anything you want—on the bottle and we’re saying it’s yours.”

The personalized labels give consumers a sense of ownership of the brand in an authentic way that multi-billion-dollar marketing campaigns can’t achieve, van Stolk asserts.

As the Seattle, WA-based company has continued to grow—Jones Soda reported $39 million in revenue in 2006—van Stolk and his team have been able to build on that emotional connection. As part of its deal with Qwest Field, Jones Soda will have photographers roaming the stadium during games taking pictures of fans and players. Those images then will be available for fans to buy and customize their own 12-packs through Jones’ patented process. In addition, Jones Soda is releasing specialty packs with Seahawks players and team logos on the bottles.

“I can’t compete with Pepsi and Coke on the money, but our competitors can’t put a consumer’s favorite football player on a bottle,” van Stolk remarks.

Jones Soda’s strategy of placing its drinks in unconventional retail outlets, such as tattoo and piercing parlors, skate and surf shops and clothing stores, also played a large role in building its cult following. At the same time, Jones was one of the early pioneers of sponsoring athletes—pro skater Tony Hawk was the company’s first athlete—especially extreme pro riders, skaters, snowboarders and surfers, which only solidified its connection with youthful, alternative consumers. Even now as mainstream companies lock up sports sponsorships, Jones Soda continues to be a maverick by sponsoring cutting-edge tattoo artist Kat Von D.

A Brand Comes of Age
Today, Jones Soda has about 280 distributors in the US, Canada and some international markets, and thanks to a five-year distribution and manufacturing deal with National Beverage Corp., in which Jones provides concentrate, 12-ounce cans of Jones Soda are now available at major retailers across the country, including Costco Wholesale, Wal-Mart, Sam’s Club, Safeway, Kroger and Fred Meyer. Beyond its current 15 flavors, for the first time, Jones Soda will offer regular cola and sugar-free diet cola products at Qwest Field, which puts the company more directly in competition with big leaguers Coke and Pepsi, even though van Stolk insists that Jones Soda plays on a different field than the two soda giants.

“They sell in a minute what I sell in year, so they are not my competition,” he concedes. “We here at Jones can’t really talk about competition because if you start looking at competition, then you take your eye off where you’re going and you’re looking in the rearview mirror all the time.”

And Jones Soda is clearly looking straight ahead, with new distribution deals and new products guided by Jones’ main philosophy—not to play by anybody else’s rules. As consumer loyalty is critical to the brand, van Stolk recognized that as consumers evolved, the company also had to evolve. In the past few years, the company has expanded the product line to emerge as a complete beverage company, van Stolk asserts, with brands such as Jones Organics tea beverages, Jones Naturals, Jones Energy and Whoop Ass energy drinks and 24C, a vitamin-enhanced water the company purchased in 2006.

“The thing I really like about Jones is that we’re not a flavor. Nobody associates Jones with a single flavor. So we can do anything we want and the limitations are what we put on ourselves,” he notes.

Yet even as the company expands into new categories, Jones Soda does things its own way, while continuing to defy expectations. Late in 2006, the company introduced Jones Soda in 12-ounce cans sweetened with pure cane sugar instead of high fructose corn syrup and has since converted all of its Jones Soda products, making it the first national brand sweetened with pure cane sugar. Van Stolk says he made the move after numerous requests from consumers, yet admits the process had its challenges.

“Financially, you probably can’t justify the conversion in the first year, or maybe even two or three years, but it’s the right move. You have to run your company for the long-term and this is a long-term right decision,” he asserts.

Besides differentiating Jones Soda’s products from other soft drinks on the market, the conversion to pure cane sugar also opened up opportunities with retailers and boosts Jones Soda’s premium image in the marketplace.

“Our strategy is to be a treat. Our marketing campaign is ‘Drink less soda, just better soda.’ We’re the first to admit that we are an indulgence and if you’re going to indulge then you should have the best available. We think we have that—the best packaging, best product, best taste, best ingredients, best in class,” he says.

In its ongoing effort to push boundaries and explore unique beverage options, Jones Soda plans to launch a new energy drink containing pharma gabatm, a naturally produced form of the amino acid gamma-aminobutyric acid (GABA), an ingredient believed to promote mental focus without the effects of caffeine. A popular food ingredient in Japan, pharma gabatm recently achieved GRAS (Generally Recognized as Safe) status in the US. Jones Soda entered into an agreement with several Japan-based ingredient companies for exclusive rights to use the ingredient in beverages, because, van Stolk says, he didn’t want to come out with another caffeine and taurine-based energy drink. “We think there’s a next category out there; something that’s better, cooler and funkier,” he explains.

Van Stolk has a clear focus on where he wants to take the company moving forward—expanding the brand’s global presence, getting Jones Soda into fountains in high-end quick-service restaurants, setting up strong distribution for 24C and the new energy drink, yet always staying focused on being the premium CSD in the marketplace.

Between the new energy drink, the Seahawks deal and expansion into more international markets, van Stolk has his work cut out for him. But that doesn’t mean he’s lost his sense of humor or his innovative edge. From the folks that brought consumers Turkey & Gravy soda in 2003, then followed up in subsequent years with Green Bean Casserole, Mashed Potato and Butter and Brussels Sprout sodas, Stolk promises that this year’s holiday offering will be just as buzz-worthy. “You’re gonna go ‘wow, this guy is nuts.’ But this stuff is going to be ripping,” he exclaims. The holiday-flavored sodas are just one way that van Stolk and his team keep themselves from taking things too seriously.

“I’ve said it before, but the world doesn’t need another soda company, and it doesn’t need Jones,” van Stolk insists. “Nobody wakes up and thinks ‘I’ve got to have a Jones today.’ So you’ve got to be fun. We’re soda and what can be more fun than soda?”

From Beverage World August 15, 2007