By: Dylan Sikes - AllPennyStocks.com News

Tuesday, July 8, 2014

The functional food and beverage industry has been on a strong growth path, reaching about $175 billion in 2013 to account for about 5 percent of the total food market. The reasons are vast, but include increasing demand for products that deliver, or at least claim to deliver, additional health benefits as people become more proactive about self-directed health care. Another factor is faster paced lifestyles that don’t often accommodate sit-down meals, meaning that people are grabbing food and drinks that can provide some nutrition and energy with a quick punch as they rush through the day. The list of motivating forces goes on and on, even including a feeling of sophistication from some products, and it’s translating to a bigger market. KonaRed Corp. (OTCQB:KRED) is increasing its market share, according to a corporate statement on Tuesday, saying that it is on track to double 2013 sales this year, its first full-year as a public company. The Koloa, Hawaii-based Company manufactures wellness products from the Hawaiian CoffeeBerry®, coffee fruit from Kona, Hawaii. The Hawaiian CoffeeBerry® is the fruit of the well-known coffee plant, Coffea Arabica, but the company says the secret to their product rests in the fruit being sourced from Hawaii, where the fruits flourish through the combination of climate and mineral-rich volcanic soil.

Through a licensing agreement with VDF FutureCeuticals, KonaRed produces antioxidant extracts and powders from the fruit to manufacture and sell a line of juices, organic green teas and on-the-go packs. The products are sold at select Kroger (NYSE:KR), Vitamin Shoppe (NYSE:VSI), Whole Foods (NASDAQ:WFM), Safeway (NYSE:SWY), Walmart (NYSE:WMT) and 7-Eleven stores, to name a few, in the U.S. and Canada. KonaRed also sells the products through its website, either as a one-off sale or as via monthly or yearly subscriptions.

Consumer product sales during the first six months of 2014 were $782,141, representing a 71-percent improvement from $458,816 in sales during the same time last year. For all of 2013, consumer product sales totaled $606,307. If the second half of 2014 maintains the pace, consumer product sales for 2014 will total $1.564 million, an improvement of 158% in the top line. On the downside, that will still be short of the $1.835 million in sales in 2012.

"We've been working hard at our many sales initiatives and these are starting to yield positive results. Momentum is heading in the right direction and we continue to push to move growth along faster,” commented KonaRed chief executive Shaun Roberts in Tuesday’s announcement. “I have little doubt that we'll double our sales in 2014 versus 2013 and expect we'll exceed that number," he added.

Total revenue during the first six months of the year increased 24 percent to $918,442 from $738,532 in the January through June period of 2013.

While the top line is looking to improve year-over-year, investors will also be looking at the bottom line, which in 2013 ended with a net loss of $3.912 million, or 6 cents per share. A 10-Q for the second quarter, which just ended June 30, hasn’t been filed with the Securities and Exchange Commission yet, but KonaRed posted a net loss of $1.724 million, or 2 cents per share, in the first quarter.

While the company continues to go through its growing pains, shares have slumped from a high of $1.36 hit in January to a low of 46 cents last month. In Tuesday trading, shares are down by about 3.5 percent at 50 cents.

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