Jones Soda has cut its net losses but saw drinks sales fall by 25% in the first quarter of 2009.

Net sales slipped to US$7m for the first three months of the year, down from $9.4m in the same period of 2008, Jones Soda said yesterday (7 May).

Net losses reduced from $3.85m in the first quarter of last year to $2.6m this year, said the US-based soft drinks group.

The sales decline was blamed largely on the termination of contracts to supply Jones' namesake drinks brand in glass bottles at some of is major retail customers. The firm discontinued a number of contracts in order to focus on higher margin distribution, it said.

The sales fall was also due to weakening consumer demand in the US recession, Jones added. Volume sales fell by 30% for the quarter, to 539,500 cases.

Company president and CEO Joth Ricci said: "We had planned case sales to be down versus a year ago as we continue to realign our distribution and focus more resources on a higher margin, single serve strategy for our product portfolio.

"Accordingly, we continued to right-size our infrastructure and effectively controlled spending, evidenced by the 30% reduction in operating expenses versus a year ago."

Last month, Jones Soda founder Peter van Stolk resigned from the group's board, stating that he was "concerned with the direction of the company".

Going forward, Ricci said: "The current economic conditions continue to create a challenging selling environment and have made forecasting demand much more difficult. Our transition to a leaner, more flexible organisation over the past 12 months is allowing us to react quicker to changes in the marketplace and drive higher productivity on lower case volumes.

"Until visibility improves, our focus will be on cash preservation, strengthening our balance sheet and managing expenses, while at the same time selectively pursuing growth opportunities that fit our margin targets."