Skinny Nutritional, a US-based producer of zero-calorie enhanced water, has reported 18% decline in net revenues to $5.66m for the year ended 31 December 2011, compared to $6.92m during the prior year period.

Skinny Nutritional sold around 786,000 cases of Skinny Water, a decline of 21%, compared to 990,000 cases during the same period in 2010.

The fall in revenue is primarily due to the capital limitations which resulted in inventory gaps and a decrease in in-store activity, as well as lowering the wholesale price.

Direct sales to retailers was $1.57m in 2011, an increase of 86%, compared to $847,177 in 2010.

Direct sales to DSD network was $4.08m in 2011 against $6.07m in 2010.

During the period, Skinny expanded its retail network to around 14,000 stores, including mass merchandisers, supermarkets, drug stores and club stores, a 97% increase compared to 7,100 stores in the previous year.

Company chairman and chief executive officer Michael Salaman said now that they have the national footprint through the expanded chains and their regional DSD network, Skinny Nutritional expects that the recently signed manufacturing and license agreement with Cott’s Cliffstar subsidiary will allow Skinny to capitalize on Cott’s inventory management and purchasing capabilities, which should even out the gaps that have limited the sales growth during 2011.

"Our 2012 marketing and sales plan is to focus our marketing and sales spending in core markets that include Boston, New York City, Philadelphia, Washington-Baltimore, Los Angeles, Miami, Chicago and San Francisco, while adding national accounts in grocery, mass, drug throughout the country," Salaman said.

Skinny Water brand includes seven variants – Acai Grape Blueberry, Raspberry Pomegranate, Lemonade Passionfruit, Orange Cranberry Tangerine and under the Sport range – Blue Raspberry, Pink Citrus Berry and Goji Black Cherry.

The key ingredients in Skinny Water are electrolytes, antioxidants and vitamins.

All drinks have zero calories, zero sugar, zero carbs, zero sodium and prepared with no preservatives and with all natural colors and flavors.