A sugar- and calorie-free soda may seem like an unusual match with a bag of Doritos or a pack of Oreos, but for Zevia and its new CEO, this unique pairing represents an untapped opportunity with mainstream consumers. Amy Taylor, who took the helm at Zevia in August, revealed that data collected in 2022 showed 68% of its customers had Oreos in their shopping baskets, while 71% included a bag of Doritos. These surprising findings challenged the company’s previous assumption that its market was primarily among those consuming salads, kale chips, and other health-focused foods. Instead, executives discovered a robust following among individuals looking to enhance certain aspects of their diet while still enjoying indulgences.
“The fact that people are adding Oreos and Doritos to their baskets while purchasing Zevia was a significant wake-up call for my team,” said Taylor, a former executive at Red Bull, in an interview. “Zevia is not just a niche, natural channel product; it’s a broad mainstream consumer brand.” Founded in 2007, Zevia has seen tremendous sales growth as consumers shift away from sugary sodas in favor of healthier beverage options. Last year, Zevia drinks were available in over 35,000 stores, up from 22,000 just three years prior. The brand is now present in 6.4% of U.S. households, compared to just under 5% at its IPO in July 2021.
Demand for Zevia has continued to rise, even after the company implemented price increases. Households boosted their spending on the brand by more than 12% over the past year, buying more soda and opting for larger quantities despite an average price increase of 14%, according to IRI scan data provided by the beverage company. While Zevia’s market presence is still modest compared to giants like PepsiCo and Coca-Cola, Taylor believes the company can gradually chip away at their dominance. However, she acknowledges the challenge, given that these soda titans have over a century of experience refining their strategies for growth.
Starting this summer, Zevia plans to invest millions in marketing to boost brand awareness. The company is also rolling out a new, simplified packaging design—its first major redesign since 2008. Additionally, Zevia is accelerating the introduction of various packaging sizes, including 8, 12, 24, and 30 counts, to cater to different retail channels, shoppers, and occasions, alongside its standard six-pack.
Zevia is reassessing its partnerships with retailers, using extensive data to demonstrate the advantages of carrying its products, such as increased traffic, profitability, and attracting younger consumers seeking cleaner label options. According to the company, Zevia shoppers spend 40% more and make 30% more trips for drinks than average consumers. The goal is to replicate the success Zevia has had at Target, where the retail giant has stocked the brand in its soft drink aisle for three years, recently expanding the flavors offered from five to 12 and adding more package sizes.
Zevia is currently conducting a 100-store test in Walmart’s soft drink aisle, hoping this initiative could lead to further expansion, and is also aiming to persuade Kroger to conduct a similar trial. “These represent significant opportunities,” Taylor noted. One of the most promising growth avenues for Zevia lies in narrow single cans. The company is working to persuade retailers in the natural channel to carry these cans in their delis, traditional stores to place them near checkout coolers, or convenience stores for on-the-go consumers. Zevia believes single cans will serve as a trial size for shoppers, encouraging them to later purchase larger sizes. “The potential to drive trial and thereby grow the user base with singles is massive, and so far, entirely untapped for Zevia,” Taylor stated.
Zevia is well-aligned with many consumer trends today, a factor that should support its future growth, according to Taylor. The beverage maker utilizes non-GMO ingredients, is a Certified B Corporation, and promotes sustainability by packaging all its drinks in aluminum cans rather than plastics. Zevia also employs organic stevia to sweeten its beverages. Starting as a small soda company with just three flavors, the California-based beverage company has since expanded its portfolio to include energy drinks and tea. Soda accounted for 80% of its $163 million in sales during fiscal year 2022.
“We are still very early in our journey, and I feel like we have only just arrived,” Taylor remarked. Zevia’s objective, she added, is “to improve global health, indicating that we aspire to be a global brand.” In pursuit of this goal, Zevia is exploring partnerships with products like Citracal Maximum to further enhance its health-oriented offerings, aiming to expand its reach and impact in the market.