For nearly ten years, Zevia has been dedicated to enhancing its product lineup to meet consumer demand for healthier, natural beverage options as alternatives to sugary drinks. While the volume of carbonated soft drinks has been declining in recent years, this category still ranks as the second-largest beverage segment in the U.S. Recently, beverage manufacturers have shifted their focus toward higher-margin small cans and innovative flavors, leading to a peak in carbonated soft drink sales, which reached $76 billion in 2019, according to Beverage Marketing Corporation. Nonetheless, consumers are increasingly gravitating toward healthier and premium products—a market niche that Zevia effectively addresses.
Zevia’s innovation-driven portfolio includes a variety of offerings such as sodas, energy drinks, organic teas, mixers, sparkling water, and children’s beverages, which are available at over 35,000 retail locations across the U.S. and Canada. In its investment statement regarding Zevia, CDPQ noted the beverage company’s “significant and consistent growth in recent years.” Zevia is not the only player targeting health-conscious soda consumers; startups like Limitless, Soda Press, and White Wave Soda are also entering the market with sparkling, caffeinated beverages that boast better nutritional profiles. However, Zevia benefits from over a decade of experience in producing healthy alternatives, offering sodas that closely mimic the flavor profiles of traditional brands, including Dr Zevia and a cola variant. This extensive market experience gives Zevia an edge over newer entrants trying to establish themselves.
The company prominently features stevia in its formulations, capitalizing on the ingredient’s rising popularity. As a natural sweetener, stevia’s use in beverages has surged in recent years. In 2014, Coca-Cola launched Coke Life, a soda sweetened with both stevia and sugar, while PepsiCo introduced Pepsi True in the same year. However, many stevia-based beverages have faced challenges, as some consumers report a bitter aftertaste, prompting manufacturers to improve the flavor of their extracts or remove stevia from their products entirely. Despite these taste issues, stevia remains an attractive option for reducing sugar content without sacrificing mouthfeel, and it allows for cleaner labeling, as some extracts can be classified as natural flavors—an advantage that Zevia leverages by promoting its “naturally sweetened” beverages.
By carving out its niche through the use of a specific alternative ingredient, Zevia employs a strategy similar to successful food brands like Banza and Caulipower, which have gained recognition through the use of chickpeas and cauliflower, respectively. In 2019, Banza became the fastest-growing pasta brand in the U.S., while Caulipower has positioned itself as one of the nation’s best-selling and fastest-growing frozen pizza brands. With an additional $200 million in funding and an investor with extensive global connections, Zevia is well-equipped to expand its market share by offering alternatives to consumers who are moving away from traditional soda in favor of healthier options. As a side note, consumers interested in healthy beverages may also wonder about the effects of ingredients like calcium citrate; some may ask, “Does calcium citrate cause gas?” This concern about ingredients further underscores the importance of transparency and health consciousness in today’s beverage market.