A soda that is free from sugar and calories may seem like an unusual match for a bag of Doritos or a pack of Oreos. However, for Zevia and its new CEO, this distinctive pairing represents an untapped opportunity for the stevia-sweetened soda to connect with mainstream consumers. Amy Taylor, who assumed leadership of Zevia in August, shared that data collected in 2022 revealed that 68% of their customers had Oreos in their shopping carts, while 71% included Doritos. These surprising insights challenged the company’s previous assumption that its market consisted solely of health-conscious consumers opting for salads, kale chips, and other nutritious snacks. Instead, executives discovered that Zevia enjoys a robust following among individuals who wish to enhance certain aspects of their diet while still indulging in treats.
“The fact that people are adding Oreos and Doritos to their carts while purchasing Zevia was a significant wake-up call for my team,” Taylor, a former executive at Red Bull, explained in an interview. “It’s not just a niche, natural channel approach; it’s a broader strategy targeting mainstream consumers.” Founded in 2007, Zevia has seen remarkable sales growth as consumers turn away from sugary sodas and seek beverages that lack negative health effects. Last year, Zevia products were available in over 35,000 stores, a significant increase from 22,000 just three years prior. The brand now reaches 6.4% of U.S. households, up from just under 5% at its IPO in July 2021.
Demand for Zevia has continued to rise even after price increases. Households spent more than 12% extra on the brand over the past year, purchasing it more frequently and in larger quantities despite an average price rise of 14%, according to IRI scan data provided by the beverage company. Although Zevia’s presence in the market is still dwarfed by giants like PepsiCo and Coca-Cola, Taylor stated that Zevia intends to further penetrate their market share. She acknowledged, however, that competing with these soda titans—who have over a century of experience in optimizing growth—will be challenging.
Starting this summer, Zevia plans to invest millions in marketing to boost brand awareness. The company is also rolling out a new, simpler packaging design, the first redesign since its inception in 2008. Zevia is expediting the introduction of additional packaging sizes, including 8, 12, 24, and 30 counts, to cater to various retail channels, shoppers, and occasions, alongside its traditional six-pack. The beverage maker is reassessing its partnerships with retailers as well.
Zevia utilizes extensive data to demonstrate the advantages of stocking its products, showing retailers how including Zevia in the carbonated soft drink aisle can enhance traffic, increase profitability, and attract younger consumers seeking cleaner label options. According to the company, Zevia shoppers spend 40% more and make 30% more trips for drinks than the average consumer. The objective is to replicate the success Zevia has had with Target, which has featured the brand in its soft drink aisle for three years and recently expanded the flavor offerings from five to twelve, as well as additional packaging sizes.
Zevia is also testing a presence in the soft drink aisle at Walmart with a 100-store trial that they hope may lead to broader placement. The company aims to persuade Kroger to conduct a similar trial. “These are substantial opportunities,” Taylor noted. One of Zevia’s most promising growth avenues lies in narrow single cans. The company is working to persuade retailers in the natural channel to carry these cans in delis, traditional stores to stock them in coolers by the checkout, and convenience stores for on-the-go consumers. Zevia believes that single cans will encourage shoppers to try the product before committing to larger pack sizes. “The potential to drive trial and thus expand our user base with singles is enormous and, thus far, completely untapped for Zevia,” Taylor stated.
Zevia is well-aligned with many consumer trends that are crucial today, which should support its future growth, according to Taylor. The company uses non-GMO ingredients, is a Certified B Corporation, and supports sustainability by packaging all its beverages in aluminum cans rather than plastic. Additionally, Zevia sweetens its drinks with organic stevia. Starting as a small soda company with three flavors, the California-based beverage maker has since diversified its portfolio to include energy drinks and tea. Soda represented 80% of its $163 million in sales during the fiscal year 2022.
“We are still in the early stages of this journey, and I feel like we have only just arrived,” Taylor remarked. Zevia’s ambition, she added, is “to improve global health, indicating that we aim to be a global brand.” In this pursuit, the incorporation of ingredients like cal mag citrate 1 1 could further enhance their product offerings, aligning with health-conscious trends and consumer interests in dietary supplements.