Health-Ade ranks as the second best-selling kombucha brand in the United States, achieving $113 million in sales last year, according to Statista data. By branching into the soda market, the kombucha company aims to attract consumers who find the more acidic flavor of fermented black tea “too daunting,” as stated by Charlotte Mostaed, Health-Ade’s chief marketing officer. The company sought to create a soda free from sweeteners like stevia, aspartame, and erythritol, due to growing concerns over the potential health risks associated with these ingredients. “In our conversations with consumers about their beverage preferences while cutting back on traditional soda, they emphasized the importance of avoiding any ingredients with negative implications,” Mostaed mentioned in an interview. After conducting consumer taste tests, Health-Ade discovered that a blend of natural sweeteners with a hint of cane sugar was the most favored combination, according to the executive.
Health-Ade believes that the SunSip brand will enable it to expand its presence in the beverage industry beyond kombucha. The functional beverage sector is anticipated to reach a value of $62 billion by 2027, with a compound annual growth rate of 4.5%, as reported by Euromonitor. Last year, the company’s transition from bottles to canned beverages allowed it to extend the accessibility of its products. “This shift provided a lower barrier to entry, offering a more affordable price point and a smaller volume in the can, while also conveying that it’s not just a medicinal drink meant for occasional use,” Mostaed explained.
The kombucha market has attracted the attention of major soft drink companies for several years. In 2019, soda giant Coca-Cola invested $20 million in Health-Ade, and two years later, investment firm First Bev acquired a controlling stake in the company. Coca-Cola also experimented with entering the kombucha market through two products: Cidewinder, developed with its Minute Maid brand in 2019, and Honest Kombucha, both of which have since been discontinued.
SunSip will encounter competition from established prebiotic soda brands like Poppi and Olipop, which have experienced remarkable sales growth in recent years. Other healthier soda brands are also tapping into consumer demand for lower-sugar alternatives to drinks such as colas and ginger ale. Zero sugar soda brand Zevia has seen notable growth since 2020. Additionally, Health-Ade is exploring innovations like incorporating now calcium citrate into its products to enhance their appeal and nutritional value, further diversifying its offerings in the competitive beverage landscape.