Paddy Spence: ‘Our brand is on fire!’

Zevia heads to the Hollywood Bowl: ‘We’d love to be a $30bn market cap public company’

By Elaine Watson contact

- Last updated on GMT

Zevia CEO Paddy Spence: “A natural products shopper is saying I just can’t consume 25g of sugar every time I have a bottle of tea'
Zevia CEO Paddy Spence: “A natural products shopper is saying I just can’t consume 25g of sugar every time I have a bottle of tea'

Related tags: Zevia

Stevia-sweetened zero-cal beverage brand Zevia – which first hit the market in 2007 - notched up growth of more than 50% year on year in the latest 12 weeks in conventional channels, driven almost entirely through velocity gains as consumers demand beverages with less sugar and cleaner labels, said CEO Paddy Spence.

Speaking to FoodNavigator-USA after striking a five-year partnership with the Hollywood Bowl in L.A. – the “first of several partnerships with upscale foodservice venues​,” Spence said: “Our brand is on fire.

“It’s insane. We were up over 50% in conventional channels year on year in the most recent 12 weeks and frankly it’s all velocity. It’s not like we’ve grown distribution, we’re just selling more products and it’s reflective of this bigger trend. There’s not a consumer out there that is saying I want to eat more sugar next year.”

The natural products shopper is saying I just can’t consume 25g of sugar every time I have a bottle of tea

Zevia organic tea – a zero calorie iced tea sweetened with stevia hitting stores in August – is a “no brainer​” for the brand, claimed Spence.

You read about these natural brands saying they use a lot less sugar than conventional brands like AriZona, which has 47 grams in a can ​[some 23oz cans of AriZona products have up to 49g sugar​], which is egregious. But even a 16 oz bottle of Honest tea still has 25g of sugar ​[Honest Tea offers an unsweetened version, while its regular sweetened varieties​ have 19-26g sugar per bottle].

A natural products shopper is saying yes it’s better, but I just can’t consume 25g of sugar every time I have a bottle of tea, so having an organic tea line with no sugar is such a compelling proposition and such an easy switch for people.”

With added sugar in focus amid changes to the Nutrition Facts panel, and growing numbers of consumers trying to cut sugar through making different beverage choices​, he said, Zevia is only becoming more relevant.

“The opportunity for this brand is more significant today than I ever thought it could be. The two brands I look at for inspiration are Halo Top, which has reinvented ice cream; and Monster, which came in with an authentic product that connected with consumers and was unique in the category. That’s exactly where our brand is at, it’s gutsy and relentlessly innovative." 

Asked about whether Zevia could remain independent, he said: “We’d love to be a $30bn market cap public company. We see the success of Monster and it shows you what can be done, these guys can beat Coke and Pepsi at their own game, stay independent, be public and frankly have a market cap that rivals the biggest beverage companies.”

zevia products incl tea
Zevia produces zero calorie soda, energy drinks, mixers and sparkling waters, and is about to launch an organic tea. The ingredients list of its core zero cal soda range is: Carbonated water, citric acid, stevia leaf extract, natural flavors

Our ecommerce business is up more than 100% over a year ago

Asked about growth opportunities, he said e-commerce and foodservice channels presented significant areas of focus this year: “Our e-commerce business is up more than 100% over a year ago and last year Bloomberg reported that we were the #2 soda brand online after Coke and Pepsi.

“Why is that? It’s down to two things: #1, we know that the ecommerce audience skews a little bit younger than bricks and mortar; but #2, shopping online is about making information-oriented decisions. It’s not about the biggest ads or displays, it’s about reviews, ingredients and other attributes, and that’s where Zevia wins every single time, as the more you learn about the brand from an ingredient and nutritional standpoint, the more compelling it becomes.”

As for immediate consumption, single serve opportunities, he said: We’re pretty deliberate in the way we approach our distribution and absolutely the next frontier for our brand ​[beyond grocery] is immediate consumption."

But convenience stores are not the first port of call, he said: "The most obvious place is hospitals. Can you imagine going into surgery, waking up and having a glass of Coke? But also universities, gyms, fitness chains.. these have been phenomenally successful channels for us.”

The Hollywood Bowl

The tie up with the Hollywood Bowl - a huge outdoor venue in L.A. hosting everything from classical music concerts to The Arctic Monkeys - make perfect sense for the brand, said Spence: "I look at the Hollywood Bowl as the first in a series of many placements in great family focused entertainment venues for Zevia. We do extremely well on the grocery shelf and yet so many folks say I want Zevia at the movie theater or the ballpark or at a concert.

"We're going to be available for purchase at the venue, but in addition we’re also sponsoring a number of events at the Hollywood Bowl, so next week we are presenting the July 4 celebration and we[ll be handing out tens of thousands of cans of Zevia: mass sampling to introduce Hollywood Bowl patrons to the brand."

Online-shopping-istockphoto-BsWei

"Shopping online is about making information-oriented decisions. It’s not about the biggest ads or displays, it’s about reviews, ingredients and other attributes, and that’s where Zevia wins every single time, as the more you learn about the brand from an ingredient and nutritional standpoint, the more compelling it becomes.”

Paddy Spence, CEO, Zevia

Who drinks Zevia?

So who drinks Zevia?

Spence divides his target audience into three lifestyles rather than demographic groups:  “They span age and ethnicity and income brackets, so #1 is people focused on fitness. If you’re paying attention to what you put in your body, you’re not going to drink a product with 47g of sugar in it. #2 is families, we’re growing up with the first generation of kids that read labels, that take nutrition into their own hands. And #3 is special diets, particularly people with kidney disease, who can’t have phosphoric acid​ [which is found in conventional colas] so we’re a great alternative.

“Once you start putting these groups together, you’re talking about an aggregation of niches that represents more than half of the US.”

Soda... the comeback?

Asked what he made of recent Nielsen data suggesting a slight rebound​ in sales of full sugar and artificially sweetened soda in recent weeks after years of flat or declining sales, he said: "If you set your expectations low enough you’ll always be impressed so it’s only in context that we’d see low single digit gains as this amazing breakout performance.

"It’s like when people say, 'Gosh it was really cold one day in December so global warming doesn’t exist.' One data point doesn’t make a trend. Let’s be clear here, I’ve not seen any meaningful data to show that there’s a mass return to soda and an exodus from better for you beverages."

What should kids drink?

Dairy milk? Bananamilk? Almondmilk? Water?  Join the debate at our FOOD FOR KIDS​​​ conference in Chicago in November where we'll explore what kids are drinking, what they perhaps should be drinking, and where we go from here...

Get full details HERE​​​.

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