Olipop – a functional beverage brand forging new territory in the soda category with 9g fiber per can – is generating “astronomically high repurchase rates,” say its founders, who have picked up significant bricks & mortar distribution during the pandemic and built a fast-growing direct-to-consumer operation.
Targeting consumers seeking low sugar beverages with functional benefits and a more accessible flavor profile (and price tag – the MSRP in stores is $2.49) than kombucha, Olipop was launched by Ben Goodwin and David Lester in late 2018 and is now in 4,500+ stores including Kroger, Whole Foods, Safeway, Wegmans, and Sprouts.
While COVID-19 delayed some store introductions, “We’re doing unbelievably well,” with sales growing by “almost 900% this year, albeit off a relatively small base in year one,” Goodwin told FoodNavigator-USA.
“Of course it’s early days, but our velocity story is extraordinarily strong, we’ve got an astronomically high repurchase rate and we’re adding incremental dollars into the digestive health category,” added Goodwin, who formulated Olipop with water, fruit juice, stevia, and a cocktail of botanicals including chicory root, Jerusalem artichoke, kudzu root, cassava fiber, cassava syrup, marshmallow root, slippery elm bark, Nopal cactus, and calendula flower.
Beyond kombucha: Retailers are looking for the next big thing in digestive health
“Retailers got some initial momentum with kombucha, and kefir added some more growth,” said Lester, who said Olipop team now has 25 full-time people on its team and had exceeded its internal revenue forecasts for 2020 “by about 30%... and it was an aggressive plan.”
“But now things are plateauing out and they are looking for where growth is going to come from next in that digestive health segment, and we’re saying what’s missing is prebiotics and fiber, and that’s allowed us to gain a footprint with these retailers very quickly.
“Our velocities are already outstripping some of the leading players in the kombucha set because there are so many soda occasions in a day. But we’re also bringing some lapsed soda consumers back to the category, because people – especially at the moment - want something with familiar nostalgic flavors that tastes like [regular] soda, but that they can feel good about.”
Each 12oz can has 35 calories, 9g fiber, and 3g sugar.
Direct to consumer platform
When COVID-19 hit, “everyone took a big gulp as we didn’t know what was coming down the pipes,” said Goodwin, “but we brought on Randy Anderson last year as senior director of supply chain [previously at Harmless Harvest and Plum Organics] and he understood that we needed to get out ahead of this in terms of ordering materials and developing flexible forecasts as consumers changed their purchasing habits.
“David has also led the charge to completely overhaul our e-commerce strategy, and e-commerce now accounts for something like 25% or more of our mix, and our investment in building a direct-to-consumer platform (drinkolipop.com) has really paid off.
“The margins are better not going through Amazon, plus we wanted to build direct relationships with our customers. When we launched Orange Squeeze [the latest flavor], we sent out a text message from Ben and within 15 minutes we had $10,000 in orders come through.”
Nostalgic flavors, less sugar, fewer calories, and functional health benefits
While Olipop – which raised $10m in a Series A round in January - is “not having particularly complex conversations around prebiotics” with most of its customers, said Goodwin, more US consumers now understand that what we feed the army of microbes that line our digestive tracts may be intimately connected to our wellbeing, and this is shifting the conversation about fiber beyond ‘roughage’ and ‘regularity’ to talk of the microbiome.
That said, survey data indicates that most of Olipop’s DTC customers cite its nostalgic flavors and branding followed by its low calories (35-45cals/can) and low sugar content (2-5g/can), before its functional health message when it comes to purchase drivers, he acknowledged.
GettyImages-ChrisChrisW
'We're actively investigating the next wave of prebiotics and fibers'
Prebiotics – fibers which promote the growth of beneficial bacteria in the gut - are fermented in the large intestine, producing beneficial short chain fatty acids (SCFAs), which are associated with a series of gut and immune health benefits. One of these SCFAs, butyrate, also appears to stimulate the production of neurotransmitters such as serotonin (click HERE), and anti-inflammatory cytokines (click HERE), which could reduce stress signals on the brain.
Some of Olipop’s ingredients – notably chicory root fiber – have well documented health benefits supported by clinical data (the prebiotic fiber reaches the colon intact and is selectively fermented, promoting the growth of good bacteria, which feed on the fiber, and increasing stool volume and softness).
Others (eg. calendula flower) have less data behind them, but may have antibacterial, antiviral, anti-inflammatory and antioxidant properties, says co-founder and formulator Ben Goodwin.
"We're actively investigating the next wave of prebiotics and fibers for inclusion, and we're in the process of doing research with Purdue and Baylor College of Medicine around the product and getting data back around the microbiome and digestive health benefits.
"We're also going to be participating in a landmark multi-year human clinical trial with Dr Jens Walter in Ireland who has just been awarded a grant to conduct a study around increasing prebiotic and fiber consumption in industrialized consumers. I think we're one of the only branded products particating in the trial, so it's going to be really rewarding to get real human data back on a large scale in a gold standard clinical study."
Right now, he said, the prebiotic soda category is in its infancy, "But at some point, if the category gets big enough, it's going to be investigated, and there needs to be a lighthouse - and that's us - in the category, that actually delivers for consumers."
“The average American gets less than a third of the WHO recommendations for fiber ... and if you’re taking probiotics without addressing underlying diet and digestive health, it’s like planting seeds in the desert and hoping a garden is going to grow.”
David Lester, co-founder, Olipop
The definition of 'prebiotic' recently agreed by the International Scientific Association for Probiotics and Prebiotics (ISAPP) is: “a substrate that is selectively utilized by host microorganisms conferring a health benefit.”
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