Soda 2.0: Nostalgic flavors, low sugar, and functional health benefits… the meteoric rise of Olipop

By Elaine Watson contact

- Last updated on GMT

L-R: Olipop co-founders David Lester and Ben Goodwin. Picture credit: Olipop
L-R: Olipop co-founders David Lester and Ben Goodwin. Picture credit: Olipop

Related tags: soda, Olipop, Prebiotics

Olipop – a functional beverage brand forging new territory in the soda category with 9g fiber per can – is on course to more than triple revenues this year vs 2020, says co-founder Ben Goodwin, who launched the brand with David Lester in late 2018.

Targeting consumers seeking low sugar beverages with functional benefits and a more accessible flavor profile than kombucha, Olipop​​​ is now in around 6,000+ stores including Sprouts, Whole Foods, Safeway, Wegmans, and Kroger, and in tests in selected Target and 7-Eleven stores as it expands its presence in new channels.

If everything comes together, we should be somewhere in that 8-10,000 door range by the end of the year​,” added Goodwin, who said Olipop has raised “north of $20m​” to date and will be wrapping up a series B round later this year, “which will take us to profitability​.”

Olipop would not provide exact revenue figures, but said revenues last year hit eight figures.

E-commerce… from $35k a month to $1m+

The e-commerce side of the business, meanwhile, has taken off like a rocket ship, said Goodwin, who hired Randy Anderson, VP supply chain (previously at Harmless Harvest and Plum Organics) ​early last year to help grow this side of the business.

And judging by the numbers, it paid off big time. In February 2020, Olipop was generating e-commerce sales of around $35k a month. Today, he said, “It’sdoing a million plus per month, and we’re hoping to double that, again, by the time we get into next year, so that's a good chunk of the overall business.

“Our goal is to direct as much​ [online traffic] onto our own direct to consumer platform​ as we can offer subscriptions, people are more likely to sign up for emails, and we've got a better kind of line of communication with our customers, so we send out surveys, we ask people what flavors they want next.

“We've also got a text platform which has a really high conversion rate - 15 to 20% conversion - and it's very cost effective.”

For the Amazon side of the business, Olipop has teamed up with reseller Wishing U Well ​ ​said Goodwin. “What’s great is that we’re aligned on packaging, messaging, pricing, returns. They also have pre-existing relationships with 40+ Amazon warehouses.

“Because Amazon is so unwieldy, if you really want to manage it correctly yourself, you almost have to build out an entire team, just as we have for our own website operation. If you've got the bandwidth, then by all means, but we felt like we found a great partner in Wishing U Well.”

Olipop orange cream

Olipop - which comes in nostalgic flavors including cherry vanilla, classic grape, vintage cola, and classic root beer - contains 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. It is sweetened with fruit juice, cassava root syrup and stevia leaf extract.

Each 12oz can contains 35-50 calories, 9g fiber, and 2-5g sugar.

Picture credit: Olipop

‘They had projected around 12 units per store per week, and six weeks in, we're already in the mid-40s’                                                                                                                                

On the retail side of the business meanwhile, he said, “between Q4 of last year, and end of Q1 of this year, we almost doubled our brick and mortar volume without any real door expansion,” ​velocity figures which impressed buyers at a series of new accounts Olipop is currently targeting, he added.

We’redoing tests with Target that are going extremely well; they had projected around 12 units per store per week, and six weeks in, we're already in the mid-40s.

“We also secured full national distribution and new SKUs with Whole Foods; we’ve nearly doubled our footprint in Kroger, and we’ve picked up new regions of Safeway Albertsons.”

Olipop classic grape
The latest flavor: Classic Grape. Picture credit: Olipop

Gaming and eSports

When it comes to getting the word out about Olipop, a lot of it is word of mouth, said Goodwin, but the company has honed its digital marketing strategy in recent months and is always experimenting with new ads, tools, and platforms from Tik Tok to gaming platforms to see what works and to reach new consumers.

Facebook and Instagram are the two primary platforms,” ​said Goodwin, with content created by a small team in-house. “And then there’s adwords on Amazon and Google, but we’ve also been playing around on TikTok, and working with podcasts and influencers, so we’ve got a lot of new customers coming into the mix, and then great repurchase rates once people do buy the products, so that’s somewhere in the forties.”

Olipop has also been exploring opportunities to reach gamers and eSports enthusiasts, where the audience skews slightly more male, whereas its marketing on platforms such as Instagram has tended to be a "bit more female-centric​," he said.

“I think it's a really interesting space. But we're looking at everything now from​ [reaching out to] NBA players to Olympic athletes, a whole bunch of different buckets."

Nostalgic flavors, less sugar, fewer calories, and functional health benefits

 

OLIPOP STACK
More consumers now understand that what we feed the army of microbes that line our digestive tracts may be intimately connected to our wellbeing, says Olipop co-founder Ben Goodwin. Picture credit: Olipop

When it comes to health, ​meanwhile, ​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 prebiotics, probiotics, postbiotics, and the microbiome.

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, 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).

Synergistic effects

Others (eg. calendula flower) have less data behind them​​, but may have antibacterial, antiviral, anti-inflammatory and antioxidant properties, said Goodwin.

“We just got our first set of clinical results from invitro studies conducted at Purdue and Baylor College of Medicine which showed that Olipop was strongly bifidogenic and promoted beneficial microbial diversity in every donor; we not only grew bifidobacterium substantially, but we grew multiple varieties, which is phenomenal; plus we generated a substantial amount of short chain fatty acids such as butyrate, propionate and lactate.”

He added: “We also tested the fiber by itself and then the botanicals together with the fiber, and we found that we got meaningfully higher Bifidogenic interactions and meaningfully higher short chain fatty acid production with the inclusion of our botanicals versus without, which is awesome because it shows that there are synergistic effects​ [and that the botanicals are not just for window dressing].”

‘There are a lot of brands popping into the space now, with varying levels of credibility’

While more players are now jumping into the functional/digestive health soda category, Olipop has put real thought behind its formulation, and has been selected to participate in a multi-year human clinical trial with Dr Jens Walter​​ in Ireland who has been awarded a grant to conduct a study around increasing prebiotic and fiber consumption in industrialized consumers, said Goodwin.

 “There are a lot of brands popping into the space now, with varying levels of credibility, but we’re fortunate enough that between the strength of the product proposition and our early mover advantage, we definitely still capture the lion's share.”

 

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