Drug Store News spoke with Paddy Spence, CEO of Zevia, about the potential for natural sodas in the U.S. marketplace.
DSN: What is the awareness level of nonartificial sweeteners, and how is that trending in the U.S. market?
Paddy Spence: Well, it’s been pretty amazing, and stevia is our primary sweetening ingredient. It’s a natural, botanical sweetener. It’s been around actually for hundreds of years, primarily in Latin America; it’s been available in Japan for about a 40-year period. Historically in the United States, it was a dietary supplement, and in 2008, the [Food and Drug Administration] granted what we call GRAS, or generally recognized as safe, status to stevia. It became usable as a sweetener, not just a dietary supplement. Since that period of time, sales have just exploded; and so in 2008, there were about $70 million worth of stevia sales in the United States, and this year it’s greater than a billion-dollar market. So we’ve seen just phenomenal growth with a lot of large packaged goods companies getting into the business, but our company, Zevia, was the first to do it in carbonated soft drinks or soda.
DSN: Can you share with us, what exactly is Zevia? What is the line and what inroads have you made into the U.S. market?
Spence: What’s neat about our brand is it’s a very simple consumer proposition. We’re taking all the great things that we loved about soda growing up from a flavor perspective; we’re in a 12-oz. aluminum can, and we’re at an affordable price point. The one difference with our product is that it’s zero calories, like a traditional diet soda, but instead of artificial sweeteners, we’re using stevia. So what we found is that soda is a huge category, one that 96% of American households are purchasing, and yet there’s an increasing number of folks who have become less comfortable with the amount of soda they’re drinking. And frankly, it’s a category that has earned a well-deserved reputation for poor health, whether you’re consuming the sugar sodas or diet sodas.
So what we’ve been able to kind of do is take that proposition and turn it on its head. We say, ‘here’s a soda with all the great things that we love about carbonated soft drinks and yet none of the ill health effects.’ And as a result, because we’re in a gigantic category that virtually everyone purchases, we have a radically differentiated product that actually removes the biggest objection to soda, which is its health profile. As you can imagine, that’s a product that consumers are pretty excited about. So our company has frankly been on a very steep growth trajectory, and sales are exploding.
DSN: What’s the go-to-market strategy?
Spence: This is a product that got its start in natural products stores — both independent stores and chains like Whole Foods Market. ... We saw amazing velocity. So the product has started to cross over into the conventional supermarket or grocery market. And going forward, I think we see huge opportunities in all the places that traditional soda is offered — whether that’s drug stores, warehouse clubs, mass merchandisers, etc.
For the full audio Q&A, click here.