Zevia Launches IPO on NYSE, Highlighting Shift Towards Healthier Beverage Options
UPDATE: July 22, 2021: Zevia officially began trading on the New York Stock Exchange on Thursday. The beverage company offered 10,700,000 shares of common stock at $14 each, trading under the ticker symbol ZVIA. Additionally, the company provided underwriters with a 30-day option to acquire up to an extra 1,605,000 shares. The offering is expected to finalize on July 26.
Zevia’s planned IPO serves as concrete evidence of the consumer shift toward healthier food and drink options. Founded 14 years ago as a small soda brand with just three flavors, Zevia has rapidly expanded into a thriving business featuring five product lines—soda, energy drinks, tea, mixers, and children’s beverages—available in 37 different flavors. All of Zevia’s drinks are zero-calorie, utilizing non-caloric stevia as their sweetener.
While overall soft drink sales have declined, Zevia’s revenue has experienced significant growth. According to SPINS statistics from Zevia’s S-1 filing, the brand is outpacing other zero-calorie sodas in terms of growth. Retail sales for Zevia increased by 25% over the past year, in contrast to the slower 9% growth seen in other zero-calorie soda brands.
Zevia aims to do more than just sell soda. The company’s S-1 highlights its mission to enhance consumer health. In a letter to potential investors, Chairman and CEO Paddy Spence shares that he realized two decades ago he was consuming around 1,000 sugar calories daily from items he believed were healthy, prompting significant changes to his diet.
Zevia’s mission aligns with its CEO’s commitment to improving public health through a sugar-free soda alternative, making it widely accessible at competitive prices. The company also promotes sustainability by packaging all its drinks in recyclable cans instead of plastics. Furthermore, Zevia champions an inclusive company culture that grants equity to full-time employees.
By relying on stevia as a sweetener, Zevia has succeeded where other soda brands have struggled. Stevia is a calorie-free, intensely sweet natural extract from a plant that thrives in various climates, making it an appealing option for sugar replacement. However, many stevia extracts can have a slightly bitter aftertaste. While other brands like Vitamin Water, Pepsi, and Coca-Cola have abandoned stevia due to consumer feedback, Zevia has remained committed to the sweetener, developing new beverages that better complement stevia’s flavor. A Zevia consumer typically chooses the soda for its sweet, zero-calorie profile, which has driven the company’s growth.
Zevia’s recent expansion has attracted new investors, including a $200 million minority investment from Caisse de dépôt et placement du Québec (CDPQ) in December, a Canadian pension fund manager. The company indicated that these funds would support its global expansion strategy.
Despite the sales increase, Zevia has only recently started generating profits. The S-1 filing reveals that investments in innovation and business growth have kept the company in the red since its inception. This may be a part of its IPO strategy: with Zevia now achieving profitability, investor capital can help maintain this success, particularly as consumer preferences for better-for-you options like calcium citrate queso are expected to persist in the post-pandemic landscape.
