Zevia is a beverage startup that claims more than $100 million in annual revenue from its “cleaner” alternative to the big soda brands. Now, the startup says it is ready to expand the lucrative niche.
Zevia CEO, Paddy Spence, tells Fortune the company is adding two new product lines to its portfolio: energy drinks and sparkling water. Zevia Energy will come in three flavors including mango ginger and Grapefruit, while Zevia Sparkling Water’s lineup of four flavors includes blackberry and lime. Both will be sold next month on Amazon.com (AMZN), in Sprouts Farmers Markets (SFM) and a few regional chains in Seattle and Wisconsin. It will be a U.S.-focused debut.
“Frankly, people don’t trust the ingredients in conventional sodas like Diet Pepsi and Diet Coke,” Spence told Fortune. “When people dig deeper, they see the nasty ingredients that are used in those products.”
The broader soda industry is certainly facing a tough operating environment. Soda sales have slipped for 11 consecutive years, as consumers move away from mainstay brands and instead opt to drink more bottled waters, flavored waters and other drinks they deem healthier. Executives have conceded part of that shift is due to worries about ingredients that are found in those drinks—in particular aspartame. Startups like Zevia have sought to disrupt the space with their own newer brands.
“People know we stand for something.” Spence said. “That’s allowing us to enter into new categories.”
The story that Zevia is trying to sell is this: the portfolio of sodas have no calories and are naturally sweetened. The Energy drink line contains caffeine from coffee extract and stevia, but has zero calories. The sparking waters by the startup also contain no calories and utilize stevia, but no sugar.
Though Zevia won’t disclose exact annual sales, the company has shared that it has posted “consistent sales growth” since the brand was bought by Spence at the end of 2010. The Zevia sodas are stocked in 60% of U.S. supermarkets, including every major national chain.
Among diet soda brands it ranks #12 in supermarkets and is the only brand not owned by Coca Cola (KO), PepsiCo (PEP) or Dr Pepper Snapple (DPS).
Spence said that expanding into the energy drink and sparkling water categories is a natural progression for the brand. He said that personally, he likes energy drinks but doesn’t trust the ingredients that are used in products on the shelves today. Spence figures that others are also on the hunt for caffeine products that taste good, but without the extra supplements.
For sparkling waters, Spence argues what’s available today doesn’t deliver on taste. “We thought with stevia, the natural sweetness would make those beverages tastier.”
