Dive Brief:
- Zevia nabbed a $20 million investment from a private equity firm as the pioneering better-for-you soda brand charts a turnaround to better compete with an influx of competitors.
- The deal with GP Investments Ltd. will fund “key strategic priorities to drive meaningful long-term value creation for shareholders,” the soda brand said in a statement.
- The investment follows a yearlong review in which the company evaluated financing alternatives after years of declines. Earlier this year, an activist investor called for Zevia to sell after failing “to capitalize on the largest shift the soda aisle has seen in a generation.”
Dive Insight:
Zevia is in the midst of a “strategic reset” and earlier this year tapped a former Red Bull executive as its new CEO. The brand’s growth stalled while other newer entrants to the better-for-you soda market such as Olipop and Poppi have experienced growth.
Zevia was founded in 2007 as a lower-sugar alternative to traditional soda. The company is hoping fresh capital will help it diversify its product portfolio to gain younger consumers at new occasions as well as increase brand visibility and distribution reach.
Zevia’s management team said it decided a growth equity investment represented the best path forward.
“Following a transformational two-year period focused on streamlining and strengthening the business, we now have a solid foundation to execute our next phase of growth,” Girish Satya, CFO of Zevia, said in a statement. “This financing represents a pivotal step in that evolution, creating additional balance-sheet capacity… and providing the flexibility to accelerate and capitalize on the tremendous opportunity to become the most trusted and chosen better-for-you brand in every category we serve.”
So far, Zevia's turnaround efforts are beginning to take shape. In the company's most recent quarter, it reported net sales of $45 million, a 1.1% year over year increase. The company also increased its outlook for third quarter sales to be $48 million, above previous guidance of $44 million to $46 million, according to a press release.
