Zevia secures $20M to reset a stalled soda business

By Daniel Okafor

Zevia has secured a $20 million investment from private equity firm GP Investments Ltd., according to the soda company’s statement. The growth equity deal gives the better-for-you brand capital for a strategic reset after years of declining performance.

The money will fund “key strategic priorities to drive meaningful long-term value creation for shareholders,” Zevia said. It will also support a broader product portfolio, younger consumers at new consumption occasions, stronger brand visibility and wider distribution, the company said.

How did Zevia reach the financing?

Dive reported that Zevia evaluated financing alternatives for a year after years of declines. Management concluded that a growth equity investment represented the best path forward. The search for capital came as Zevia confronted stalled growth and pressure from an activist investor.

Earlier this year, Dive reported that an activist investor called for Zevia to sell. The investor said the company had failed “to capitalize on the largest shift the soda aisle has seen in a generation.”

Zevia named a former Red Bull executive as its new CEO earlier this year. Dive described the appointment as part of a “strategic reset.” The company’s growth had stalled while Olipop and Poppi, two newer entrants to the better-for-you soda market, experienced growth.

Zevia was founded in 2007 as a lower-sugar alternative to traditional soda, Dive reported. The company now wants to diversify its product portfolio, attract younger consumers at new occasions, and increase brand visibility and distribution reach.

What does the financing change for Zevia?

Girish Satya, CFO of Zevia, said: “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.”

He added: “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.”

For Zevia, the practical change is operating capacity. The money gives the company more room to diversify its portfolio, win younger consumers at new occasions, and extend visibility and distribution, Zevia said. The test is whether that capacity reverses the decline behind the review and turns a higher sales outlook into sustained growth.

What do the latest sales figures show?

Dive reported that Zevia’s turnaround efforts are beginning to take shape. In its most recent quarter, Zevia reported net sales of $45 million, a 1.1% year-over-year increase. The company also raised its third-quarter sales outlook to $48 million. That target sits above the previous guidance range of $44 million to $46 million, according to a Zevia press release.

The modest sales gain and higher outlook provide early support for the reset. The next test is whether added balance-sheet capacity can deliver faster growth, broader distribution and a stronger position against Olipop and Poppi.