US – Zevia, a Stevia sweetened soda brand, has closed a US$200 million minority investment from Caisse de dépôt et placement du Québec (CDPQ), an investor that manages pension funds in Canada.
Zevia said it will use the funding to pursue its global expansion strategy and enable it better take advantage of the increasing demand for better-for-you, natural beverages to replace sugary drinks
In its announcement, Zevia noted that it selected CDPQ as its investment partner for its ability to accelerate the company’s growth through expertise in asset management, international reach and a strong commitment to environmental, social and governance values.
Stevia which is the main ingredient that Zevia uses in its beverages presents a strong opportunity for companies to clean up their ingredient lists and produce healthier beverages.
The stevia sweetened beverage category grew by 36% in 2018. Zevia has capitalized on this better-for-you trend by steadily increasing its stevia beverage line since 2015.
This is in sharp contrast to the market of conventional carbonated drinks where volumes have been shrinking over the past several years despite the category being the second-biggest beverage category in the U.S.
Zevia is not alone in trying to reach consumers who are interested in healthier soda.
Startups like Limitless, Soda Press and White Wave Soda have embraced sparkling, caffeinated beverages with an improved nutritional profile and are competing along with Zevia against the traditional soda titans.
However, Zevia has more than a decade of experience creating healthy alternatives, and it makes a line of sodas with a similar flavor profile to many of the brands they are trying to replace — including Dr Zevia and a cola-flavored drink.
Zevia also explicitly promotes the inclusion of stevia in its recipes, which has helped the company ride the wave of the ingredient’s growing popularity.
By defining its niche through the use of a specific alternative ingredient, Zevia is tackling the market using a similar strategy to successful food brands like Banza and Caulipower that have made their name using chickpeas and cauliflowers respectively.
With an additional US$200 million at its disposal and an investor that has global connections, Zevia will continue its efforts to increase its market share by offering an alternative to consumers who continue to fall away from soda and favor better-for-you alternatives.
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