Profile: Olipop and Healthful Soft Drink Category
That taste of a new generation is probably chicory root
I quit soda a while ago. At a certain point, I just couldn’t justify the calories, the added sugar, or the chemical alternatives to make it low-calorie but still taste as sweet.
Yet lately, I’ve found myself back in the soda aisle. Not for Coke or Pepsi but for a variety of upstarts all promising to help me fall back in love with soda.
And who all seemed to have been founded in 2020 oddly - true pandemic babies).
The ‘healthy’ soda trend is being fueled by new entrants like Olipop, Poppi, Wildwonder, United Sodas of America, and Zevia. Who are upending the soda market by offering decidedly less sugar (2g in Olipop cola) than your average Pepsi (41 grams). While also offering other health benefits, typically some form of prebiotic.
Taking On Big Soda
Overtaking the Big 3 (Coca-Cola, Pepsico, Keurig Dr Pepper) will mean climbing a big mountain of sugar. As of 2021, these 3 accounted for 93% combined share of the US soft drink market.
However, growth has slowed substantially. Coke sales climbed 3% in its latest quarter, but that was driven largely by price increases. And PepsiCo says volume fell 5% in its beverage unit last quarter.
Meanwhile, the upstarts are gaining traction.
Olipop is available in 20K stores and expects $500MM in sales this year, doubling its sales from just a year ago. They even have a collaboration with Barbie.
And Poppi was the top-selling soft drink on Amazon in February (one and a half times the market share of Coke).
What’s Driving the Trend
Hydration - there has been an incredible emphasis on drinking enough water for a variety of health benefits. Which has naturally progressed into looking for creative ways to drink more by adding natural flavor (#watertok).
Sugar Aware - with more coverage of the amount of added sugar in the average American’s diet as well as the negative health impacts, people are trying to cut sugar out. Even going zero sugar (sadists).
Gut health - somewhat connected to lowering sugar, many are considering the benefits of feeding their gut biome. Which makes the pre-biotic claims appealing for many of these new sodas.
Direct to consumer - taking a page out of Liquid Death’s playbook, many have grown substantial followings online, although with more optimistic tone than ‘Murder Your Thirst’.
Is it all Hype?
More specifically, is it healthy? Or healthful (i.e., less bad for you)?
This is where the companies need to be careful. Olipop, Poppi and many others are prebiotic because they include inulin, a type of fiber derived from chicory root. The claim goes, these fibers help slow digestion allowing for better absorption of nutrients across the digestive tract.
Poppi is currently being sued for misleading claims regarding its prebiotic fiber content, alleging "a consumer would need to drink more than four Poppi sodas in a day to realize any potential health benefits."
Still, these sodas can be beneficial by helping many up their overall fiber intake (only about 5 percent of Americans meet the average daily recommendation).
Does Big Soda Need to Worry
Probably…not. Like most categories, the sheer size of a Coca-Cola or PepsiCo means they can play the waiting game and either come in with their own creation or buy up one of the new upstarts.
A better question might be, is there one in the group who can leap ahead of the rest? The way Oatly is to alt milks.
Right now, the category cues make it distinctive from traditional sodas. But not from each other. Bright colors. Bright flavors. Pop-py names.Enthusiastically positive about life and your gut health. Tailor made for social media but how about right next to each other on shelf?
That remains to be seen. Olipop and Poppi have lept ahead but the differences are flavors and fiber content at this point. (Note, I am somewhat addicted to Olipop’s Cream Soda).
The Players
Olipop (298K followers on Instagram / 429K on Tik Tok)
“OLIPOP is leveraging deep childhood memories and our aim was to tap into nostalgia and shared social moments,” - co-founder Ben Goodwin
started in 2018 in Santa Cruz, Ca by Ben Goodwin and David Lester
Grew 223% in revenue in 2022 making it the “fastest-growing refrigerated functional beverage brand in the United States.”
Reportedly on track to make $400MM in revenue this year
Available in over 23K stores as of Sept ‘23
15-20% of revenue coming direct-from-consumer via its website
Olipop’s root beer is reportedly outselling A&W
Poppi (372K followers on Instagram / 516K on Tik Tok)
“Poppi’s become so much more than a soda, it’s a tight-knit community and lifestyle at this point…As soda lovers, we want to share the joy and the freedom of drinking soda again and normalizing it. For a long time, soda has had a bad reputation and it’s our mission to turn that around. The response we see from Gen Z lets us know we’re on the right path!” - co-founder Allison Elsworth
officially launched in March 2020 by wife-husband Allison & Stephen Ellsworth in Austin, Tx
Can be found in 120 major retailers spanning more than 36,000 locations, and the company projects it will be in 58,000 locations before 2025.
Is the largest selling soda on Amazon with reportedly 19% share of market, 1.5 times that of Coca-Cola
Revenue figures are hard to pinpoint, however, reportedly Poppi's retail sales across all channels for 2023 was $116.3 million
Reportedly Poppi has been bought by 5MM American homes thus far
Poppi has built a grassroots strategy using organic social and influencer marketing amounting to 204MM impressions and 2.3MM engagements in 2023.
This year, Poppi ran its first Super Bowl ad by Brooklyn-based agency Virtue
Wildwonder (25K followers on Instagram)
“We do offer a healthy soda alternative, but we don't go after the traditional soda flavors. There [are] enough people doing that, and enough options out there. But we bring a different perspective into the space with cultural and botanical influences. It’s grandma's herbal wisdom with the concept of a very fresh California produce stand'- founder and CEO Rosa Li
Founded in 2020 by Rosa Li in California
Li came up with the idea while trying to improve her health by improving her gut health. In doing so, she started brewing herbal tonics, inspired by her Chinese grandmother's recipes, and infused them with California farmstand fruits.
Found success by targeting overlooked distribution channels like offices of major tech companies like Google, Netflix and Meta, which account for around a third of its sales. This business-to-business model has helped drive awareness.
Culture Pop (17K followers on Instagram)
“I was surprised that of all the categories that have been disrupted or reinvented or rethought, the one that hadn’t had a lot of innovation was carbonated soft drinks…I was drawn to carbonated soft drinks because people love bubbles.” - founder/CEO Tom First
Founded in 2020 by Tom First in Cambridge, MA
Revenue is unavailable, however, the company raised $21 million in Series B funding led by Enlighten Hospitality and former Starbucks CEO Howard Schultz suggesting confidence in the company
Like others, it built a direct-to-consumer through its website and Amazon
While starting in such retailers as Albertsons, Kroger, Safeway, Meijer, Stop & Shop, Giant Food, Fresh Thyme Market, Walmart, Whole Foods Market, and soon Sprouts Farmers Market in May.
With the additional funding and national retail presence, Culture Pop plans to expand advertising more nationally into 2025
Others to look out for include:
Turveda - combines natural flavors with functional benefits like Chill and Wellness
De La Calle Tepache - made from fermented pineapple (tepache), a variation of a traditional Mexican beverage
Health-ade Sunsip - by the makers of the popular Kombachu you’ve likely seen in your grocery store.
United Sodas of America - launched as a direct-to-consumer soda in 2020
Zevia - naturally sweetened, zero-sugar soda with $39MM in sales in Q1 ‘24
Related:
Is Pepsi okay?: Dr Pepper has tied Pepsi as America’s second favorite carbonated soft drink