While traditional soft drink giants continue to dominate the beverage space, many upstarts are finding success in developing soft drink-like offerings that also have a healthier function, reflecting the ever-changing preferences of modern consumers.
Poppi, a prebiotic soda brand, is joining competitors like Olipop in the global functional soda category, which is projected to be worth $173 billion by 2025 despite predictions from some venture capitalists that most beverage companies won’t end up being big players.
With less than five grammes of sugar and twenty calories per serving, the company’s drinks combine real fruit with apple cider vinegar. The formula’s components are aimed at promoting healthy digestion, a strong immune system, and radiant skin.
In 2021, when we last spoke with Poppi co-founder Allison Ellsworth, the Dallas-based company had just closed a $13.5 million round of funding. More than 7,500 stores carried it, including major chains like Target, Safeway, Kroger, Publix, Whole Foods, and Amazon.com, and the company had been around for about a year with nine different flavours.
“A big change is the functional pop fast growing category,” Ellsworth told. “Last year, we were at proof of concept, but now we are past that. We are seeing real revenue growth, real penetration and real trial. It’s been exciting to see. We’re here to play and a hot new brand.”
According to Ellsworth, online sales have increased by 250% and overall revenue has increased by 148% over the past 12 months. More than a billion people have watched Poppi’s videos on TikTok.
She added that the direct store delivery network Poppi established was a key factor in the company’s success. Back in 2020, Rohan Oza, co-founder and managing partner of CAVU Consumer Partners and an early investor in Poppi, gave Ellsworth and her husband, Stephen, this piece of advice.
“By the end of January, we will have pieced together, in the U.S., a full DSD network where no other brand of our size has done this,” Ellsworth said. “Now, we have our cans in the refrigerated section, on the shelves and doing a pallet drop in the lobby of retailers. That has made a major difference we can see.”
With so much expansion, Ellsworth said, Oza made the decision to increase its funding.
CAVU has once again taken the helm of a $25 million funding round. More than $40 million dollars have been invested into Poppi so far. Although Ellsworth did not share the exact valuation, he did say it was higher than the previous round.
It’s also making a comeback this year, but with a lot of changes, such as some new faces at the top. After 15 years at Talking Rain Beverage, most recently as CEO of the Sparkling Ice brand for the past five years, CEO Chris Hall (no relation to the reporter who wrote this) joined the company in May.
Lana Buchanan, formerly of Anheuser-Busch and Campari, has been hired as chief marketing officer, and Chuck Czerkawski has been hired as chief financial officer. Ellsworth remarked that Czerkawski “helped get us on the road to profitability” after leading Essentia Water to an exit in 2021.1
Poppi has doubled its distribution to over 20,000 locations and is set to reach 30,000 doors next year, according to Ellsworth. The company still only offers nine flavours.
Although the company began operations in the midst of the pandemic in March 2020, when aluminium was in short supply and other problems arose, Ellsworth has “invested in the right people so we are a well-oiled machine” by increasing headcount and establishing a leadership team.
That additional funding will be used to increase consumer exposure to the brand, or “getting more cans in hands,” as she put it.
Next up, Poppi is exploring club retailers, like Costco and Sam’s Club, working on how to sell in multipacks and developing some new flavours, with the potential for two to come out next year. Initial releases of the Cherry Limeade flavour appeared earlier this year.
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