Changing the Soda Game

👋🏻 Hey gang!!

Long time, no see!

This is the sixth newsletter and the second with a beverage focus… The Grocer is 33.33% beverage and I am totally fine with that. 🤷🏻‍♂️

I don’t know what it is about them, but ready-to-drink beverages just scream “happy little treat”! Ask anyone — a can/bottle of sparkling water, soda, cold brew? Everyone loves them… me included.

My personal favorite, and the topic of today’s main story, is Olipop! A functional soda developing flavors reminiscent of the nostalgic sodas everyone knows and loves.

Today's Content

• Think of Your Gut — Drink a Soda

• Boston Cannons Win PLL Championship Series

• eCommerce Innovators: Eli Weiss

Hope you enjoy the read! Feel free to reply with any thoughts or comments. And, if you really really liked it, consider sharing it with a friend!? 🙂

Have a great week!

Sam Sherfey

Presented by:

BETTER-FOR-YOU SODA
Think of Your Gut — Drink a Soda

It’s a category that didn’t really exist until recently, but it’s making noise at Whole Foods, Sprouts, Mom’s Organic Market, and beyond…

Better-for-you soda, now officially known as functional soda, has exploded in popularity over the last few years, largely thanks to a brand obsessed with gut health. The category, in short, is low in sugar (2-5g vs. 40g or more in “regular soda”) while containing ingredients with functional benefits — in this case, 9g of soluble fiber and gut-healthy prebiotics.

The entirety of the soda industry is a $42B industry with 98% household penetration in the United States. Olipop is battling its way into this market while taking on the big bad wolves of soda — PepsiCo, The Coca-Cola Company and Keurigg Dr. Pepper — as well as other competing brands.

Olipop is building the functional soda for everyone, not just the folks shopping in the natural food markets. They mean business… biiiig business. With experience from past CPG startups and a treasure chest of funding from trusted investors, Ben Goodwin and David Lester are building a rocket ship.

Olipop started with a $100,000 investment and, since then, has raised a Series B round of $39.7M from venture capital funds as well as some very notable names. In the fall of 2023, the company became a Certified B Corp.

In 2023, Olipop did over $200M in revenue (up from $74M in 2022), reached 10% household penetration, and surpassed A&W as the best-selling root beer in the United States, (CNBC).

Listen here: Where gut health meets hypergrowth with Ben Goodwin from Olipop, (Apple Podcasts, Spotify) 🎧

Those sales and the trajectory of the popularity put Olipop at third in total sales at major national retailers* while occupying only about 30,000 retailers which is less than half as many as companies of comparable size. Olipop is looking to double the number of retailers in 2024 as they prioritize small format and convenience retailers to increase accessibility and further awareness and growth.

This rapid sales growth has ‘big soda’ inquiring about acquisition opportunities as they look to…

1. Regain customers they’ve lost to the new category

2. Capitalize on shifting trends

There’s no single cause or strategy behind Olipop’s growth but the timing is pretty perfect. The better-for-you soda movement is coming at a time when kombucha (probiotic) sales are slumping, mocktails & non-alcoholic drinks are becoming more popular, and younger generations are, in general, giving their health & diet more attention.

Despite their meteoric success, Olipop isn’t relying on organic market shifts alone to drive their business. Olipop has scaled over the past through years through an exclusive partnership with Target (Cherry Cola), incredible customer experience, A+ communication through social and email, and endless UI testing and enhancement.

Leading a new and emerging category requires constant tinkering and optimization as well as consistent, clear, and concise consumer education & product positioning. Olipop does this through their communication on social, their website, and beyond, but one of the more interesting components is how they’ve defined their own product.

Olipop is “A New Kind of Soda™” but initially arrived on store shelves as a “Sparkling Tonic”. The transition is clearly a prioritization of their bet on the relationship consumers have with traditional soda. Instead of badmouthing or trying to separate themselves from the term “soda”, they are embracing the love and nostalgia most people have for it.

You’ll find plenty of other playful brands in the category, such as Poppi, Culture Pop, Vina, Healthade Pop, and Halfday (a prebiotic iced tea), in the ready-to-drink end-cap or by the checkout. Ultimately, Olipop reigns supreme with a cult-like following, and deservedly so, though Poppi is giving their biggest and best effort at writing their own argument for being the household name in functional soda.

Poppi ran the first ever Super Bowl commercial for a functional soda with their “The Future of Soda is Now” campaign. It was one of the more talked about commercials of the night. While Poppi is getting their fair share of attention, the category as a whole is benefiting from the spot and its focus on category awareness and consumer education. It’s one of those “rising tide lifts all ships” situations…

Watch here: Poppi Super Bowl LVIII 2024 Commercial, (YouTube) 👀

There’s plenty to come from the functional soda category and Olipop as we look for new flavors, retail expansion, more experiential content, and continued microbiome benefits.

*Major National Retailer Sales (in dollars) for the 12 weeks ending 1/28/2024

AISLE 8
Boston Cannons Win PLL Championship Series

Old-school grocery stores were more than, well, groceries. They were the go-to place for most of your shopping. This was before department stores, big box, and so on. With that in mind, I’ll be using “Aisle 8” as a place to drop headlines from other industries, such as sports, design, and so on.

Premier Lacrosse League’s Boston Cannons win the second annual Championship Series.

The PLL is an eight-team, single-entity lacrosse league co-founded by Paul and Mike Rabin with significant investment from The Raine Group, The Chernin Group, Creative Artists Agency, Joe Tsai, and others.

The league plays a full season of field lacrosse in the summer months and an Olympic-style ‘sixes” tournament in the winter, featuring the top-4 teams from the previous season. The Championship Series was created to incentivize teams’ regular season finishing position, provide more playing opportunities for PLL players that do not play in the National Lacrosse League (Box Lacrosse), and to create more inventory for the PLL's broadcasting partners.

The 2024 Championship Series took place February 14-19^th at The St. James outside of Washington D.C. The Boston Cannons defeated the Philadelphia Waterdogs 23-22 in overtime. This was the Cannons first championship since joining the league as a result of the PLL’s acquisition of Major League Lacrosse and their related properties.

The PLL’s regular season begins May 21^st when the league’s eight teams descend on Albany, New York to begin the league’s sixth season.

PRESENTED BY
Your New Favorite Coffee

Coffee and pastries served by some guy in a van.

Short story… in 2019, I quit a job with nothing lined up. I was down in the dumps, and my dad gave me a pep talk that I’ll never forget. He told me I had tons of opportunity ahead and that I didn’t have to be chained to a desk.

Now, apparently, at some point I had mentioned this dream of a mobile coffeeshop. While I have no recollection of that, it’s stuck with me since this talk.

I’ve started referring to the concept as “Generic Coffee”, and it’s become somewhat of a symbol for optimism, perseverance, and what lies ahead.

*Advertise with The Grocer

LISTEN
🎙 eCommerce Innovators: Eli Weiss

Eli Weiss is the VP of Retention Advocacy at Yotpo. Prior to this role, he held numerous positions across CX & Retention at leading DTC and retail brands, such as Jones Road Beauty and Olipop.

In this episode:

• The crucial role of customer education across the buyer journey

• Early experiences in the world of eCommerce as a generalist

• How Olipop's culture early on was pivotal to its success

• Balancing brand building with measuring marketing return

• Creating legendary experiences for customers

• The importance of customer conversations and how to have them

• His move to Yotpo and work building the future of CX & retention

Connect with Eli on LinkedIn.

Check out his CX & Retention Newsletter.

Listen here: Apple Podcasts, Spotify 🎧

OTHER
Self-Checkout

• Sprouts Farmers Market plans to open 35 new stores after strong performance in 2023, including a $1.7B fourth-quarter performance.

• Beyond Meat launches new, healthier version of burger in bid to bring back customers while other meat alternative companies are considering layoffs.

• Liquid Death launches “Death dust”, an electrolyte drink mix that comes in three flavors promising “you’ll rise from the dead and no longer be a flesh-eating zombie psychopath after a long night of partying”.

• Tech Creator, Marques Brownlee joins accessories company, Ridge as Chief Creative Partner with a focus on R&D.

• Instacart lays off 250 employees and 3 executives (7% of workforce) in an effort to flatten the organization.

• L.L. Bean Tote Bag sales have increased 35% since influencer Emily Mariko announced the launch of her $120 bag.

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