Functional beverages are booming, and Big Soda is circling.
Bubbling up. Consumers want low-sugar, gut health-boosting drinks. And prebiotic soda maker OLIPOP is cashing in.
According to founder and CEO Ben Goodwin, the company already turned down takeover offers from Coca-Cola and PepsiCo, opting to double down instead.
- The brand grew 900% between 2019 and 2020.
- OLIPOP expects to double sales from 2022, eclipsing $200M by year’s end.
- It has distribution in 20K stores, with its root beer flavor overtaking A&W’s sales at an unnamed top US retailer.
Founded in 2017, OLIPOP has raised more than $55M, including a $30M round last year.
Low in sugar and containing 32% of recommended daily fiber intake, Goodwin said his company’s better-for-you beverage is winning fans:
“We really are replacing that soda experience and soda occasion.”
A change in behavior, the company said ~10% of OLIPOP drinkers have replaced traditional soda entirely.
On trend. A fast-growing segment of the $265B functional beverage category, prebiotic soda is still relatively unknown.
According to recent data from The New Consumer, ~14% of Americans have heard of prebiotic sodas, but of those in the know, 45% were “extremely” or “very” interested in consuming the product — the fourth-largest affinity only behind food as medicine, adaptogens, and probiotics.
Riding the wave, prebiotic beverage makers are scaling up.
- Rival prebiotic soda brand Poppi raised $25M late last year and is seeing 2.4x YoY sales year to date.
- The UK’s Hip Pop, which is doubling its revenue year over year, launched its Living Soda range late last year, with distribution reaching 42 US states.
- Australian prebiotic soda maker Bobby did A$1.5M ($995K) in its first year, leading to national distribution deals with 7-Eleven and Coles supermarkets.
Just in the past three months, the category has gained new entrants in the UK’s Fibe, Buddha Brands’ Thirsty Buddha, RISE’s Better Soda, and Daytrip’s CBD + prebiotic cola — with undoubtedly more in the pipeline.
But… Prebiotic sodas are certainly the lesser of two evils, but the average American consumer will drink 43 gallons of sugary soft drinks in 2023, per IBISWorld.
Punchline: While OLIPOP and others offer healthier alternatives, we’re a long way from breaking our addiction to added sugar.