As functional beverages have played an increasingly important role in consumers’ daily routines, pro- and prebiotic gut health friendly drinks spent 2022 increasing their presence in the market. Through new product launches, increased distribution and some sizable investments gut health drinks – be they CSDs, kombuchas, juice shots or emerging disruptive categories like tepache – have greatly increased their visibility over the past 12 months.
With so much news coming from this space, you may have missed some updates. If you did, here are some of the biggest gut health stories of the year.
Prebiotic CSDs Raise Big Capital
The year was bookended by sizable funding rounds from leaders in the functional soda category.
On February 1, prebiotic soda maker Olipop kicked off 2022 by announcing it had closed a $30 million Series B funding round led by Monogram Capital and supported by a roster of celebrity backers – including Priyanka Chopra and Gwyneth Paltrow – and business professionals such as former PepsiCo CEO Indra Nooyi and A-Series Management & Investments founder Anjula Acharia.
Olipop co-founders Ben Goodwin and David Lester told BevNET at the time that the funding would be put towards its goal of doubling its 10,000 store national footprint and achieving a $100 million run rate. With a high retail growth target, the co-founders said Olipop would begin transitioning to direct distribution with a number of its existing partners and the brand had “already eclipsed” a number of kombucha brands in annual sales.
According to IRI, Olipop dollar sales in MULO and convenience accounts were up 368.4% to $35.3 million in the 52-weeks ending October 2.
More recently, closing out the year, Poppi announced it has raised $25 million in its own Series B led by existing investor CAVU Venture Partners. The brand said it has experienced 148% year-over-year growth with under 50% ACV in most traditional retail outlets, with about 18,000 doors nationwide and a goal of surpassing 30,000 accounts in the new year.
Both Olipop and Poppi have been at the forefront of the emerging functional soda set, each offering consumers a health boost from prebiotics and low sugar content while providing the taste of classic soda flavors. While their core propositions are similar, this summer the two brands further differentiated their brands and approaches to the category, as Olipop advocated for more scientific research and backing behind functional claims in the space while Poppi leaned harder into its flavor-first marketing message.
Beyond CSDs, probiotic tepache maker De La Calle closed a $7 million funding round in February, accompanied by the launch of four new flavors.
Leadership Shifts Mark Growth Ambitions
New executive appointments at several leading gut health brands signaled that the category is taking growth and profitability more seriously as seasoned operators assumed top roles.
In April, Poppi announced it had hired former Talking Rain CEO Chris Hall as its new chief executive, while co-founder Stephen Ellsworth moved to the position of Chief of Product. Hall announced his exit from the Sparkling Ice manufacturer in March and the company’s COO Ken Sylvia was named as his permanent replacement shortly thereafter. On April 21, Poppi announced that Hall would be joining the brand full time beginning in May.
Besides Hall, Poppi has also drafted other seasoned CPG professionals into its ranks this year, including new CMO Lana Buchanan, formerly VP of Anheuser-Busch InBev’s Beyond Beer division, and former Essentia CFO Chuck Czerkawski as its chief financial officer. Poppi co-founder Allison Ellsworth, who previously headed the brand’s marketing, has moved into the role of Chief Brand Officer and continues to work closely with Buchanan on the brand’s messaging and campaigns.
In the kombucha category, Health-Ade announced a major leadership change in the fall as co-founder Vanessa Dew was named interim CEO following the departure of Jack Belsito. Belsito took the chief executive role last year when investment group First Bev took a controlling stake in the California-based brand, with co-founder and former CEO Daina Trout taking the newly created position of Chief Mission Officer.
In December, the company found its new permanent CEO, naming former PepsiCo executive Chris Lansing to the position. Lansing, who previously helped identify and lead PepsiCo’s investment in – and eventual acquisition of – sparkling probiotic drink and kombucha brand KeVita, will seek to further scale the kombucha brand which has made gut health a core pillar of its messaging.
As Lansing comes in, Trout and Dew announced they will leave Health-Ade in Q1 of 2023. Trout’s husband, co-founder and former COO Justin Trout left the brand last year.
Elsewhere, a year after founder Matt Thomas handed the CEO role over to CPG veteran Dan Stangler, Oregon-based kombucha brand Brew Dr has worked to streamline operations and drive new growth. In September, after roughly a year in the position, Stangler told BevNET that the company is opening up new production lines and working to further expand its core kombucha line in retail.
Innovations Abound
There was no shortage of functional soda launches in 2022, with gut health benefits serving as one of the top trends for the category. At Natural Products Expo West 2022 in March, numerous brands showcased line extensions and rebrands with a focus on prebiotics and probiotics, including TEAONIC, Mortal Kombucha, Turveda, Mission Loop and Humm.
But innovation was constant throughout the year. Supplements brand Nouri began the year in January with the launch of its new Inner Immune functional drinks line and prebiotic soda brand Vina introduced a refreshed design for its product line.
Gut health proved to be a popular trend for brands to tap as they launched into new categories. New York-based kombucha company Bear’s Fruit turned to the sparkling water category in July with the launch of a new probiotic line and CBD sparkling water company Daytrip unveiled a prebiotic soda line in September. Canadian brand Cove Kombucha later unveiled a rebrand and a new prebiotic soda in line in November.
Outside of CSDs and sparkling water, Australian kombucha maker Remedy Drinks announced its U.S. launch in April with a shelf stable canned line and in November Wild Tonic Jun Kombucha unveiled a refreshed look for its products.
Other Major Moments
The gut health trend has given older brands a chance to seize the moment: Doctor D’s Sparkling Probiotic launched in 2013 and had experienced slow and modest growth for much of its lifetime, but in 2022 the surge in interest for gut health drinks set it on course for 100% year-over-year growth. The company opened a funding round this summer to further fuel expansion.
Massachusetts-based Culture Pop, co-founded by Nantucket Nectars’ founder Tom First, is also prepping for national expansion in 2023. First told BevNET in November that the brand is now available in over 2,000 stores nationwide and the two-year old company has grown to 21 full time employees.
Demand for gut health isn’t just contained to full-sized formats, either. Suja’s acquisition of juice shot brand Vive Organic in October is set to give the company a majority share of the fast-growing category where probiotics are a key attraction for consumers.
Not all news in the gut health space has been positive, however. The year also saw legacy apple cider vinegar (ACV) maker Bragg Live Food Products take the offensive in a regulatory and messaging battle with ACV supplements brands that it believes could hurt the integrity of the category with ineffective products. As well, gut health beverage startups Goodwolf, a water kefir producer, and ACV tonic company Shire City Herbals, maker of Fire Cider, went out of business.