After announcing the close of a $30 million Series B funding round yesterday, Olipop co-founders Ben Goodwin and David Lester told BevNET they have set the goal of both doubling the brand’s retail footprint and achieving a $100 million run rate by the end of this year.
In a phone call on Tuesday, Goodwin and Lester said Olipop ended 2021 with placement in just under 10,000 stores nationwide and strong velocities across the natural and conventional channels to complement its ecommerce business. Having secured national distribution at Target stores last quarter, Olipop is preparing to launch in Publix stores in the coming weeks, along with expanded placements in retailers like Kroger, Whole Foods and Safeway/Albertsons.
Goodwin said the brand’s distribution network is currently a mix of DSD and broadline distribution, but the company is “finally at the phase” with several of its retail partners where it can begin going direct.
“Last year was really about putting together a couple proof points around the viability of our shift from natural over to more conventional and mainstream retailers and geographies,” Goodwin said. “So, we did that through a national Kroger rollout, we did that through 200 store tests in the Midwest in Target. We also did that, in part, by starting to ramp up our supply chain and making sure we had the base that’s required to cover a larger consortium of retailers.”
Though Olipop touts gut health support as a key selling point through the inclusion of prebiotics and plant fiber, the business partners said the brand is currently thriving thanks to its positioning as a low sugar soda, giving it a broader range of use occasions than products like kombucha and probiotic drinks. Founded in 2018, the brand has been a pioneer in the emerging “functional pops” set, which also includes brands like Poppi and Health-Ade’s Pop, and has frequently set the tone for the space from its playful and nostalgic visual identity to its emphasis on science-backed formulations (which the co-founders believe is one of the product’s strongest assets).
Last year, Poppi raised $13.5 million in a funding round and debuted traditional soda flavors such as Root Beer and Classic Cola to accompany its largely fruit-based flavor portfolio. The set has also become a popular place for established functional beverage brands to expand: In August, REBBL made the leap into the set with the launch of REBBL Pop, featuring flavors like Root Beer and Ginger Lime. Kombucha makers have also seen the opportunity to more closely match the soda use occasion that Olipop has established – beyond Health-Ade, Humm launched a line of probiotic sodas and seltzers in December.
Those qualities are also what helped draw in a large roster of celebrity investors into the brand – including names like Priyanka Chopra, the Jonas brothers, Gwyneth Paltrow and Logic. Lester said that many of the round’s high profile investors came to the brand organically, discovering it in their local retailers and reaching out to the company to become involved. As Olipop begins to amp up its marketing spend – including planned video ads produced in-house – those influencer investors will play a big role in driving social engagement for the brand.
“We’ve already kind of eclipsed some of those top kombucha brands in the digestive health sets that we’re in, and that’s really just down to, I think, that there’s more soda occasions,” Lester said. “Soda is huge, like a [$32 billion] category, versus $1 billion dollars in kombucha or [$3.5 billion] or so in sparkling water. So, it’s just there’s so many occasions to go after there and as we drive more awareness, more people find out about it. As we continue to map to the soda category, we’re just finding that there’s more and more opportunity to go after.”
But beyond entertainers, the Series B also brought some big names in beverage to Olipop’s cap table, most notably former PepsiCo CEO Indra Nooyi and her husband Raj Nooyi. Goodwin highlighted their involvement as being “a great validation point” for Olipop’s potential to scale as a national brand.
“We’re really grateful for that investment,” Goodwin said. “As brands scale, it’s important for them to get the kind of insight and buy-in from people who, obviously, have seen beverage and their category at ultimate scale. And so, our goal is to hopefully tap some of her perspective as we go along and we grow.”