Cove Soda has a new Canadian distribution partner that it hopes can open paths to growth on both sides of the border.
The Halifax, Nova Scotia-based brand announced on Thursday morning it has signed an exclusive agreement with Keurig Dr Pepper (KDP) Canada to lead national sales, distribution and omni-marketing execution for its line of probiotic sodas in 12 oz. cans. KDP Canada has not taken a financial stake in Cove, according to the brand’s CEO and co-founder, John MacLellan.
“This partnership represents a bold and strategic step forward in the evolution of our CSD portfolio,” said Jean Gagnon, VP of Cold Beverages at Toronto-based KDP Canada. “Cove Soda is uniquely positioned at the intersection of taste and function, aligning perfectly with consumer demand for health-conscious refreshment. We’re proud to support a Canadian success story that complements our vision for a more diverse and modern beverage offering.”
Cove launched as a kombucha brand in 2018, but since 2022 has shifted focus towards its shelf-stable Cove Soda, which moves across all channels in Canada through UNFI.
Conversations about a partnership began around a year ago, said MacLellan. The move takes Cove from around 2,200 retail locations in Canada – including Costco, Loblaws and Sobeys – to between 15,000 to 20,000 locations once fully integrated into KDP Canada’s system.
KDP’s support in Canada, however, is also intended to add fuel to the company’s U.S. business, according to VP of sales John Wahl. Cove Soda launched in the States in February 2024 at Fresh Market, and has since balanced expansion in natural retailers (Erewhon, Bristol Farms, Whole Foods) with large chains like Costco (in 15-count variety packs) and Target. The brand is working with Horizon Distributors to service accounts on the West Coast.
“We’re excited because we think this is a huge opportunity to expand in Canada, but also gives us the chance to really focus on the U.S. as well,” he said, adding that the business plans to “build a proper U.S. team.”
KDP Canada’s alignment with Cove Soda comes the same week as Nutrabolt acquired a majority stake in Bloom Nutrition, makers of prebiotic soda Bloom Pop, which is distributed by KDP in the U.S. Seeking to revitalize CSDs with better-for-you options, Big Soda players – most notably Pepsi with its acquisition of Poppi – have jockeyed for position and partners within the wide field of probiotic and prebiotic sodas now on the market.
Amidst all of that competition, Cove’s flavors have given it an edge, Wahl said. Expect more soon, with “five or six” new-to-the-category innovations in the pipeline, MacLellan added.
“What’s fun about representing and working with Cove, is that we’re not just another me-too item; we’re not saying ‘taste our root beer against theirs,’” said Wahl. “We’re bringing innovation and really creative flavors and fun to the set, and that’s what the buyers are telling us – that we’re really bringing some nuance and creativity and we’re finding our own lane.”
The KDP Canada deal comes roughly one year after lifestyle brand Palm Tree Crew expanded its investment in Cove Soda, bringing along celebrities like Chris Rock, Miles Teller, The Chainsmokers, Diplo, Michael Rubin, Ryan Tedder, and Mike Meldman.