Zevia PBC, a beverage company that makes zero-calorie and zero-sugar beverages with “clean” ingredients, has filed to go public.
The Encino, Calif.-based company plans to list class A shares on the New York Stock Exchange under the ticker “ZVIA.”
Zevia’s initial public offering has priced at $14, the midpoint of the $13 to $15 range. The company cut the size of the deal to 10.7 million shares from previous plan to offer 14.3 million shares. That would will raise $149.8 million, which the company will use for working capital and other general corporate purposes.
Goldman Sachs & Co. LLC, BofA Securities and Morgan Stanley are the lead underwriters in a syndicate of six banks.
Once the deal closes, Zevia, which started as a Public Benefit Corporation, will reorganize into a holding company through a UP-C process that will provide tax advantages to existing members of the business. Full-time employees have an interest in the company.
“At Zevia, every full-time team member has an equity interest in the company, receives robust pay and benefits, and is a key stakeholder in our mission,” Spence said in his CEO letter.
Zevia is classified as an emerging growth company, which means it does not have to make the same disclosures required of bigger public companies. A business remains an emerging growth company until it reaches a number of milestones, including annual revenue of more than $1.07 billion.
Founded in 2007, Zevia makes soda, energy drinks, teas, drinks for kids, mixers like tonic water and ginger beer, and sparkling water that are distributed across the U.S. and Canada.
“All of our beverages are made with only a handful of plant-based ingredients that most consumers can easily pronounce,” the company said in its prospectus.
Cola accounted for 24% of the company’s sales in 2020. Cola competitors include Coca-Cola Co. /zigman2/quotes/209159848/composite KO -0.95% and PepsiCo Inc. /zigman2/quotes/208744353/composite PEP -0.29% , two of the biggest brands in the world.
Zevia presents data from Statista and Beverage Digest showing that per-capita consumption of conventional carbonated soda has dropped to 38.6 gallons in 2019 from 45.5 gallons in 2010.
On the other hand, the health and wellness beverage category reached $301 billion in retail sales in 2020 and will grow at a CAGR of 2.8% from 2019 to 2025, according to Euromonitor data.
Zevia estimates that it has 88% market share of zero-calorie, naturally-sweetened soft drinks in 2020. Zevia has six product lines and 37 flavors.
Zevia estimates the global liquid refreshment beverages market is worth $771 billion.
Moreover, Zevia beverages are suitable for those with a variety of dietary regimens including kosher, vegan and gluten-free.
Paddy Spence has served as Zevia’s chief executive since March 2021. Previously he was CEO and a director on the Zevia board while it operated as an LLC. He acquired the company in September 2010. He also founded SPINS, a market research firm for the natural products industry, and was its CEO from 1995 to 2003.
Hank Margolis will be chief operating officer once Zevia is public, and Bill Beech will be chief financial officer. Both have served in these respective roles for Zevia prior to the IPO.
Zevia puts its environmental, social and corporate governance (ESG) efforts out front, highlighting its partnerships with dietitians and nutrition educators to provide educational materials about the impact of consuming sugary drinks, which has been tied to health problems like obesity, diabetes and other diseases.
Spence began keeping a food journal in 2001 and discovered how much sugar he was consuming despite his diet of natural and organic foods and beverages. He and his wife decided to eliminate sugar from their diets.
“Today, we still use a ‘sugar budget’ to manage our sugar intake at home,” Spence wrote in the CEO letter included in the prospectus.
Spence says there are “barriers” to others that preclude them from making healthier diet choices.
“So at Zevia, we are proud that we offer beverages that are accessible to consumers across a broad range of income levels,” he said.
Zevia has also taken steps to eliminate waste and set standards for transparency.