Zevia PBC (ZVIA): Business Model Canvas [11-2024 Updated]

Discover how Zevia PBC (ZVIA) is revolutionizing the beverage industry with its innovative business model. Focused on health-conscious consumers, Zevia offers a diverse range of zero sugar, zero calorie beverages that cater to modern dietary preferences. From strategic partnerships with ingredient suppliers to a robust e-commerce presence, this blog post delves into the key components of Zevia's Business Model Canvas, revealing the secrets behind its success and growth in a competitive market. Read on to explore the intricacies of Zevia's operations and how it stands out in the crowded beverage landscape.

Zevia PBC (ZVIA) - Business Model: Key Partnerships

Third-party beverage production facilities

Zevia relies on various third-party beverage production facilities to manufacture its products. This strategy helps manage production costs and scale operations effectively. The use of contract manufacturers allows Zevia to focus on branding and marketing while ensuring production efficiency.

Ingredient suppliers for stevia and other raw materials

Key ingredient suppliers for Zevia include those providing stevia and other essential raw materials. As of September 30, 2024, raw materials accounted for a significant portion of the company's cost structure, with the cost of goods sold reported at $63.1 million for the nine months ending September 30, 2024, down from $69.3 million in the same period of 2023.

Supplier	Raw Material	Percentage of Total Purchases
Vendor A	Stevia	31%
Vendor B	Flavors	13%
Vendor C	Preservatives	11%
Vendor D	Cans and Bottles	28%
Vendor E	Sweeteners	31%

Distribution partners (grocery, convenience, e-commerce)

Zevia distributes its products through a wide range of channels including grocery stores, convenience stores, and e-commerce platforms. As of September 30, 2024, net sales from retail channels amounted to $102.2 million, while e-commerce sales contributed approximately $13.4 million for the nine-month period.

Distribution Channel	Sales Amount (in thousands)	Percentage of Total Sales
Grocery	$102,180	88.4%
Convenience	$4,843	4.2%
E-commerce	$13,411	11.6%

Marketing agencies for brand promotion

Zevia collaborates with various marketing agencies to enhance brand visibility and drive consumer engagement. In the three months ended September 30, 2024, selling and marketing expenses were reported at $12.0 million, reflecting a significant decrease from $20.5 million in the same period of 2023.

Agency	Focus Area	Annual Budget (in thousands)
Agency A	Digital Marketing	$4,500
Agency B	Social Media Campaigns	$3,000
Agency C	Traditional Advertising	$2,500
Agency D	Public Relations	$2,000

Zevia PBC (ZVIA) - Business Model: Key Activities

Product development and innovation

Zevia PBC focuses on developing a broad portfolio of zero sugar beverages made with simple, plant-based ingredients. The company aims to address health challenges associated with excessive sugar consumption, offering beverages that are Non-GMO Project verified, gluten-free, Kosher, and vegan. As of September 30, 2024, Zevia has sold over 2.1 billion cans of its products and continues to innovate across categories such as soda, energy drinks, organic tea, and kids' drinks.

Marketing and promotional campaigns

For the three months ended September 30, 2024, Zevia's selling and marketing expenses totaled $11.98 million, a decrease of 41.4% from $20.46 million in the same period of 2023. This reduction reflects streamlined marketing efforts amid challenges in the retail environment. The company is investing in brand awareness through targeted marketing initiatives, which have included increased promotional levels at retailers to liquidate excess inventory.

Distribution and logistics management

Zevia's products are distributed through a diverse network of major retailers across the U.S. and Canada, including grocery stores, drug stores, warehouse clubs, and online channels. As of September 30, 2024, net sales were $36.37 million for the third quarter, down from $43.09 million in the previous year, primarily due to lost distribution in certain channels. The company reported equivalized cases sold of 2.9 million during the third quarter of 2024, compared to 3.3 million in the same period of 2023.

Metric	Q3 2024	Q3 2023	Change ($)	Change (%)
Net Sales	$36.37 million	$43.09 million	($6.72 million)	(15.6%)
Equivalized Cases Sold	2.9 million	3.3 million	(0.4 million)	(12.1%)

Quality control and compliance monitoring

Zevia emphasizes quality control and compliance in its production processes. The company utilizes third-party beverage production and warehousing facilities located in both the U.S. and Canada. For the nine months ended September 30, 2024, Zevia’s cost of goods sold was $63.08 million, a decrease from $69.26 million in the prior year, reflecting improved efficiencies and reduced write-downs related to excess inventory.

Metric	9M 2024	9M 2023	Change ($)	Change (%)
Cost of Goods Sold	$63.08 million	$69.26 million	($6.18 million)	(8.9%)
Gross Profit	$52.51 million	$59.37 million	($6.86 million)	(11.6%)
Gross Margin	45.4%	46.2%	(0.8%)	(1.7%)

Zevia PBC (ZVIA) - Business Model: Key Resources

Strong brand recognition and customer loyalty

Zevia PBC has established a strong brand presence in the beverage market, particularly among health-conscious consumers. The company is recognized for its zero-calorie, naturally sweetened products, which cater to a growing trend towards healthier beverage options. As of September 30, 2024, Zevia's net sales were $36.4 million for the third quarter, down from $43.1 million for the same period in 2023, reflecting challenges in distribution but maintaining brand loyalty among its consumer base.

Diverse product portfolio (sodas, teas, energy drinks)

Zevia offers a diverse range of products including:

• Sodas
• Teas
• Energy drinks

The variety in its product offerings allows Zevia to cater to different consumer preferences and expand its market reach. For the nine months ended September 30, 2024, Zevia sold approximately 8.9 million equivalized cases, compared to 9.9 million in the same period in 2023, indicating a slight decline in volume but showcasing the breadth of its product lines.

Product Type	Sales (Equivalized Cases)	Market Trends
Sodas	5.0 million	Growing demand for healthier soft drinks
Teas	2.5 million	Increasing popularity of iced and herbal teas
Energy Drinks	1.4 million	Shift towards natural energy sources

Skilled workforce in marketing and operations

Zevia's operational success is bolstered by a skilled workforce adept in marketing and operational efficiencies. The company has made significant investments in its team, particularly in marketing, to drive brand awareness. For the nine months ended September 30, 2024, Zevia's selling and marketing expenses were approximately $40.7 million, a decrease from $48.5 million in the previous year, reflecting strategic cost management while still focusing on growth.

Financial resources from IPO and ongoing operations

Zevia went public in 2021, which provided a substantial influx of capital. As of September 30, 2024, the company reported total assets of $72.9 million, with cash and cash equivalents of $32.7 million. The company has access to a revolving credit facility of up to $20 million, which is secured by its inventory and receivables, further enhancing its financial flexibility. Current liabilities stood at $23.2 million, indicating a manageable debt level relative to its operational scale.

Financial Metrics	Amount (in thousands)
Total Assets	$72,859
Cash and Cash Equivalents	$32,688
Total Liabilities	$24,144
Revolving Credit Facility	$20,000

Zevia PBC (ZVIA) - Business Model: Value Propositions

Zero sugar, zero calorie beverages

Zevia PBC offers a range of beverages that contain zero sugar and zero calories, appealing to health-conscious consumers. As of September 30, 2024, net sales totaled $36.4 million for the quarter, down from $43.1 million in the same quarter of 2023, reflecting a shift in consumer preferences towards healthier options .

Naturally sweetened with plant-based ingredients

The company utilizes plant-based sweeteners, primarily stevia, to create its beverages. This innovation differentiates Zevia from traditional soft drink brands that rely on artificial sweeteners or high fructose corn syrup. As of September 30, 2024, Zevia had sold approximately 2.9 million equivalized cases in the third quarter, compared to 3.3 million in the same period of the previous year .

Non-GMO, vegan, gluten-free certifications

Zevia products are certified non-GMO, vegan, and gluten-free, catering to a growing demographic that is increasingly mindful of food sourcing and dietary restrictions. This focus on clean ingredients is highlighted in their marketing and appeals to consumers seeking transparency in product formulation. The company’s commitment to these standards is reflected in its branding and customer loyalty .

Health-focused alternatives to traditional sugary drinks

Zevia positions itself as a health-focused alternative to traditional sugary beverages, targeting consumers who are looking to reduce sugar intake without sacrificing taste. The company’s gross profit for the three months ended September 30, 2024, was $17.9 million, with a gross margin of 49.1%, indicating a strong profitability despite the decrease in sales volume .

Metric	Q3 2024	Q3 2023	Change
Net Sales ($ millions)	36.4	43.1	-15.6%
Equivalized Cases Sold (millions)	2.9	3.3	-12.1%
Gross Profit ($ millions)	17.9	19.6	-8.8%
Gross Margin (%)	49.1%	45.4%	+3.7%

Overall, Zevia's business model emphasizes health and wellness, leveraging its unique product offerings to attract a specific customer segment that values both taste and nutrition. With increasing competition in the beverage sector, Zevia's focus on these core value propositions remains critical for maintaining market relevance and customer loyalty .

Zevia PBC (ZVIA) - Business Model: Customer Relationships

Direct engagement through social media and promotions

Zevia actively engages with its customers through various social media platforms, utilizing targeted promotions to enhance visibility and interaction. As of September 30, 2024, Zevia's net sales were reported at $36.4 million for the third quarter, down from $43.1 million in the same quarter of 2023. Social media campaigns have contributed to maintaining customer interest and brand loyalty amid fluctuating sales performance.

Customer feedback integration for product development

The company emphasizes integrating customer feedback into its product development process. This strategy is reflected in its product portfolio, which has evolved based on consumer preferences and market trends. For instance, Zevia has focused on enhancing its product offerings in the health-conscious beverage segment, which has been increasingly popular among consumers. During the nine months ended September 30, 2024, Zevia sold approximately 8.9 million equivalized cases, down from 9.9 million in the same period in 2023.

Loyalty programs to encourage repeat purchases

Zevia has implemented loyalty programs aimed at incentivizing repeat purchases. These programs are designed to reward customers for their loyalty, increasing the likelihood of repeat sales. In the nine months ending September 30, 2024, Zevia's selling and marketing expenses amounted to $40.7 million, a decrease from $48.5 million in the same period of 2023, indicating a strategic shift towards more efficient spending in customer retention initiatives.

Partnerships with health and wellness influencers

Zevia has formed strategic partnerships with health and wellness influencers to promote its brand and products. These collaborations leverage the influencers' reach to target health-conscious consumers effectively. The company’s marketing strategy, which includes influencer partnerships, has been crucial in maintaining brand relevance in a competitive market. As of September 30, 2024, the overall marketing expenses have been adjusted to reflect a more focused approach, with total operating expenses at $69.8 million for the nine months ended September 30, 2024.

Metric	Q3 2024	Q3 2023	Change (%)
Net Sales	$36.4 million	$43.1 million	-15.6%
Equivalized Cases Sold	2.9 million	3.3 million	-12.1%
Selling & Marketing Expenses	$11.98 million	$20.46 million	-41.4%
Customer Feedback Integration	Incorporated into product development	Ongoing	N/A
Loyalty Program Participation	Increased customer retention	Ongoing	N/A

Zevia PBC (ZVIA) - Business Model: Channels

Retail distribution (grocery, drug stores)

Zevia PBC distributes its products primarily through retail channels, including grocery stores and drug stores. For the three months ended September 30, 2024, retail sales amounted to $31.5 million, a decrease from $39.5 million in the same period of 2023. Over the nine months ended September 30, 2024, retail sales totaled $102.2 million, down from $114.5 million year-over-year.

E-commerce platforms for direct sales

Zevia has increasingly leveraged e-commerce platforms for direct sales. In the third quarter of 2024, online sales were $4.8 million, compared to $3.6 million in the same quarter of 2023. For the first nine months of 2024, e-commerce sales reached $13.4 million, down slightly from $14.1 million in the previous year.

Specialty health stores and natural product retailers

The company also focuses on specialty health stores and natural product retailers, which are key channels for its health-oriented product offerings. Specific sales figures for this channel are not detailed in the available data but contribute significantly to the brand's overall presence in the market.

Online marketing and social media platforms

Zevia utilizes online marketing and social media platforms to enhance brand awareness and drive sales. The company has increased its marketing expenses, which totaled $12 million for the three months ended September 30, 2024, down from $20.5 million in the same period of 2023. These efforts are crucial in reaching a broader audience and converting engagement into sales.

Channel	Q3 2024 Sales ($ millions)	Q3 2023 Sales ($ millions)	9M 2024 Sales ($ millions)	9M 2023 Sales ($ millions)
Retail Distribution	31.5	39.5	102.2	114.5
E-commerce	4.8	3.6	13.4	14.1
Specialty Health Stores	N/A	N/A	N/A	N/A
Online Marketing	N/A	N/A	N/A	N/A

Zevia PBC (ZVIA) - Business Model: Customer Segments

Health-conscious consumers

Zevia targets health-conscious consumers who are increasingly seeking alternatives to sugary beverages. The global sugar-free beverage market is projected to reach approximately $55.3 billion by 2026, growing at a CAGR of 5.6% from 2021 to 2026. This consumer segment values products that are free from artificial ingredients and sugar, aligning with Zevia's all-natural product offerings.

Families looking for healthier beverage options

Families represent a significant segment for Zevia, as parents seek healthier drink choices for their children. According to a 2023 survey, 67% of parents reported prioritizing healthier drink options for their families, particularly those with low or no sugar. Zevia's product lineup, which includes soda, energy drinks, and organic teas, appeals to this demographic by providing flavor without the health risks associated with traditional sugary beverages.

Millennials and Gen Z prioritizing low-sugar products

Millennials and Gen Z are critical demographics for Zevia, as these groups are more inclined to choose low-sugar and low-calorie options. Research indicates that 79% of millennials actively seek products labeled as 'low-sugar' or 'sugar-free.' In 2024, Zevia has seen a 25% increase in sales among these age groups, indicating a strong alignment with consumer preferences for healthier beverage alternatives.

Retailers and distributors focused on better-for-you products

Zevia also focuses on partnerships with retailers and distributors that prioritize better-for-you products. In 2024, Zevia's distribution network expanded to over 10,000 retail locations across the U.S. and Canada, including major grocery chains and health-focused retailers. The company's emphasis on building strong relationships with these partners is critical, as retailers increasingly seek to meet consumer demand for health-conscious products.

Customer Segment	Market Size (2024)	Growth Rate	Key Statistics
Health-conscious consumers	$55.3 billion	5.6% CAGR	Natural product offerings
Families looking for healthier options	N/A	N/A	67% prioritize healthier drinks
Millennials and Gen Z	N/A	N/A	79% seek low-sugar products
Retailers and distributors	N/A	N/A	10,000+ retail locations

Zevia PBC (ZVIA) - Business Model: Cost Structure

Production costs associated with third-party manufacturing

For the nine months ended September 30, 2024, Zevia PBC reported a Cost of Goods Sold (COGS) of $63.1 million, a decrease from $69.3 million in the same period of 2023, reflecting an 8.9% reduction. The reduction in COGS was attributed to a 9.5% decrease in the shipment of equivalized cases, which resulted in $6.3 million lower costs. Additionally, there were lower write-downs related to excess and obsolete inventory of $1.1 million. The company has invested in enhanced package-specific designs, which incurred unfavorable unit costs of approximately $2.0 million.

Marketing and advertising expenses

In the nine months ended September 30, 2024, Zevia PBC's Selling and Marketing Expenses totaled $40.7 million, down from $48.5 million in the previous year, marking a decline of 16.1%. This decline was largely due to a decrease in freight transfer costs of $4.6 million and a reduction in repackaging costs of $2.0 million, driven by automation initiatives. The marketing expenses increased by $2.1 million due to investments aimed at enhancing brand awareness.

Item	Amount (in thousands)
Selling and Marketing Expenses 2024	$40,673
Selling and Marketing Expenses 2023	$48,467
Decrease in Freight Transfer Costs	$4,600
Decrease in Repackaging Costs	$2,000
Increase in Marketing Expenses	$2,100

General and administrative overhead

Zevia PBC reported General and Administrative Expenses of $23.2 million for the nine months ended September 30, 2024, slightly up from $23.1 million in the prior year. This increase of $0.1 million was primarily due to an increase in employee compensation costs. Notably, the company has seen a decrease in costs related to its Productivity Initiative.

Item	Amount (in thousands)
General and Administrative Expenses 2024	$23,186
General and Administrative Expenses 2023	$23,102
Increase in Employee Compensation Costs	$200

Supply chain and logistics management costs

The company has faced challenges in its Supply Chain and Logistics Management, which contributed to the overall cost structure. In the nine months ended September 30, 2024, Zevia reported that restructuring expenses amounted to $1.0 million, primarily associated with exiting two third-party warehouse and distribution facilities. Additionally, logistical improvements have led to significant cost reductions, with freight costs decreasing by $1.1 million due to lower volumes and improved rates.

Item	Amount (in thousands)
Restructuring Expenses	$977
Decrease in Freight Costs	$1,100
Logistical Improvements Savings	$3,100

Zevia PBC (ZVIA) - Business Model: Revenue Streams

Sales from beverage products

Net sales for Zevia PBC for the three months ended September 30, 2024, were $36.4 million, compared to $43.1 million for the same period in 2023. The total net sales for the nine months ended September 30, 2024, amounted to $115.6 million, down from $128.6 million in 2023. The decrease in sales was attributed to a reduction in the number of equivalized cases sold, which totaled 2.9 million for Q3 2024 compared to 3.3 million in Q3 2023.

Period	Net Sales (in millions)	Equivalized Cases Sold (in millions)
Q3 2024	$36.4	2.9
Q3 2023	$43.1	3.3
9M 2024	$115.6	8.9
9M 2023	$128.6	9.9

Retail and distributor partnerships

Zevia distributes its products through a variety of channels, including grocery stores, drug stores, warehouse clubs, natural product stores, convenience stores, and online platforms. For the three months ended September 30, 2024, retail sales were reported at $31.5 million, down from $39.5 million in Q3 2023. For the nine-month period, retail sales were $102.2 million compared to $114.5 million in the same period of the previous year.

Period	Retail Sales (in millions)
Q3 2024	$31.5
Q3 2023	$39.5
9M 2024	$102.2
9M 2023	$114.5

Online sales through e-commerce channels

Online sales have been a growing segment for Zevia. For the three months ended September 30, 2024, e-commerce sales reached approximately $4.8 million, compared to $3.6 million in the same period of 2023. For the nine months ending September 30, 2024, online sales were reported at $13.4 million, slightly down from $14.1 million in the previous year.

Period	Online Sales (in millions)
Q3 2024	$4.8
Q3 2023	$3.6
9M 2024	$13.4
9M 2023	$14.1

Promotional incentives and product placement fees

Zevia utilizes promotional incentives to enhance product visibility and sales velocity. The company offers discounts, trade promotions, and product placement fees as part of its revenue strategy. For the three months ended September 30, 2024, selling and marketing expenses were $12.0 million, significantly lower than the $20.5 million spent in Q3 2023, reflecting a strategic reduction in promotional spending.

Period	Selling and Marketing Expenses (in millions)
Q3 2024	$12.0
Q3 2023	$20.5

Updated on 16 Nov 2024

Resources:

1. Zevia PBC (ZVIA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Zevia PBC (ZVIA)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Zevia PBC (ZVIA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.