Zevia PBC (ZVIA) FY Conference May 15, 2025 11:00 AM ET Speaker0 Okay. There we go. We're going to start with our next discussion here. It's my pleasure to introduce Zevia for our next discussion. Zevia is a producer of zero calorie, naturally sweetened plant based beverages. The company is executing on a robust growth strategy focused on enhanced distribution, channel expansion and improving brand awareness. Zevia's initiatives are expected to drive accelerating sales growth through 2025, which will be enh ...

Summary of Zevia PBC (ZVIA) Conference Call - May 13, 2025 Company Overview - Zevia is an emerging nonalcoholic beverage company that went public about four years ago, offering a variety of zero sugar, zero calorie beverages sweetened with stevia, including soda, energy drinks, and organic tea [1][2] Key Industry Insights - The beverage industry is shifting towards "better for you" options, with Zevia positioned as a leader in this segment [8][32] - The company has expanded its distribution significantly, particularly with Walmart, moving from 800 to 4,300 stores, which is part of a broader trend in grocery towards healthier beverage options [8][9] Financial Performance - Q1 results showed top line growth that was down but better than market expectations, with guidance for FY 2025 maintained at modest growth of 2% to 5% [6][7] - The company expects a healthy acceleration in the second half of the year, projecting growth of about 7% [13] Growth Drivers - Key growth drivers include expanded distribution, increased shelf space, and new distribution channels such as Walgreens [12][13] - The introduction of new flavors, including Strawberry Lemon Burst, is expected to support growth [11][28] - The company is optimistic about achieving growth targets despite macroeconomic uncertainties [19] Risks and Challenges - The primary risk to guidance is macroeconomic conditions, including potential recessionary impacts [19] - The company has lost some club distribution but is working to regain it, which represents an upside opportunity [21][22] Strategic Initiatives - Zevia is focused on profitable growth, with a goal to become EBITDA profitable by the end of 2026 [29][30] - The company is investing in brand marketing, doubling its marketing spend in 2025 compared to 2023 [56][60] - A strong innovation pipeline is in place, with a focus on bringing new products to market more rapidly [40][41] Market Positioning - Zevia is positioned as an affordable option within the "better for you" beverage category, appealing to health-conscious consumers [33][34] - The company emphasizes its clean label and simple ingredient profile, which aligns with current consumer trends [31][32] Financial Metrics - Q1 gross margins reached a record 50.1%, with expectations for high 40s margins for the rest of the year, impacted by aluminum tariffs [68][70] - The company has achieved $15 million in annualized cost savings through productivity initiatives, ahead of initial expectations [74][76] Consumer Behavior - There is an expectation of resilience among health-conscious consumers, who view Zevia products as essential rather than discretionary [85][86] - The company anticipates benefiting from trade-down behavior within the "better for you" category [86] Investor Insights - Zevia's household penetration is currently in the single digits, indicating significant growth potential as consumer preferences shift towards healthier options [88] - The company believes it is well-positioned to capitalize on the growing demand for clean label products, supported by its distribution and innovation strategies [89][90] Conclusion - Zevia is at a critical juncture with strong growth potential driven by strategic distribution expansion, innovative product offerings, and a commitment to brand marketing, all while navigating macroeconomic challenges [35][36][89]