Zevia(ZVIA) - 2026 FY - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company has achieved approximately $15 million in annualized cost savings by the end of 2025, with a target of an additional $5 million in 2026, bringing the total to $20 million [46][52]. - The path to profitability is expected to be reached with slightly positive Adjusted EBITDA on an annualized basis, driven by cost savings, modest volume growth, and incremental pricing actions [52][61]. Business Line Data and Key Metrics Changes - The company has seen significant improvements in its product portfolio, particularly in taste, with new flavors outperforming the legacy portfolio [12][55]. - The energy drink segment, while currently small, is recognized as a future growth opportunity, with plans to increase focus and resources in this area [55][56]. Market Data and Key Metrics Changes - The company has successfully transitioned from a niche market to mainstream distribution, particularly with its partnership with Walmart, which has led to increased visibility and sales [28][34]. - The company is experiencing a macro trend away from sugar, which is becoming mainstream, allowing for broader distribution opportunities [28][34]. Company Strategy and Development Direction - The company is focused on innovation in product development, with plans for new flavors and limited-time offers to drive consumer interest and sales [15][16]. - Marketing strategies have shifted to emphasize brand storytelling and influencer engagement, aiming to attract new consumers and enhance brand visibility [42][44]. Management's Comments on Operating Environment and Future Outlook - Management believes there is a significant opportunity to capture market share from consumers looking for healthier alternatives to conventional sodas, with less than 5% household penetration currently [63][66]. - The company is optimistic about future growth, citing a strong foundation for marketing investment and a clear value proposition for consumers [59][66]. Other Important Information - The company has re-engineered its cost structure and organizational setup over the past 18 months, setting the stage for accelerated growth [58][59]. - The company is testing distribution in convenience stores, which represents a significant growth opportunity despite current low penetration [38][59]. Q&A Session Summary Question: What are the key strategies for distribution? - The company has successfully gained national distribution through Walmart, which has transformed its business and set a precedent for other retailers to follow [22][28]. Question: How has marketing evolved? - The company has focused on brand storytelling and influencer engagement, with plans to redesign packaging to better communicate its unique selling points [42][44]. Question: What are the long-term growth opportunities? - The company sees significant potential in increasing household penetration and expanding into under-penetrated channels like convenience and food service [59][66].