‘We’re seeing very limited price sensitivity,’ says CEO

Zevia reported a net sales increase of +32.5% to $45.5m in the second quarter (above original projections of $41-$43m) and volume growth of +30% vs. the same quarter last year. 

Gross margins were down to 38.1% for the quarter vs. 47.3% last year primarily due to the impact of inflation and increased manufacturing costs.

“Based on our strong performance in the second quarter and our confidence in the trajectory of our business, we are also reaffirming our 2022 net sales guidance of $177-$182 million (an increase of 28% to 32% over 2021),”​ said Zevia’s new CEO Amy Taylor, who took over from Paddy Spence this month. 

“Velocity accounted for 47% of scan sales growth in Q2, while new store or new item distribution accounted for the other 53%.”

Growing consumer base

Zevia has continued to attract new consumers to the brand, added Taylor, sharing that household penetration for Zevia products grew 22% in the past 12 months to 6.1% (or 1.4 million new households) bringing its total household penetration to 7.8 million homes.

Average household spend increased 4% (or $1.22) to $33.18 in Q2 2022 versus the prior year (a benefit partially driven by a 6% price increase to its six-pack soda packages that went into effect in Q2 2022).

However, even with the price increase to part of its portfolio, Zevia consumers are spending more – the brand’s existing consumer base (i.e. those that have been purchasing Zevia for two years) increased their spend by 69% vs. two years ago to $55.10 in Q2 2022 vs. Q2 2021, according to Taylor, who noted that the company is seeing a diversification in its household income levels suggesting the brand is becoming more mainstream.

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