In February 2020, prebiotic soda maker Poppi was a team of two, with husband-and-wife co-founders Stephen and Allison Ellsworth. It now has around 50 employees as it takes its products to store shelves nationwide.
Already with products in thousands of stores across the country and with plans to go fully nationwide with companies like Target, the Dallas-based apple cider vinegar-based beverage brand has landed a $13.5 million funding round to fuel its expansion. It’s also relocating its headquarters to Austin later this year to be closer to longtime partner Whole Foods.
“We're living in a crazy, crazy time, right now with COVID. And kind of all of this home delivery… is just like blowing up. So, freight is through the roof. Aluminum cans are hard to get,” said Stephen Ellsworth, who serves as CEO. “We just thought it was really necessary to talk to these partners that are part of our supply chain and make sure that our incentives were aligned. So, we brought them on and allowed them to invest in Poppi to make sure that we were on the (track) heading into 2022.”
The new funding brings Poppi’s total to $20 million, Stephen Ellsworth said. Investors include CPG-focused firm CAVU Ventures. Poppi’s relationship with CAVU founder Rohan Oza dates back to 2018 when the company – at the time going by Mother Beverage – landed a $400,000 deal while appearing on a “Shark Tank” episode. In that time, the company rebranded for its nationwide relaunch effort last year. Mother Beverage got its start in 2016 at the Dallas Farmers Market, where it landed a deal to expand into a dozen Whole Foods locations.
“We had the liquid super figured out, and now we have the opportunity to almost have a do-over and totally start over,” Allison Ellsworth, who serves as chief brand officer, said. “We changed the name, we change the packaging, we changed the look, and honestly, it's the reason we're so successful now. He have a fantastic liquid, and we have a fantastic brand down.”
Other investors on the round include celebrity names like the Chainsmokers, Ellie Goulding and Nicole Scherzinger, and influencers like Chantel Jefferies, Bryce Hall and Noah Beck. Allison Ellsworth said Poppi has used time during the pandemic when its nationwide rollout was put on hold. At the same time, the store focused on stocking essential items to invest in digital marketing and e-commerce. She said about 30% of its sales come from online channels, adding it has found recent success on social media platforms, with influencers helping to push posts viral. One viral post helped the company sell over 100,000 products in one week. It said in June 2021, its Amazon sales were more than $712,000, compared to just $9,000 in March 2020.
“What (COVID) did is it allowed us to really push digitally. We switched our strategy because we knew that (retail) was on hold to Amazon and Instacart. In return, it took us leaps and bounds further digitally than we would have been having we focused more on the retail,” Allison Ellsworth said. “With us launching in March of 2020, we didn't have the opportunity to do a lot of in-store demos, festivals or sampling events. We truly haven't still today had the opportunity to do that. That really made us have to think really think outside the box about how we implement digital strategies in place or lieu of those.”
Poppi’s products are sold in more than 7,500 retail stores, including multiple regions with Kroger, a nationwide rollout with Target and Sprouts, and plans to go in all Florida locations of Publix. While not disclosing specifics, Stephen Ellsworth said the company had seen 500% year-over-year revenue growth. He added that Poppi extended its round from the initial $13 million it was looking to raise to accommodate for increasing supply chain costs caused by the pandemic. It’s planning to use the funds to expand distribution, grow its team and invest in marketing opportunities.
“There's such a massive opportunity,” Stephen Ellsworth said. “What's next for us is to continue to get cans in hands and sips on lips. We want to continue to share this product with everybody.”
As it looks to grow its team, with plans to reach around 85 employees by the end of the year, Poppi is relocating its headquarters to Austin. While the company hasn’t selected a final location, it plans to have around 10 employees at the new offices. The company said the move is closer to the CPG talent pool Whole Foods has helped create in Austin. Overall, Allison Ellsworth said Poppi is hiring in areas like marketing and manufacturing.
“There’s Pepsi and Coke and Gatorade. It's nothing new at the end of the day. I think the difference in the way that we're doing it is these are real people that love the brand,” Allison Ellsworth said. “They invest, they want to post, and they want to do things. It's not just like a contractor; they have a stake in it. They want to talk about it, and they believe in it. So, it just goes quite a bit further when they feel like they're part of the Poppi family, as well.”
