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Zevia Faces Pressure from Activist Investor to Sell
Zevia, a popular better-for-you soda brand, is currently under pressure from activist investor Kanen Wealth Management to explore strategic alternatives, including a potential sale. Kanen, which owns about 4% of Zevia’s outstanding shares, believes that the company has not fully capitalized on the recent shift in the soda market.
Zevia’s Struggle to Keep Up with Competitors
Founded in 2007, Zevia was one of the early players in the lower-sugar soda category. However, despite being a pioneer in the industry, Kanen argues that Zevia has failed to keep pace with competitors like Olipop and Poppi. The modern soda sector has experienced significant growth, but Zevia’s sales have declined, leading to concerns about the company’s performance.
Potential for Acquisition and Growth
Kanen suggests that a new buyer could help Zevia reduce costs and improve its performance. With recent acquisitions in the industry, such as PepsiCo’s purchase of Poppi, there is potential for Zevia to attract a buyer. Kanen proposes a purchase price range of $2.75 to $3.75 per share, highlighting the company’s value in the market.
Challenges and Changes at Zevia
Zevia reported a slight increase in net sales in the second quarter, but challenges remain in terms of volume and market positioning. The appointment of a new CEO earlier this year has also raised questions about the company’s decision-making process. Kanen criticizes the lack of transparency in the selection of the new CEO, highlighting the need for a more rigorous evaluation process.