How Olipop’s founders became a $100,000 funding into a ‘more healthy’ soda tag bringing in $20 million a month

Most folk most productive wake up within the heart of the night to a noise outside or a negative dream — but at 3 a.m., Ben Goodwin thinks about soda.

Goodwin is the CEO and formulator of Olipop, a “more healthy” prebiotic soda no longer off course to surpass $200 million in sales by the discontinue of the 365 days. 

He and his co-founder, David Lester, 42, launched Olipop in 2018 with the aim of constructing a product that would maybe “again push folk’s diets in a more healthy path … but doesn’t require a big behavior shift from them,” Goodwin, 38, tells CNBC Destroy It. 

In its first 365 days of industry, Olipop made $852,000 in execrable revenue selling to 40 grocery retail outlets in Northern California. Goodwin and Lester packed and delivered the cans of Olipop themselves, a formula Goodwin perfected in a makeshift lab at his dwelling in Santa Cruz.

Since then, Olipop has grown into a nationwide tag and a favorite among Gen Z and millennial shoppers, who gravitate to the logo’s secret agent-catching packaging and nostalgia-inducing flavors worship root beer and vintage cola — plenty of which Goodwin comes up with within the early hours of the morning.

As an instance: Olipop’s banana cream taste came about “as I became once laying in bed one night and requested myself, ‘What’s the most unearthly, hardest taste I would maybe moreover pull off?'” Goodwin says.

Olipop’s flavors would maybe mimic the taste of assorted beloved soda, however the put it stands out is its ingredients: Many favorite soda producers can pack about 39 grams of sugar in a single can, but Olipop slashes that number the full method down to 2-5 grams, while moreover offering 9 grams of fiber. Every can charge about $2.49. 

It be no accident that Olipop’s upward push has coincided with the final public’s increasing ardour in gut health. Between December 2022 and January 2023, because the hashtag #guttok surpassed 700 million views on TikTok, Google searches for “Olipop” spiked. Within the principle six months of 2023, Olipop hit $100 million in execrable revenue.

Here’s how Goodwin and Lester became a $100,000 funding into a multimillion-dollar industry able to selling $20 million price of soda a month.

Goodwin and Lester met at a crossroads in their lives, when every felt lost in their careers. 

In 2005, Goodwin dropped out of the College of California Santa Cruz, the put he studied environmental science, to again indubitably one of his chums launch up a kombucha company. 

“I knew that if I did kind my stint at school, I would be saddled with quite plenty of debt,” says Goodwin. “And I the truth is read the e book by the Clif Bar founder [Gary Erickson] on the founding of Clif Bar, and it precise dawned on me that I would maybe moreover roam be a meals or beverage entrepreneur.” 

Discovering out guidelines on how to brew kombucha sparked Goodwin’s curiosity about gut health and all of the fruits, herbs and varied ingredients that would maybe again enhance it.

“I realized that we no doubt kind plenty of neurotransmitters and hormones in our gut microbiome, and they’ve an outsized affect on how we are looking ahead to and feel,” Goodwin recalls. “The light bulb went off for me.”

Various compare dangle confirmed that your gut performs a pivotal role in your total neatly-being, fighting pathogens, producing food scheme K and varied well-known chemical compounds, and can dangle to mild affect your immune machine and heart health.

He left the kombucha company in 2008 with hopes of constructing his dangle drink, one which would be scrumptious and gut-healthy — but this time, it’d be a soda.

Goodwin demonstrates the formulation course of for Olipop at a makeshift lab in San Francisco.

Photo: Jes Gallegos for CNBC Destroy It

“I grew up ingesting soda, it be indubitably one of doubtlessly the most ubiquitous American drinks of all time,” says Goodwin. “I believed, In the event you no doubt are searching for to kind a healthy product that’s accessible and would maybe moreover damage by at mass scale, soda is the wonderful automobile.”

Goodwin spent the following four years in a makeshift lab he location up in a friend’s backyard alongside Jim Ilehder, a microbiologist he hired to again with formulation. At the same time, Goodwin balanced plenty of freelance jobs, including product pattern, web abolish and digital marketing and marketing for diverse companies, inserting no topic money he made toward the experiments.

“I dangle I spent about $300,000 of my financial savings on that project,” says Goodwin. “We made our dangle equipment from parts at Ace Hardware and an aquarium retailer downtown to build money.”

By 2012, Goodwin had created the fizzy, fermented soda of his needs. At the same time, 6,000 miles away, Lester stop his corporate job at Diageo, a giant alcohol distributor, and made up our minds to transfer from São Paulo to San Francisco to remodel a plump-time entrepreneur.

Goodwin and Lester dangle lunch at the espresso shop they first met at in Palo Alto.

Photo: Jes Gallegos for CNBC Destroy It

It became once no doubt Lester’s used boss at Diageo who equipped the pair. 

“She knew Ben became once having a look for for a industry partner and idea the 2 of us would work neatly together,” says Lester.

They agreed to fulfill at a espresso shop in Palo Alto in early 2013 to dispute about a capacity partnership in Ben’s probiotic soda company – Obi. 

“I be wakeful Ben became up with this win of sodas that he decanted into these magnificent glass champagne bottles,” says Lester. “And he precise blew my mind with his files of the gut microbiome, probiotics, and his ardour for what he became once doing … it became once a the truth is varied fashion of conversation than I would be having in my corporate profession.”

Adds Goodwin: “It became once definite to me after we met that David became once this very vivid, earnest, neatly-intentioned person, and we developed plenty of belief for every varied the truth is rapidly.”

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Two weeks after their preliminary assembly, they became companions. Alternatively, Obi did not check the success and traction they’d hoped for, and in 2016, Goodwin and Lester sold Obi. Goodwin and Lester declined to share how much Obi sold for, and to whom. 

Neither would maybe moreover demonstrate a particular motive as to why Obi failed — but both Lester and Goodwin agreed that they weren’t appealing to prevent working together.

Ben Goodwin and David Lester became companions in Goodwin’s probiotic soda company, Obi, in 2013.

Courtesy of Ben Goodwin and David Lester

“We acquired to the assorted facet of Obi and realized that we hadn’t labored that neatly together, but equally well-known, we hadn’t killed every varied. We mild felt very motivated to steal a look for at and decide it out,” says Lester. “To me, it would maybe’ve been a wasted expertise if we did not then roam on and set into apply what we realized.”

Goodwin went assist to work within the lab — one he location up in his Santa Cruz dwelling — this time specializing in prebiotics versus probiotics, a dedication that became once buoyed by new compare on the advantages of prebiotics for the gut and the brain. Prebiotics are non-digestible fibers that stimulate the verbalize of staunch micro organism within the gut, whereas probiotics are stay micro organism discovered in some foods and supplements.

In 2018, Goodwin accomplished the brand new formula for Olipop, a blend of botanicals, plant fibers and prebiotics including marshmallow root, nopal cactus and Jerusalem artichoke. 

Olipop’s name became once impressed by a team of prebiotic fibers, oligosaccharides, that Goodwin discovered at some level of this experimental phase — Lester instructed they mix its shortened name, “oli” with “pop,” a new nickname for soda within the U.S. Midwest. 

The pair pooled $100,000 they acquired from selling Obi to win Olipop’s first cans on shelves.

Goodwin and Lester packed and delivered the principle cans of Olipop themselves to 40 grocery retail outlets in Northern California.

Photo: Olipop

Before the full lot up of 2019, Olipop launched in three flavors — ginger lemon, strawberry vanilla and cinnamon cola — across 40 varied health meals retail outlets in Northern California. That very same 365 days, they surpassed $850,000 in revenue and expanded to nationwide retailers worship Plan and Walmart.

Lester and Goodwin raised $2.5 million in a seed funding round in 2019 as neatly, which went to constructing stock, scaling up their retail presence, attempting out new marketing and marketing perspectives and hiring new employees. 

Olipop’s group is all remote, and they now dangle over 100 employees. Goodwin begins the formulation course of at his dwelling in Washington, then the soda is shipped and accomplished at a lab in Palo Alto.

The more favorite Olipop became, the more time Goodwin desired to spend in his lab, constructing new flavors to commence. Between 2022 and 2023, he concocted flavors worship tropical punch, impressed by the tangy taste of Hawaiian Punch, and watermelon lime, which he describes as “a watermelon Jolly Rancher sweet smushed into a watermelon agua fresca drink.” 

2022 became once a mountainous 365 days for Olipop: It kicked off with a series B funding round that raised $39.7 million dollars, with mountainous names worship Gwyneth Paltrow, Mindy Kaling, and the Jonas Brothers (Joe, Prick and Kevin) on the checklist of investors. It ended the 365 days with $73.4 million in execrable revenue.

Lester and Goodwin acquired’t publicly expose their pay but say they’ve paid themselves “low to moderate” salaries since the corporate has grown, and mostly lived off their financial savings in its early years.

Olipop has long gone from selling in most productive 40 retail outlets to over 23,000 stories within the U.S., and it is no longer off course to sell in 30,000 retail outlets by the discontinue of the 365 days, a company spokesperson tells CNBC Destroy It. At the present, the corporate does no longer ship internationally. Most impressively, in 2023, Olipop has considered at least $20 million in sales every month.

For Goodwin, doubtlessly the most surreal profession 2nd got right here earlier this 365 days when Olipop dethroned A&W as doubtlessly the most attention-grabbing-selling root beer within the U.S.

“To win to that level of belief with your buyer the put they’re appealing to swap out a tag that’s been with them since childhood to your product … that’s mountainous to me,” he says.

Olipop’s group is all remote, and they now dangle over 100 employees.

Photo: Olipop

Lester and Goodwin say they’ve already acquired solutions for dozens of more iterations of healthy soda, if the ask is there.

“It be extremely tempting to spend all of my time holed up in my lab experimenting with new flavors, but for better or worse, we develop dangle a company to flee,” Goodwin jokes. 

Adds Lester: “I the truth is don’t dangle any crystal ball that would maybe divulge us what happens subsequent, but what we develop know is that we’re filling a solid client need, and we’re in a mountainous category. We’re searching for to steal this product neatly beyond $1 billion [in revenue]. I dangle the capability is there, but we moreover dangle the humility to bear in mind the truth that’s the truth is sophisticated to develop.”

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