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

Most folks only wake up within the center of the evening to a noise originate air or a unfriendly dream — but at 3 a.m., Ben Goodwin thinks about soda.

Goodwin is the CEO and formulator of Olipop, a “more healthy” prebiotic soda heading within the correct course to surpass $200 million in sales by the waste of the year.

He and his co-founder, David Lester, 42, launched Olipop in 2018 with the arrangement of developing a product that would “serve push folks’s diets in a more healthy course … but doesn’t require a big behavior shift from them,” Goodwin, 38, tells CNBC Effect It.

In its first year of industry, Olipop made $852,000 in ghastly earnings selling to 40 grocery stores in Northern California. Goodwin and Lester packed and delivered the cans of Olipop themselves, a formulation Goodwin perfected in a makeshift lab at his home in Santa Cruz.

Since then, Olipop has grown into a nationwide mark and a well-liked among Gen Z and millennial buyers, who gravitate to the logo’s search-catching packaging and nostalgia-inducing flavors like root beer and vintage cola — many of which Goodwin comes up with within the early hours of the morning.

As an instance: Olipop’s banana cream fashion took situation “as I changed into as soon as laying in mattress one evening and requested myself, ‘What’s the most unfamiliar, hardest fashion I could well pull off?'” Goodwin says.

Olipop’s flavors may well mimic the fashion of diversified cherished soda, but the place it stands out is its ingredients: Many popular soda manufacturers can pack about 39 grams of sugar in a single can, but Olipop slashes that number all of the procedure down to 2-5 grams, whereas furthermore providing 9 grams of fiber. Each and every can designate about $2.49.

It be no accident that Olipop’s upward push has coincided with the general public’s growing interest in gut nicely being. Between December 2022 and January 2023, because the hashtag #guttok surpassed 700 million views on TikTok, Google searches for “Olipop” spiked. For the length of the main six months of 2023, Olipop hit $100 million in ghastly earnings.

Right here’s how Goodwin and Lester turned a $100,000 funding into a multimillion-dollar industry in a position to promoting $20 million price of soda a month.

A school dropout meets a company quitter

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 place he studied environmental science, to serve one of his friends initiate a kombucha company.

“I knew that if I did build my stint in class, I would be saddled with reasonably a minute of debt,” says Goodwin. “And I in actuality be taught the book by the Clif Bar founder [Gary Erickson] on the founding of Clif Bar, and it simply dawned on me that I could well plug be a meals or beverage entrepreneur.”

Studying straightforward be taught the procedure to brew kombucha sparked Goodwin’s curiosity about gut nicely being and all of the fruits, herbs and diversified ingredients that may well serve enhance it.

“I realized that we indisputably fabricate a form of neurotransmitters and hormones in our gut microbiome, and they also gain got an outsized impact on how we whisper and feel,” Goodwin remembers. “The sunshine bulb went off for me.”

Plenty of reviews gain proven that your gut plays a pivotal operate for your overall nicely-being, struggling with pathogens, producing diet Okay and diversified crucial chemical substances, and can gain to impact your immune machine and heart nicely being.

He left the kombucha company in 2008 with hopes of developing his fill drink, person that would be palatable and gut-wholesome — but this time, it’d be a soda.

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

Checklist: Jes Gallegos for CNBC Effect It

“I grew up engrossing soda, it’s most certainly the major ubiquitous American drinks of all time,” says Goodwin. “I idea, In case you in actuality decide to form a wholesome product that’s accessible and may well smash through at mass scale, soda is the acceptable automobile.”

Goodwin spent the following four years in a makeshift lab he situation up in an ultimate friend’s backyard alongside Jim Ilehder, a microbiologist he hired to serve with formulation. On the identical time, Goodwin balanced loads of freelance jobs, including product growth, web create and digital marketing for diversified firms, inserting no subject money he made towards the experiments.

“I whisper I spent about $300,000 of my financial savings on that project,” says Goodwin. “We made our fill tools from parts at Ace Hardware and an aquarium store downtown to avoid wasting money.”

By 2012, Goodwin had created the fizzy, fermented soda of his dreams. On the identical time, 6,000 miles away, Lester quit his corporate job at Diageo, an infinite alcohol distributor, and decided to pass from São Paulo to San Francisco to change into a beefy-time entrepreneur.

Goodwin and Lester gain lunch at the espresso store they first met at in Palo Alto.

Checklist: Jes Gallegos for CNBC Effect It

It changed into as soon as indisputably Lester’s vulnerable boss at Diageo who launched the pair.

“She knew Ben changed into as soon as looking for a industry associate and idea the 2 of us would work nicely collectively,” says Lester.

They agreed to satisfy at a espresso store in Palo Alto in early 2013 to debate a doable partnership in Ben’s probiotic soda company – Obi.

“I be conscious Ben turned up with this receive of sodas that he decanted into these aesthetic glass champagne bottles,” says Lester. “And he simply blew my mind with his knowledge of the gut microbiome, probiotics, and his passion for what he changed into as soon as doing … it changed into as soon as a very diversified form of dialog than I would be having in my corporate career.”

Provides Goodwin: “It changed into as soon as clear to me after we met that David changed into as soon as this very luminous, earnest, nicely-intentioned person, and we developed a form of have faith for every diversified in actuality hasty.”

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Sooner than Olipop, there changed into as soon as Obi

Two weeks after their preliminary assembly, they changed into companions. Nevertheless, Obi did now not see the success and traction they’d hoped for, and in 2016, Goodwin and Lester bought Obi. Goodwin and Lester declined to share how powerful Obi bought for, and to whom.

Neither may well veil a particular cause as to why Obi failed — but both Lester and Goodwin agreed that they weren’t ready to quit working collectively.

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

Courtesy of Ben Goodwin and David Lester

“We obtained to the diversified facet of Obi and realized that we hadn’t worked that nicely collectively, but equally crucial, we hadn’t killed every diversified. We still felt very motivated to clutch a ogle at and decide it out,” says Lester. “To me, it would’ve been a wasted skills if we did now not then plug on and build into practice what we realized.”

Goodwin went aid to work within the lab — one he situation up in his Santa Cruz home — this time focusing on prebiotics versus probiotics, a choice that changed into as soon as buoyed by sleek be taught on the benefits of prebiotics for the gut and the mind. Prebiotics are non-digestible fibers that stimulate the expansion of factual bacteria within the gut, whereas probiotics are dwell bacteria realized in some foods and supplements.

Getting Olipop off the ground

In 2018, Goodwin done the sleek formulation for Olipop, a combination of botanicals, plant fibers and prebiotics including marshmallow root, nopal cactus and Jerusalem artichoke.

Olipop’s identify changed into as soon as impressed by a bunch of prebiotic fibers, oligosaccharides, that Goodwin realized at some point soon of this experimental section — Lester steered they combine its shortened identify, “oli” with “pop,” a usual nickname for soda within the U.S. Midwest.

The pair pooled $100,000 they obtained from selling Obi to web Olipop’s first cans on cabinets.

Goodwin and Lester packed and delivered the main cans of Olipop themselves to 40 grocery stores in Northern California.

Checklist: Olipop

On the initiate of 2019, Olipop launched in three flavors — ginger lemon, strawberry vanilla and cinnamon cola — all over 40 diversified nicely being meals stores in Northern California. That identical year, they surpassed $850,000 in earnings and expanded to national stores like Target and Walmart.

Lester and Goodwin raised $2.5 million in a seed funding spherical in 2019 as nicely, which went to constructing stock, scaling up their retail presence, testing sleek marketing perspectives and hiring sleek workers.

Olipop’s crew is all distant, and they also now gain over 100 workers. Goodwin begins the formulation activity at his home in Washington, then the soda is despatched and done at a lab in Palo Alto.

Inserting soda gold

The more popular Olipop changed into, the more time Goodwin wanted to converse in his lab, developing sleek flavors to open. Between 2022 and 2023, he concocted flavors like tropical punch, impressed by the tangy fashion of Hawaiian Punch, and watermelon lime, which he describes as “a watermelon Jolly Rancher sweet smushed into a watermelon agua fresca drink.”

2022 changed into as soon as a giant year for Olipop: It kicked off with a series B funding spherical that raised $39.7 million dollars, with extensive names like Gwyneth Paltrow, Mindy Kaling, and the Jonas Brothers (Joe, Chop and Kevin) on the checklist of traders. It ended the year with $73.4 million in ghastly earnings.

Lester and Goodwin may well no longer publicly enlighten their pay but enlighten they’ve paid themselves “low to life like” salaries because the corporate has grown, and mostly lived off their financial savings in its early years.

Olipop has long gone from selling in simply 40 stores to over 23,000 stories within the U.S., and it’s heading within the correct course to promote in 30,000 stores by the waste of the year, a company spokesperson tells CNBC Effect It. At the moment, the corporate does no longer ship internationally. Most impressively, in 2023, Olipop has viewed no no longer up to $20 million in sales every month.

Having a ogle ahead

For Goodwin, the most surreal career moment came earlier this year when Olipop dethroned A&W because the finest-selling root beer within the U.S.

“To web to that point of have faith with your buyer the place they’re sharp to swap out a mark that’s been with them since childhood to your product … that’s extensive to me,” he says.

Olipop’s crew is all distant, and they also now gain over 100 workers.

Checklist: Olipop

Lester and Goodwin enlighten they already gain options for dozens of more iterations of wholesome soda, if the search data from is there.

“It be extraordinarily tempting to converse all of my time holed up in my lab experimenting with sleek flavors, but for greater or worse, we execute gain a company to bustle,” Goodwin jokes.

Provides Lester: “I gain now not any crystal ball that may well express us what occurs next, but what we execute know is that we’re filling a important person need, and we’re in a colossal category. We elect to clutch this product nicely beyond $1 billion [in revenue]. I whisper the doable is there, but we furthermore gain the humility to clutch that’s in actuality bright to build.”

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