The answer is none of the above. Spence is CEO and co-owner of a specialty diet soda called Zevia, the first to ditch sugar and artificial sweeteners in favor of stevia, a natural sweetener with zero calories that’s made from a plant extract. Zevia, which can be found at Whole Foods, and in the natural food aisles of some supermarkets, is a very small player in the soda industry—it accounts for well under one percent of all U.S. soda sales. But industry insiders care enormously about what Spence has to say, because Zevia is doing something almost unheard of recently: while national soda sales continue to drop, Zevia’s keep going up.
In 2010, the company produced 15 million cans of soda. This year, production has surpassed 100 million cans. It’s sold in every state and in Canada, comes in 14 flavors, including cola, ginger root beer, and strawberry, and in some markets, such as California, where the company is based, it costs no more than a Diet Coke. “You’re not going to do what Paddy has done and not get attention,” says Duane Stanford, editor of Beverage Digest, which invited Spence to speak at the publication’s New York conference, which hundreds will attend. “What Zevia’s done is pretty interesting.” Spence, who grew up in Cambridge and attended BB&N through eighth grade, allows that his mom always had a 2-liter bottle of Tab in the refrigerator when he was a kid. But he and his family were hardly soft-drink junkies. In fact, they were well ahead of the current health-food craze, steaming tofu for dinner back in the 1970s, and shopping at the area’s original health food store, Bread & Circus. Spence carried those lessons about healthy eating into adulthood, and eventually, let them guide his career. After graduating Harvard Business School in 1992, he spent two decades marketing natural and organic consumer goods, including Kashi cereal when it was in its infancy. (He was its seventh employee.) He first tasted Zevia five years ago and was so hooked, he bought the company. “I came across it on the shelves at Whole Foods, and thought, ‘I’m a sample of one, but this would bring me back to soda,’” he says. The key for him was that Zevia was sweetened with stevia, which Spence and his wife, Jerra, had already been fans of for a decade.
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“I thought I was a healthy guy—I was doing a lot of exercise, running triathlons and stuff. But I woke up one day and I realized I was consuming 250 added grams of sugar a day,” Spence says. “I was getting 1,000 calories of sugar just from the healthy stuff I was buying. I was drinking a couple of Odwalla smoothies and a couple of Cliff Bars and putting unrefined cane crystals in my tea in the morning. We really went off of sugar cold turkey, and the substitute we started using then was stevia.” The stevia Spence first consumed hardly resembles the highly-refined version that’s now in Zevia, as well as in many other consumer products. (According to Nielsen research, about half of U.S. households have a stevia item on their shelves.) The first stevia products—coffee sweeteners and baking sugar substitutes categorized as “dietary supplements”—were about 40 percent refined, and could often cause indigestion, or leave a strange aftertaste. By the time the FDA officially recognized stevia as a food in 2008, the extract that was used was about 80 percent refined, Spence says. About a year ago, Zevia began using 99 percent refined stevia, completely changing the drink. “When people say they tried the product and didn’t like it, I ask, ‘When did you try it?’ Because if it’s been more than a year, you probably haven’t tried our product,” Spence says. Zevia’s ability to change as it grows is perhaps its greatest asset, Spence says. Responding to customer demand, Zevia eliminated all artificial colorings from its drinks this year—even its version of cola is clear to the eye. It also earned a non-GMO verified project seal, meaning it’s about as natural as it gets. (GMO stands for genetically modified organisms.)
Coca-Cola, Pepsi, and Dr. Pepper Snapple Group, the industry’s Big Three soda producers, don’t have such flexibility to adapt their products to change with the times, Spence says. “The formula for Coca-Cola is locked in a vault somewhere, and it’s been that way for 120 years. The one time they tried to change it, consumers revolted. That’s very different than the way we approach it,” he says. “It’s an an age-old question for big food and beverage companies. When you start to create better-for-you
versions of existing items, you risk undermining the existing item. If you create an organic Oreo, all of a sudden, what does that say to your customers about regular Oreos?” Stevia’s emergence as an everyday sweetener, as well as consumer demand for healthier food options, have certainly contributed to Zevia’s success since Spence bought the company. (Its three founders, who started Zevia in Seattle in 2007, are now among its silent partners.) So, too, has his leadership. “My impression of him has always been that he’s an aggressive leader, an aggressive salesman, that he knows his product inside and out, and is about as passionate about his brand as anyone I’ve ever seen,” says Stanford, of Beverage Digest. Spence, who has run more than 40 triathlons, and competes in a range of martial arts, agrees that he is someone who loves to be challenged—a drive he specifically credits to his years at BB&N.
SPENCE WITH FORMER LONGTIME BASEBALL COMMISSIONER BUD SELIG
“At BB&N I had an amazing peer group. Being surrounded by kids who were so talented and so motivated and so brilliant was incredible,” he says. “For me, tougher competition makes me perform better. I love waking up every day and thinking, ‘OK, how can we beat Diet Coke?’” Of course, Zevia has a long way to go to catch Coke, or any of the other major brands. But it continues to forge ahead. The company now has 30 employees, up from five when Spence bought it. In 2014, it became the official ballpark soft drink of the Oakland A’s baseball team, the company’s first major concession deal. Across the country, Zevia cans are slowly but surely gravitating from supermarkets’ health-food aisles, to shelves alongside Diet Pepsi and Mountain Dew in traditional beverage aisles. That Zevia has found a niche in the ubercompetitive diet soft drink market is, by itself, worthy of praise. And unlike the past, soda’s future isn’t about quantity, Spence says. It’s about quality. “The beer (market) was pretty stagnant for decades, then Sam Adams came out, and craft beer is now 11 percent of the category,” he says. “Our aspiration is to be the Sam Adams of soda.” ❖ SPENCE (RIGHT) IN MIDDLE SCHOOL WITH TED CHAVEZ ’85
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