Now officially, good afternoon, everyone. My name's Jim Solera. I'm the packaged food and beverage analyst here at Stephens. With us today from Zevia are Amy Taylor, CEO, and Girish Satya, CFO. Amy, Girish, thank you for joining us today.
Thank you for having us.
Of course. Maybe for starters, I think 2025 has maybe turned out a lot differently than many of us expected, certainly a lot differently than we expected at the outset of the year. Consumer spending has been choppy across retail and beverages, and yet better-for-you beverages have held in particularly well and have been a kind of a pocket of growth, whether that's soda or in the energy category. What do you think's driving that dynamic, just at a category level first?
Sure. Yeah, 2025's brought a lot of surprises. Of course, we're not immune to macroeconomic considerations. Net-net, we know there is a movement away from sugar that is permanent, here to stay, global, durable. Increasingly, there's a movement away from artificial ingredients. We sit right in this sweet spot of solving for the sugar addiction, of bringing a great-tasting, zero-sugar soda to the market that has literally the fewest ingredients of any soda on the market, all that under the umbrella of a trusted brand. Despite all the headwinds, what's still growing in the soda landscape is diet and zero. What's leading that growth is the better-for-you segment. I think what's kind of cool for Zevia is, think about the fact that the soda category is in 90-plus % of American households.
These are folks that drink soda multiple use occasions through the day, multiple day parts, all family members. For that family, they want a great-tasting treat, increasingly without sugar and without artificial ingredients. Therefore, it needs to be affordable so you can stock it in the home. Within this modern soda or better-for-you soda set, not only are we great-tasting, zero sugar, and no artificial ingredients, but we're the most accessible and affordable option. If you add all that up, even in a tough time, it's quite a bright road ahead for Zevia. We made a lot of progress this year in distribution and innovation and growing our user base, but we see a lot of upside for all of the reasons that I just outlined and more.
If we think about this big white space opportunity for better-for-you beverage, kind of the subcategory within broader carbonated beverage, how does Zevia remain at that leadership position? You guys were obviously at the vanguard when the category emerged. How do you retain your position kind of among the front of the pack as new brands enter the space, potentially as legacy brands start to kind of reformat and reformulate their portfolio to match some of these characteristics that you're talking about?
Yeah. You know, we used to sit on the shelf next to conventional soda. We were price premium. The conventional soda people we know will pay a couple cents per fluid ounce more for clean ingredients. That's where we used to sit. To your point, now there are these massive tailwinds coming in from a category that is leading growth across this massive category. That is the better-for-you segment. As I mentioned before, the benefit that we have, number one, is that we're truly zero sugar, so not just low sugar, but zero sugar. For a lot of consumers, that's really important, that we taste great. No matter what the research tells you, let me tell you with tremendous confidence, the number one driver of selection in soda is taste. We taste great. As I mentioned before, we're accessible and affordable.
While, yes, the singles business is important to drive trial, we are today a multi-pack business, a home stocking brand. We are really the only brand in the category that makes sense to stock a 12-pack in your fridge or take a multi-pack or a variety pack to a cookout or to a kid's birthday. We are at an accessible and affordable price point for a family to do exactly that. Those become our points of distinction: great taste, truly zero sugar, and the accessible and affordable price point. You are going to see more and more marketing from us, Jim, where we talk a lot less about these rational drivers and a lot more about the emotional ones. What we are the most proud of is that we are just like this radically real sort of people's champion in a world awash with fake.
That is our brand, our brand communication, as well as our product.
We definitely look forward to seeing that as they roll out. I think one of the concerns we hear from investors is, is this just the next fad? Amy, you've been in beverage for a long time. These things come and go. What gives you confidence that this kind of better-for-you positioning in soda isn't one of the 1,000 federation of consumer fed?
Sure. Yeah. You know I mentioned foundationally before that this movement away from sugar is macro. It is a trend. It is here to stay. It is global. Increasingly now, the consumer is moving away from artificial ingredients. You see that in all categories. Bear in mind, even artificial colors being kind of demonized at the moment, we have been a clear beverage. If y'all have not tried one before, pour out a can of Zevia into a cup and you realize it is clear. I hate to break it to you, but there is no brown kola nut out there making your kola brown all these years. These are artificial colors, and Zevia does not have any. We are very confident that these are macro trends that are here to stay. Jim, remember that our brand has been around 15, 16 years.
There has been a small, passionate group of consumers that discovered us in the proverbial natural channel and stuck with us all these years. Now the rest of the world is realizing, hey, wait, I can enjoy this tasty little treat at all these different day parts without having to take in all this stuff that's bad for me. The fact that we've established this loyal user base with very strong repeat rates and are now cracking it open and moving into the mainstream is a great indicator of the very healthy foundation of this category and the tremendous opportunity the category has to continue to grow. Jim, we have five percentage points of household penetration. Our competitors through kind of spiky initiatives like some singles one-off distribution at multiple retailers have taken them as high as 20% of household penetration.
We think that's attainable for Zevia, but also sustainable. We can double and triple and quadruple our household penetration over time with the right tactics that grow us on this presumption that these macro trends are here to stay.
You mentioned a couple of times being priced so that you're accessible to everyday consumers. What are you seeing both from your consumer and maybe from kind of broader mainstream beverage consumers in terms of demand elasticity? I know there's been a lot of conversation around pricing this year, not just in your category, but in all categories. How do you feel Zevia's positioned relative to the category and how the category's positioned overall?
Yeah. So I mean, I think just to rewind the tape for a second, I think it's important to just establish a couple of points. One, we are priced at a slight premium to mainstream soda, but at a significant discount to all other better-for-you beverage brands. I think secondly, from a promotion standpoint, we really reinvested a significant amount into promotion to be more competitive on shelf. We've been very agile both in terms of depth and breadth of promotion. You've seen that sort of layered into the P&L. As I take those two pieces of data and sort of push them forward, we continue to see tremendous upside in terms of price pack architecture over time. We do think there are opportunities for us to continue to maintain our affordability while continuing to take price.
I think secondly, we've seen a bit of a sort of shift in terms of value as consumers go to lower-cost channels like Walmart, Costco, and Amazon. We continue to play with differentiated promotional strategies in order to sort of manage that, but also drive demand as well.
You mentioned pricing and kind of thoughts around how you fine-tune that. One of the components there and consideration from your end, I'm sure, is how your raw material costs impact that. We did see over the weekend, or actually might have been last Friday, the Trump administration announced a reduction of a lot of tariffs on food products. Aluminum is really the key driver for you guys. How do we think about inflationary pricing to offset aluminum versus maintaining that value offering for the consumer and sequencing that in?
Yeah. If you go back to what we had announced, I think it was last quarter, we will have realized about $15 million of the $20 million in overall productivity savings that we had announced by the end of this year. There is an incremental $5 million that we have identified, which is both in terms of COGS as well as selling expenses that will begin to be recognized in Q1 of 2026. Some of that will be obviously offsetting the tariff exposure that we have. Some of, alternatively, pricing will sort of be the other lever that we pull. I think as we look at it going forward, right now we have the ability to do both. We will take some incremental pricing while maintaining our sort of affordability vis-à-vis the category.
We have incremental levers at our disposal from a productivity perspective to offset the remainder.
You know, something we've talked about this before, Jim, but we are more affordable than 65% of all non-alcoholic beverage options on the market. So one of the things that's really important to our mission, but also to growing our base, is that we remain a better-for-you product that's actually affordable. As a society, we make so many better-for-you products, food and beverage, that are for wealthy people. And so we sit in a premium category, as Girish outlined, but with still upside on price relative to the rest of the market. We're moving with the market. And so we're not pricing ourselves out of any of the opportunities that we yet to have realized in the way that I outlined before.
Shifting gears a little bit to innovation, that's been a clear unlock. Strawberry Lemon Burst has been one that you guys have highlighted has done exceptionally well this year. We have a couple of newer flavors up here on the table as well. How do you decide where you innovate next in the portfolio? What informs your decision around what flavors to kind of invest behind, what flavor profiles or characteristics?
Sure. We can talk about our innovation process a little bit. So we have really sort of two subsets of our portfolio. We have the classic soda flavors like cola, Ginger Ale, Creamy Root Beer you're enjoying now, like the Lemon Lime. That's kind of the classics that we've all known for decades that are soda. But sort of the new soda is all in this fruity or fruity and creamy space, so Strawberry Lemon Burst, Peaches and Cream, et cetera. And the great thing is that we have such growth opportunity with both, with different consumer sets and different usage occasions. So we can continue to innovate and improve taste in both of those subsets of the category. But specifically, how do we decide what's next?
How do we decide that salted caramel should be our seasonal play or that peaches and cream and orange creamsicle can be our kind of long run next year's kind of big news or whatever? It has a lot to do with just insights on hot flavors. And it's not just about, hey, what are competitors doing or what juices are selling or what sodas are selling. It's also insights from restaurants and what kids are mixing at the fountain in quick-serve environments and fast casual restaurants. I'm no longer studying exactly what flavors are coming out hot in vodka, but it's relevant. So all the flavor trends become relevant both in snacks and treats and fountain beverage, and those become inspiration for us.
We've put out a lot of fruity and fruity creamy lately, but in the pipeline, there's actually some surprising flavors coming out kind of as the next gen. And some of them are nostalgic to kind of the throwback, like soda jerk 1950s, like early soda years. And some of them are like you see a lot of more typical flavors in the modern soda set. So there's a lot of innovation ahead that helps to grow kind of that foundation of the classic soda flavors and then win the new and young consumer that's more typical, new to bubbly beverages.
Do you have a target around innovation should make up X percent of whether it's your total sales base or incremental sales? Is that the right way to think about it? Or is it more of this is a trial driver to bring people to the brand?
It is a trial driver, and it is new news to bring kind of brand heat at a moment in time. Absolutely. So it's less about a target for innovation because a healthy brand should continue to grow its base. Innovation is brought to the retailer when it has a role to play. So every SKU has a job, and we're able to explain to the retailer, hey, here's the unlock with this next innovation, be it a package innovation or a flavor innovation. But we don't want to get into that cycle where you're so dependent upon innovation. Instead, it has a strategic role to play as we grow our user base.
You mentioned taste a little bit earlier, but I know that's always been a big challenge for the mainstreaming of better-for-you products in general. And I think there's still probably for a lot of consumers kind of this latent expectation that you can either choose something that's good for you or something that tastes good.
Definitely.
How do we or brands in your position bridge that gap and that expectation gap between, again, a mainstream consumer that has really been taught that if something's better for you, it means it probably doesn't taste great?
Yeah. I mean, honestly, we love this problem because we solve it. The way we first positioned Zevia when we first came around, we said, we solve the tension in the category. The tension is between health and taste. And the idea for my generation is always that you had to pick one. You had to drink a full sugar cola, or you had to drink a diet one, and then you're kind of wondering what that's doing to you too. So now we have something where you don't have to pick between health and taste. And that's the premise of Zevia's reason to exist, is to unlock permission to drink amazing tasting soda. And so I think there's, of course, could be some skepticism because why, if soda's been around for 100 years, would you just now be figuring this out?
Why are you uniquely qualified to figure this out? That'll just remind us that Stevia, which happens to be the plant that we use to sweeten our product, has been greenlit for use in beverage and food by the FDA since 2008, which was not that long ago. Since then, we've been working on different blends using different molecules within the Stevia leaf. Of course, as that commodity grows in availability, then pricing makes some different molecules more readily available. The new news for us right now, and we'll communicate this on PAC and through marketing in 2026, is that we've had a real unlock in a more sugar-like taste experience such that people can taste the richer flavors with little to no aftertaste, not just in that wonderful Creamy Root Beer that you're drinking, but in the lighter fruitier flavors too.
So this breakthrough in a more sugar-like taste experience has opened up avenues for us to innovate into multiple different flavor categories under soda. So we understand the tension between health and taste, but we're glad it exists because that is our actual market opportunity, and we're happy to be solving for it.
Is that something we should expect to be seeing in marketing moving forward, that communication around this basically isn't the previous generation's version of better-for-you, like this is you can have it all?
Yeah. I think that you will find that our brand-building marketing messages are very much about sort of emotional reasons to drink soda and really fun and engaging messages. But on PAC, we're a lot more overt about why Zevia. So on PAC, zero sugar, zero fake colors, zero fake sweeteners. And then when we have a new improved taste, we'll communicate that very overtly. And so we think that that helps to drive trial, and then the taste itself drives repeat. Our repeat rates are already really strong. But with our goal of growing the user base, we're going to bring in a lot of light and medium users. And we believe that with our taste improvements, we'll continue to get really strong repeat rates even with the new kids.
You mentioned packaging. You just recently finished a new packaging refresh, which the can you have there. Can you just share any initial feedback from the consumer engagement there, maybe anything that retailers have told you? How's that performing? Any noticeable change in either intent to purchase, on-shelf visibility, engagement?
Super early going, but I'll just kind of recap it by saying retailer has been unilaterally positive. They're like, I get it. I see why you're making these changes. This is going to work so much harder for you and for us on shelf, unilaterally. We only have a couple little test cases in the market now. So we have strawberries and cream in Kroger, for example, in the new packaging. And we saw a tremendous performance of that product on end cap. So when on display with the new packaging, that new item was one of the top three drivers of all Zevia SKUs in the customer. And so that's a nice little early indicator that packaging can have a positive effect.
Finally, as I mentioned in prepared remarks on the Q, we did some proprietary research that indicated that we had a 60% increase in purchase intent with our new packaging versus the old, and it also outperformed competition. We are really bullish on the new packaging, and we think it's going to work really hard for the brand.
Great.
Is that the new packaging?
Yes. So this is emblematic of what's on shelf today, which is elegant and timeless and can sit next to the Coke and Pepsi, et cetera. But this actually tells you why Zevia. And with low levels of household penetration and awareness, it's really important to be very overt on the reasons why. We think it also looks delicious, which should help. So yes.
Great.
Yeah. Thanks.
And why don't we just see if there's any other questions from the audience if we get a chance?
Happy to.
Beyond the design changes around the packaging, any other format changes we can think about? Traditionally, your growth has been in multi-pack format, which is kind of the inverse of how most beverage brands grow. Just any updates there from both singles, but then also the size and the formats for the multi-packs, 36, 8?
Sure. So we're really pleased that our variety packs, both in mass channel, so Walmart, as well as in grocery, have become top drivers of new-to-brand purchase. So that means that new consumers are trying multiple flavors of Zevia, and then over time, we'll be able to track them coming back and buying straight flavor single packs. So the multi-pack, six-packs, and eight-packs are working really hard for us. If you go up in pack size, you move along to the next channels. We have variety pack, multi-pack, and club, and an Amazon that also drive that type of a trial. But beyond that, to your point, it's really important for us to get singles distributed so that people can pay two bucks or less for a Zevia to try a flavor one time, and preferably cold.
So that's a major initiative for our company to continue to focus on driving trial and specifically through singles, not just reliant upon multi-packs going forward.
You mentioned earlier household penetration just over 5%, and that you've seen other peers through kind of turbocharged marketing efforts reach 20% plus mark. Can you just help us size up? If we think about where the household penetration opportunities are kind of most available to you, is it within traditional club, mass? Where are the channels that you feel like you have the most opportunity to really drive benefit from increased marketing, packaging to secure that awareness?
I mean, I'll start closest at home, even in natural, because we do get household penetration data by customer. So even closest to home in natural and in grocery, those channels are working really hard to reach new households for us. So as we today are mostly just distributed on shelf, as we start to break out and get display around the store, or even better yet, singles, cold, those legacy channels will work hard for us to expand the base. But to your point, there's also more immediate step-changed opportunity. So we've now been just about a year in 100% of Walmarts and the modern soda shelf. We are not yet in the other national mass player. So that's a big opportunity for us. And then we are distributed in club in some regions on rotational basis and increasingly looking at becoming an everyday item.
And the more club distribution we get and with more regularity year-round, the greater opportunity we have to grow thanks to that distribution. And then, of course, in the long term, household penetration will be supported by singles distribution and food service and inconvenience. So those are some of the stair steps to get to increased household penetration. Remember, though, that's all just distribution, and marketing is a big part of the story too, driving trial and continuing to win usage occasions and purchase decisions across channels.
Since you brought up marketing, as we think about the firepower that you have there and maybe as it coincides with some of the productivity savings you're doing, are there any dollar figures that we should think about in terms of marketing step up? And I don't know if it's percentage of sales or certain spend, but anything you speak to.
Yeah. I mean, I think right now we're at, let's call it low double digits, which is double what it was just two years ago. And so I think generally speaking, you should see it in that sort of 12 to 14% range. And I think we'll be closer to 13% this year. And so I think generally we feel like we're at a healthy place. And as we find and continue to test and learn into new marketing channels and new marketing opportunities, we'll obviously invest behind the things that work. And if we have opportunities to upsize it for a particular initiative, we will. But as we've talked about, we're always biased towards investing the productivity savings into demand creation.
Amy, in the last call, you talked about opportunity. You just mentioned club, but also expanding within Walmart Canada. Are you able to offer any kind of guide rails to how we should think about these incremental, whether it's permanent placement in club or Walmart, what type of uplift that looks like to overall sales base?
Well, let me answer it a little bit differently and see if Gears can help me either clarify or double down on any of it. But I think the story of growth for Zevia in 2025 was all about the step-change distribution. So we regained some distribution that we had lost, and then we had net gains of new distribution overall. While we will continue to win new distribution into 2026, we would anticipate the primary driver of our growth next year is in velocity. So what you're probing out around innovation and the package changes and our marketing investments are the right questions to ask because that's what we're really focused on. In the end, distribution is sustained as velocity continues to accelerate. So we're really focused on velocity in order to complement, strengthen, and then ultimately expand that distribution.
So not quite quantifying, but giving you some building blocks.
Maybe thinking of channels where historically, as a beverage brand, you need to have singles, convenience, food service. Is the playbook to expand your product in those channels different than what you guys run in traditional FDM and club? Do you need more capabilities around singles to be able to win in those channels?
Yeah. No, that's a good way to frame it because I think so many brands in that 100 to 150 million dollar range of annual net revenue kind of get over their skis and think that success is instant distribution nationwide, inconvenience, and singles. But the challenge is you have to have the pull to justify that distribution. It's a very competitive space. Convenience stores are small. The footprint's small. The cooler space is limited, and they're often locked up by three or four massive beverage companies. So if you're a little guy, you got to fight to win and then protect your space there. So our philosophy is a little bit more demand first, pull out ahead of the push. So we're focused on all the things we've been talking about today and growing the base and demand creation.
And then we want to enable via route to market expansion into convenience when we know that will be successful. And so the category is in early stages of, let's call it readiness for convenience distribution. When I was at Red Bull 20 years ago and riding on a distribution truck, we were eating slim jams and potato chips and drinking a Red Bull, and that was lunch, right? And today, we're starting to evolve what's sold in a convenience store. There are healthier snacks, et cetera. But it is inherently called convenience for a reason. And it's going to take a little longer for the better-for-you shopper to find their way into the convenience channel. And both we and our competitors as a category are finding it to be a little bit slow going. So how do we think about it?
We are focused on regional direct store distribution to enable regional pilots with convenience to build some case studies of success, largely focused on operators that would have our typical shopper darkening their door. And with that, we're starting to glean some really strong learnings about how to scale convenience over time.
That segues perfectly into my next question, which is going to be about your DSD partnerships.
Oh, cool.
Any noticeable distinctions in those territories that you have the DSD partnerships? And maybe if you could just kind of visually remind us where that's at geographically.
Yeah, I'm sorry. Geographically, yes. We are in the northwest and the southwest. Oregon, Washington, Idaho, Montana, and don't forget Alaska. We are more newly across the southwest, Arizona, and now growing into southern California. How I would distinguish between the different geographies would just be that time in market helps. The DSD operator is able to have more of an impact once they really know our brand. They're confident in selling it. They are activating long-standing relationships for the benefit of our brand, both in grocery as well as in new independent and convenience distribution. That kind of case study is living up in the northwest where we've had a DSD partner for a good year and a half. Newer, of course, is down in the southwest where we're just getting ramped up.
The other thing that we're learning is we do DSD primarily to grow new business, to expand inconvenience, et cetera. But DSD can also pay us back with improved merchandising in grocery where we already play. So where we see photos of massive Zevia displays either seasonally around big weekends or hand in hand with some salty snacks, et cetera, that's oftentimes in the DSD footprint where they're able to get those jump balls and get that incremental space. So early days in our DSD expansion, and we don't imagine that we would convert all channels and all geographies, but selectively, a hybrid route to market is starting to work well for us.
And particularly around singles, I assume much higher propensity of singles in the DSD markets relative to.
That's right. That's our expectation over time is that singles become a lot of the reason why for the distributor. So yes, that mix should shift there.
Talked a lot about top-line drivers of the business, maybe just shifting gears a little bit to how pay for all this.
Good.
We've seen gross margin step down recently with costs from, we mentioned the packaging refresh. You mentioned the aluminum tariffs. Can you just walk us through some of the productivity initiatives and kind of the components of that to rebuild margin gears? You mentioned $15 million earlier with kind of line of sight to another $5 million.
Yeah. So I think the productivity initiative obviously has been rooted in really sort of simplifying the portfolio, simplifying our network, and then simplifying our cost structure to really sort of shake out efficiencies. And so we've largely tackled, I'd say, to use a baseball analogy, we're sort of in the sixth inning of all of that, right? And I think the unexpected headwind, of course, was tariffs. And so if you look at, to your point on the step down, we're at, if you add the, let's call it 800,000 or so of packaging expense, you get to sort of a 47-ish gross margin, which is reflective of where we are with the impact of tariffs down from close to 50 or just about 50 in Q1 of this year.
And so as we look forward, building it back up is the component that we just talked about, which is the, let's call it half of the 5 million, incremental 5 million in savings will be on the COGS line. We found incremental opportunities to sort of sharpen the portfolio and sharpen some of our raw material contracts. And then the other component will be pricing, of course, as we talked about earlier. So between those two, you should start to see margin start to trend back up starting in Q1. It'll take a couple of quarters to get back to the sort of upper 40s, low 50s, but we think that will largely get us there.
And then the other piece, as we continue to point towards modest adjusted positivity in 2026, we'll continue to sort of mine for cost within the supply chain largely and really reinvest all of that into brand marketing, which I think you've seen us do over the past three to four quarters. Because if you look at many of the quarters this year, I mean, we could have been even that positive. But again, we were choosing to invest into the brand.
That brings up a second question, follow-up maybe. But before I go to that, on the aluminum side, is there anything we understand the tariff impacts, and that's everyone in the industry. Is there anything that you can do from an alternative sourcing perspective that can allow you to maybe negate some of that? I don't know, recycled versus new aluminum, if there's any kind of way to negate that, or it's pretty much just a tariff.
Yeah. I think there's sort of the blessing and the curse of being in this sort of turnkey asset light model, right, which is we can generate a lot of efficiencies and a lot of flexibility within the supply chain, particularly given our size. However, we are at the mercy of the sort of aluminum hedging and sourcing practices of our co-manufacturing partners. And so there is a little bit of we obviously work with them to figure out how we can be as efficient as possible collectively, but we don't have total control over our aluminum sourcing.
And then the follow-up I wanted to ask was you mentioned you could have been even a positive in a lot of the recent quarters. How do you think about what percentage of the productivity savings or whether percentage or dollar figure that you drop through to the bottom line versus reinvesting in some of those gross units?
Yeah. And it's a little bit of art versus science, of course. And I think as we have seen the savings, we've tried to invest it back into the business. And so looking forward, I think our focus really has been about if we can really create compelling unit economics, it makes it a lot easier to reinvest into the business. And so over the next, let's call it six months or so, you'll continue to see us kind of thread that needle of reinvesting, but then dropping some to the bottom line. And so we're close, right, as you think about getting from where we were a couple of years ago to really slightly above break-even. And then going forward, it's really going to be about reinvesting and reinvesting until we can really create that revenue flywheel and then support.
Eventually, because the unit economics are so strong, it'll translate into strong profitability.
Is there anything outside of the aluminum tariffs that we should think about or that we should be concerned about from kind of an operations or a procurement side that would upend the kind of margin improvement story that you have?
I mean, I think the good news is no. I think we've really kind of set the entire foundation of the business at this point. It is very stable and both flexible and scalable, which I think the team has done an incredible job of running towards that goal over the last 18 months or so. I think the good news is we're really at the most stable, I think, the company has ever been.
Can you just provide us some quick thoughts on you guys' at-the-market offering you put in place earlier this year? Where do you stand from a liquidity standpoint and thoughts on how you use that flexibility that that offered you?
Yeah. I mean, I think from a balance sheet perspective, I think we've made incredible strides in overall working capital management, and we've substantially reduced the cash burn. So I think from an operating standpoint, we have more than enough cash. And so I'm not worried about that, particularly as we've inflected into positive adjusted EBITDA in 2026, which means, let's call it slightly negative free cash flow generation for the foreseeable future. So I think we're in a really good shape. I think the ATM was really more about sort of good corporate hygiene. We hadn't had a shelf offering on file. So we filed the S3. We filed the ATM closely thereafter. And I think really it's about future flexibility and future optionality.
I don't foresee a need to use it in the short or medium term, but should there be a compelling opportunity, say, a strategic partnership or something like that, it just gives us the flexibility to pursue that without worry. So I think it's, again, really about optionality and flexibility.
Great. Looking forward, as we look 2026 and beyond, maybe the number one or number two thing you're most excited about, and then, if you'll indulge, maybe the number one or number two thing you're most concerned about.
Yeah. Sure. For me, I'm the most excited about the fact that in 2026, not only will it be the year that we demonstrate profitability, but it's the year that we're rolling out this new packaging. And we are standing on, as Girish said, the most stable foundation we've ever had as a company. So we're investing in marketing with this new look at retail, expanded distribution, and a great taste at the perfect time. So despite headwinds, which of course make visibility a little bit murky into the next year, what I'm most excited about is the fact that we are presenting the product to millions of consumers that have never tried Zevia before in a really clear way through packaging change. So I'm excited about next summer when we'll be fully to bright.
The flywheel of marketing and the investments that Girish is talking about are manifesting in that at shelf, the product is screaming to you, why Zevia, and the taste will deliver on expectations. So the packaging design initiative is what I'm most excited about. What am I concerned about? I wouldn't say it's concerned, but there are unknowns in the macroeconomic environment, and we're not immune to them. I think we've outlined very well why we are very competitive relative to those that we sit next to on the shelf in this moment, given our accessible price point and given how much upside is ahead. So I wouldn't say I'm concerned about the macro, but that's the unknown. So how about you? Anything?
No. I mean, I think I would echo similar sentiments. I think there's been a ton of work that's happened over the last 18 months to set us up for this coming inflection point as we get not only the operational side right, but also the commercial and marketing side right as well. And so I think all those things are finally converging into 2026. And then, as Amy alluded to, I mean, I think the macro continues to give us a little bit of pause. And with that being said, I think the sort of better-for-you consumer remains really healthy. And so there's certainly opportunity, but there's a lot of opportunity. And again, we can't control the macro, so we're going to continue to be focused on controlling things we can control.
And I think we've shown over the last year or so that we just continue to execute upon the things that we said we were going to do, and we're starting to see the results of that.
Great. Well, Amy, Geers, appreciate your time today. Appreciate all the thoughts and commentary and everyone. Thank you for joining us.
Yeah. Thanks for being.