Kanen Wealth Management Urges Zevia to Consider Business Sale

Kanen Wealth Management, an activist investor holding around 4% of Zevia, has urged the company's board to consider selling the business. Zevia, known for its stevia-sweetened beverages in the US and Canada, is seen by Kanen as having failed to take advantage of the growth in the zero-sugar soda category.

David Kanen, president of Kanen Wealth Management, stated in a letter that Zevia could be valued at $2.75 to $3.75 per share in a sale, more than double its current price of $1.30 as of the latest trading in New York. Kanen has highlighted what he describes as 'valuable assets' owned by Zevia, including its two decades of brand equity and wide distribution.

Kanen criticized Zevia’s governance, pointing to the board's recent decision to appoint Alexandre Ruberti as president and CEO without an external search, following Amy Taylor’s departure. In response, Zevia reiterated its commitment to strategic priorities and said it would review Kanen's concerns thoroughly.

Zevia recently reported second-quarter net sales of $45 million, a 1.1% increase year-on-year, while its operational losses rose to $2.9 million. The company's annual forecast remains between $170 million and $175 million in net sales, with an adjusted EBITDA loss projected between $2 million and $4 million.

As part of its strategic planning, Zevia aims to refine its market strategy and brand identity under the leadership of Ruberti, who expressed confidence in achieving sustainable growth.