Idaho soft drink company sees growth while limiting impact on environment
Hayden-based organic soft drink maker Tractor Beverage Inc. says it’s on track this year to avoid the use of 34.5 tons of synthetic pesticides in its food system, compared with conventional production practices.
Kevin Sherman, CEO of Tractor Beverage, says the company has been set on having a measurable reduction in environmental impact from the outset.
“It’s still something that to this day we don’t stray away from,” Sherman says.
The company is tracking its progress through its organic impact tracker tool that measures the sustainability and impact of its products and ingredients.
The tool measures five key metrics that show how “one single beverage can change the world,” claims Sherman.
In addition to measuring synthetic pesticides, the organic impact tracker also measures carbon emissions avoided, improved soil health, organic land supported, and water saved.
In 2022, Tractor Beverage’s practices saved 144,400 gallons of water, improved nearly 3,300 acres of soil, prevented over 570 tons of carbon emissions, and avoided use of 25.8 tons of synthetic pesticides, compared with industry-standard practices, according to the company’s web page.
Tractor Beverage partnered with HowGood, a Brooklyn, New York-based sustainability food rating company, to track and disclose data about the company’s ingredients.
“There is no one in the beverage industry that is showing that type of transparency,” boasts Sherman. “We believe we’re doing something that’s never been done before and showing accountability to our customers to show them we’re putting our money where our mouth is.”
Being green has also been successful for the company on a national scale.
For the second consecutive year, Tractor Beverage made Inc. business magazine’s annual list of the 5,000 fastest-growing companies in the country. It placed No. 18 in the food-and-beverage category, and No. 352 overall. In 2021, Tractor Beverage was named in Fast Company magazine’s annual list of the World’s Most Innovative Companies.
Tractor Beverage was established in 2014 in Hayden and has three co-founders and 60 employees. It has a 12-person office in Coeur d’Alene that runs the operations department, and an office in Denver, where Sherman is based. The remainder of the company is fully remote. The company sources its ingredients from farms around the world and has production facilities in the Midwest, where its products are manufactured by contract workers.
The name of the company is tied directly to one of the company’s founders, Travis Potter, a farmer based in Idaho, says Sherman. The tractor logo evokes the image of a farm, and the company’s drinks are farmer-created beverages, he says.
“Travis is a farmer first and foremost, and secondly, he is someone who has a really amazing palette in designing and developing beverages,” he says.
Sherman, who has been with Tractor Beverage in various roles for eight years, says the vision for the company was to disrupt the food-service beverage category.
The company’s total revenue in 2022 was $45 million, up from $35 million in 2021, $14.5 million in 2020, and $2.5 million in revenue in 2019, says Sherman.
He declines to share 2023 projected revenue except to say it will be far above $45 million.
Sherman says the company’s business strategy is to serve two target markets: restaurants and institutional customers.
Its restaurant channel is focused on “pouring partners” that are looking to increase their carbonated soft drinks revenue. However, carbonated soda is declining in sales across the board, he says.
Gen Z is driving the future of the quick-serve restaurant market, says Sherman.
“They’re looking for cleaner options, they’re looking for transparency on their labels, and they’re looking to see what’s behind what they’re eating and what they’re drinking,” he says. “I think Gen Z is going to catapult massive change in the industry, because they are demanding transparency.”
A 2023 survey by HowGood found that 69% of consumers have an interest in seeing how their beverage choices affect the planet. The survey focused on climate-change concerns and how sustainability has become increasingly influential in consumer decision making.
In 2020, Tractor Beverage launched a series of noncarbonated drinks with Newport Beach, California-based Chipotle Mexican Grill Inc. According to the Tractor Beverage website, Chipotle donates 5% of profits from Tractor Beverage sales to support farmers.
The company’s institutional channel focuses on partnerships with major distribution platforms including Aramark Refreshment Services LLC and Sodexo USA, which provides facilities management and food services to schools, universities, hospitals, and other institutional customers.
“We’re growing exponentially in colleges, universities, and hospital campuses,” he says.
As the company grows, Tractor Beverage will be hiring more people. From the start, the company’s founders have had an emphasis on having employees who feel balanced in their work and personal life, Sherman says.
“We’re really intent on making sure, first and foremost, that we push hard on the idea of getting your personal life right, and getting it in order only makes your job that much better,” he says.