BevNet Live Kombucha Article ~ we’re in the News!

BEVNET LIVE: Kombucha Back to 18% Growth; ‘Kombucha Challenge’ Coming; Does Category Need Greater Innovation? Brisk panel at last week’s BevNet Live conference in Santa Monica, Calif, keyed in on vibrant kombucha category, detailing return from mid-year crisis in 2010 and efforts to continue popularization push – even via New Year’s “kombucha challenge.”

For a while of course, fermented-tea segment wasn’t lookin’ assured of remaining vibrant: in Jun 10 when Whole Foods pulled all brands off its shelves because of concerns over excessive alcohol content for nominally NA bevs. Now that’s lookin’ like merest bump in road. Bobbi Leahy, from syndicated researcher SPINS, which tracks natural channel excluding Whole Foods, noted that segment had been scoring robust 18% growth until crisis caused it to hit a wall. But category came back in 2011, rising 11% to $650 mil, and lately is back to 18% growth. National pioneer GT’s – where most of the elevated-alcohol items were found – is still leader, with 80 share in natural, despite losing some shelf space. There are some 44 active brands in natural channel vs 13 in mainstream channels like grocers. (Heck, BBI editor counted 4 different brands just in Portland, Ore, airport stores last summer.) Fastest-growing include GT’s, Kombucha 2000 and Townsend’s; newbies makin’ a splash include St Helens, Ore-based Captured by Porches, which sells lotsa craft beer and kombucha off 3 roving trucks plying Portland streets.

Still, 2,000-yr-old category still lacks awareness among large portion of American public, acknowledged Kombucha Kamp founder Hannah Crum, who’s enlisting High Country, Bucha and others for 30-day “kombucha challenge” around New Year’s, when consumers traditionally resolve to detox and lose weight. They’ll be invited to swap their soda for kombucha “and see what happens,” said Hannah. Brands like Bucha are looking to be “on-ramp” for consumers thru more vibrant, contemporary packaging and less vinegary flavors, said Ron Lloyd, ceo of Bucha brewer B&R Liquid Adventure. Still the best brand-building vehicle is in-store sampling: High Country’s Ed Rothbauer said a demo at Whole Foods typically yields 200-300% lift in volume that day, and gains are sustained for weeks. As sign of grass-roots health, homebrew kits are popping up next to craft-brewing kits in lotsa retailers like Whole Foods, too. “Every commercial brand started as a homebrewer,” Lloyd noted.

Plenty of contrasts and sometimes stresses within segment: between those that remain defiantly raw and those that pasteurize product, those that use clear bottles and those that use tinted bottles, those that make health claims and those that don’t, those that go out as alcoholic and those that remain NA (GT’s is playing in both realms now). And innovation likely could use a boost: best that Lloyd could point to was GT’s addition of chia-seed-based flavors. Tho Celestial Seasonings has garnered some buzz for kombucha-based shot, High Country’s Rothbauer said so far he doesn’t see much movement on it.

Some are movin’ segment intentionally into alcoholic realm, such as Unity Vibration, out of Mich; Captured by Porches, and Beyond Kombucha, from upstate NY, which mixes brewer’s yeast into formula. Blurring with beer is also visible in entries such as Goose Island’s Fleur, Belgian-style pale ale that employs kombucha, and Vanberg & DeWulf’s Lambrucha, mashup of lambic beer and kombucha. Still, noted Hannah, items branded as kombucha tend to do poorly when shelved with craft beers.

Despite segment’s growth, so far it’s proved hard to put finger on exactly who consumer is. Some use it as detox cure, others for probiotic content. Some runners say it helps their knees. “Unique category,” said Bucha’s Lloyd. “Everyone has their own reason for why they’re drinking this stuff” and there’s not been much research so far to learn more. Even celebs that drink the stuff have been double-edged swords: Olympian athletes, on one hand, and 2-time Ironman Triathlon winner who sports High Country logo, but also endlessly troubled Lindsay Lohan on other.

Bud House Sees Potential It seemed a stretch when Bud house American Eagle Distributing Co picked up role as master distributor for nearby High Country Kombucha (BBI, Jun 24). But prexy Jerry Helgeson told BBI the drinks struck a chord when he saw them featured on local news channel while working out. Since major natural foods distrib UNFI works Whole Foods stores but doesn’t call on on-premise accounts, he spotted opportunity there – particularly if High Country moves into alc realm. So is that afoot? No comment for now, said High Country execs.