The global Kombucha market is predicted to surpass $5 billion by 2025, as investment into brands including Flying Embers, Health-Ade and Better Booch continues to build momentum.
The latest to secure funding, US startup Flying Embers, which closed a $25 million Series B round co-led by the Ecosystem Integrity Fund and PowerPlant Ventures earlier this month, is one of a surge of hard kombucha brands including KYLA Hard Kombucha, Kombrewcha and Tura, disrupting the “better for you” alcohol market.
Following its cash injection, the startup says it is better placed to meet the exponential demand for its kombucha while innovating to create additional “better for you” alcohol beverage lines.
“It takes an extraordinary team to bring health and wellness to the alcohol industry,” commented Mark Rampolla, managing partner, PowerPlant Ventures. “Bill, Ty, and the team are the ones to make it happen and we believe they are building Flying Embers into one of the next great iconic brands.”
According to research, the North American kombucha market in particular, which generated approximately $342 million in 2016, is expected to reach $2.7 billion by 2025, and this growth hasn’t gone unnoticed by big beverage players.
Last year Coca-Cola made a $20 million equity investment in Health-Ade Kombucha, with the legacy brand — an investor since 2014 through First Beverage Ventures, a limited partner of its Venturing & Emerging Brands unit — revealing that it was continuing to see attractive growth opportunities for the brand. An earlier deal, which saw PepsiCo acquire US kombucha brand Kevita, in an attempt to expand its health and wellness offerings, has also helped to bolster the market.
In June, Better Booch, a manufacturer of premium, small craft kombucha, secured $2.5 million in a funding round led by Crush Ventures, after Revive Kombucha completed a $7.5 million Series B round in 2017 led by Peet’s Coffee & Tea, Inc. the premier speciality coffee and tea company in the US.
As consumers continue to pivot away from drinking sugary, calorie-laden drinks, kombucha seems to be finding its footing as a functional alternative. And within this expanding market, “hard kombucha has a lot of opportunity to grow,” Caitlyn Battaglia, manager of the beverage alcohol practice at Nielsen recently told Fortune.
“Non-alcoholic kombucha caught the tailwind of the health and wellness trend that we’ve seen across consumer packaged goods. It is evolving, and part of that is this hard kombucha trend,” she added.
As demonstrated, Flying Embers, which already boasts 70 distributors across 30 states in the US, is already making waves. And as consumers continue to search for “better-for-you” options, it might not be long before it’s scooped up by a legacy brand. However, its competition is closing in.
Below we’ve rounded up some of the hard kombucha brands to keep an eye on, as the category continues to heat up.
KYLA Hard Kombucha
Distributed in over 6,000 locations in the US, KYLA Hard Kombucha is currently the only hard kombucha brand offering full consumer transparency via its fully compliant FDA label, as well as being the only product that doesn’t require constant refrigeration.
The brand claims to sit at the convergence of four trends driving growth across the alcohol category: low calorie, low alcohol content, gluten-free and craft fresh, making it one of the US market’s sales leaders.
Boochcraft, a handcrafted high alcohol kombucha brand made with fresh-pressed juices, launched in San Diego in 2016.
Born out of a garage in Ocean Beach, founders Todd Kent, Adam Hiner and Andrew Clark, have been committed to developing a product with certified organic ingredients, sourced directly from local farmers.
Earlier this year, the company opened an 18,000 square-foot brewery located in Chula Vista, with the expansion revealed to be the first step in furthering the brand’s imprint nationwide. Currently its six flavours, including Grapefruit Hibiscus Heather and fall seasonal Spiced Pear, are available at retailers such as Whole Foods Market, Safeway, select Walmart locations and other natural grocery stores.
Backed by AB InBev’s ZX Ventures, Kombrewcha, one of the first-movers in the alcoholic kombucha category, uses all-natural ingredients including organic black tea, organic cane sugar, organic yeast, and organic fruit.
In 2017, the brand chose to up its alcohol content and carve out a space for itself as a “better for you” beverage, while still keeping a low ABV.
“We are keenly aware that sessionable drinks are leading the way amongst health-conscious consumers and at 3.2% ABV, we are giving consumers a way to socialize without compromise,” said CEO Garrett Bredenkamp, at the time.
To help position itself within the wellness space it has been sampling at retail stores and wellness events, as well as partnering with brands such as lululemon and Flywheel.
This Los Angeles-based kombucha maker raised $2.5 million in funding earlier this year.
Launched in 2012, the brand which started out as a fixture in local farmers markets can now be found in approximately 1,000 locations in the US including retailers such as Whole Foods, Sprouts, and Safeway.
Better Booch is currently focused on launching a DTC channel and expanding into more stockists.
Launched in 2018, JuneShine Kombucha is a better-for-the-planet beverage that contains probiotics, antioxidants, and 6% ABV.
Earlier this year the startup announced the close of its seed round of financing, with an investor group featuring the founders of Thrive Market, Peter Rahal and Jared Smith of RXBAR and Nick Heldfond, an early investor in KeVita kombucha.
The proceeds of the financing, which haven’t been disclosed, are currently being used for product and geographical expansion, primarily in the forms of building a larger team and expanding manufacturing capacity.