Kombucha & Probiotics Booze Makes a Comeback (with Brand News)

Kombucha’s rise over the past decade has been as much about what is not about in the bottle as what is. After multiple brands were pulled from grocery store shelves in the early 2010s amid concerns about alcoholic content, brewers have gone to various lengths to verify their alcohol content — naturally produced during fermentation — as coming in below the 0.5% ABV legal threshold.

But after years of work, the efforts of a small handful of mainly West Coast brands to build a viable, standalone adult kombucha category are paying off. The category is forecasted to grow 75% in the U.S. by 2025, according to IWSR, while the Specialty Food Association’s State of the Specialty Food Industry Report 2022-2023 cited hard kombucha as one of the growth drivers that helped specialty beverages to grow twice as fast as food in 2021. That momentum has helped attract the interest of major strategics like Beam Suntory, which led a $20 million Series C funding round in Flying Embers, the hard kombucha brand created by KeVita co-founder Bill Moses, in January. Other CPG venture players like PowerPlant Partners and Beechwood Capital were also involved. Meanwhile, in October California-based JuneShine announced the opening of its third

taproom (and fi rst East Coast location) in Brooklyn, which will offer ten hard kombuchas on draft alongside a small food menu when it debuts later this winter. That move was largely fueled by a $24 million investment last year led by VC groups Amberstone and Litani Ventures, each of which have broad CPG experience.

As drinkers seek more adventurous and betterfor-you alternatives to hard seltzer, alcoholic kombucha has been the benefi ciary.

“There have been major shifts in the consumption habits of alcohol over the last few years, with a major focus on more intentional choices when people are choosing to drink,” said Abbey Schoenberg, Marketing Director at Boochcraft. The San Diego-based company has been one of hard kombucha’s early success stories, growing from a small operation to being sold in 7,000 stores across 12 states, though its primary focus has been in on-premise accounts.

The rise of West Coast brands like Boochcraft helped inspire Sam and Luke Walker to launch their eponymous brand Walker Brothers in Nashville. Hard kombucha was always the goal from the beginning; its non-alcoholic versions, released in 2019 while awaiting approval to begin producing the boozy kind, is a modular business that can provide some “insulation” for the company overall, according to co-founder Caroline Walker. The company’s four hard kombuchas — available in Watermelon Lime, High Gravity Ginger, Blueberry Juniper and High Gravity Passion Fruit — are unpasteurized and come in at 5% ABV per 12 oz. can.

Some years ago, the idea of national brands playing on either side of the alcoholic kombucha divide might have been considered risky; category leader GT’s revamped its package label design to clearly distinguish its alcoholic and non-alcoholic lines, while various brands have adopted or advocated for alcoholfree verifi ed certifi cations. But there are also signs that barriers may be starting to crack, if not fall completely: see the release of Health-Ade’s three-SKU mixer line last year, or Aqua ViTea’s introduction of After Glow (5% ABV).

Others like Arizona-based jun kombucha maker Wild Tonic have leaned into both sides: along with its recently rebranded 5.6% ABV line, the brewer is adding new fl avors to its Wanderer series of “cocktail inspired” non-alcoholic jun that is “almost identical to the fl avors of their alcoholic (counterparts),” according to Jessica Gerth, director of sales and marketing at Wild Tonic. With a vast sea of small players fi ghting for share, Sam Walker said he sees echoes of craft beer in the hard kombucha category, where narrow opportunities for national distribution are helping gestate robust regional markets and push breweries to go deep rather than wide. His plan for Walker Brothers is to “play the regional craft kombucha game” by building a strong base in the Southeast, betting that the overall category will continue to develop. Within the store, however,

the challenges may be different, as Walker explained. In the already mature non-alcoholic kombucha category, consumers have come to expect unpasteurized, refrigerated products; as such, retailers retain cold-box space specifi cally for them. Despite also being unpasteurized, hard kombucha enjoys no such protection, as brands like Walker Brothers are forced to fi ght for their cooler slots against all types of other alcoholic beverages. Add on cold-chain logistical hurdles and a rapidly proliferating canned RTD cocktail market and it’s clear that competition is getting tougher, Walker said, forcing his company to reconsider its approach.

That means fi nding workarounds to practical issues; faced with soaring rates for less-than-truckload (LTL) cold shipping, the company began wrapping pallets in reusable insulation so they could be shipped dry. Yet at retail, merchandising tools like end caps, secondary displays and fl oor stacks remain off limits as long as it is restricted to the cold box. Solving that problem ultimately takes Walker back to the issue of pasteurization itself, with the company setting the goal of fi nding how to make its hard kombucha shelf-stable by 2023.

“It’s tough to go in as a brand and stand by your morals and say ‘we’re unpasteurized because of this and this’ and fi ght for the space when maybe there is a lack of understanding of why that is important from the retailer and the consumer. I think that has been tough for us,” Walker said. “And that’s been leading us to investigate how important is being unpasteurized in this category?”

With its health halo knocked slightly askew, hard kombucha consumers tend to be more interested in taste experience than the drink’s better-for-you properties. Walker said his brand initially made efforts to keep ABV low enough to maintain residual probiotics, thinking that better-for-you callouts would enhance its appeal. Yet that wasn’t the

case, according to Caroline Walker, as hard kombucha drinkers tended to “focus on how it makes them feel versus why it makes them feel that way.”

That can put the onus back on brewers to come up with innovative fl avors, Schoenberg noted.

“The challenge we face is melding familiarity with the boldness that our customers desire,” she said. “Familiar can’t mean mild, as our customers gravitate toward bold, full bodied fl avor, which we will always deliver. As we approach innovation in the coming years, it’s about fi nding that balance between familiar fl avors and interesting combinations to deliver a pallet pleaser with every sip.”

NON-ALC: INNOVATION SPURS EXPANSION

Probiotic seltzer, anyone? More like probiotic seltzer, everyone.

Whether prebiotic, probiotic or placed somewhere under the general banner of “gut health,” you know them when you see them. The growth of shelf-stable, kombucha-adjacent CSDs has been one of the major developments within the space over the past several years, and it’s showing no signs of slowing.

For kombucha makers, the extension makes a lot of sense, ticking boxes for innovation that both widens their offerings and circumvents some of the production and distribution challenges related to raw kombucha. Most of these have come in the form of gut health-boosting seltzers and soft drinks: along with moving its core line from glass bottles to cans, New Yorkbased Bear’s Fruit introduced its fi rst non-kombucha product, a sparkling water made with the Bacillus subtilis probiotic strain, in July, while North Carolina’s Tribucha launched SuperB, a four-SKU line of fermented beverages dubbed as “soda redefi ned” at the beginning of this year.

The range of brands making the leap into gut-health CSDs refl ects a market that is still wide open with low barriers to entry. Vermont-based Aqua ViTea, a longtime proponent of raw, unpasteurized kombucha, jumped in the shelf-stable game in July with the introduction of Aqua Seltzer, a four-SKU line boasting fi ve billion live probiotics per 12 oz can, plus just 15 calories and 1 gram of sugar. Two months later in September, CBD drink and gummy maker Daytrip followed suit with its prebiotic soda line.

That diversifi cation brings to question whether kombucha brewers can truly claim this new functional sub-category as their own – as Revive, Humm, Health-Ade have all attempted with their own shelf-stable line extensions – or if brands that have been working exclusively in the space – like Culture Pop, Poppi and Olipop – have already beaten them to the punch.

Regardless, as large strategics lean out of refrigerated beverages in general — as refl ected in the recent spate of sales for once-vaunted cold-pressed juice businesses like Suja, Naked and Evolution Fresh — it’s unlikely that the momentum away from cold-chain will reverse in the years ahead.

Maryland-based Wild Bay Kombucha is now on tap in WeWork locations across the country and sold in Weis Markets throughout the Mid-Atlantic.

The newest fl avor from Mother Kombucha, Arise, is a magical combination of mango, peach and ginger, coupled with a natural caffeine kick from guayusa and the calming focus of L-theanine. Mother Kombucha uses regeneratively farmed teas and all organic ingredients and is a Certifi ed B Corporation.

Ferm Fatale relaunched after reformulating its revolutionary and proprietary shelf stable formulations combining such ingredients as kombucha, shrub, water kefi r, and sauerkraut brine (although you’d never know it.) Besides reformulating and rebranding, Ferm Fatale’s fermented cocktails now come in 8 oz. cans in contrast to the custom glass bottles they were in when they launched January 2020.

GT’s SYNERGY Raw Kombucha is launching their most popular fl avors in category-fi rst 10 oz. glass bottles perfect for the lunch time crowd or on-the-go consumer.

Though Buddha’s Brew is known for Wildly Delicious Kombucha, it can also can Kefi r! The brand announced its newest Sparkling Water Kefi r fl avor: Pineapple. The new offering will be available in Central Market (Texas) and Whole Foods (Southwest Region) soon.

The Bu’s kombucha line launched regionally into select Target stores in California, Arizona and Utah. To build awareness, The Bu launched 3 out-of-home marketing campaigns consisting of bustails and 30-sheet billboards, infl uencer partnerships and samplings events like Farmers’ Markets and a Spartan Race. Three fl avors - Strawberry Hibiscus, Tropical and Ginger Peach - are available at Target for $2.59.

Better Booch is proud to announce its collaboration with Colorado-based artist Bailey Elder for its fall/winter seasonal fl avor, Ginger Spice. The can features Elder’s intuitive biomorphic forms, a natural fi t for the can format. Ginger Spice is a delicious take on a traditional spiced apple cider, with notes of ginger, cinnamon and orange peel.

Health-Ade expanded its Glow Up Line with two new fl avors: Ginger Pineapple Belly Reset and Citrus Immune Boost. The former features Vitamin C, Zinc and a blend of oranges. The latter features pineapple and ginger and includes 6 billion CFU of living probiotics at bottling, six times more probiotics than Health-Ade’s other kombuchas. Both new fl avors are available for $3.99 per 16 oz. single-serve bottle and $8.99 per 48 oz. bottle at Whole Foods Market, Sprouts, Safeway and Target stores nationwide.

KeVita put a new twist on a classic summertime staple with its Sparkling Probiotic Lemonade. Available in two varieties – Classic and Peach – each 15.2 oz. bottle is made with fermented water kefi r culture and packed with live probiotics. Each serving has just 30 calories and 6 grams of sugar. KeVita Sparkling Probiotic Lemonade is available nationwide for a suggested retail price of $3.49 per bottle.

Kombucha 221 B.C. (K221BC), a women-owned and operated company in Sarasota, Florida, recently launched two new fl avors: Passion Fruit + Red Clover and Tangerine + Marigold. Additionally, the brand rolled out a label redesign that showcases the timeless medicinal herbs used during the traditional fermentation process.

Cultured South Fermentation Company, makers of Georgia’s Golda Kombucha, starts construction at Atlanta Utility Works, to become its new company headquarters and second brick-andmortar location. Construction is expected to wrap up by the end December 2022.

Jun maker Wild Tonic has unveiled a revamped visual identity designed to celebrate the brand’s uniqueness and clarify the difference between jun and kombucha for consumers. Concurrent with the rebrand, the brand is introducing several new fl avor profi les with its Wanderer Series, a cocktail inspired non-alcoholic line of jun that is “almost identical to the fl avors of their alcoholic [counterparts].” The brand is also slated to roll out a line extension of its existing portfolio with Orange Dream and Lavender Honey Lemonade varieties.

Remedy Drinks debuted its new Orange Splash kombucha fl avor along with other best-selling fl avors including Raspberry Lemonade, Mixed Berry and more at Natural Products Expo East. Orange Splash is made through the brand’s traditional technique of a 30-day brewing process to accentuate the fl avor and strength of living cultures and organic acids, creating a light and refreshing better-for-you beverage.