Kombucha Industry Survey Results from Kombucha Summit 2023

The Kombucha Summit held in Berlin, Germany, from Nov 17-18, culminated with a compelling ‘Live Kombucha Industry Survey’ led by presenter Denis Kelleher, CEO of Good Culture Kombucha.

Over 70 of the 100+ attendees in the room took the opportunity to participate, using their phones to connect to the Mentimeter live polling program. Around 40% of responses were from established kombucha brands, with 30% in start-up mode and another 30% who had not yet launched.

The results – displayed in real-time – highlighted a range of concerns illustrated by charts, word clouds, and a host of statistics. They provide an intriguing glimpse into the aspirations and apprehensions of these producers as 2023 draws to a close.

Optimism

This was an optimistic crowd who had a positive experience of the business. A resounding 60% reported that 2023 had been a good year, marked by substantial growth, while less than 10% observed stagnant sales. Looking forward, everyone expected 2024 to be a better year, with 64% expecting significant growth and the remainder anticipating some level of improvement.

The attendee’s excitement for the coming year is encapsulated in a word cloud – the larger the word, the more responses.

Terms like ‘growth’ and ‘new products’ feature prominently. Brands expect to sell to new customers, increase market share, diversify, innovate, and create amazing flavors.

Concerns

Beneath the overarching optimism, there lay a spectrum of concerns. The attendees were asked to weigh these on a 1-10 scale. The responses highlight the divergence in issues that keep them awake at night.

While the overall graph indicates a particular trend, a deeper analysis reveals some fascinating divergence of opinion. Notably, shelf stability was less concerning than any other topic. Indeed, 20% had zero concern with the issue. Opinions about excess alcohol lie at either end of the spectrum. While 20% had zero concern, an equal number ranked this as the most concerning. People were only mildly concerned with achieving product consistency, with few extremes at either end. It was much the same story with production capacity. It was no surprise that over half were concerned about costs in a period of widespread inflation.

Pasteurization

One way to control alcohol levels and deliver a shelf-stable product is to pasteurize kombucha and thus stop fermentation. When asked how much they agreed with issues about pasteurized vs. unpasteurized kombucha, these attendees exhibited a nuanced perspective that suggests a considerable – some might say surprising – openness toward exploring pasteurization as a viable approach.

Most striking, over 60% of attendees think pasteurizing would help grow their business, and less than half think kombucha should only be raw and living. Balanced against these views, few people thought raw kombucha was risky, and even fewer were indifferent.  

We can only speculate about the implications of this data. The survey did not ask how many brands already sold pasteurized products. We can assume it is a minority. So, the survey might be seen as probing for their views on the consumer acceptance of this issue. Since there is no labeling requirement to declare the production process, consumers are unaware of the risks or benefits of raw and living vs. pasteurized kombucha.

Kombucha Summit Experience

A last slide to consider is the word cloud created by people expressing their favourite things about the Summit.

Clearly, a chance to be part of a community of producers, share knowledge, network, and meet people was high on the list. However, it was the range of other benefits that showed why attending an event like this was worth time away from their business. From sampling other kombucha to sharing opinions and sitting in presentations, the Summit was a unique opportunity for all.

Looking ahead, The Kombucha Summit hopes to attract an even broader spectrum of producers to KS24 next year in Berlin – offering a unique opportunity for learning, networking, and industry insights.

This blog was kindly written by Ian Griffin from Booch News

8 Reasons why Manna-K Kombucha is a game changer for the Kombucha Industry

Kombucha, the tangy and effervescent fermented tea, has gained tremendous popularity in recent years & is forecast to grow 15.7% CAGR from 2022 - 2030 to become a USD 11.40 billion market. As demand for this delicious beverage continues to soar, the commercial kombucha industry faces unique challenges in meeting consumer expectations, maintaining quality, consistency, and scaling up production. In this blog post, we will explore eight compelling reasons why utilizing a Manna-K Kombucha is a game changer in the commercial kombucha industry. From ensuring consistency and quality to enhancing scalability and flavor customization, this innovative ingredient completely revolutionizes the way commercial kombucha is produced.

Firstly, what is Manna-K?

Manna-K is a traditionally fermented organic kombucha that has already been fully fermented. This means to kombucha brands do not need to do any of their own fermentation and don’t even need to build out & manage a brewery. Manna-K is ready to blend with ingredients (like sugar, juices, flavour extracts & sugar) to create a finished delicious kombucha in just one day. It is already used by over 150 kombucha brands and is distributed all over Europe and North America.

1. ConsistencY

Consistency is crucial when it comes to commercial kombucha production. Consumers, distributors & retailers expect a reliable product with consistent taste, quality, and composition. Utilizing a kombucha ingredient like Manna-K offers a standardized starting point, ensuring that every batch maintains the desired flavor profile and character. With a consistent kombucha base, commercial producers can establish their unique brand identity and build consumer trust in their product.

2. Time Efficiency

Brewing kombucha from scratch is a very time-consuming process, that requires expertise in commercial scale kombucha fermentation that very few people know how to do to a very high standard. By incorporating Manna-K into their production process, commercial producers save valuable time. They can focus on scaling up their operations, meeting growing demand, and optimizing other critical aspects of their business. This increased efficiency enables them to bring their product to market faster and seize opportunities in a competitive industry.

3. Quality Control

Maintaining stringent quality control measures is imperative for any commercial kombucha producer. Using a carefully crafted and tested kombucha base like Manna-K ensures that the end product consistently meets specific standards for taste, acidity, and probiotic content. It minimizes the risk of undesirable microbial growth or contamination, guaranteeing a safe and high-quality product for consumers. The use of a Manna-K empowers commercial producers to establish a reputation for excellence and build long-term customer loyalty.

4. Scalability

Brewing kombucha on a large scale presents unique challenges. Commercial production requires the use of specialized equipment and large fermentation vessels that may not be feasible option for your production. A kombucha base like Manna-K streamlines the scaling process, enabling producers to meet higher growth production volumes without compromising quality. This scalability is particularly advantageous for expanding into new markets, meeting the fast growing demands of retailers, and achieving economies of scale.

5. Flavor Customization

One of the most exciting aspects of kombucha is its versatility in flavor profiles. Using a Manna-K provides commercial producers with a neutral foundation to build upon. They can experiment with various flavor combinations and ingredients, creating a diverse range of products that cater to different consumer preferences. Whether it's infusing fruits, extracts or creating a sugar free kombucha, Manna-K serves as a blank canvas for flavor innovation, setting brands apart in a crowded marketplace.

6. Regulatory Compliance

The commercial kombucha industry is subject to stringent regulatory standards and guidelines to ensure consumer safety. Meeting these requirements can be complex and time-consuming for individual brewers. However, using a kombucha base that has already been tested and complies with safety, labelling, and manufacturing regulations alleviates this burden. Commercial producers can confidently navigate regulatory landscapes, ensuring that their products adhere to all necessary standards and building trust with regulatory bodies and consumers alike.

7. Alcohol-Free Guarantee

One of the key challenges in commercial kombucha production is ensuring that the alcohol content remains within permissible limits. Kombucha is a fermented beverage, and during the fermentation process, a small amount of alcohol is naturally produced. However, for commercial brands, it is essential to adhere to legal requirements and maintain an alcohol content below the specified threshold of 0.5% ABV. Here's where Manna-K Kombucha proves to be a game changer.

By utilizing a Manna-K, commercial producers can guarantee an alcohol-free product without compromising on flavor and quality. The kombucha base undergoes rigorous testing to ensure that the fermentation process is controlled and monitored effectively, minimizing alcohol production. This allows commercial brands to confidently market their kombucha as alcohol-free, meeting the needs of consumers who expect their kombucha to be alcohol free.

The alcohol-free guarantee provided by Manna-K is crucial. It ensures compliance with alcohol regulations and eliminates any potential legal issues or consumer concerns regarding the alcohol content of the product. Ultimately, the alcohol-free guarantee adds a layer of trust and transparency, further enhancing the brand's reputation and attracting a wider consumer base.

8. Confidence for Growth

How successful could your kombucha brand be if you had 100% confidence in your product?

In a competitive market, building confidence in one's product is vital for growth and success. We see Manna-K plays a significant role in instilling confidence in commercial brands, empowering them to expand their operations, enter new markets, and drive business growth.

Manna-K, with its consistent flavor, quality, and composition, serves as a solid foundation for commercial brands to build upon. It ensures that every batch of kombucha maintains the desired characteristics that consumers have come to expect. This consistency instills confidence in the brand, as consumers can rely on a familiar taste experience with each purchase. By consistently delivering on their promises, commercial brands can build a loyal customer base and generate positive word-of-mouth, fueling organic growth.

Moreover, Manna-K streamlines production processes, reduces the risks associated with brewing from scratch, and facilitates scalability. With a reliable base, commercial brands can confidently scale up their operations without compromising quality or sacrificing efficiency. This enables them to meet growing demand, penetrate new markets, and secure partnerships with distributors and retailers.

Overall, the Manna-K provides commercial brands with the confidence they need to pursue big growth opportunities, expand their reach, and establish themselves as reputable players in the kombucha market. With a reliable and high-quality product, supported by Manna-K, brands can confidently invest in marketing, distribution networks, and product innovation, unleash their full potential for success and sustainable growth.

How to Optimize Your Kombucha Recipe for Co-Packing

We have had the pleasure of working with a wide range of companies in the kombucha industry, including many of the worlds leading Kombucha brands. Through our experiences, we have seen significant benefits and ease of growth for kombucha brands that have decided to work with Kombucha copackers over trying to build their own factory. Copackers are an essential part of the beverage supply chain, and optimizing your kombucha recipe formulation before you start working with a copacker can really decrease any issues and seriously increase your chances of success. This also has the added benefit of expanding the range of copacker that will work with you and also really optimise your costs & efficiencies from day one.

Kombucha is a unique and complex beverage that requires a delicate balance of ingredients to achieve the desired taste and health benefits. Getting the recipe formulation right is crucial for any brand, but it becomes even more critical when working with copackers.

Copackers are responsible for manufacturing and packaging Kombucha on behalf of brands, and they have their own set of processes, equipment, and quality control standards that need to be followed. Therefore, it's essential for Kombucha brands to develop beverage recipe formulations that are compatible with copackers' processes and equipment.

From our experience to optimize your kombucha recipe formulation for copacking, there are several key factors that Kombucha brands should consider:

Consistency in Ingredient Sourcing

One of the most important things to consider when optimizing beverage recipe formulations is the consistency in ingredient sourcing. Copackers require that the ingredients used in the Kombucha recipe are sourced from reliable and reputable suppliers to ensure consistency in taste and quality. Brands must ensure that they source ingredients that meet the copacker's quality standards (BRC, SQF, GFSI, IFF, Organic, Bio, Kosher, Halal) and are readily available all throughout the whole year. Some ingredients like fresh fruit juices and purees can cause issues here. Also fresh ginger can be very sessional and and quiet a difference in quality through out the year, for this reason it is better to source for a large supplier who can guarantee supply year round.

Simplify the Recipe

A complicated recipe formulation may be perfect for a small batch artisanal Kombucha producer, but it can be problematic when working with copackers. A complicated recipe can make it more challenging for copackers to achieve consistency and cost control in the final product. Simplifying the recipe can help eliminate any potential issues that may arise during the manufacturing process. Most copacker want to find the most efficient and cost effective way to blend ingredients and will not be very happy if you want them to custom infuse 20 different ingredients. As a general rule, just keep it simply.

Stability of Ingredients

The stability & consistency of the ingredients used in the Kombucha recipe is another important factor to consider when optimizing the recipe for copacking. Ingredients that are unstable or contaminated will have a very short shelf life can create challenges for copackers during the manufacturing & cleaning process and storage of ingredients. Brands must consider using ingredients that are stable and have a longer shelf life to make it easier for copackers to work with. For example using frozen juices can be a good options to maintain the shelf life and consistency of your ingredients without compromising on flavour & colour quality.

Consistent Flavour Profile

The flavours of wild home brew style Kombucha can vary significantly from batch to batch, making it difficult to achieve a consistent flavour profile. To optimize the recipe for copacking, Kombucha brands should aim to use a consistent kombucha base that copackers can replicate high quality results from batch after batch. Copackers will generally not want to brew kombucha onsite and for this reason we recommend using a high quality kombucha ingredient like Manna-K Kombucha.

Ease of Scale-up

Finally, it's important to consider the ease of scale-up when optimizing the recipe for copacking. As ambitious Kombucha brands grow and scale up production, copackers will need to produce larger quantities of Kombucha on short notice. Brands must ensure that their recipe formulations can be scaled up easily without compromising on taste, quality, or consistency.

In conclusion, optimizing the beverage recipe formulation can make it much easier for Kombucha brands to work with copackers. By considering the factors listed above, brands can create a recipe that is compatible with copackers' processes and equipment, making it easier to achieve consistency in taste, quality, and packaging. Developing a recipe that is optimized for copacking can help Kombucha brands to scale up production, increase efficiency, and reduce costs while maintaining the integrity of their brand.

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Why Outsourcing Kombucha Production Can Save You Time and Money

Denis Kelleher - CEO @ Good Culture Kombucha

The popularity of kombucha has led to an increase in the number of kombucha brands in the market, making it more important than ever for brands to find ways to stay competitive. A popular way to do this is by outsourcing the production of kombucha.

In this blog post, I will discuss the financial benefits of outsourcing kombucha production and why using high-quality pre-fermented ingredients like "Manna-K Kombucha" in a co-packing environment can save you time and money.

Reducing Your Invest Costs

Outsourcing kombucha production to a co-packer also reduces the need for high capital investment in building out a full kombucha brewery. Setting up a brewery requires a significant investment in equipment, infrastructure, and personnel. By outsourcing production to a co-packer, you can avoid these costs and invest your resources in other areas of your business. This is especially important for new brands that are just starting and may not have the capital to invest in a full-scale brewery. By outsourcing production, you can focus on building your brand, developing your products, and expanding your market share without worrying about the cost and complexity of building a brewery. This makes outsourcing kombucha production a smart and cost-effective choice for many kombucha brand owners.

Reducing Your Labor Costs

One of the most significant benefits of outsourcing kombucha production is the reduced labor costs. Producing kombucha requires a lot of labor-intensive processes such as brewing, cleaning, bottling, labeling, and packaging. By outsourcing the production of kombucha, you can reduce your labor costs significantly. You will not have to worry about hiring and training employees to perform these specialist tasks. Instead, you can focus on other areas of your business, such as marketing, sales, and product development.

Increased Efficiency

Outsourcing kombucha production also increases efficiency. Professional co-packers have streamlined production processes and equipment that can produce kombucha at a faster rate and with higher quality than doing it in-house. This means that you can produce more kombucha in less time, allowing you to meet the demand of your distributors and retailers more efficiently. You will also have access to the latest technologies and equipment, which will improve the quality and consistency of your kombucha.

Cost-Effective

Using high-quality pre-fermented ingredients like "Manna-K Kombucha" in a co-packing environment is also far more cost-effective than doing it in-house. By using pre-fermented ingredients, you can guarantee product quality and consistency, which is essential for building brand loyalty and trust. You can also save money by purchasing these ingredients in bulk, reducing the cost per unit. This means that you can produce kombucha at a lower cost and still maintain the quality that your customers expect.

Find out more about Manna-K Kombucha Ingredients HERE

Scalability

Outsourcing kombucha production also gives you the ability to easily scale up your production. As your business grows, so does the demand for your product. By using a co-packer, you can easily increase your production capacity without having to invest in additional equipment or infrastructure. This allows you to focus on expanding your business and increasing your market share without worrying about production capacity.

Consistency

Another important benefit of outsourcing kombucha production is consistency. Co-packers have strict quality control measures in place to ensure that every batch of kombucha meets the highest standards. This means that you can provide your customers with a consistent product every time they purchase from you. Consistency is essential for building brand loyalty and trust, which is vital for the long-term success of your business.

Our Global Kombucha Copacker Partners

If you would like to work with a high quality kombucha copacker to take your brand to the next level, we can help. We have close relationships with the best kombucha copackers in the business & are happy to share these contact for projects that are a good fit.

If you would like to talk please do book a call.

Liquid Death Kombucha

Could Liquid Death murder the kombucha market?

I can confidently say that Liquid Death is one of the most exciting & entertaining brands in the world right now, and not just in the beverage space. Their punk rock aesthetic and irreverent attitude is hugely resonating with consumers, making them a stand-out brand in the crowded beverage market.

But the question remains, could Liquid Death murder the kombucha market if they released a kombucha range?

First, let's talk about the kombucha market. It's a fast-growing industry that has seen a big surge in popularity in recent years. With the US kombucha market valued at $1.52 billion in 2020 it is expected to be at a staggering $7.05 billion by 2028. Up until now consumers have been drawn to the supposed health benefits of kombucha, including improved gut health and immune function. It is fair to say the word “kombucha” has a superfood type halo around it.

This kombucha halo has served the market leading kombucha brands like GT's and Health-Ade very well, often presenting clear brand archetypes of the nurturing caregiver, the cure all healer or the magical mystic which all fits in very well with their main consumers avatars of the yoga loving hippy.

However is it time for the kombucha market to be shaken up? Where are the truly exciting and inspiring brands in the kombucha space that have a Rebel, Outlaw or even court Jester type personality that really go against the grain of the traditional category characters, frankly they are nowhere to be seen.

mic check and enter stage left Liquid Death Kombucha!

I could talk endlessly for hours about why a brand of Liquid Death’s caliber should enter the kombucha market. There is so much room and frankly a real need in the kombucha market for a brand with this personality style. Liquid Death which already has a well-established punk rock image would easily stand way out a the sea of peace and love health only focused brands. (much respect to these other kombucha brands, many of them are our very valued Manna-K Kombucha Ingredients customers)

Mike Cessario, the founder of Liquid Death, has proven to be both successful and creatively talented in creating an iconic brand that has taken the beverage market by storm. Mike himself being call a marketing genius by Forbes Magazine. His unique vision for the brand's punk rock aesthetic and irreverent attitude has resonated with consumers, and his execution of the brand's marketing and advertising campaigns has been nothing short of brilliant. From partnering with unconventional influencers to creating hilarious & entertaining viral social media content, Cessario has demonstrated a keen understanding of what it takes to build a successful brand in today's competitive market. With his track record of success, it's no wonder that many are excited to see what Liquid Death will come up with next, whether it's a kombucha range or another exciting venture they could easily also play outside of the beverage space.

Now, let's talk about Liquid Death's potential for success in the kombucha market. One advantage they have is their existing fan base. Liquid Death has already built a strong following of consumers who love their brand, and many of these consumers I believe would be extremely interested in getting their hands on a Liquid Death Kombucha. Additionally, their punk rock aesthetic and irreverent attitude could be a refreshing change for consumers in the current kombucha landscape and appeal to a much broader audience.

If you were in Liquid Death's position what sort of product would you launch? Would a shelf-stable kombucha that delivers on a light and natural kombucha flavour appeal to a more mainstream audience? This might involve creating a product that is not too acidic, with a pleasant taste that is not too overpowering, bitter or funky. By making kombucha accessible to as wide a range of consumers as possible who may not have tried it before or have previously been put off by the intensity of some other kombucha brands in the market. A shelf-stable product for a brand like this would also be more convenient for retailers, making it easier to distribute and transport. By creating a kombucha product that appeals to a mainstream audience, Liquid Death could potentially capture a larger share of the market and continue to grow their brand.

So, how much of the market share could Liquid Death potentially take or even create?

The kombucha market is projected to continue growing at a rapid pace, with some estimates suggesting that it could reach $7.05 billion. If Liquid Death were to capture even 10% of this kombucha market, it could translate into a $700 million opportunity.

To ensure success in the kombucha market, Liquid Death would need to create a product that delivered on consumer expectations for taste and quality, of course that they already expect & know from Liquid Death current product range of mountain waters & ice teas. They could effectively & quickly achieve this kombucha kombucha production at scale by outsourcing their production to a US copacker and using a high quality pre-fermented kombucha ingredient like Manna-K Kombucha.

Liquid Death's unique and always entertaining marketing could be a game-changer in the kombucha market, wat if they created partnerships with conventional kombucha personality types like Gwyneth Paltrow, who could be transformed into an axe-wielding goth-inspired zombie figure to promote Liquid Death kombucha. The potential for Liquid Death in the kombucha market is enormous, and it could be very exciting to see what the brand comes up with next. Will they or others take up this opportunity?

Denis Kelleher - CEO @ Good Culture Kombucha

As a kombucha ingredients company, we love working with exciting innovative brands that are open to trying new products and creating new exciting opportunities. By supporting innovative and creative brands, we can help drive the kombucha market forward and encourage more brands to push the boundaries.

Many Thanks, Denis

For clarity, I have absolutely no knowledge of Liquid Death launching a kombucha and i am not aware of their product pipeline, this is just a fun article to write on some ideas i’ve had.

The American Kombucha Market in 2023, Big Challenges & Bigger Opportunities!

Denis Kelleher - CEO @ Good Culture Kombucha

I’ve just spent a few weeks travelling around the US visiting many of the kombucha industries leading brands & beverage industry experts. I'm in a lucky and unique position to be able to be able to sit down with these industries insiders who really know what is going on and are at the coal face of the kombucha market everyday. Each insightful conversation over a glass of booch gives me a unique perspective and insights into where things are at & more importantly where they are going.

Personally i’m always looking for the next big opportunity and right now in the kombucha world i can see endless runway for innovative & exciting new brands that want to come in and shake up this market. Its a really exciting time!

I thought it might be helpful to share some of my main takeaways & thoughts from my trip so maybe it can help inform & inspire others to take advantage of the opportunities in this ever evolving kombucha market.

Here are some of my takeaways & thoughts:

Changing Consumer behaviour

Covid-19 had a significant impact on the kombucha market in the USA. The pandemic has led to a shift in consumer behaviour towards more online sales and away from traditional brick-and-mortar stores, with some brands seeing huge growth in their online sales. However, this shift in behaviour has created big challenges for kombucha brands that only serve raw living unpasteurised kombucha in glass bottles. In online deliveries for example this creates challenges when raw products can spend considerable amounts of time outside the fridge, which leads to explosive bottles & excessive levels of alcoholic due to the ongoing fermentation in the bottle that can easily happen on a warm day. Glass bottles also do not travel well and leads to a lot of breakages which is not ideal. The big opportunity here is for innovative brands that have ambient stable kombucha that ships in more durable and lightweight cans. A good example of this is Remedy Kombucha who has really been shaking up this part of the market.

Is it time for kombucha to get out of the fridge?

There is a big problem that is holding back the growth of the kombucha market: most of the current leading kombucha brands that are raw & unpasteurised are only found in the chilled refrigerated section of stores. This limits the potential market for kombucha and makes it difficult for kombucha brands to expand beyond their current consumer base. Let me explain.

Firstly, refrigeration limits the potential market for kombucha. Many consumers are still not even aware of kombucha or do not actively seek it out in the refrigerated section. By creating ambient shelf stable products, brands can make kombucha more accessible to a much wider audience and explode the growth of the category. These products can be placed on the shelves alongside other main stream beverages, making them much more visible and increasing the purchased by consumers who might not otherwise have considered kombucha before.

Secondly, refrigeration is an added cost for brands. Refrigerated products require additional storage and transportation costs, which can be a significant financial burden for smaller brands. By creating shelf-stable products, brands can reduce these costs and make their products more affordable for consumers.

Thirdly, shelf-stable products have a longer shelf life than refrigerated products. This means that they can be sold in more locations and for longer periods of time, reducing waste and increasing profitability for brands.

Finally, creating ambient shelf-stable products & getting kombucha out of the fridge can help to grow the kombucha market overall. By making kombucha more accessible and affordable, more consumers will be able to try it and discover its amazing qualities.

Kombucha too expensive for the average American consumer

Despite its growing popularity, kombucha remains very expensive in the United States, with many of the leading brands priced at $3.99 per bottle…ouch! This high cost is a significant barrier to entry for many consumers, and it is preventing the category from growing and competing with big beverage.

Kombucha's high cost is due to several factors, including the cost of premium raw materials, production, and distribution. Hot infusing loose leaf tea is typically more expensive than the fast formulation methods of other beverages like soda. Additionally, kombucha requires a lengthy fermentation process, which can increase production costs. Finally, chilled distribution costs are also high due to the perishable nature of the product, which requires refrigeration and careful supply chain management.

However at $3.99 per bottle, kombucha is seen as luxury item that is out of reach for many consumers. This high cost is stopping the category from growing, and it is preventing the American kombucha industry from entering the mainstream market and competing with the likes of like Coca-Cola and PepsiCo.

But the whole kombucha category does not need to be this way, I see so much opportunity for clever more mainstream optimised brands to enter the better for you kombucha category.

The European kombucha market has already figured this out with many of the leading kombucha brands being much more mainstream in their flavour profiles, formulation and regularly priced at below 2 euros. Needless to say the European market is growing at a much faster pace, while off a lower base number of course.

If the cost of kombucha could be reduced to $2 per serving, the total addressable market for kombucha would explode. Consumers would be more willing to try the drink at a lower price point, and the lower cost would make it easier for retailers to stock the product. As a result, the market for kombucha would significantly grow.

Other retail beverage data supports the idea that lowering prices can significantly increase the total addressable market (TAM) for kombucha. For example, in 2008, the energy drink market was valued at $8 billion, with prices ranging from $2 to $4 per can. However, in 2018, the market was valued at $63.5 billion, with prices as low as $0.99 per can. It unarguably that lower prices made energy drinks more accessible to consumers, leading to explosive market growth.

Which of you is going to take on this opportunity for the kombucha market?

Continue reading below…..

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Kombucha has a quality problem

The kombucha market has significant quality issues, even among the market leading brands. Consumers are experiencing issues such as excessively high alcohol levels, short shelf life, inconsistency from batch to batch, and of course off flavours from poor control over the fermentation processes. Brands that solve these problems have the potential to really excel in the market and gain more market share.

One of the most significant quality issues is the presence of high alcohol levels in some kombucha brands. Kombucha is a naturally fermented drink, and as such, it can contain trace amounts of alcohol. However, the Alcohol and Tobacco Tax and Trade Bureau (TTB) has set a limit of 0.5% alcohol by volume (ABV) for non-alcoholic beverages which is a reasonably common global standard. Some brands have been found to exceed this limit, some at >3% ABV causing taxation issues in some states & concern among consumers who may be sensitive to alcohol or those who are avoiding it altogether. I don’t think this image is helping the category especially in a beverage world moving more towards low and no alcohol products.

Another quality issue that both retailers & consumers are experiencing is the short shelf life of kombucha. Because much of the kombucha in the market is a live and active drink, kombucha can continue to ferment and change over time, leading to changes in flavor & aroma and not in a positive way.

Inconsistency from batch to batch is also a significant quality issue in the kombucha market. Due to the nature of fermentation, each batch of kombucha can vary in flavor & aroma. While the hardcore purist will tell you that’s just how kombucha is, it is however extremely hard to build any brands when every experience the customer has is different.

Brands that solve these quality issues have the potential to excel in the American kombucha market. By ensuring that their products meet the TTB's 0.5% ABV limit, brands can offer peace & confidence to consumers. Extending the shelf life of their products can reduce waste and increase customer satisfaction. Implementing consistent quality control processes can ensure that each batch of kombucha has the same high quality, which can lead to brand loyalty and repeat business. Finally, having better control over the fermentation process can result in a delicious and refreshing drink that keeps consumers coming back for more.

Consumers think the calories & caffeine in kombucha is too high

As consumer awareness of the negatives impacts of a high sugar diet increases, so does the growing demand for low-sugar, Low-calorie and sugar-free beverages. This can be seen clearly in a huge surge in seltzers and health soda alternatives like Poppi in recent years. Consumer trends are changing and there is now a huge opportunity for new innovative kombucha brands that offer mainstream delicious low-sugar or sugar-free options. We are already seeing some brands offering “kombucha light” and I thiink this trend will continue.

The sugar content in traditional style kombucha can vary widely, with some brands containing upwards of 10 grams of sugar per 100ml and the consumer is now all too aware of this.  As consumers become more health-conscious, there is a growing demand for low-sugar or sugar-free beverages. According to a study by the International Food Information Council (IFIC), 76% of consumers are actively trying to limit or avoid sugar in their diets. Additionally, the same study found that 60% of consumers are trying to limit or avoid artificial sweeteners.

In response to this demand, some kombucha brands are now offering low-sugar or sugar-free options. These brands are using alternative healthier sweeteners such as stevia, monk fruit, or erythritol to sweeten their products. Some brands are also using fruits and vegetables to add natural sweetness to their kombucha.

These low-sugar or sugar-free kombucha options are not only appealing to health-conscious consumers, but they also offer a mainstream appeal, again broadening the market for kombucha. By offering delicious, low-sugar or sugar-free options, kombucha brands can attract a wider audience who may have been hesitant to try kombucha in the past due to its high sugar content.

Hard Kombucha is growing

The alcoholic hard kombucha market experienced a massive growth during the COVID-19 pandemic. As more people turned to at-home drinking and healthier options, hard kombucha became a popular choice.

According to industry reports, the hard kombucha market saw a 200% increase in sales in 2020. This growth is expected to continue in the future, with new brands entering the market to meet the demand. The market is forecasted to reach $1.5 billion by 2027, with a CAGR of 24.8% from 2020 to 2027.

One of the main reasons for the growth of the hard kombucha market is the changing drinking habits of consumers. With the pandemic, people are more health-conscious and are seeking out beverages that offer health benefits.

The growth of the hard kombucha market has also led to an increase in competition, with many new brands entering the market, but it looks like there is space for a lot more since hard kombucha today only makes up such a tiny part of the overall alcoholic beverage market.

These leading brands are offering flavor forward where the flavouring of the product is much more dominant that that kombucha flavour, some feel this could be leading to more consumer adoption..

The rise of health-conscious drinking habits, the popularity of kombucha, and the increasing competition are all contributing to the market's growth. With the entrance of new brands and innovative flavors, the hard kombucha market is poised for continued success in the years to come.

Is the kombucha market too focused on Percieved health benefits and probiotics?

Many leading kombucha brands have marketed their products primarily as a health drink, touting the benefits of its probiotics, antioxidants, and other nutrients. However, maybe this narrow focus on health could be limiting the potential of kombucha as simply a tasty and enjoyable beverage.

While the health benefits of kombucha are certainly noteworthy and is the main reason I was originally drawn into this industry, it is important not to overlook the other reasons why people might enjoy drinking it. Kombucha has a unique and complex flavor profile that can range from tart and sour to sweet and fruity. It is also naturally carbonated, giving it a refreshing effervescence that many people find appealing. These qualities make kombucha a great alternative to soda or other sugary beverages, especially for those who are looking for a healthier option.

By focusing solely on the health benefits of kombucha, many brands are missing out on the opportunity to appeal to a much broader range of consumers & create exciting brands for those just looking for a delicious and enjoyable beverage that fits into their overall healthy lifestyle.

Kombucha is and can be much more than just a health drink. Its unique flavor profile and versatility make it a great alternative to alcohol, soda and a fun and enjoyable beverage.

In conclusion

While this article may at times seem critical and pessimist, I am however at my core and optimist. I see such huge opportunity for innovative and open minded entrepreneurs who can look objectively at the kombucha market, not as it is but what it could be.

The American kombucha market is facing some big challenges it needs to overcome but this offers some significant opportunities for transformational growth into the mainstream. The brands that solve the big issues and make kombucha more accessible, affordable, and visible may very well take the lion's share of the market in the years ahead as it goes more and more mainstream.

It really is an exciting time for this industry!

At Good Culture Kombucha we are helping over 150 kombucha brands & copackers all across the world take their business to the next level with our pre-fermented kombucha ingredients we call Manna-K. We offer a game changing solution for ambitious brands & copackers and are often the catalyst for some serious growth. We help them improve their quality, scalability and reduce their costs of production, making it more affordable for consumers and easier for retailers to stock the product. If you would like to learn more please do reach out and Book in a Video Call.