JuneShine Concludes Series A Funding Led by Diplo, Whitney Cummings and Other Celeb Investors

Leading hard kombucha brewery JuneShine announced the completion of Series A funding today, led by several celebrity investors.

Twelve investors participated in the funding round for the San Diego-based company, including musical artist Diplo, comedian Whitney Cummings, YouTube star Cody Ko, and U.S. Women’s National Team soccer players Ashlyn Harris and Ali Krieger. JuneShine co-founder Forrest Dein called the investors in this funding round “cultural icons,” who will each serve as ambassadors to the brand.

“We feel like as the leader in the hard kombucha category, it’s our responsibility to continue building the category and reach new audiences. And I think that being able to integrate it into pop culture is super important,” Dein told Brewbound. “We’ve proven the concept in Southern California, but we need to build the category across the country, and working with these national icons will help do that.”

Whereas Boston Beer Company’s Truly Hard Seltzer brand has the budget to partner with celebrities such as Dua Lipa to be the face of its campaigns, JuneShine — which Dein said holds between 30% and 40% of the hard kombucha market — has to be more creative. According to Dein, that includes having celebrities invest in and become co-owners of the brand, giving them advantageous marketing services agreements for more equity and creating a more authentic partnership.

Seed round investors Litani Ventures, Peter Rahal, and Amberstone Ventures also participated in the funding round.

The investment will mainly be used for growth capital, including marketing campaigns to reach new consumers, Dein said. One planned campaign is to create limited-edition flavors for each of the celebrity ambassadors, including a 6-pack with Diplo set to release next summer.

“As I’ve gotten older, I’ve become much more aware and intentional about what I put in my body, because it makes such a difference in my overall mood and energy levels,” Diplo said in a release. “Last year, I made hard kombucha my drink of choice because I feel better when I drink JuneShine.”

The investment will also help fund JuneShine’s continued commitment to sustainability, which Dein said the company looks for in potential investors. Currently, the company donates 1% of all revenue to 1% For the Planet. This year, it is planning to become carbon neutral in partnership with Climate Neutral, a certification company that helps businesses decrease and eliminate their carbon footprint.

“[Going carbon neutral] is very expensive,” Dein told Brewbound. “We have to do an entire carbon audit of our whole supply chain and everything we make and calculate exactly how much carbon we’re putting into the world, and then how much it’s going to cost to offset it.”

In April, JuneShine opened its new flagship tasting room in Santa Monica. The 2,000 sq. ft. location is located in a higher visibility area compared to its San Diego tasting room, and has “blown past all [JuneShine’s] expectations,” Dein said. He said the location has been packed seven days a week, with two-to-three hour wait times on weekends. The space even gained mainstream publicity shortly after opening when Bachelor stars Matt James and Rachael Kirkconnell were filmed by TMZ grabbing a drink.

Dein expects the location to maintain its popularity through the summer, especially with the lifting of capacity and table-service restrictions on June 15.

JuneShine is eyeing other big markets for future tasting rooms, including Denver, New York, and Chicago. Although there have not been any leases signed yet, Dein said the company plans to open one or two more locations within the next 18 months.

Last year JuneShine produced 30,000 barrels of product, and is outpacing its goal of doubling production to 60,000 barrels this year, according to Dein. The brewery is the No. 1 brand family in the hard kombucha segment and holds the top two SKUs nationwide with its Blood Orange Mint and Midnight Painkiller 6-packs, according to a JuneShine release, citing off-premise chain sales scan data from market research firms NielsenIQ and IRI as of May 2.

Off-premise dollar sales of hard kombucha increased nearly 138%, to $56.6 million, in 2020, according to market research firm NielsenIQ. JuneShine alone generated $13.3 million in off-premise sales, an increase of 229%, the firm reported.

Year-to-date through May 29, hard kombucha dollar sales are up 66.4%, to $27.2 million, NielsenIQ reported. In the same report, JuneShine accounted for $6.7 million in sales, up 93.9% year-to-date.

Hard kombucha became one of the fastest-growing subcategories on Drizly last year, with sales increasing by 2,122%, according to a JuneShine release.

JuneShine’s goal is to get to 100,000 barrels by 2023, maxing out the company’s San Diego production facility, Dein said.

Production growth in 2020 was led by the brewery’s direct-to-consumer (DTC) launch in response to COVID-19 shutdowns.

“It totally changed our business, and we’re acquiring an insane amount of customers every month,” Dein said. “We’re actually able to survey those customers and find out where they’re shopping after, and we’re proving that you can actually acquire customers online and then send them to retail.”

JuneShine is now available via direct-to-consumer shipping to 44 states, with sales tripling company forecasts, according to Dein. He said online sales have also helped the company strategize potential distribution expansion markets through wholesalers, including Pennsylvania and Minnesota. Those states are in the top five for JuneShine’s DTC sales, but previously did not have any wholesale distribution of the company’s hard kombucha.

This year, JuneShine launched its first shelf-stable product, allowing it to land distribution deals with Trader Joe’s and Costco as of May 1. It has also formed retail partnerships with Kroger, Target, Whole Foods, Albertsons/Safeway, Publix, and Total Wine. Dein said wholesale will continue to be 80% of JuneShine’s business, despite their ecommerce success.