ZX Ventures-Backed Kombrewcha Refreshes Look, Expands Distribution

Amid growing interest in more “functional” alcoholic beverages, one of the country’s pioneering hard kombucha brands is undergoing a makeover in an effort to appeal to younger female consumers looking for boozier versions of the fermented tea beverage.

Originally launched in 2013 as a more traditional non-alcoholic kombucha, Kombrewcha — which was co-founded by Honest Tea co-creator Barry Nalebuff and received investment from Anheuser-Busch’s ZX Ventures in 2016 — has upped its alcohol content and unveiled new packaging as an emerging hard kombucha category begins to develop.

Kombrewcha’s forthcoming March release of the reformulated and rebranded offerings comes about 15 months after the company launched its first alcoholic kombucha onto the market.

Speaking to Brewbound, Kombrewcha CEO Garrett Bredenkamp said the moves — which include a transition from bottles to cans and expanded distribution to the Pacific Northwest — were the byproduct of consumer feedback from the last year. The company’s core customer — active 28- to 45-year-old women — wants a sessionable beverage with a slightly higher ABV and natural ingredients packaged in cans, he said.

“We check all of the boxes for that drink,” Bredenkamp said. “We give them great taste, organic and natural ingredients and a refreshing experience that you can’t get from a wine or something like that, and they can still feel good about it.”

So starting in March, Kombrewcha will increase the ABV of its three core offerings — Royal Ginger, Lemongrass Lime and Berry Hibiscus — from 3.2 percent ABV to 4.4 percent ABV.

“We feel pretty good that this 4.4 is a really good sweet spot for us,” he said. “Unless you’re very discerning, you’re not going to be able to taste any difference in what we previously had versus this formulation.”

Those products will also move into 6-packs of 12 oz. cans, sold at a suggested retail price of $11.99, as the company phases out 4-pack bottles.

“We’ve had to find that happy medium between where kombucha sits and where beer sits,” Bredenkamp said of the price. “Hopefully, that $11.99 price point is premium enough that it signals that it’s kombucha and people are willing to pay it, but also affordable enough that it’s comparable to buying a nice bottle of wine or a 6-pack of beer.”

Additional flavors will be added in the summer, Bredenkamp added.

“One of the best things about kombucha is how many flavor combinations you can have,” he said.

With the pivot, Kombrewcha is hoping to continue building on its early success — volumes have doubled every year since it was founded, Bredenkamp said.

Though he wouldn’t disclose specific volume figures, Bredenkamp said the company is forecasting as much as five times growth over the next year.

Kombrewcha is the second ZX Ventures-backed alcoholic beverage brand to rebrand and reformulate in recent months.

In late 2018, Owl’s Brew, which received ZX investment in May 2017, announced that it would drop the term “radler” from its ready-to-drink line and became “Owl’s Brew Boozy Tea & Botanicals.” The company also increased the ABV of its offerings from 3.8 percent to 5 percent, while transitioning to 12 oz. slim cans at a price point of about $11.99 per 6-pack.

According to Bredenkamp, ZX Ventures is Kombrewcha’s “principal investor,” and the relationship has helped it expand distribution into the Seattle and Portland, Oregon, metro areas.

“With the backing of ZX Ventures, it puts us in a great spot to really grow and expand so we can really lead the category,” he said.

That category, while fledgling, has grown to include a number of brands from small and large players alike. Most notably, Boston Beer Company plans to introduce Tura, a 4 percent ABV kombucha, in the coming months.

Other companies that are already active in the space include Full Sail Brewing, with its Kyla Kombucha line, as well as a trio of Southern California-based companies — Boochcraft, JuneShine, and Flying Embers (launched by Kevita founder Bill Moses).

Other craft breweries, including stalwart Sierra Nevada, among others, are also considering a foray into the space, Brewbound understands.

And while California may be one of the proving grounds for this emerging product offering, the Pacific Northwest is “the kombucha capital,” according to Bredenkamp, who said a distribution expansion to that region made sense because it boasts the highest per capita consumption of non-alcoholic kombucha in the the U.S.

Kombrewcha is partnering with six A-B wholesalers in Seattle and Portland, including Western Beverage, Maletis, Olympic Eagle, Anheuser-Busch Sales of Washington, Crown Distributing and Sound Distributing.

“We feel like we’re really well-positioned in the market,” he said. “We’ve been able to get some great placements, as well.”

Those placements include chain grocery and liquor stores such as Safeway, Kroger, Whole Foods, Total Wine, Albertsons and Fred Meyer.

The ZX partnership also provided Kombrewcha with a place to brew its products, at A-B’s new Blue Point Brewery in Long Island, which opened about six months ago.

“We have plenty of capacity to supply our current markets and even future markets,” Bredenkamp said. “And we get the A-B quality stamp of approval.”

Nevertheless, Bredenkamp said the company is in talks with manufacturing facilities on the West Coast about moving some of its production there in the future.

Kombrewcha, which was originally founded as a non-alcoholic beverage company, pivoted a little more than a year ago to become one of the first hard kombucha brands. The boozy version of Kombrewcha launched in New York City, where it gained shelf placements at Whole Foods and Trader Joe’s stores, as well as more than 100 on-premise accounts.

At on-premise accounts in New York, Bredenkamp said the brand gives consumers an option beyond beer, cider, cocktails and wine.

“It really fills a nice niche in the on-premise at the right types of accounts — the farm-to-table, places that serve only organic food, vegan restaurants,” he said.

Nevertheless, Bredenkamp said Kombrewcha isn’t sourcing its occasions from beer, but taking them from wine and spirits.

Bredenkamp added that he believes people’s existing knowledge of non-alcoholic kombucha is helping lead to trial of Kombrewcha. To help drive interest in the brand, Kombrewcha has partnered with Soulcycle and Flywheel Sports and conducted tastings after spin classes.

“We know that it’s a new category, it’s a new product, so the No. 1 thing that we’re trying to do is just get people to try it,” he said.

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