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Hard Kombucha Attracts New Consumers As Marketers Forecast Major Growth

May 15, 2020

The rise of health and wellness products has paved the way for new beverage alcohol types, and kombucha has been among the more successful players. Tea-based, fermented, and slightly effervescent, kombucha is attracting a new wave of drinkers.

Hard kombucha still comprises only a small share of the $1.8 billion kombucha category, according to trade group Kombucha Brewers International, but its sales have grown from $1.7 million in 2017 to more than $12 million in 2019, and are expected to rise exponentially over the next five years.

Retail is the primary channel for hard kombucha, though some on-premise venues have offered it on draft, in cans, and in cocktails. Hard kombuchas generally are found in the beer aisle, alongside the hard ciders and seltzers. Specialty grocers are key, but larger players like Whole Foods, Safeway, Kroger, and HEB are embracing the category. Stephen Finn, vice president of strategy and communication for hard kombucha brand Wild Tonic, says his brand is expanding rapidly into the convenience, drug, and food service channels. Wild Tonic is now sold in more than 40 states, with particular strength in Arizona and California, as well as urban markets including Seattle, Portland, Denver, Austin, and Miami.

Hazel’s Beverage World in Boulder, Colorado, carries eight kombucha brands. Kyla and Wild Tonic are the top-sellers (averaging $3.98 a can; $10.98 a six-pack of cans), and Hazel’s recently added the Boochcraft and Flying Embers brands. “Sales have almost doubled since this time last year,” says beer manager Derek Ridge. Hard kombucha is also thriving at BevMo, which operates 166 stores in California, Arizona, and Washington. Assistant beer manager Matt Asendorf says the category is sold in every BevMo unit. Bevmo carried four hard kombuchas in 2018 and upped that total to 13 last year. The top seller is Boochcraft, comprising half of all sales, followed by JuneShine and Flying Embers.

More than 80% of hard kombucha’s sales are still in California, according to Boochcraft marketing director Margaret Link, who adds that the brand’s home base of San Diego is a leader in market penetration. “The San Diego metro area has provided a glimpse into what’s possible in terms of market penetration,” she says. “We’re seeing the same patterns emerge across most of the western United States, in major metros and smaller cities.”

Anheuser-Busch entered the category in 2016 when it acquired Kombrewcha, then an alcohol-free brand. A-B added alcohol to the lineup in 2017. Today, Kombrewcha offers three flavors at 4.4% abv and is distributed across more than 10 states.

A full analysis of the hard kombucha category will appear in the Summer issue of Market Watch.—Laura Pelner

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