Can Kombucha Go to Mass Market?

Kombucha is about to become a $1 billion market. But can it sustain its growth and maintain its nutritional value?

October 09, 2018

ATLANTA – It’s clear that kombucha is having a moment. Coca-Cola Co. and PepsiCo Inc. have diversified their portfolio to include kombucha—and are continuing to invest. In 2018, sales are up 43% over all of 2017—and on course to break $1 billion for the first time, according to Bloomberg.

“Consumers are going toward beverages that are organic and natural—which is where kombucha came from,” Tom Vierhile, innovation insights director at Global Data, told Bloomberg. It’s the probiotic piece that hits home. Nearly 65% of American consumers believe probiotics are good for you, typically contributing to improved digestive health and gut bacteria.

According to NACS vice president of industry initiatives, Jeff Lenard, 53% of shoppers go to convenience stores to satisfy their thirst, and kombucha just “needs is a few people saying it’s cool” on social media to break into this market. 7-Eleven Inc. has been testing a kombucha brand in 350 U.S. locations, Lenard said, and sales are strongest in Southern California and Oregon. But Lenard added that for more widespread c-store distribution, kombucha needs to attract a larger following. “Convenience stores aren’t accordions,” he said. “If kombucha comes in, then something needs to go out.”

But since it is hand-crafted, kombucha sold beyond the local market presents a production challenge. And because the raw product must be refrigerated, some adjustments will be required to make kombucha shelf-stable. It also contains alcohol because it’s a fermented product—so it could be taxed as an alcoholic drink if the alcohol content is above 0.5%.

The biggest question seems to be whether kombucha will gain more mainstream fans and stay in vogue. “Nonalcoholic beverages are like the fashion industry,” Vierhile told Bloomberg. “Stuff comes into favor, then falls out of favor—it’s very accommodating to entrepreneurs who have hustle.”