Dive Brief:
- Sales data showed consumers across natural and conventional channels are drinking kombucha at very high rates, according to New Hope Network. SPINS research shows U.S. sales of kombucha grew 37.4% in 2017 to $556 million, excluding sales from Whole Foods and Costco. Euromonitor International predicts U.S. sales of the probiotic beverage will hit $656.7 million in 2019.
- Players in the segment are confident the category has ample room for growth, so long as brands improve the drink's accessibility to mainstream consumers. Some companies are doing this by embracing aluminum cans that serve on-the-go drinkers and are easily shareable. “Kombucha is coming out of its infancy," Matt Thomas, CEO of Brew Dr. Kombucha, told New Hope Network. "And all the brands have grown up in the single-serve glass bottle that indicates craft and quality. The can gives us an opportunity to be stocked and consumed everywhere—where glass can’t be.”
- Aluminum cans also have a recycling rate of 67% compared to 26.4% for glass bottles, according to the Environmental Protection Agency, which could appeal to environmentally conscious shoppers.
Dive Insight:
Consumer interest in gut health and probiotics is fueling interest in kombucha, but Thomas told New Hope Network that the segment's potential is still largely untapped.
"The fact remains that still just a small percent of the population even has an idea of what kombucha is," he said. "There is huge opportunity to continue educating and innovating what kombucha is in the United States. 'Kombucha' is a funny word. Fermented tea with bacteria and yeast is a funny idea. And for a long time, it was seen as a yoga-hippie drink."
While some of this stigma may persist for mainstream consumers, recent M&A activity in the segment reflects Big Food's confidence in the kombucha market. In 2016, PepsiCo acquired sparkling probiotics beverage maker KeVita, and Peet's Coffee contributed to a $7.5 million Series B round of funding for Revive Kombucha last summer. The sparkling tea has caught the attention of the beer industry as well. Molson Coors bought California-based Clearly Kombucha for an undisclosed amount in June.
Much of the drink's current popularity stems from millennial interest in premium, better-for-you foods and beverages. Grocery stores are cashing in on this growing interest by adding walls of kombucha at the front of their stores to position their chains as healthy and on-trend. Erol Schweizer, executive global grocery coordinator for Whole Foods, told Forbes the beverage occupies one-third of the refrigerated shelf space for functional beverages in its stores.
Aluminum cans could help extend kombucha's reach to older generations who may not be as familiar with gut health trends or the product itself. The packaging could help kombucha brands differentiate themselves in a crowded market. The sparkling beverage's traditional glass bottles may be eye-catching and Instagram-worthy, but the packaging is generally impractical for occasions beyond drinking it. Six-pack aluminum cans, however, could encourage consumers to bring it to beaches, parties, sip it in their car on the way to work and other activities while sharing it with friends, broadening the product's reach.
This transition isn't without risks. Selling kombucha in cans could undermine it's premium positioning, and the product could fade into aisles filled with soda, energy drinks and cheap beer. Aluminum cans also can't provide the transparency that glass can, which is a value-add that shoppers increasingly view as a staple. Still, if companies push the environmental sustainability and convenience of canned kombucha — and maintain engaging product design — the format could be a new path to growth for the segment.