“We’re not just going after kombucha drinkers,” Armen Soghomonian, EVP at California-based brand owner Stratus Group Beverages told FoodNavigator-USA.
“We’re going after the other 90% of consumers that have not had their first kombucha. We don’t have the vinegary flavors that most of the kombucha brands have, which makes them difficult to drink. We’re an easy drinking fruit forward, friendly kombucha [MSRP $2.99].
“We’re a bridge between kombucha, carbonated soft drinks, tea, juice, and other new age beverages, and we’re pulling from all locations. We have a pretty wide consumer base."
The kombucha category is exploding
The KÖE brand, which was launched in mid-2018 and is currently in around 2,500 doors, has secured up to 10,000 points of distribution for 2019, he said. “A lot of the success is coming from convenience, vending and micro-markets as well as grocery. In 2019 we're looking at building up in the southeast region - mainly Florida, also Los Angeles, and then we'll go after Chicago, New York and Texas."
He added: “The kombucha category is exploding. It’s about $700m and growing at about 30% year on year, while popularity and household penetration is also growing. But there’s also a lot of white space in the category too. Most products are in the refrigerated case and in glass, although some brands [eg. Brew Dr] have launched cans. But we’ve come in with a shelf stable can.
“The great thing about KÖE is that we are able to go across the store because it’s shelf stable, so it can be displayed in multiple locations, the shelf, on display, on end caps, or in the cooler in the grab & go section.”
Our kombucha is authentically fermented
But would a purist consider KÖE to be a kombucha (a term that is not defined in law, although some industry stakeholders are trying to pin down a definition)?
KÖE – which contains purified sparkling water, kombucha (water, sugar, active culture, black tea), sugar, fruit purees and juice concentrates, natural flavors, and the LactoSpore Bacillus coagulans, MTCC 5856 probiotic strain – contains 80-90 calories and 19-21g of sugar per 12oz can.
“There’s no statement of identity for kombucha in the FDA regulations, but our kombucha is authentically fermented," said Soghomonian.
"We have a four-month fermentation process so we produce it in the same way most premium brands out there do. We’re fermenting tea with sugar and a scoby [symbiotic culture of bacteria and yeast] and I think if you have a fermented tea base then you are a true kombucha.”
Sugar and alcohol
As for sugar and alcohol, two areas of contention for players in the kombucha space following a flurry of lawsuits, Soghomonian said: “We are 100% alcohol compliant [ie. under 0.5% abv] and we have multiple checkpoints within our production process, and everything is tested and verified through the end of shelf life, and we have a test and hold program, so nothing leaves our facility until it’s been tested and verified.
“There is a lot of secondary fermentation out there [a shorter secondary fermentation that takes place in the bottle, whereby residual yeast convert some of the remaining sugar in the tea plus sugar from added fruit juices into more alcohol and carbon dioxide, and bacteria convert some of the alcohol into acids, but this time, the carbon dioxide cannot escape, creating bubbles] and some of brands are not controlling the process properly. But we have a couple of [undisclosed] techniques to ensure that we don’t have any secondary fermentation.”
At 19-21g per 12oz can, the sugar content in KÖE is higher than that of many leading kombucha brands (which vary widely), but still far lower than most full sugar sodas (a 12oz can of regular Coke has 39g added sugar, while Pepsi has 41g), noted Soghomonian.
“We feel pretty comfortable about the sugar level, but we’re working on ways to lower our sugar content and calories in the future.”
Perfect Hydration brand has 'exploded'
Alkaline water brand Perfect Hydration, the second functional beverage in the Stratus portfolio, has "exploded" out of the blocks, added Soghomonian.
"It's really flying off the shelf, we keep growing in store counts, volume, and velocity, and it's becoming the #1 brand in most markets we're putting it in. We're putting a lot of emphasis on marketing this year along with additional national chains coming on board."
Asked about claims in the category, which has started to attract the attention of plaintiff's attorneys, he said: "In any food and beverage category you have to tread very carefully with the claims you make. We don't make any claims on our bottle as the category overall is perceived to deliver a higher level of hydration."
