Manhattan Beer to Distribute Reed’s Kombucha

Reed’s, Inc. announced Tuesday morning that sizable distributor Manhattan Beer will begin distributing its kombucha brand, Culture Club.

The distributor will give the fast-growing line access to the five boroughs of New York City and the Hudson Valley.

Manhattan Beer Distributors (MBD), which already distributes Reed’s-owned Virgil’s sodas and Ginger Brew, will distribute all eight flavors of Reed’s Culture Club Kombucha, according to a release from Reed’s.

MBD accumulates more than 50 percent of its volume from MillerCoors and Crown Imports products, such as Corona, and also carries Samuel Adams, Shiner and a wide selection of craft beers from smaller breweries. While the distribution house predominantly focuses on its beer business, it does carry a number of non-alcoholic brands including Red Bull and Vita Coco.

Bob Sipper, a managing partner at Cascadia Managing Brands, has worked with MBD since the late 1980s and represents Koh, a coconut water brand distributed by MBD. Sipper, who presents brands to MBD about three to four times per year, said that the deal indicates the distributor’s interest in a growing category and takes Reed’s to another level in the natural channel.

“I think it’s a great opportunity for Reed’s,” he said. “They’re a powerhouse in New York City.”

The ginger brews and Virgil’s sodas have been distributed in the city for about 30 years, he said, and MBD has carried them since 2007. The familiarity likely made the deal an easier arrangement.

“I think it’s a distributor that sees a really good brand and wants to be involved,” Sipper said.

He said that while the “avant-garde” look of chia-based beverages may still intimidate consumers, kombucha has been around for long enough to establish a level of comfort in the marketplace and emerge in mass retailers. He’s already seen kombucha in mainstream grocers like ShopRite and imagines that the partnership between Reed’s and MBD could lead to new placements for Culture Club Kombucha in Whole Foods, Fairway Markets, Gourmet Garage, Food Emporium and a bevy of other high-end specialty and natural food stores in the greater New York area.

“That’s a big, big territory,” he said.

Sipper also noted that the price of kombuchas, which typically range from $2.50 to $5, formerly distanced consumers. However, with the emergence of cold-pressed/HPP juices that often sell for $8 to $12 a bottle, the sentiment has changed and the price point for kombucha is considered to be reasonable, he said.

“People are beginning to understand the kombuchas a little better,” Sipper said.

The increase in awareness and understanding of kombucha products has led to a recent spate of new distribution and investment in the category. Since the summer, Reed’s has secured distribution in approximately 1,000 Kroger supermarkets across the country, more than 200 Ingles Markets in North Carolina, South Carolina, Georgia, Tennessee, Alabama and Virginia, and Wegmans, among other deals. Meanwhile, the private equity arm of First Beverage group announced in October that it has invested in Health-Ade, the kombucha marketer that won the most recent New Beverage Showdown at BevNET Live in December.