Seeking to expand operations and fund new marketing initiatives, Humm Kombucha announced today that it has opened an $8 million line of credit with Naturally Gerber Finance.
In a press release, the Oregon-based kombucha brand said it intends to use the credit to hire new staff, purchase machinery and “fund large-scale retail programs and marketing initiatives.” The brand, which was founded in 2009, is currently available nationwide as well as in Guam and Sweden.
“Gerber Finance’s genuine desire to be long-term and collaborative partners stuck out to us and made a lasting impression,” said Aaron Kitchell, Humm’s VP of Finance, in the release. “The team took the time to understand our business, our company, and our mission. They recognize the significance of building relationships, and we couldn’t be happier with our decision to partner with them.”
Launched in 2020, Naturally Gerber Finance is a division of asset-based lending firm Gerber Finance Inc. (itself a subsidiary of eCapital Corp) that is focused on health, wellness and natural products companies seeking $500,000 to $25 million in financing. The division has previously funded companies including Stasher, Coola and Om Mushroom Superfood.
“We are passionate about brands that are positively impacting people’s health and happiness and have deep experience with natural food and beverage companies,” said Jennifer Palmer, CEO of Gerber Finance, in the release. “With our similar values and commitment to lasting partnerships, it made natural sense to work with Humm Kombucha. We look forward to our flexible financing and expertise in the space helping to move Humm Kombucha forward in their success.”
The financing comes about five months after Humm co-founder Jamie Danek stepped aside as CEO, handing the chief executive role to the company’s president Matt Witherell. Witherell, who joined Humm in 2019, is a beverage industry veteran who previously served as SVP of retail sales at Red Bull and prior to that held VP positions at MillerCoors and JPMorgan Chase.
As the kombucha category has faced stagnating sales growth over the past year, Humm has worked to expand its brand platform by embracing new functionalities and product formats. Last month at Natural Products Expo East 2021 the brand showcased a new energy line that is currently being piloted in the Pacific Northwest in a single SKU (Cherry Cola) containing 115 mg of caffeine per 12 oz. can. The brand has previously introduced line extensions within the kombucha space, including canned drinks, Zero Sugar varieties and a Whole30 Approved line.
Last year, Danek told BevNET that kombucha makers believe they “have to think outside the box and make it so more people can have access to the product” in order to drive growth in the space. For Humm, that has meant focusing its innovation around shelf-stability, low calorie and expanded use occasions in order to bring new consumers into the category. At the time, she called the Zero Sugar line a necessity to scaling distribution and extending kombucha’s reach in mainstream channels.
However, like many kombucha brands, Humm has felt the challenges of a slowing category. According to SPINS, sales of Humm products were up 13% to $27.8 million in MULO, natural and convenience during the 52-week period ending August 8.
Humm previously raised $10 million in 2018 from its longtime lead investor VMG Partners with the goal of expanding production. Plans to build a new 100,000 square foot East Coast facility in Roanoke, Virginia were cancelled in 2019 as the company said it faced “challenging market conditions” and opted to make upgrades to its existing Bend, Oregon headquarters.
Prior to that round, the brand raised $8.08 million in a 2017 Series B also led by VMG, and a combined $4 million from two separate rounds in 2016.
Editor’s Note 10/20/21: This story has been updated to include more complete sales data for Humm.