Expo West: No Fermentation Vacation

Kombucha, the vinegary, sour product of tea fermentation, has some pretty sweet growth prospects, if last week’s Natural Products Expo West is any measure.

Several booths featured new commercial varieties of the often homegrown brew, which features a plethora of reputed functional properties, from digestive health and skin care to appetite suppression and energy.

While kombucha wasn’t the only product type attracting attention at Expo West – both stevia-sweetened products and coconut water also carried buzz on the show floor – it was certainly the most consistently discussed, mainly because the bootstrap entities who have long typified the natural products channel were feeling pressure from larger companies like Honest Tea and the Hain Celestial Group. Both big tea makers showed off flavor and ingredient profiles that masked much of the vinegar bite in an attempt to attract new consumers.

At Honest, which launched a series of Kombucha products in the natural foods channel last fall, Maqui Berry Grapefruit and Apple Jasmine both provide some cover for the bite.

Such a move is important for a more mainstream consumer because kombucha “can be an acquired taste,” according to Honest Tea spokeswoman Samme Menke.

Still, buzz about the product’s growth buzzed across the trade show floor, especially as natural foods giant Hain moved into kombucha through a sub-line of its Celestial Seasonings tea company. With five kombucha labels that all feature a juice content of five percent, the new glass bottle line is expected to launch in April.

The Celestial Seasonings line grew out of its purchase of the fermentation facility of the Boulder, Colo.-based independent kombucha company Inifini-tea. Founder Nicole Gervace is now heading the line for the acquiring company, and said the addition of juice to the mix “will help bring it closer to the consumer.”

“So many people can benefit from a product like this,” Gervace said, adding that the new ready-to-drink line constituted the biggest product launch in Celestial Seasons history.

To reinforce those benefits, the Celestial Seasonings line features a functional attribute on the flavor of each label: Pomelo Citrus/Energy, Meyer Lemon Ginger/Digestion, Superfruit/Antioxidant, Berry Guava/Metabolism and Tropical Blend/Super Green.

“We’ve been tea experts for more than 40 years,” she said of the company. “Herbal teas used to be a niche category, and like herbal teas, we see in this an opportunity to take it out to the masses.”

Aside from the big company products, some smaller companies were at Expo East to show off bigger products. Specifically, High Country Kombucha poured product from a keg, a trend that, like the home-brewing of the stuff, has rapidly caught on. Recently, several Whole Foods locations have begun to offer kombucha on tap as a way for consumers to purchase in bulk – something that High Country seems poised to take advantage of.

The growth in Kombucha varieties seemed logical and, in some ways, overdue: category leader Millennium, which makes GT’s Kombucha and Synergy, a Kombucha/Juice blend, has become one of the best-selling items in Whole Foods.

While some companies seemed to be intent on grabbing that share by making their product more accessible to the mainstream palate, others, like year-old Vibranz, were deliberately headed to a more traditional taste.

“People expect that punch,” said CEO David Cordtz, who offered a six-SKU variety brewed in Healdsburg, Calif. “We made a choice not to downplay it.”

That noted, he said, for the category to be as successful as many hope, “the key is to get people to try it and say, ‘Oh! I don’t really hate kombucha.'”

While the kombucha category appeared to be at the starting gate, the sweetener Stevia and its derivatives seemed to be hitching a ride in several new beverage categories.

With all-natural credibility to back it up, Stevia appeared as a sweetener in high-end RTD teas produced by Tazo, which launched a line of zero-calorie drinks that reflect three of its most popular SKUs, Zen (green tea-flavored), Passion (hibiscus) and Refresh (peppermint and spearmint). Using erythritol to balance out the Stevia, according to Mike de la Cruz, the research and development manager for the Starbucks-owned Tazo line, offered a new way to offer zero-calorie products to the consumer.

“There’s definitely a re-energized emphasis on Tazo at Starbucks,” de la Cruz said. That might be a result of the re-energized tea category overall; the category has been one of the few that have kept a positive growth profile this year.

In another growth area, coconut water, one of the category’s three main players also reached out to Stevia as a way to expand its portfolio.

O.N.E. became the first of the coconut water companies to offer functional SKUs that include more than just coconut water and flavorings. With O.N.E. Active – still being poured from test bottles at the show — company founders Rodrigo and Emilie Veloso are attempting to realize an idea they developed two years ago, turning base coconut water into “an isotonic functional product with mainstream American flavors,” said Rodrigo Veloso – hence the grape/berry, lemon/lime and cranberry/grapefruit SKUs.

“Now we have the capability and the capital,” he added, referring to recent investment from a venture capital group and Pepsi Bottling Group.

The 40-calorie Active line features extra electrolytes beyond even the normal electrolyte-rich coconut water profile, as well as ginkgo biloba, ginseng, and catuaba.

Another coconut water taking a different path is ZICO, which parlayed some of the money it pulled in from an investment by the Coca-Cola Co. to develop a new PET bottle. The package, which comes in three flavors, marks the first from-concentrate coconut water line to be launched by the big three.

ZICO’s tetra-pack product will continue to be not-from-concentrate, said founder Mark Rampolla, who acknowledged that the different processes would result in slight differences in flavor in the plain coconut water SKUs.

“There are products that vary in flavor from package to package,” Rampolla said, adding that he believed tetra-pack was actually keeping some consumers at bay.

“It’s clear that the category’s legitimate,” he said. “It’s no longer about establishing yourself within the category, it’s about establishing yourself as a unique, strong beverage brand. The idea is that this product is mainstream, and we want to be the mainstream version of it.”