First Beverage Ventures Invests in Kombucha Brand

Six months after launching a new fund aimed at investment in emerging non-alcoholic beverage brands, the private equity arm of First Beverage Group has taken a stake in Health-Ade, which markets a line of premium, small-batch kombucha products. The deal is the first transaction made by First Beverage Ventures’ new fund, whose limited partners include the Coca-Cola Co.’s Venturing and Emerging Brands group as well as several high-net- worth individuals and family offices.

Though terms were not disclosed, Bill Anderson, Chairman and CEO, First Beverage Group, in a statement called Health-Ade “the perfect brand for our inaugural investment, and hailed kombucha, a fermented tea touted for its probiotic health benefits, as “a dynamic and growing category.”

“Health-Ade embodies the type of company that our new fund seeks to partner with,” Anderson said.

Based in Los Angeles, Health-Ade was founded in 2012 by a trio of entrepreneurs: husband and wife team Justin and Daina Trout, and Vanessa Dew, a close friend of both.  Marketed as “a bubby probiotic tea,” the line of kombucha drinks is made using cold-pressed fruit from local farmers’ markets and is naturally fermented. Packaged in amber-colored 16 oz. glass bottles, Health-Ade comes in an original flavor and four seasonal varieties. The products are currently sold in nearly 150 independent specialty grocers and fitness studios in the Los Angeles area as well as direct-to-consumer via the company’s website.

Noting the popularity of carbonated beverages and the general tilt toward better-for-you products, and, in particular, mid-calorie drinks that are low in sugar and other sweeteners, Tom First, Managing Partner, First Beverage Ventures, said that the firm had been seeking to make an investment in the probiotic space and looked closely at a number of kombucha brands.

“I think kombucha is an extremely important category for the industry and showing a lot of growth right now,” First said. “It’s a magical drink and a diverse beverage. You can do a lot with kombucha, and you’re seeing a lot of different offerings from [manufacturers].”

First said that while the flavor profile of kombucha has long been an acquired taste, the category has seen significant strides in flavor development, and praised Health-Ade as an “incredibly delicious kombucha” and having “the best liquid we could find on the market.”

Along with Jason Camillos, a managing director of First Beverage Ventures, First will work closely with Health-Ade, which recently signed on with few local distributors, he said. The company is also in the midst of building a new production facility that will enable the company to increase capacity and expand distribution to larger retail chains that are interested in carrying the brand. The launch of the new plant is about one to two months away, First said. As for additionally expansion, First said that Health-Ade is aiming to bring its products to the East Coast and is in the planning stages of creating a new manufacturing plant on the East Coast, one geared toward supplying New York and New England.