In a sign of the category’s continuing momentum, Oregon-based kombucha brewers Humm Kombucha and Brew Dr. each announced partnerships with Target last month.
Humm, of Bend, Ore., is now the third kombucha brand — along with GT’s Kombucha and KeVita — to be carried nationally by Target, the country’s second largest retailer. As part of a soft national roll out, the store added four of Humm’s 14 oz. bottled SKUs to 1,571 locations in September. They are tagged with a $2.99 SRP.
In an interview with BevNET, Humm co-founder Jamie Danek said the move to Target fits with the brand’s ambition of mainstream success. The company has also pushed into conventional grocery stores and convenience stores; a recent article in the Bend Bulletin cited SPINS data indicating the brand was second in convenience store sales for kombucha in 2015, as well as eighth in conventional grocery accounts.
“Humm is all about accessibility and making it available to people who shop anywhere,” said Danek. “Target is amazing because they believe in what we are doing. They hit the general public. We’ve never focused on health food stores and specialty grocers — it’s always been about everywhere else.”
Danek said that in the past the demand for Humm has consistently exceeded their production capacity, an issue the company will address next year by moving to a new 40,000 square-foot brewery capable of producing 25,000 cases per week.
Humm will support its retail expansion with a refocused marketing effort. In addition to hiring a director of marketing and a marketing team, Danek said the company will use social media campaigns and sampling events — including handing out bottles to staff at Target corporate headquarters this Monday — to drive awareness.
Meanwhile, Portland-based brand Brew Dr. Kombucha last month entered 56 Target locations in Washington, Oregon and northern California, which will carry the brand’s products in “grab-and-go” refrigerators. The company also recently completed a test set at 13 Costco locations in the Pacific Northwest. Brew Dr. is currently in 3,500 locations in the U.S., Canada and Mexico.
Michelle Schmidt, director of sales and marketing at Brew Dr., told BevNET that the agreement with Target came together quickly.
“Target expressed interest about three months ago, and the process didn’t take very long at all,” said Schmidt. The company is aiming for growth: a new, second production facility has increased production capacity from 10,000 to 100,000 bottles per day, she said, allowing the company to supply larger retailers.
In addition to Target and Costco, the brand is launching at Sprouts and Fresh Market stores in select regions this fall.
Independent broker Craig Decker, who arranged the deal between Brew Dr. and Costco, said that the brand’s strong performance in sales per point of distribution made it particularly attractive to the big box retailer.
Decker said Costco plans to retain and possibly expand Brew Dr.’s regional presence after the successful test set, along with launching the brand at all stores in an unspecified new region in early November. He emphasized the category’s importance, calling it one of the stores’ “top performing SKUs.”
“Kombucha as a whole is very strong relative to all other beverages in the store,” he said.
A report by market research firm Markets and Markets estimated the U.S. kombucha market will grow to $1.8 billion by 2020, a rate of 25 percent per year. Consumers are gravitating more towards flavored varieties, which represented 68 percent of market volume in 2015, according to a report by Grand View Research, Inc.