Propelled by sustained consumer demand for kombucha along the West Coast, sales of Brew Dr. Kombucha doubled to nearly $12 million in 2016, according to founder and CEO Matt Thomas. He expects booming growth to continue amid an expansion of the company’s manufacturing capacity and the addition of an experienced sales executive to focus on new business opportunities. Thomas believes the moves will help Brew Dr. reach $50 million in revenue potential by 2018 or 2019.
Based in Portland, Ore. Brew Dr. produces a line of 100 percent raw and organic kombucha made using high-quality tea, herbs and roots. Packaged in 14 oz. bottles, the kombucha contains no added juice or flavorings after fermentation and comes in 10 varieties. The brand, which is owned by premium tea retailer Townshend’s Tea Company, is sold at Whole Foods Markets in six of the company’s regions: Pacific Northwest, Midwest, Northwest, Northern California, Rocky Mountains and South. Brew Dr. is also available at dozens of independent retailers and is sold chain-wide at The Fresh Market and Earth Fare, two Costco divisions and over 50 Target locations.
Thomas told BevNET that much of the recent sales growth has come from its home market as well as other parts of the Western U.S., where consumers are constantly seeking out higher quality and organic options.
“The Pacific Northwest is doing really, really well,” he said. “We’re having great success throughout our business into Northern California and Southern California and we’ve been in the Colorado market and the Rocky Mountain states around that for three years. Those have been focus markets for us as we’ve grown.”
In December Townshend’s hired Marty Wall as its executive vice president of business development. Wall joined the company after three-and-a-half years as the vice president of sales for Stumptown Coffee Roasters. He also has extensive experience in the craft beer industry having worked as the vice president of sales for both Widmer Brothers and Craft Brew Alliance.
Wall’s new role will cover all three operating companies under the Townshend’s umbrella: Townshend’s Tea Company, Brew Dr. Kombucha, and Thomas & Sons Distillery, with the majority of his focus on Brew Dr. Wall is tasked with outlining new sales and distribution initiatives and helping to nurture growth in existing retail accounts. While the brand is primarily sold at natural retailers, Wall views the conventional and convenience store channels as a big opportunity for Brew Dr. over the next two years.
In May 2016 Brew Dr. expanded production to a new 50,000 sq. ft. manufacturing facility located in a Portland suburb. The plant, which operates in conjunction with the company’s original 10,000 sq. ft facility, will get a $2 million upgrade to its bottling lines later this year, a cost financed through debt. Brew Dr. currently makes 300,000 bottles per week and the improvements will allow the company to increase its production capacity to 750,000 bottles.
“That’s one more stepping stone that we’ll eventually have to upgrade again, but that can get us through 2018 and towards 2019,” said Thomas. “It’s a benefit of doing it as we go and having the ability to debt finance our growth and the equipment involved.”
Thomas noted that Brew Dr. has consistently used a combination of cash flow and debt to expand operations and has spurned investment from private equity firms. Although other fast-growing kombucha brands have leaned on outside investment to help drive growth, he is wary of additional hands on the wheel.
“It is very validating to see how much money is coming into the kombucha category,” he said. “We’re certainly making a lot of friends in the private equity world. It’s not to say that won’t happen eventually, but the longer you can live without it, while not hamstringing your growth curve, just seems logical to me as far as maintaining control of the company.”