Kite Flies Into U.S. Market with Adaptogenic Botanical Beverages

Having spent the past year building its Canadian business and navigating a series of supply chain disruptions, Toronto-based sparkling botanical beverage brand Kite is making its U.S. debut this month in California and the Midwest.

Kite, the winner of last year’s New Beverage Showdown 20, was founded in 2018 by food and beverage industry veteran Claudia Marion and nutritionist Michelle Tirmandi. Still in its early stages with Marion, as CEO, and Tirmandi as the only full time employees, the product is now available in roughly 700 to 800 retail stores across North America and counting, most recently adding Erewhon and Meijer to its list of U.S. partners via distribution by broadliners UNFI and KeHE, with additional authorizations to enter Harmons Grocery and Better Health stores.

In Canada, Kite has also added 170 Save-On-Foods accounts, Vejii, and chains including Whole Foods, Choices and Natures Fare Markets. It is distributed in Canada through UNFI, Horizon and Purity Life. By the end of this year, the company is projected to be in over 1,000 stores in both countries with plans to extend its focus on the Northeast U.S. and Florida markets, alongside California and the Midwest.

Focused primarily on health conscious consumers within the natural and specialty channel, Kite’s line of sparkling adaptogenic teas includes three functional SKUs: Rise (Lemon with green tea), Unwind (Orange with ashwagandha) and Align (Hibiscus with tulsi). All three varieties contain adaptogenic ingredients — including moringa, turmeric and licorice — with no sugar or sweeteners. Each 12 oz. can retails for $2.99 and is also available on Amazon for $34.99 per 12-pack.

“What we’ve done up here with the natural channel in Canada has been phenomenally successful,” Marion said. “The repeat purchases are incredible there and the education that the health food stores and pharmacies are giving the customer about Kite has been amazing. So we’re going the same route as we roll into the U.S. and we’re very much focused on getting out to the natural channel.”

Kite is far from the first beverage venture for Marion, whose 20+ year career in the food industry includes eight years as the owner and operator of Ireland-based gourmet food shop and importer Loose&Green, founder and CEO of Irish CPG and cafe brand Matchabar (not related to the New York-based CPG brand) before selling the company in 2011. In addition to Kite, she has also served since 2014 as president and founder of Stork and Dove, the maker of Baby Boons and Boons+ Brands for pregnant women and breastfeeding mothers, which produces lines of lactation cookies, probiotics and bars. Tirmandi, meanwhile, has a background in marketing and previously worked as an online wellness coach and holistic nutritionist, founding her own consultancy business Michelle Nutrition in 2014.

However, the road to growth has been tricky for Kite, particularly as the brand launched into a pandemic-rattled market last March. Marion said the company spent much of the past 12 months fortifying its supply chain, particularly aluminum cans, while working to scale production and move into a larger facility that can produce up to 100 hectoliters of liquid. As well, Kite fought successfully to keep its SRP level while seeing costs of goods rise, including a 30% spike in corrugated cardboard among other inflationary headwinds.

Facing out-of-stock challenges over the summer, the brand worked closely with distribution partners and retailers to maintain relationships while navigating the crisis. Despite the challenges, however, Marion said the brand has managed to gain traction without losing stores or distributors, and she counts Kite lucky for facing these hurdles before expanding into larger chains. Tirmandi noted that the crisis in many cases helped “nurture the relationship” between the company and its retail partners, particularly independent accounts.

“I think from the consumer perspective — and it’s very untrue to the manufacturer perspective — but when [consumers] see that you’re out of stock it almost increases demand, because it’s like ‘Oh, they must be so good they’re selling off the shelves,’” Tirmandi said. “So in some ways, it’s a very strong story for us and people followed along. They really felt our growing pains with us.”

While the company initially expected to open a Series round in late 2022, Kite’s faster-than-anticipated growth means it is preparing to begin seeking out investors for a Series A round by Q1 next year at the latest, Marion said.

As it builds its footprint, Kite finds itself in an emerging category for better-for-you sparkling tea brands, including companies like Minna, Sound and Rishi Sparkling Botanicals. According to Tirmandi, Kite sees itself as an unique product in the Canadian market with limited competition, but she acknowledged the brand faces more competition in the U.S. where functional beverage sets are crowded with innovation. In addition to a strong “Instagrammable” can design and a focus on clean label, efficacious ingredients, she said the company aims to tell a story around its founders and its quality.

“People want to connect with the brand and with the people behind the brand,” Tirmandi said. “So they’re excited about a woman-founded company run by people who know food, know nutrition, know CPG and are really starting at a grassroots level.”