Liquid Death Kombucha

Could Liquid Death murder the kombucha market?

I can confidently say that Liquid Death is one of the most exciting & entertaining brands in the world right now, and not just in the beverage space. Their punk rock aesthetic and irreverent attitude is hugely resonating with consumers, making them a stand-out brand in the crowded beverage market.

But the question remains, could Liquid Death murder the kombucha market if they released a kombucha range?

First, let's talk about the kombucha market. It's a fast-growing industry that has seen a big surge in popularity in recent years. With the US kombucha market valued at $1.52 billion in 2020 it is expected to be at a staggering $7.05 billion by 2028. Up until now consumers have been drawn to the supposed health benefits of kombucha, including improved gut health and immune function. It is fair to say the word “kombucha” has a superfood type halo around it.

This kombucha halo has served the market leading kombucha brands like GT's and Health-Ade very well, often presenting clear brand archetypes of the nurturing caregiver, the cure all healer or the magical mystic which all fits in very well with their main consumers avatars of the yoga loving hippy.

However is it time for the kombucha market to be shaken up? Where are the truly exciting and inspiring brands in the kombucha space that have a Rebel, Outlaw or even court Jester type personality that really go against the grain of the traditional category characters, frankly they are nowhere to be seen.

mic check and enter stage left Liquid Death Kombucha!

I could talk endlessly for hours about why a brand of Liquid Death’s caliber should enter the kombucha market. There is so much room and frankly a real need in the kombucha market for a brand with this personality style. Liquid Death which already has a well-established punk rock image would easily stand way out a the sea of peace and love health only focused brands. (much respect to these other kombucha brands, many of them are our very valued Manna-K Kombucha Ingredients customers)

Mike Cessario, the founder of Liquid Death, has proven to be both successful and creatively talented in creating an iconic brand that has taken the beverage market by storm. Mike himself being call a marketing genius by Forbes Magazine. His unique vision for the brand's punk rock aesthetic and irreverent attitude has resonated with consumers, and his execution of the brand's marketing and advertising campaigns has been nothing short of brilliant. From partnering with unconventional influencers to creating hilarious & entertaining viral social media content, Cessario has demonstrated a keen understanding of what it takes to build a successful brand in today's competitive market. With his track record of success, it's no wonder that many are excited to see what Liquid Death will come up with next, whether it's a kombucha range or another exciting venture they could easily also play outside of the beverage space.

Now, let's talk about Liquid Death's potential for success in the kombucha market. One advantage they have is their existing fan base. Liquid Death has already built a strong following of consumers who love their brand, and many of these consumers I believe would be extremely interested in getting their hands on a Liquid Death Kombucha. Additionally, their punk rock aesthetic and irreverent attitude could be a refreshing change for consumers in the current kombucha landscape and appeal to a much broader audience.

If you were in Liquid Death's position what sort of product would you launch? Would a shelf-stable kombucha that delivers on a light and natural kombucha flavour appeal to a more mainstream audience? This might involve creating a product that is not too acidic, with a pleasant taste that is not too overpowering, bitter or funky. By making kombucha accessible to as wide a range of consumers as possible who may not have tried it before or have previously been put off by the intensity of some other kombucha brands in the market. A shelf-stable product for a brand like this would also be more convenient for retailers, making it easier to distribute and transport. By creating a kombucha product that appeals to a mainstream audience, Liquid Death could potentially capture a larger share of the market and continue to grow their brand.

So, how much of the market share could Liquid Death potentially take or even create?

The kombucha market is projected to continue growing at a rapid pace, with some estimates suggesting that it could reach $7.05 billion. If Liquid Death were to capture even 10% of this kombucha market, it could translate into a $700 million opportunity.

To ensure success in the kombucha market, Liquid Death would need to create a product that delivered on consumer expectations for taste and quality, of course that they already expect & know from Liquid Death current product range of mountain waters & ice teas. They could effectively & quickly achieve this kombucha kombucha production at scale by outsourcing their production to a US copacker and using a high quality pre-fermented kombucha ingredient like Manna-K Kombucha.

Liquid Death's unique and always entertaining marketing could be a game-changer in the kombucha market, wat if they created partnerships with conventional kombucha personality types like Gwyneth Paltrow, who could be transformed into an axe-wielding goth-inspired zombie figure to promote Liquid Death kombucha. The potential for Liquid Death in the kombucha market is enormous, and it could be very exciting to see what the brand comes up with next. Will they or others take up this opportunity?

Denis Kelleher - CEO @ Good Culture Kombucha

As a kombucha ingredients company, we love working with exciting innovative brands that are open to trying new products and creating new exciting opportunities. By supporting innovative and creative brands, we can help drive the kombucha market forward and encourage more brands to push the boundaries.

Many Thanks, Denis

For clarity, I have absolutely no knowledge of Liquid Death launching a kombucha and i am not aware of their product pipeline, this is just a fun article to write on some ideas i’ve had.

The American Kombucha Market in 2023, Big Challenges & Bigger Opportunities!

Denis Kelleher - CEO @ Good Culture Kombucha

I’ve just spent a few weeks travelling around the US visiting many of the kombucha industries leading brands & beverage industry experts. I'm in a lucky and unique position to be able to sit down with these industry insiders who really know what is going on and are at the coal face of the kombucha market everyday. Each insightful conversation over a glass of booch gives me a unique perspective and insights into where things are at & more importantly where they are going.

Personally i’m always looking for the next big opportunity and right now in the kombucha world i can see endless runway for innovative & exciting new brands that want to come in and shake up this market. Its a really exciting time!

I thought it might be helpful to share some of my main takeaways & thoughts from my trip so maybe it can help inform & inspire others to take advantage of the opportunities in this ever evolving kombucha market.

Here are some of my takeaways & thoughts:

Changing Consumer behaviour

Covid-19 had a significant impact on the kombucha market in the USA. The pandemic has led to a shift in consumer behaviour towards more online sales and away from traditional brick-and-mortar stores, with some brands seeing huge growth in their online sales. However, this shift in behaviour has created big challenges for kombucha brands that only serve raw living unpasteurised kombucha in glass bottles. In online deliveries for example this creates challenges when raw products can spend considerable amounts of time outside the fridge, which leads to explosive bottles & excessive levels of alcoholic due to the ongoing fermentation in the bottle that can easily happen on a warm day. Glass bottles also do not travel well and leads to a lot of breakages which is not ideal. The big opportunity here is for innovative brands that have ambient stable kombucha that ships in more durable and lightweight cans. A good example of this is Remedy Kombucha who has really been shaking up this part of the market.

Is it time for kombucha to get out of the fridge?

There is a big problem that is holding back the growth of the kombucha market: most of the current leading kombucha brands that are raw & unpasteurised are only found in the chilled refrigerated section of stores. This limits the potential market for kombucha and makes it difficult for kombucha brands to expand beyond their current consumer base. Let me explain.

Firstly, refrigeration limits the potential market for kombucha. Many consumers are still not even aware of kombucha or do not actively seek it out in the refrigerated section. By creating ambient shelf stable products, brands can make kombucha more accessible to a much wider audience and explode the growth of the category. These products can be placed on the shelves alongside other main stream beverages, making them much more visible and increasing the purchased by consumers who might not otherwise have considered kombucha before.

Secondly, refrigeration is an added cost for brands. Refrigerated products require additional storage and transportation costs, which can be a significant financial burden for smaller brands. By creating shelf-stable products, brands can reduce these costs and make their products more affordable for consumers.

Thirdly, shelf-stable products have a longer shelf life than refrigerated products. This means that they can be sold in more locations and for longer periods of time, reducing waste and increasing profitability for brands.

Finally, creating ambient shelf-stable products & getting kombucha out of the fridge can help to grow the kombucha market overall. By making kombucha more accessible and affordable, more consumers will be able to try it and discover its amazing qualities.

Kombucha too expensive for the average American consumer

Despite its growing popularity, kombucha remains very expensive in the United States, with many of the leading brands priced at $3.99 per bottle…ouch! This high cost is a significant barrier to entry for many consumers, and it is preventing the category from growing and competing with big beverage.

Kombucha's high cost is due to several factors, including the cost of premium raw materials, production, and distribution. Hot infusing loose leaf tea is typically more expensive than the fast formulation methods of other beverages like soda. Additionally, kombucha requires a lengthy fermentation process, which can increase production costs. Finally, chilled distribution costs are also high due to the perishable nature of the product, which requires refrigeration and careful supply chain management.

However at $3.99 per bottle, kombucha is seen as luxury item that is out of reach for many consumers. This high cost is stopping the category from growing, and it is preventing the American kombucha industry from entering the mainstream market and competing with the likes of like Coca-Cola and PepsiCo.

But the whole kombucha category does not need to be this way, I see so much opportunity for clever more mainstream optimised brands to enter the better for you kombucha category.

The European kombucha market has already figured this out with many of the leading kombucha brands being much more mainstream in their flavour profiles, formulation and regularly priced at below 2 euros. Needless to say the European market is growing at a much faster pace, while off a lower base number of course.

If the cost of kombucha could be reduced to $2 per serving, the total addressable market for kombucha would explode. Consumers would be more willing to try the drink at a lower price point, and the lower cost would make it easier for retailers to stock the product. As a result, the market for kombucha would significantly grow.

Other retail beverage data supports the idea that lowering prices can significantly increase the total addressable market (TAM) for kombucha. For example, in 2008, the energy drink market was valued at $8 billion, with prices ranging from $2 to $4 per can. However, in 2018, the market was valued at $63.5 billion, with prices as low as $0.99 per can. It unarguably that lower prices made energy drinks more accessible to consumers, leading to explosive market growth.

Which of you is going to take on this opportunity for the kombucha market?

Continue reading below…..

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Kombucha has a quality problem

The kombucha market has significant quality issues, even among the market leading brands. Consumers are experiencing issues such as excessively high alcohol levels, short shelf life, inconsistency from batch to batch, and of course off flavours from poor control over the fermentation processes. Brands that solve these problems have the potential to really excel in the market and gain more market share.

One of the most significant quality issues is the presence of high alcohol levels in some kombucha brands. Kombucha is a naturally fermented drink, and as such, it can contain trace amounts of alcohol. However, the Alcohol and Tobacco Tax and Trade Bureau (TTB) has set a limit of 0.5% alcohol by volume (ABV) for non-alcoholic beverages which is a reasonably common global standard. Some brands have been found to exceed this limit, some at >3% ABV causing taxation issues in some states & concern among consumers who may be sensitive to alcohol or those who are avoiding it altogether. I don’t think this image is helping the category especially in a beverage world moving more towards low and no alcohol products.

Another quality issue that both retailers & consumers are experiencing is the short shelf life of kombucha. Because much of the kombucha in the market is a live and active drink, kombucha can continue to ferment and change over time, leading to changes in flavor & aroma and not in a positive way.

Inconsistency from batch to batch is also a significant quality issue in the kombucha market. Due to the nature of fermentation, each batch of kombucha can vary in flavor & aroma. While the hardcore purist will tell you that’s just how kombucha is, it is however extremely hard to build any brands when every experience the customer has is different.

Brands that solve these quality issues have the potential to excel in the American kombucha market. By ensuring that their products meet the TTB's 0.5% ABV limit, brands can offer peace & confidence to consumers. Extending the shelf life of their products can reduce waste and increase customer satisfaction. Implementing consistent quality control processes can ensure that each batch of kombucha has the same high quality, which can lead to brand loyalty and repeat business. Finally, having better control over the fermentation process can result in a delicious and refreshing drink that keeps consumers coming back for more.

Consumers think the calories & caffeine in kombucha is too high

As consumer awareness of the negatives impacts of a high sugar diet increases, so does the growing demand for low-sugar, Low-calorie and sugar-free beverages. This can be seen clearly in a huge surge in seltzers and health soda alternatives like Poppi in recent years. Consumer trends are changing and there is now a huge opportunity for new innovative kombucha brands that offer mainstream delicious low-sugar or sugar-free options. We are already seeing some brands offering “kombucha light” and I thiink this trend will continue.

The sugar content in traditional style kombucha can vary widely, with some brands containing upwards of 10 grams of sugar per 100ml and the consumer is now all too aware of this.  As consumers become more health-conscious, there is a growing demand for low-sugar or sugar-free beverages. According to a study by the International Food Information Council (IFIC), 76% of consumers are actively trying to limit or avoid sugar in their diets. Additionally, the same study found that 60% of consumers are trying to limit or avoid artificial sweeteners.

In response to this demand, some kombucha brands are now offering low-sugar or sugar-free options. These brands are using alternative healthier sweeteners such as stevia, monk fruit, or erythritol to sweeten their products. Some brands are also using fruits and vegetables to add natural sweetness to their kombucha.

These low-sugar or sugar-free kombucha options are not only appealing to health-conscious consumers, but they also offer a mainstream appeal, again broadening the market for kombucha. By offering delicious, low-sugar or sugar-free options, kombucha brands can attract a wider audience who may have been hesitant to try kombucha in the past due to its high sugar content.

Hard Kombucha is growing

The alcoholic hard kombucha market experienced a massive growth during the COVID-19 pandemic. As more people turned to at-home drinking and healthier options, hard kombucha became a popular choice.

According to industry reports, the hard kombucha market saw a 200% increase in sales in 2020. This growth is expected to continue in the future, with new brands entering the market to meet the demand. The market is forecasted to reach $1.5 billion by 2027, with a CAGR of 24.8% from 2020 to 2027.

One of the main reasons for the growth of the hard kombucha market is the changing drinking habits of consumers. With the pandemic, people are more health-conscious and are seeking out beverages that offer health benefits.

The growth of the hard kombucha market has also led to an increase in competition, with many new brands entering the market, but it looks like there is space for a lot more since hard kombucha today only makes up such a tiny part of the overall alcoholic beverage market.

These leading brands are offering flavor forward where the flavouring of the product is much more dominant that that kombucha flavour, some feel this could be leading to more consumer adoption..

The rise of health-conscious drinking habits, the popularity of kombucha, and the increasing competition are all contributing to the market's growth. With the entrance of new brands and innovative flavors, the hard kombucha market is poised for continued success in the years to come.

Is the kombucha market too focused on Percieved health benefits and probiotics?

Many leading kombucha brands have marketed their products primarily as a health drink, touting the benefits of its probiotics, antioxidants, and other nutrients. However, maybe this narrow focus on health could be limiting the potential of kombucha as simply a tasty and enjoyable beverage.

While the health benefits of kombucha are certainly noteworthy and is the main reason I was originally drawn into this industry, it is important not to overlook the other reasons why people might enjoy drinking it. Kombucha has a unique and complex flavor profile that can range from tart and sour to sweet and fruity. It is also naturally carbonated, giving it a refreshing effervescence that many people find appealing. These qualities make kombucha a great alternative to soda or other sugary beverages, especially for those who are looking for a healthier option.

By focusing solely on the health benefits of kombucha, many brands are missing out on the opportunity to appeal to a much broader range of consumers & create exciting brands for those just looking for a delicious and enjoyable beverage that fits into their overall healthy lifestyle.

Kombucha is and can be much more than just a health drink. Its unique flavor profile and versatility make it a great alternative to alcohol, soda and a fun and enjoyable beverage.

In conclusion

While this article may at times seem critical and pessimist, I am however at my core and optimist. I see such huge opportunity for innovative and open minded entrepreneurs who can look objectively at the kombucha market, not as it is but what it could be.

The American kombucha market is facing some big challenges it needs to overcome but this offers some significant opportunities for transformational growth into the mainstream. The brands that solve the big issues and make kombucha more accessible, affordable, and visible may very well take the lion's share of the market in the years ahead as it goes more and more mainstream.

It really is an exciting time for this industry!

At Good Culture Kombucha we are helping over 150 kombucha brands & copackers all across the world take their business to the next level with our pre-fermented kombucha ingredients we call Manna-K. We offer a game changing solution for ambitious brands & copackers and are often the catalyst for some serious growth. We help them improve their quality, scalability and reduce their costs of production, making it more affordable for consumers and easier for retailers to stock the product. If you would like to learn more please do reach out and Book in a Video Call.

Kombucha Brand Health-Ade Sued Over Product Alcohol Issues.

Kombucha brand Health-Ade and Whole Foods Market have reached a settlement to conclude a class action lawsuit filed last year by customers who alleged the company’s beverage products were mislabeled as non-alcoholic.

According to a motion filed on Friday in U.S. District Court for the Northern District of California, Health-Ade and Whole Foods are seeking to settle all claims for approximately $4 million ($3,997,500), including settlement administration, incentive awards, and attorneys’ fees and expenses.

In the complaint, originally filed last March and amended in May, the plaintiffs, Gabriela Bayol and Bruce Verbeck, alleged that Health-Ade Kombucha “has passed off its entire line of… beverages as non-alcoholic, when, in fact, the beverages contain more than twice the alcohol allowed for non-alcoholic beverages.” The complaint also stated that sugar levels have been understated in order to position the products as healthy alternatives to alcohol, while contributing to the continued fermentation of the drink in store coolers.

The suit claimed Whole Foods “materially contributes, controls and abets the fraud and misleading advertising” by placing the drink on shelves next to non-alcoholic beverages. The natural retailer was also part of a similar 2017 class action suit alongside GT’s Living Foods (formerly Millennium Products Inc.) that resulted in an $8.25 million settlement.

However, Whole Foods has no obligation to contribute any funds to the total financial settlement in the Health-Ade case, according to court documents.

According to the terms of the settlement, individual class members will be eligible to receive a cash payment of $4 for each product purchased during the class period without proof of purchase, up to $40 in total. Class members with proof of purchase can receive up to $80 in cash. According to the plaintiffs’ attorneys, the weighted average retail price of Health-Ade kombucha throughout the class period is $3.83.

The settlement also requires Health-Ade to add a warning to its package labels stating: “Kombucha should not be consumed if left unrefrigerated for an extended period of time. Pregnant/breast feeding? Consult your doctor. Due to natural fermentation, there may be trace amounts of alcohol and small pieces of culture.”

The company also agreed to “effectuate a formulation change” to control variability of alcohol and sugar content, and to regularly test its products using a third-party laboratory to ensure compliance.

Bayol and Verbeck will also each receive a $2,000 incentive award.

According to court documents, plaintiffs in the case deposed a representative of Health-Ade on a range of subjects, including alcohol and sugar content, beverage formulation, and the company’s financial health. The plaintiffs also commissioned independent lab tests for sugar and alcohol, and interviewed a Health-Ade distributor regarding potential issues related to refrigeration and cold-chain transportation.

Representatives for Health-Ade declined to comment, citing pending litigation.

Representatives for Whole Foods did not respond to a request for comment.