Beverage Business INSIGHTS:
LA-based private equity shop First Beverage Ventures is ready to enter kombucha realm with investment in small local play, Health-Ade. Glass-bottle brand was created in Santa Monica by husband-and-wife team of Justin and Daina Trout and friend Vanessa Dew, as small-batch play employing local, seasonal farmers’ market fruit. They’re self-producing in Santa Monica (with a move to bigger digs in Van Nuys imminent) and offering year-round Original flavor and seasonal flavors like Ginger-Lemon, Pink Lady Apple, Seasonal Plum, California Grape, Pomegranate and Cayenne Cleanse. Minority investment is first transaction by First Beverage Ventures, private-equity arm of First Beverage Group launched earlier this year with limited partners that include bev distributors and Coca-Cola’s Venturing & Emerging Brands incubator unit. “There’s nothing more exciting than discovering a wonderfully packaged brand that is built on premium-quality ingredients and run by an outstanding leadership team,” noted Tom First, First Beverage Group mgg partners who’ll help guide development of Health-Ade. Kombucha, of course, has been object of fascination among investors because of its fervent following, purportedly beneficial health benefits, and home-brewing and on-premise culture that bears comparisons to craft brewing. But segment’s intriguing potential has been counterbalanced by difficulty of scaling up, refrigerated supply chain, and lingering issue of keeping fermentation from exceeding legal limit of 0.5% alcohol for items labeled as non-alcoholic.
In chat with BBI this morning, Nantucket Nectars and O Water creator First said First Beverage has been determined to play in probiotic category that offers broad diversity in flavors, ingredients and formats like kegs, growlers, bottles and cans. “We were looking for incredible liquid, very strong leaders, and brand and packaging with halo capability and diversity,” Tom said. Health-Ade has carved out premium position in demanding market, staying away from either fringe, “hard-core hippy” or “barely kombucha.” “We knew we were going to be in this category, and went out and looked for the best possible branding and liquid we could find.” Tho co and presumably initial investment were small, eyeing longer-term outlook, “our goal is not to be a little company in LA and this is a significant investment for us,” First emphasized.