MIDDLEBURY — In a market awash with startup kombucha makers, Aqua ViTea founder Jeff Weaber is fighting hard to set his company apart.
A graphic artist on staff at Aqua ViTea applies colorful personality to the company’s products, ingredients and swag. Aqua ViTea just rolled out a bottled hard kombucha and a CBD kombucha, and Weaber has set up a tasting room.
And, with a $1.5 million machine from Australia, Weaber aims to settle any questions about how much alcohol remains in the fermented tea drinks that are sold in 25 states.
The room-size machine, called a spinning cone column, was developed to reduce the alcohol content in wine without degrading the flavor. Aqua ViTea has had it in place since 2014, but it continues to serve an important purpose in distinguishing the company in a chaotic new marketplace.
Weaber sees the alcohol issue as the most critical in the industry — and as an opportunity to set his Middlebury brewing company apart from the competition.
“There is still a con being played on consumers,” Weaber said. In many cases, he said, kombucha sellers are claiming their products are alcohol-free when they’re not. Sometimes they’re not even kombucha, he added — just carbonated apple cider vinegar with added probiotics and flavoring.
“Over 70% of the kombucha products you find on the market now are mislabeled intentionally,” he said.
Life in the hippie trades
Weaber got his start in the world of kombucha as his wife attended a school of naturopathic medicine in Oregon in the 1990s. Weaber, who was working in organic farming and woodworking, was strongly influenced by what he was learning about nutrition in Oregon and by the naturopath curriculum.
“It was at that time we started realizing there’s an epidemic of people drinking soda and how awful it is for you,” he said. “When we discovered kombucha, it was that ‘aha’ moment.”
He compares the consumption of soda now to the days when people smoked on airplanes — a practice that came to seem unthinkable to many.
The couple moved to Middlebury in 2005, and Weaber sold his home-brewed kombucha at the Middlebury farmer’s market, buying and pouring out Santa Cruz juice so he could use the refillable glass 32-ounce bottles.
“In the early days, every $5 I made went to buy two more glass jars of Santa Cruz to dump out,” he said. He eventually moved a keg into the Middlebury Coop.
Working with Hardwick farmer Todd Hardie, Weaber introduced elderberries to the black and green tea.
In 2014, Aqua ViTea took over the 60,000-square-foot Woodchuck Cider space when that company moved to larger quarters nearby. Now Weaber’s company is venturing into hard kombucha, a drink sold currently in Vermont and entering the New York, Maine and Massachusetts markets next month. The company also sells a kombucha drink that contains CBD.
Aqua ViTea shows the company’s political stripes through flavors like Peachmint and Blue Bernie.
Weaber, the son of two entrepreneurs, said natural food CEO mentors he met through the Vermont Sustainable Jobs Fund helped him find his way as the company grew.
“It’s easy to get stuck staring at balance sheets and profit and loss statements,” he said. “Some of my CEO mentors reminded me to pick my head up and keep my perspective on the whole business and where it is going, and not get stuck looking at your feet. That’s been a huge lesson for me.”
A new entrant in a crowded market
While kombucha has been brewed informally for years, only in the last decade or so has it been widely commercialized as a substitute for soda and other sugary beverages that have lost favor among parents and public health officials.
By 2010, several Kombucha brands were available in supermarkets and natural food stores. Foodnavigator USA, a company that researches the beverage industry, said sales of kombucha and other fermented beverages rose 37.4% in 2017.
“Local, regional and national brands have flooded the market, yet the thirst of a nation suffering from chemical toxification has created a demand that continues to grow at an appalling pace,” says Kombucha Brewers International, a trade group based in Beverly Hills. There’s a vast untapped market for the drink, the group says, because in many parts of the country, the beverage hasn’t yet been discovered.
Weaber, too, sees a bright future despite the fact that new companies continually enter the market.
“I used to feel threatened every time I read about another kombucha company starting, and then I stepped back and remembered all the challenges we had to go through to get where we are today,” he said. “It’s easy to have an idea; it’s difficult to scale a business.”
Meanwhile, he’d also like to see regulators rein in competitors whom he said aren’t being clear about their processes or their finished product.
“At any stage of an emerging industry, there’s not a lot of information being shared between producers about definitions,” he said. “Unfortunately, a lot of these companies are just lying to their consumers, claiming it’s kombucha when it’s really not.”
The alcohol factor
A cloud of controversy about alcohol content has hovered over kombucha for at least a decade.
Kombucha is made with tea, sugar, and a live colony of bacteria and yeast. Alcohol is a byproduct of the fermentation process that produces the fizzy beverage. It’s difficult to predict or control how much alcohol will remain at the end of the brewing process, especially on a large scale.
Accordingly, the matter of alcohol content is still highly unsettled. While Kombucha Brewers International maintains that there are only traces of alcohol in the beverage, food groups and consumers have complained – sometimes in court — that some of the products on store shelves have a high alcohol content, in some cases as high as a light beer.
In June, Whole Foods and the Kombucha maker Health-Ade agreed to pay almost $4 million to resolve claims that their kombucha beverages contained more alcohol and sugar than their labeling stated.
Weaber and other brewers found out unexpectedly in 2009 that their own kombucha had a higher alcohol content than they thought. To be sold as a non-alcoholic beverage, a drink must have 0.5% or less alcohol content. The incident prompted distributors to recall kombucha from stores around the country.
“The more organisms you have, the more unpredictable it is,” Weaber said. “With beer and wine, you’re usually using one type of yeast and it’s very repeatable. With kombucha, you have potentially five different dominant organisms in there, constantly fighting for center stage. Your results are going to change depending on who is winning that battle.”
That’s why Weaber decided to invest in the spinning cone column. Now the company brews 50,000 gallons of tea every month, using 28,000 pounds of black and green tea leaves. Aqua ViTea has just under 40 employees and the capacity to produce 1 million gallons per year, although it’s only producing about half that now. Apart from the hard kombucha, it all has less than 0.5% alcohol, Weaber said.
Some of the alcohol that is extracted goes into a vodka that AquaVitea makes with its neighbor, Appalachian Gap Distillery; the rest is stored in huge tanks outside the headquarters, available for purchase by anyone who needs it. Right now, Weaber is talking to a customer who uses it for herbal tinctures.
Competing with Coca Cola
Aqua ViTea is a small player in a large, chaotic market. Large companies like Coca Cola have invested in some kombucha makers, giving those products superior access to marketing might and store shelves. According to SPIN, a market analysis firm for the natural products industry, U.S. retail sales of refrigerated kombucha and other fermented beverages were $600 million in the year ending in August.
The research group told attendees at the KombuchaKon conference last May that they should expect to see competition in the market become increasingly fierce.
Weaber, who describes his company as comparatively middle-range in size, is girding for that competition. Among other things, he’s eyeing large retailers like Costco and Target.
“From the beginning, the box stores looked like the evil empire, but now that’s the place where we reach those consumers who are becoming educated around healthy choices,” he said. “You definitely have to reach a certain scale, and have to have good manufacturing practices in place, which can be a real hurdle for startup food companies. We’ve achieved that level now.”
To get to the next growth stage, Weaber is going to have to find some middle-stage capital. The company took on debt early that has restricted him from borrowing subsequently.
“You think if you sell equity, that equity is going to own you,” he said. “It can be just as bad on the debt side. That was definitely something we ran into.”
Last year, Aqua ViTea received $300,000 from the Flexible Capital Fund to support the purchase of a bottling line. The fund chose Aqua ViTea in part because the company focuses on buying its ingredients locally and supporting other Vermont businesses, said Janice St. Onge, president of the Montpelier fund.
St. Onge said about 67% of Aqua ViTea’s annual expenses go to regional products and services.
Also, “Aqua ViTea has made a major commitment to extracting the excess alcohol from its Kombucha and is one of only a few Kombucha companies in the country to do so,” she said.
Weaber is also focused on the educational side of the business: introducing the uninitiated through novelties like coloring books that explain the kombucha-making process. Ultimately, Weaber’s goal is to see kombucha replace soda.
“All sugary drinks that are not helping the health of kids, I’d like to see go away,” he said.
