With gut health becoming a key focus for an improved immune response during the COVID-19 pandemic, consumers continue to shift their focus towards foods and beverages with functional advantages. This trend will prove beneficial for the kombucha market, which is expected to exceed $7.9 billion by 2027, as per estimates from a Global Market Insights Inc. (GMI) report.
While it has started to gain more popularity recently, kombucha (fermented probiotic tea drinks) has been in existence for more than 2,000 years. From its origins in the Far East to its use as a peasants’ beverage in Russia and Eastern Europe, kombucha has undergone a long and eventful evolution over the years. In recent years, kombucha has been making rapid progress as a fast-growing carbonated ready-to-drink functional beverage alternative in the health food domain.
Local Kombucha Breweries vie for Expansion in North America
Despite numerous big brands like Coca-Cola and Pepsi venturing into functional kombucha beverages recently, the focus is gradually shifting towards local breweries, especially in the North American kombucha industry, which is set to cross $3.34 billion by 2027, according to GMI projections. Many of these breweries are making targeted efforts to expand their horizons and make their mark on a national scale.
For instance, one of the foremost kombucha breweries in the U.S, JuneShine, received substantial Series A funding from various early-stage investors and celebrity ambassadors in June 2021. This funding was part of its aim to boost its growth across the nation and promote the consumption of transparent, organic, and sustainable hard kombucha beverages.
In Canada, meanwhile, CPG Health Beverage firm Cove Kombucha raised over $4.5 million in funding through Canaccord Genuity, an investment bank, to expand its operations across Canada, venture into the United States kombucha market, and further enhance its growth in North America.
More recently, in January 2022, Chicago-based Beam Suntory led a Series C funding round worth $20 million for Ventura-based kombucha brewery Flying Embers, to help scale the brand of the hard seltzer and hard kombucha producer nationwide.
Clean-label Functional Beverages Gain Favor Among Consumers
Since the novel coronavirus outbreak was declared as a pandemic in early 2020, consumers have become increasingly focused on their health and general wellbeing to ensure a strong immune response to the virus. According to numerous research efforts over the past two years, a healthy gut microbiome plays a crucial role in this, by ensuring proportionate responses to bodily threats. As a result, gut health improvement has become a major focus area for consumers, leading them to turn towards naturally sourced clean-label functional beverages like kombucha tea.
In fact, GMI reports suggest that the kombucha industry could surpass $6.5 billion by 2027 from the organic product segment, given the growing popularity of the natural probiotic drink.
A research study conducted by Washington State University researchers with support from USDA’s NIFA (National Institute of Food and Agriculture) and AFRI (Agriculture and Food Research Initiative) project showed consumers’ willingness to pay premium prices for products considered clean-label. Leading brands have started to recognize this and are thus making conscious efforts to introduce organic probiotic beverages like kombucha, designed to demonstrate beneficial health attributes.
For instance, in February 2022, Rowdy Mermaid introduced a novel range of functional beverage products, including the Hibiscus Pulse kombucha. Made from a botanical blend of hibiscus flower, chipotle, and cassia, among other regenerative and organic ingredients, the kombucha drink was designed to address cardiovascular health and improve circulation.
Hard Kombucha Emerges as a Key Functional Beverage Innovation
Amid a persistent shift toward functional beverages, the kombucha industry, as a whole, has gained rapid momentum over the years. In particular, a highly sought-after functional substitute for beer and hard seltzer has recently emerged – hard kombucha.
According to Kombucha Brewers International reports, the sales of hard kombucha have grown from $1.7 million to over $12 million between 2017-2019.
Unlike regular kombucha, which contains only trace amounts of alcohol, hard kombucha is left to ferment for a longer period of time, allowing it to serve as a more functional and healthier alternative to conventional alcoholic beverages like beer.
In March 2021, Texas-based Four Corners Brewing Co. introduced a new range of alcohol-based kombucha seltzers under its BuchaLada brand, free from gluten, containing 120 calories and 4.5 percent ABV (alcohol by volume).
A similar move was made by hard kombucha producer JuneShine in August 2021, when it partnered with San Diego-based Stone Brewing to launch StoneShine, a boozy kombucha drink flavored with stone fruits and hops. The limited-edition functional beverage, rich in antioxidants and vitamins and possessing probiotic, organic, and non-GMO attributes at a six percent ABV, was designed as a way to bridge the gap between craft beer and kombucha enthusiasts.
Indeed, the global health crisis created by the COVID-19 outbreak shed significant light on the importance of gut health in immunity building, bringing functional beverages to the fore as ideal health-boosting solutions. With massive beverage brands and local breweries alike jumping on the bandwagon in recent times and introducing innovative beverage lines, kombucha is paving the way towards a more sustainable, health-focused food and beverage ecosystem in the years ahead.
To learn more about the recent kombucha market report from Global Market Insights, visit GMInsights.com/industry-analysis/kombucha-market.
Saloni Walimbe – a content writer and researcher with Global Market Insights Inc. – follows her passion for content creation by penning insightful articles related to global industry trends, business news and market research. Global Market Insights Inc is a global market research and consulting service provider, offering syndicated and custom research reports along with growth consulting services. The firm offers insights and market data, designed and presented to aid strategic decision making.
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