When something long popular in Southern California finds traction in brownstone Brooklyn, is it evidence of a truly national trend? Or just a reminder that Southern Californians and Brooklynites have a lot more in common with each other than the rest of us?

The question was on my mind the other night as I surveyed the scene at a new hard kombucha taproom in the terminally gentrified heart of post-hipster Williamsburg. The place used to be a Greek tapas restaurant, but its current tenant, hard kombucha heavyweight JuneShine, has transformed it into a little slice of San Diego, replete with breezy decor, gauzy bungalow lighting, and a surfboard mounted above the front cooler. It all verges on California cliché, but the well-heeled Friday happy-hour crowd didn’t seem to mind. A friend, Mike (you may recall him from non-alcoholic craft beer’s Allbird’s paradox) soon joined, and we ordered colorful flights of JuneShine’s 6 percent alcohol-by-volume hard kombucha. “It seems like people who like kombucha wouldn’t necessarily like hard kombucha,” Mike said, sipping a grayish liquid. He grimaced. “I don’t know about this one.”

Full disclosure: I don’t know about kombucha, generally. I don’t like the sour taste or the biting acidity or the vinegary smell, and SCOBY upsets me as a concept. But personal preferences aside, in our present age of blurring category lines and soft-to-hard brand extensions and alcopop redemption arcs, covering the American beer business requires looking past the wholesome beverage brewed with malt, hops, water, and yeast into beverage categories emergent and underappreciated. “Beyond beer,” as they say in the business.

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It’s hard to think of a beverage more “beyond beer” than hard kombucha, a 21+ version of the ancient beverage that has for at least half a decade been heralded by boosters as a “better-for-you” heir apparent for the dollars that LOHAS (members of the “Lifestyle of Health and Sustainability” demographic, in marketing jargon) aren’t spending on BOLAs (Boring Old Lagers and Ales, in Hop Take jargon.) “Instead of an alternative to alcohol, hard kombucha are now an alternative alcohol,” proclaimed beer journalist Josh Bernstein, writing for Wine Magazine in 2018. In 2020, the trade publication Shanken News Daily reported that sales of the hard beverage in the United States had leapt from $1.7 million in 2017 to $12 million just two years later, and “are expected to rise exponentially over the next five years.” Massive macrobrewers like Anheuser-Busch InBev bought their way into the category; big craft players like Sierra Nevada Brewing Co. developed their own hard kombucha brands to compete. And the money! Investors have plowed nearly $100 million into hard kombucha brands like JuneShine, Flying Embers, and Jiant, lured by fruit-forward flavors, health haloes, and eye-popping growth metrics.

But for all the hoopla, hard kombucha remains a relatively niche category. Maybe Mike’s observation — that gut-health obsessives and #wellness acolytes who have helped turn non-alcoholic kombucha into a nearly $2 billion market might not be keen on the fermented tea when it contains real ABV — is a factor. Or maybe hard kombucha is just a *Red Hot Chili Peppers voice* dream of Cali-fermentation at home in drink coolers west of the Rockies and east of the Hudson River, but only a few places in between. “From a geographic perspective, it is definitely bigger on the West Coast,” 3 Tier Beverages consultant Mary Mills tells Hop Take via email, noting that nearly half the segment’s volume comes from the Golden State. “However, there are some growth pockets in the South and East Coast that are helping stem some of the declines from more mature markets.”

After explosive growth last decade, the category has declined a bit recently. According to total outlet scan data from NielsenIQ, hard kombucha was down 6.4 percent in dollars and nearly 10 percent in volume in 2022. It could be worse. “Dollar sales look a little better mostly due to price increases [at the] end of last year, with average price up 3.9 percent,” says Mills. (Note: JuneShine and Jiant are both 3 Tier Beverages clients.) Dollars and volume tend to have an inverse relationship in this business: When you raise one, you can expect the other to sink apace. If hard kombucha is going to earn a place on mainstream American drinks menus, it’s currently heading the wrong direction.

Hard kombucha still sells well in bougie retailers like Whole Foods, where “it’s growing faster than any segment [has been] for at least a year now,” as global category merchant for beer & spirits Mary Guiver told wholesalers at the National Beer Wholesaler Association’s annual conference in October 2022. And some big-out-West hard kombucha companies are trying to establish footholds beyond the segment’s Golden State stronghold. Flying Embers, based in Ojai, piloted a temporary taproom in Boston for about a year, closing in September 2022 to make way for the expansion of a local beer brewery. “We have been approached with a few other taproom-esque opportunities on both the East Coast and West Coast, but have no plans to expand in 2023,” Flying Embers chief marketing officer Ryan Giunta told Hop Take in response to emailed questions. Just weeks after its competitor’s Beantown exit, JuneShine announced plans for the Williamsburg taproom I visited last week, boasting a small brewing setup. “We wanted to truly be a craft brewery, not just a tap room,” co-founder Forrest Dein explained to Brewbound last fall.

Whatever it is, it looked to be working on the busy, buzzy Friday night I stopped by. Dein is bullish: “The Brooklyn location is crushing so far for us,” he said in a brief email exchange.

Whether JuneShine’s Williamsburg address will boost the company’s case count on the East Coast — or for that matter, anywhere outside of Kings County — remains to be seen, especially considering the overall segment’s uncertain, uneven geographic uptake. But its hard kombucha is already distributed in over half of all states, and its SKUs are still showing strong retail growth, bucking the segment trend, so… maybe! Besides, “hard kombucha brand” isn’t the only thing JuneShine wants to be anymore. After closing a $24 million Series B fundraise in November 2021, the company announced its plan to diversify into spirits-based canned cocktails, using the strength of its lifestyle brand to elbow its way into a hotly contested but red-hot category. Already available in around a dozen states, JuneShine aims to introduce its vodka- and tequila-based RTDs to another 10-plus markets this year. “Having a more expansive portfolio will give them more opportunities for growth,” Mills says.

Jiant, founded in Santa Monica, is doing likewise, launching hard tea last year even as its foundational hard kombucha line continues to sell well in the lukewarm category. “We don’t really see ourselves as a kombucha company,” Jiant co-founder Larry Haertel Jr. told Brewbound this past summer. “We see ourselves as a modern alcohol brand.” (Sounds familiar!) At Flying Embers, which closed a $20 million Series C round in January 2022 led by spirits giant Beam Suntory, Giunta says spirits-based RTDs “often requir[e] the use of countless fillers and additives to stabilize the liquid within the can, which directly contradicts our ethos,” but clearly sees merit in extending the brand outside its original lane: The company introduced Margarita– and Mojito-inspired canned cocktails made with a fermented base in July 2022.

KYLA, another top-5 hard kombucha brand, may wind up being the exception that proves the rule. Having hewed closely to its core offering and the West Coast region since 2018, the Hood, Ore., firm was acquired this month by Patco Brands, makers of Rancho La Gloria wine-based ready-to-drink Margaritas. Thus, the follow-the-drinker mantra that hard kombucha category leaders seem to have adopted: Either you diversify your hard kombucha company into more conventional, nationally scalable offerings, or you get bought by a company that already makes ‘em. I think that’s good! Hard kombucha may not be your humble Hop Take columnist’s cup of (fermented) tea, but its leading brands’ willingness to use their core offering as a means to more mainstream ends is refreshing after years of craft beer brewers negging the American drinking public for not properly appreciating rauchbier, barleywine, and other niche hobbyhorses before finally acquiescing to hazy India pale ale, hard seltzer, etc. last decade. Give the people what they want!

Will it work? As with everything else in the beverage-alcohol business, drinkers will ultimately decide hard kombucha brands’ mainstream fate, too. After Mike and I gave up on our flights at JuneShine’s Williamsburg redoubt, I approached a trio of women in their mid-20s to ask them what they thought of the brick-and-mortar experience, the flights they’d ordered, JuneShine’s move into spirits-based offerings… all of it. Could hard kombucha make it as a mainstream category? Two at the table, hailing from Dallas and Tampa, were skeptical on the drink’s broad appeal. The third disagreed with her friends: “For sure, it can succeed here!” Then again, she confessed to me, her perspective on hard kombucha might be skewed. After all, she was originally from San Diego.

🤯 Hop-ocalypse Now

With the Super Bowl right around the corner, Molson Coors has released more information on its plan to reintroduce itself to Big Game audiences this year after three-plus decades of bench-warming thanks to Anheuser-Busch InBev’s recently relinquished advertising exclusivity arrangement. And the plan… keeps getting weirder? Not only are the macrobrewer’s heavy-hitting housemates, Coors Light and Miller Lite, “competing” for a single ad slot rather than buying enough air for both; this weekend, the firm announced that viewers can gamblepredict every detail of what will happen in the top-secret spot” thanks to a tie-in with gambling platform DraftKings. Yes, drinking and gambling predicting are addictive, compounding behaviors with serious individual and social consequences, but they’re also fun as hell, so… good luck everyone?

📈 Ups…

Thanks to Voodoo Ranger (and maybe a bit of Fruit Smash?), New Belgium Brewing’s year-over-year shipments were up ~15 percent in 2022… Yuengling, which people still drink, is hoping said people live in Kansas, Missouri, and Oklahoma, where it’ll expand this spring… Molson Coors x Coca-Cola products (Topo Chico & Simply Spiked) grew thrice as fast as the macrobrewer did overall in 2022, yeesh… Virginia craft breweries can almost taste self-distribution as General Assembly advances bill in support…

📉 …and downs

2022 tax-paids show U.S. beer down 4.6 percent by volume, much worse than 2021 (an admittedly “tough comp,” says Beer Institute)… Sierra Nevada Brewing Co. projects 4 percent growth this year after being down 3.5 percent in 2022… Food and Drug Administration confirms CBD still isn’t “generally recognized as safe,” angering advocates…


UPDATE 2/3/23: Due to a communication error, a previous version of this article misattributed quotations from Flying Embers’ executive. They were from Flying Embers’ chief marketing officer Ryan Giunta, not chief executive officer Bill Moses. The article has been updated accordingly.

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