How Canada’s fastest-growing kombucha brand is breaking barriers

Sitting on a beach in Maui, Bucha Brew founder Kara Sam never imagined that her seaside chat with friends about making and selling kombucha would result in a company with product sold in more than 1,000 stores across Canada.

From the beginning, Vancouver-based Bucha Brew was rooted in Sam’s desire to promote wellness to as many as people as possible. She wanted others to experience the same sense of wellbeing that kombucha brought to her.

“I want to offer as many people as possible healthier options in order to live better and feel better,” says Sam of Bucha Brew’s flavourful offerings. “Kombucha makes people feel good when they drink it. It’s low in calories and low in sugar. It has always been my trajectory — to try and help people.”

As fast as Bucha Brew is growing (from producing 400 litres a month in March 2016 to producing 50,000 litres a month today) the company holds firm to its core values of sustainability, transparency and community. From sourcing ingredients — when seasonally possible, local is always the first choice — to environmentally responsible packaging Bucha Brew strives to reflect those values in both production and in its work-place culture. Bucha Brew became the first Canadian kombucha brand to use aluminum cans when it launched the new packaging featuring tropical flavours.  

 

 

Bucha Brew entered the retail market with Whole Foods and distribution steadily expanded from there. Recently landing warehouse distribution with Sobeys and 7-Eleven has taken Bucha Brew to the next level. It is now the fastest-growing Canadian kombucha brand and the country’s third-largest kombucha company with projected sales of more than $2.2 million for 2019.

Meeting the growing demand for Bucha Brew’s beverages (it needs to double production by 2020) while pursuing new distribution opportunities creates exciting challenges for the company — one of which is seeking an infusion of capital to fund that expansion.

In keeping with Sam’s straight-forward and transparent approach to business, she has opted for a more unorthodox route to raise the funds: equity crowdfunding with FrontFundr

“I like equity crowdfunding because it’s disrupting early stage venture investment, providing an alternative to angels and venture capitalists,” says Sam. “While we are still working with angels through Front Fundr and talking to funds, they are not used to having the terms set out for them. It also really helps build a loyal set of investors who feel part of the venture.”

Sam wanted to avoid more debt — they have a loan with Vancity — she figured a limited equity offering of 20 per cent would provide the funds they needed to meet Bucha Brew’s expansion goals.

Fundraising offers a greater range of investment (for example, a lower minimum threshold). As for the investor’s return, Sam says it is a longer-term investment of five to seven years. She notes that investing in private companies can provide several possible personal tax benefits.  

Sam envisions various options of how an investor will realize a return on their investment. One could be a strategic sale. As the functional beverage and food category is rapidly growing, large long-standing food companies — for example General Mills says Sam — are looking to acquire established companies. 

There is also interest from the cannabis sector and large breweries are looking at kombucha companies as a way to diversify, Sam says.

“Having a strategic sale would be an ideal situation for everyone in this investment,” she observes.

A second option might be an eventual IPO or management buy out. And lastly, Sam say that as she projects that BB will be able to attain a high level of profitability, keeping the investors on board and offering regular dividends is not out of the question.

At this point she says that all the options are on the table and no one can predict the future. 

But there is one certainty and that is Bucha Brew is moving forward as planned. For Sam, it’s very clear and simple.

“We are building a great company in a thriving market and having a ball.”