Selling Itself: The Inside Story of House Kombucha

Interview: Rana Chang, House Kombucha, San Leandro, CA

House Kombucha is located, quite appropriately, on Teagarden Street in the San Francisco Bay Area city of San Leandro. Booch News visited the company at the end of 2018 and met with founder and CEO, Rana Chang.


We interviewed Rana in the brewery tasting room. An eight-keg system allows customers to fill their growlers with exclusive seasonal brews available only on tap. Some report driving over an hour to San Leandro to get their ‘booch.

Start-up vision

In the summer of 2009 Rana was a newly minted law graduate who had just passed the bar. The economy was slow, so rather than pursue a career in law, she took the plunge and started brewing ‘booch.

She was inspired by mother—who had supported the family by brewing kombucha when Rana was a child.
 

Rana had no funds.  But she had a strong belief in the rewards of owning a sustainable business and vision for what kombucha could become.

She got her start selling in a local farmers market with a couple of buckets, a sleeve of paper cups, a folding table and a dry erase board.

Her vision was to sell refillable growlers to customers, and kegs to restaurants, bars and cafes.  For sustainability and environmental reasons, she wanted people to enjoy her kombucha by the glass, not the bottle. 

From the start, she saw kombucha as a social beverage, complex and refined, not just a healthy sports drink.  Like companies such as Left Field Kombucha and Real Kombucha in the UK, she wanted the best hotels and eateries to have in-house kombucha on tap.  Her focus was on the quality of the product, not on branding her business.  Indeed, bottled beverages and the landfill they produced had negative connotations for her.

Her goal: to make the best kombucha ever and have other people like it so much they would want to put their own name on it and call it their house kombucha.  Hence the name House Kombucha!

Educating the public

Back in 2009 ‘booch was a niche drink, known only to the few. She spent her time educating people who asked “What is kombucha?”

Even today, when people ask, what do you do? I say I run a tea company!

She soon realized that her original vision made no business sense.  People like bottles.  They prefer to have a 16oz. glass bottle even if buying by the bottle costs up to $1 more.  At that time, most hotels and restaurants had no idea what kombucha was.  So she realized that bottling the beverage would be the best way to succeed.

Unfortunately, the farmer’s market shut down after only a month.  So she took a chance and bought $500 worth of glass bottles.  This was a huge investment at that time. She sold cases of 16oz bottles to cafes and grocery stores, traveling from account to account on public transit.

A year later she had built a state of the art fermentation facility and hired her first three employees.

The House brand

She highlights the fact that House Kombucha is a “tea forward” brand – made with white, black, green teas and added herbs.  The focus is on the floral notes inherent in the teas. Unlike many other kombuchas, their product is juice-free – the tea creates the profile and extra ingredients accentuate the flavor.

Rana believes kombucha needs to stay true to its roots as a craft brewed beverage and not try and “grab the Red Bull vitamin water market”.  She has seen her customer base in the San Francisco Bay Area change over the years. The House Kombucha brand has been consumer-driven, without the need to advertise and “force acceptance onto the market”.

Following an investment in advanced brewing and bottling equipment, she’s now looking to take advantage of the greater capacity. However, while open to the idea of partnering to expand nationally, she’s happy to stay a local brand.

Rana acknowledges that smaller brands ride the coat tails of the big brands. The bigger brands, with their hefty marketing and sales budgets, drive the market.  Once the shelves open up at Safeway and elsewhere, retailers see the demand for kombucha and stock local brands like House Kombucha.

Quality Product

Rana is proud that House Kombucha continues to refine and improve the product.  

We’ve the highest quality that we’ve ever had right now.  Next year is going to be better. Our new processes get more flavor out of the tea and produce a really beautiful tasting drink. We have a much better shelf life. There’s more consistent carbonation and better packaging. All those pieces have been dialed in—that’s something I’m very proud of.

In addition to creating a consistently great tasting brew, Rana has sourced really good organic ingredients. House Kombucha is organically certified.

They’ve found the right suppliers for their fruit and a vegetable based ingredients. This gives the brew a consistent flavor, and keeps the product from over-fermenting when on the shelf.

Overcoming challenges

Rana has had to address the challenges faced by any brewer who wants to scale production. These include producing enough starter liquid.  This isn’t something that can be done overnight. Creating quality starter takes time. It also takes time to move the brew to bigger vessels, install better pumps, and address the many technical aspects of production.

House Kombucha also had to overcome packaging issues, such as the time a manufacturer sent caps that didn’t exactly match the bottles used. Due of leaks, they had to recall bottles that has shipped. The product was not an issue, but consumers had to be reassured and trust rebuilt.

The future

Rana was one of the women who run kombucha companies at the recent BevNet conference in Santa Monica.

BevNetConference
From left to right: Daina Trout, CEO and co-founder, Health-Ade Kombucha; Rana; Hannah Crum, aka “The Kombucha Mama”, author and President, Kombucha Brewers International; Jamie Danek, Founder and CEO, Humm Kombucha

The future is bright for these companies. Recent reports state that the U.S. market for refrigerated kombucha and fermented beverages has grown 31.4 percent over the last year, and is now a $700+ million market.

Rana is unequivocal about her focus:

I think the brand is just beautiful and it has sold itself, I’ve been lucky to be in this awesome San Francisco Bay Area, where people appreciate the brand as it is, they recognize it and it’s got this cool underground feel.

She feels a kinship with David Tran, the Vietnamese refugee who made his fortune with Sriracha hot sauce, whose claim to fame is developing a product that sells itself:

To this day, Sriracha still can boast that it has never advertised its products, nor does it employ one single salesperson — the existence of the secret sauce is only spread by word of mouth — the ‘secret’ sauce sells itself.

If you’re in the San Francisco Bay Area it’s well worth taking a trip to Teagarden Street to taste House Kombucha.

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