Daina Trout’s Health-Ade journey

The August 20, 2020 Business Insider (subscription required) profiles Health-Ade co-founder Daina Trout. With a headline that many who’ve bootstrapped a small business can relate to Daina Trout was living on $7 a day — now, her drinks brand brings in $100 million a year. She shares a step-by-step breakdown of how she grew her business. The interview outlines four stages of the growth of the company that today is in “more than 35,000 stores”.

Stage 1: Pre-investment

This is when they lived on $7 a day and worked 12-hour days. (Not many with a masters in nutrition from Tufts struggled like that!)

Stage 2: Post-investment 

They’ve raised over $50 million in investments over the past eight years and got Health-Ade into to 5,000 stores.

Stage 3:  Getting to $50 million in revenues

With 50 employees, Health-Ade was now in 15,000 stores.

Stage 4:  Getting to $100 million in revenues

With 150 employees “Health-Ade became the number one kombucha brand in absolute dollar growth, and contributed 80% of the category’s growth in 2019.”

More on Daina’s journey

You can learn more about the Health-Ade story below. It’s fascinating to see numbers that reveal their growth path, and how they vary between publications.

• In their own words: “Health-Ade kombucha was started in 2012 by a husband, wife, and best friend in a true farmers’ market start-up story: a small credit card and a big dream to make REAL FOOD and bring only THAT to the commercial shelf.”
• This March 2016 Fortune article reports the $7 million in venture funding from CAVU Venture Partners. “The four-year-old company currently has products in over 3,000 stores in 42 states, including in over half of the Whole Foods regions, and plans to use a lot of the new cash to build a new manufacturing facility in Torrance, California.”
• A May 2018 Almost 30 podcast sharing how they attracted investor’s interest at the farmers’ markets where they started out.
• A July 2018 Self Love Sunday blog post where Daina states “today we are over 200 employees strong, in 12,000 accounts nationwide and will sell over 3M cases this year.”
• In August 2018 Food Navigator report they were in 15,000 stores (a jump of 3,000 from a month earlier).
• A November 2018 CNBC profile reveals by that time they were in 16,000 stores (adding 1,000 stores a quarter).
• This February 2019 Money Matters interview which confirms their shoe-string start-up income “we paid ourselves a meer (sic) $300 a month in the beginning.” OK, OK, that’s $10 a day, not $7 — a difference of around the cost of a bottle of Health-Ade.
• A March 2019 Pattern Recognition podcast we’re previously reviewed on Booch News, noting they were in 18,000 stores (up 2,000 over the previous quarter).
• The July 2019 Bustle article highlights the career twist “The truth is, we were making kombucha because my husband [Health-Ade co-founder Justin Trout] was losing his hair.” (Something must have worked out for him, as the picture below shows…)
• The June 2019 Inc profile that shares “The company has more than $30 million in funding and the founders say it is nearing profitability.” Implying that they’ve raised $20 mil in the last year (assuming Business Insider is accurate in the Stage 2 number quoted above).
• This July 2019 Well Insiders profile that reveals “We started with $2,000 and then gave everything we got back to the business. It wasn’t until we received investment that we started to pay ourselves two years later.” (The $300 a month reported by Money Matters was just walking around money…)
• In this September 2019 LA Times profile highlighting the 2013 investment by First Beverage Group: “They had been following the kombucha market. They were our first big investor. One of their managing partners tried us, saw my mobile phone on the bottle and called.” They sell into 26,000 stores.
• This February 2020 Snacknation podcast which shares that they have 250,000 2.5 gallon glass jars in their (hopefully earthquake-proof) Southern California facility. She shares the “worst I feel is after each of the five fundraising rounds I’ve been through,” since each involves giving away part of what she’s built.
• This March 2020 Founder Hour podcast interview gives more details on outside investment, starting with the first $100k friends and family loan followed by the First Beverage Group private equity $2.5 million investment, who turned to Health-Ade when a deal with Kevita fell through. At the time they were doing under a million in sales. They are in 30,000 stores selling close to 5 million cases in the year. “Now we have 250 people” (contrast with the number Business Insider reports).
• This July 2020 dot.LA podcast which claims Health-Ade is “generating over $150 million in revenue across 30,000 stores.” Meaning the Business Insider headline is off by only $50 million (!)

Legal challenges

Health-Ade has faced legal challenges on it’s path to becoming “The best tasting and highest quality kombucha you can buy.”

Food Navigator report that in October 2019 Health-Ade settled two lawsuits for $4 million over sugar and alcohol content (while denying any wrongdoing). The website Top Class Actions notes that “The settlement will award $4 per bottle of Health-Ade Kombucha purchased to consumers who file a valid claim.”

In response, Health-Ade made certain “formulation changes” to it’s production process and changed the wording on the labels.