The Irresistible Factor: Health-Ade co-founder Daina Trout

Of course, you have to fight for your right. Beastie Boys said that, right? You got to fight for your right every single day. I think the people who rest on their laurels, die, especially in consumer because it is so competitive. And if you found something that works, there’s going to be ten people after that the next year or 20 the year after that, and so on and so forth.

Kristi Bridges hosts The Irresistible Factor, a podcast that focuses on brands in the health and wellness space that want to become irresistible to consumers, investors and retailers.

Her interview with Health-Ade Kombucha co-founder Daina Trout covers a lot of ground.

Health concerns inspired Daina to start Health-Ade alongside her husband and best friend, Vanessa. Their goal was to create the highest quality, best tasting, and most functional kombucha in the market.

In this entertaining and informative 38-minute podcast, Daina talks about how every single small decision she made about the brand was intentional (the name, the shape of the bottle, etc.) and has kept them relevant and desirable in today’s market. Daina also emphasizes the importance of being aware of competition, but remaining authentic and true to your brand’s values as a formula for success and keeping consumers engaged.

Listen to Kristi’s interview to hear how:

• Farmers markets were key to their early success, when half of the people in Los Angeles they talked to already knew what kombucha was.
• Their goal was to be “in every fridge in America” and they now plan to expand internationally.
• She believes people drink kombucha “because they think they should” for gut health. Taste, flavor, and price are less immediate concerns.
• Health-Ade’s biggest challenge was manufacturing, not marketing. “We were constantly building a brewery for ten years.”
• Why she does not trust co-packers.
• Why they needed to raise a total of $60 million in private equity, and how selling the company (“crossing the finish line”) was a great moment.
• Retail is a competitive “land grab” since there is only so much shelf space.

Commentary

Given Daina’s experience in this industry, it was surprising to hear the claim that there are now “200 kombucha brands”. The Booch News Worldwide Directory lists over 650 in the USA alone. If Health-Ade expands internationally, it’ll compete in a market with over 2,500 brands.

However, the podcast hosts’ claim that this is “a now extremely saturated market” buys into the view that we’re close to “peak kombucha” consumption — that the pie is only so big and brands must compete for their share. This view equates the kombucha market to the soda market. As anyone who has taken high school economics knows, some markets are classic duopolies: Coke & Pepsi, Avis & Hertz, Android and iOS. Daina’s desire to be in every fridge in America reveals a view of her brand as a “Pepsi” to GTs “Coke” (complete with a refusal to name the “other brand” that had an 11-year start and was the reason that half the people at those LA farmers markets had heard of kombucha).

Craft beer is a better marketing model for the other 648 US brands than soda. Back in the day, there was, nationally, Miller and Bud (with Coors west of the Rockies) fighting it out for market share with hefty advertising budgets. Then along came craft beer. Suddenly the pie grew bigger. There are now over 9,000 craft beer brands in the USA selling over $26 billion worth of suds. The market for the big commercial brands is actually declining.

So while GTs and Health-Ade are clearly among the market leaders, and shelf space in the retail stores is limited, this isn’t the zero-sum game that the podcast interviewer and Daina paint it as.

(For more background on Health-Ade’s growth see our earlier report plus this 2019 podcast that clarifies while she now claims the company started because of concerns over her husband’s gut health, it was initially due to a mistaken belief that it could benefit a different part of his anatomy!)