Kombucha in California: Part 4 of 4
This is the conclusion of the four-part series of posts looking at the kombucha category and consumers in California.
In Part 1, we shared data from a Searchabull report on the California kombucha category over four years. The report showed that California is the heart of kombucha in the US, and while overall search volume declined when COVID hit, this has since stabilized.
In Part 2, we took a more granular look at consumers’ specific interests, noting a potential trend away from ‘medicinal’ or strictly health-related searches toward overall wellness. We also highlighted the seasonal nature of interest in kombucha.
In Part 3, we reviewed the changes in consumer interest in different flavors and noted a declining interest in home brewing.
In Part 4, we conclude these highlights by looking at the interest in the names of specific brands and retailers in California.
The retail channel covers everything from local natural food stores to so-called multiple-unit outlets (MULO).
In terms of search interest, the clear leader is ‘big box’ store Costco. The ‘low price leader’ Walmart and ‘gourmet economy’ chain Trader Joe’s are in the following two places.
As of October, 2023, Costco has 61% of all retailer searches, growing 20% from 2020, with specialist retailer Whole Foods and owner Amazon losing share.
Most retailer searches exclude brand names, indicating that consumers rely on the brands they find on offer at each retailer when they visit the store.
Coincidentally, I’ve been tracking the brands at my local Costco in Vallejo. Here’s what was on offer this month compared to December 2022 and August 2021.
The space allocated in the chiller has grown, and the brands on offer have changed over the past two years. In 2021 they featured Brew Dr and Kevita alongside Costco’s private label Kirkland brand. They have carried Humm, Health-Ade, and Kirkland for the past year. With price points of $1.62/bottle for Kirkland and $2.33/bottle for Humm and Health-Ade, these are — as for most goods sold at Costco — aimed at the high volume, price-conscious consumer.
Brands must ascend an ever-steeper slope to achieve distribution in a limited number of California multi-unit outlets, which typically carry fewer brands at a lower price point. One can assume that what they lose in margin, they make up in volume.
The challenges of selling at Costco include the limited SKUs, competition from the Kirkland private label brand, and relentless price pressure on CPG vendors to sell products at low-profit margins. It has been noted that:
Costco also expects your price to drop a bit as well so that they are able to still be able to sell your product at a lower price to its members. As a seller, you need to strongly consider dropping your wholesale price due to the fact that if it remains too high, Costco may end up simply choosing not to stock your item.
If you are trying to get your product into these stores, whether online or in their physical stores, as a part of your sales model, your total sales should not exceed more than 20% of your gross revenue. Costco wants to see that your distribution strategy is diversified, and you’re not going to solely depend on the proceeds of Costco sales to keep your business afloat.Forbes, Mar 11, 2022
Even though Safeway was in seventh place, as pictured in Part 3, the Vallejo Safeway carries ‘booch a-plenty.
In Part 1, we noted that brands play a smaller role in the kombucha category, as most searches are generic questions about kombucha as a beverage. Health-Ade and GT’s / Synergy account for almost half the branded searches in California. However, between 2020 and this year, the top brands have declined, with interest in KeVita down 2x the category rate, while Humm is reversing the trend, growing 46% from 2020.
Brands’ Performance in Retail
The large retailers who dominate search drive brand awareness. There’s a strong relationship with search share in line with retail activation. This is most clearly shown where Costco’s price promotions drive search demand for Humm, with offers in January and May / June every year.
The search presence of the larger brands in California-wide retailers maps as follows.
This series has touched on the highlights of a lengthy 55-page report. The charts we shared were purged of the detailed numbers and percentages available to Searchabull clients. The specifics in the full report allow you to plan, activate, and evaluate changes in consumer interest so that you can improve your product mix and marketing focus in four main areas:
Category Dynamics: Reveal the size of the category and growth drivers. You can tailor your messaging to motivate more people to drink your brand of kombucha.
Consumer Need and Interests: The search data shows that most consumers have low overall knowledge about kombucha. Brands can seek consumer engagement through education that takes consumers on the journey to trial and purchase.
Opportunity: Past, current, and future trends reveal how new products and flavors align with consumer interest.
Brand performance: While this report showed data for the largest brands, Searchabull can consult with brands of any size in any geography — down to the level of a region, county, or even city. Local search data can be as revealing as national or statewide searches.
The content of this article is accurate to the best of our knowledge and is presented for general informational purposes only. We have no financial interest in Searchabull and make no recommendation about their products. All data (except where noted) is from Searchabull. The opinions are those of the editor.