RIP: Creature Craft Soda, Joplin, Missouri
Statistics show that 50% of small businesses failure occurs within five years. Last year, we looked at general numbers for the kombucha industry. This is the story behind one brand’s decision to move on. The goal of these features is *not* to celebrate failure but to share stories that contain lessons for others in the industry and help them avoid the same fate.
Kim Welch, the founder of Creature Craft Soda, talked with Booch News about the experience of her three-year journey operating a commercial kombucha company. Kim recounts her serendipitous discovery of using silicone bags for kombucha brewing, an innovative method she researched and documented, supported by the findings of scientists at Shippensburg University. This interview also explores the challenges of starting and running a kombucha business. Founders need to master a complex interplay of factors, including market demand, planning, funding, logistics, sales channels, branding, regulations, and support systems. Kim ultimately decided to close her business, citing financial difficulties and the physical demands of the work. Finally, she discusses possibilities related to her innovative brewing method and the potential development of silicone-based brewing equipment.
It’s really cool because the bacteria in your brew is way smarter than people give it credit for. It’s not just that the bacteria makes the SCOBY and it floats up to the top. No, the bacteria intentionally build the SCOBY exactly where they want it and where they need it. And then that SCOBY itself, you can also tell, is not an oxygen barrier but more of like a transfer membrane to bring the energy into the center of the brew.
Here are some of the critical lessons Creature Craft Soda learned about the challenges of running a successful kombucha company:
● Having a ready market is crucial. Creature Craft Soda discovered that many people in their target market were unfamiliar with kombucha. This lack of awareness created a challenge in selling a more expensive, specialty beverage.
A lot of people had never heard of it, and then people who had heard of it didn’t understand what it was or never tried it.
● Thorough planning is essential. Kim emphasizes the importance of understanding all aspects of the business, including branding, sales channels, and health department regulations, before launching.
You will need a full understanding and focus on building your brand and building a following and figuring out how you want to sell to that following. Do you want to sell through other retailers and what does that mean from a health department viewpoint? Or do you want to sell direct-to-consumer and what does that mean? Are customers doing bottle refills on-site with you directly, or are you shipping? There’s a wide range of what you need to have in place. You need to understand all of that really well and have a plan. So, do one thing first, just one thing. We tried to do way too much.
● Funding and financial stability are critical. Creature Craft Soda was self-funded and ultimately went into debt due to sales not keeping up with expenses. This situation forced the owners to return to full-time jobs.
We did end up both going all-in on it for a period of a year before everything was completely depleted, and we were in debt, and the sales just weren’t keeping up with the expenses. So, that was when I was like okay, we have to go back to work again.
● Distribution and logistics are key considerations. The physical demands of transporting heavy kegs and bottles to farmers’ markets proved exhausting. Additionally, the inconsistent nature of wholesale orders made it difficult to manage brewing schedules effectively.
It was just the physical activity of moving everything to a farmers’ market. You need to move the physical weight carrying kegs of liquid plus bottles that we put on ice in a jockey box. Lugging all of that stuff around multiple times a week, every single week, is just exhausting. I hadn’t thought of the physical tasks that would have to be performed.
● Initially focusing on a specific sales channel is advisable. Creature Craft Soda attempted to manage both farmers’ markets and wholesale, finding both to be demanding and different. Kim advises new businesses to start with just one sales channel.
It was one of those interesting learning curves that made me appreciate the complexities of wholesale and why certain brands choose to do wholesale only or retail only because they are completely different worlds.
● Building a strong brand and following takes time and effort. Engaging with potential customers, educating them about kombucha, and establishing a recognizable brand are essential for success.
We were in a couple of coffee shops and restaurants, but I had to help them market it, because they’re not going to market it for me. People have to know that they can go to these places to get kombucha.
● Understanding legal and regulatory requirements is necessary. Producing kombucha commercially requires compliance with health department regulations, including obtaining necessary licenses and approvals.
Contrary to public opinion the health department people were super helpful and really, really nice because it’s literally their job to help you succeed. It’s not their job to beat you down and put you out of business. We had open conversations where they would do their research and send me documentation and we had to come up with a documented plan of the process. It had to document how I brew the kombucha and how I keep it safe and that sort of thing. Even details such as when we’re straining the kombucha, what type of straining or filtering system we are using. And if it is metal mesh there needs to be an additional checkpoint in the documentation saying that the metal mesh was inspected and free of any defects.
● Collaboration and support are beneficial. Creature Craft Soda benefited from assistance provided by the health department and collaboration with scientists at Shippensburg University. Kim is now mentoring others who are considering entering this business.
Just because your friends want your kombucha does not mean everyone wants your kombucha. I sat down with someone a few weeks ago and went through everything. I was like, you can do this and I can help you with some of this paperwork, but you have to be ready for this.
Podcast
Listen to the podcast to hear Kim’s story. She can be reached at craft@creaturesoda.com.
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