Deane's Kombucha is looking for investors

For a while last year it seemed doubtful that Deane's Kombucha would survive. The St. Paul-based maker of fermented tea beverages started by Bryan Bertsch in 2009 was well on its way to success when the federal government suddenly discovered that kombucha was an alcoholic beverage. As such, it was subject to the same rules and regulations as beer, wine, and spirits. It could no longer be sold in the grocery and health-food stores that had been the drink's main access to consumers. What to do?

Many kombucha makers chose to reformulate, removing the alcohol that was the root of the problem. Bertsch refused to make this concession, preferring to stick with the traditional method that gave him the flavorful and purportedly healthful drink that he had set out to make from the beginning. He became licensed as a brewer and placed his product in specialty beer and wine stores. Through personal appearances at festivals and in-store tastings, he has built a following among the aficionados of craft beer and wine, a large enough following that he is now looking to expand.

Bertsch wants to take Deane's Kombucha, already sold in Minnesota and Wisconsin, into other states. He is also looking to move from his tiny space in the basement of a Marshall Avenue community kitchen. The goal is to build a larger, dedicated kombucha brewery. He would also like to hire additional staff to help take the business to the next level.

As one of only five kombucha makers with a federal brewer's license, he feels that he is in a good position to take a leading role in a growing market. He cites an article in Beverage Spectrum Magazine that reports a 28 percent sales growth for the category in 2010, despite the alcohol hiccup that took the product off the shelves for a time. The article points to an anticipated 60 percent growth for 2011. According to Bertsch, trade projections suggest kombucha will be a $500 million industry by 2015.

Growth takes capital. To raise the money needed for expansion, Bertsch is looking for investors. He is working with a Minnesota attorney who connects entrepreneurs with investors to seek bigger donors. But he is also looking for some grassroots support. Bertsch wants to sell shares in the company to anyone interested in investing. In a recent email he said, "We plan to use the capital to clean up our start-up debt, invest in equipment, and aggressively grow into several new markets."

Bertsch is inviting potential investors to contact him. You will find more information on the Deane's Kombucha website.

Michael Agnew
Certified Cicerone
A Perfect Pint

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