The nation’s largest kombucha supplier is picking up more space in Vernon to double up production of the fermented tea drink.
Millennium Products Inc., maker of GT’s Kombucha, has leased an additional 260,000-square-foot facility two miles from its Hampton Street headquarters. The expansion will house additional brewing operations and will allow the company to double output production, owner George Thomas Dave said.
Dave, commonly known as GT, started the company in his parent’s kitchen in 1995 when he was 17 years old, and the privately held company was credited with starting the U.S. commercial kombucha industry.
Dave said the company produces 1 million bottles a month with a retail price of about $6, and expects to see that double once the new facility is up and running in the coming weeks. He declined to provide revenue numbers but said that the company’s employees, which number between 40 to 70 due to seasonality in tea farming, would double.
“With this expansion we’ll have a little under 500,000 square feet of facility space,” Dave, 39, said. “Space really is king in our books. Like a farm, you can only produce as much as your acreage. Nature is our boss and we have to honor her.”
The new space will provide additional support for every aspect of the business, he said. The company doesn’t rely on co-packing partners as do many smaller food companies, instead brewing, packing, and labeling the carbonated and fermented drinks at its facility.
The expansion comes amid rising consumer interest for health-based products and healthy alternatives to soda.
Despite accounting for a small share in the ready-to-drink tea category in the United States, kombucha led the way in attracting consumer interest last year, according to London-based research firm Euromonitor. The carbonated ready-to-drink tea category, which includes kombucha, recorded sales of $1.1 billion in 2016 and is on track to reach $1.5 billion in 2020.
GT’s Kombucha is the top distributor of these carbonated tea drinks, Euromonitor said, and has a particularly strong presence among U.S. kombucha makers.
“The company maintains a dominant market share, accounting for 60 to 70 percent of it,” said Hannah Crum, president of Kombucha Brewers International, a trade association she founded with her husband in Los Angeles in 2014. “(Dave) started the entire industry more than 20 years ago. Kombucha is a probiotic drink that originated in Asia centuries ago, but he was the first one to bottle the drink and sell it.”
The trade organization started with 40 members and now counts more than 200 kombucha makers across the United States. Led by Millennium, eight L.A. producers collectively account for about 80 percent of U.S. output, Crum said.
Dave recounts his family’s influence that led him to make homemade kombucha when he was a teenager in their Bel-Air kitchen. His parents were keen on Eastern philosophy and health foods, kombucha being one of the products the family indulged in.
The base ingredients in his kombucha concoction are made from organic Indian green and black tea, pressed fresh fruit juice, and a bacteria culture, he said.
He introduced the bottled drink in 1995 to health food store Erewhon Natural Foods in the Fairfax District, and the business expanded to more health food stores in the L.A. area over the years. Whole Foods Market Inc. came calling in 1999, making the company’s drinks available in its California and Southwest stores.
The company’s first major expansion was in 2005, when it began national distribution, but the company had a setback in 2010 when Whole Foods pulled kombucha brands from its shelves due to reports from the Maine Department of Agriculture that the drink’s alcohol levels ran as high as 2.5 percent by volume, five times the legal limit for nonalcoholic drinks.
Millennium has faced several lawsuits, most recently seeing a settlement being proposed this February in a class-action suit alleging it and Whole Foods misrepresented the alcohol, sugar, and antioxidant content of certain GT’s Kombucha products, according to Top Class Actions, a website that tracks class-action lawsuits.
Despite the setbacks, the business continues to grow from the time it went mainstream in 2011 through a partnership with Safeway Inc. Today, the company’s brands, GT’s Kombucha and Synergy, can be found nationally in stores including Kroger Co., Wal-Mart Stores Inc., and Costco Wholesale Corp.
“The expansion of the company only means positive things for the industry as a whole,” Crum said. “A challenge operating on a larger scale will be maintaining compliance.”
As the industry grows and sees new players including PepsiCo Inc., which acquired Oxnard-based kombucha maker KeVita, Dave isn’t too worried.
“It’s nice to see these big companies interested in healthier products for the soul,” he said.
