Word-of-Mouth and Referral Marketing Blog

Billion Dollar Bacteria: How GT’s Kombucha kept growing through word-of-mouth

As the health food brand that made fermented drinks cool again, GT’s kombucha is an uncanny marketing success story across multiple fronts. How do you sell a product in an entirely new category? How do you stay true to your small-batch roots when you go mainstream? How do you even sell a product when people don’t know what it is?

From handing out bottles in small scale health foods stores to sponsoring the biggest music festivals on earth, here’s how GT’s became America’s first commercial kombucha brewer.

Rising to the Top

While the exact origins of kombucha remain murky, one fact is clear: humans have been brewing and drinking it in the name of good health for thousands of years. Kombucha is still consumed for its wellness benefits, and many people believe the drink can improve digestion, boost immunity and reduce the risk of certain diseases.

It’s also good for making money: In 2016, the global market value of kombucha was estimated at 1.06 billion U.S. dollars. This number is expected to exceed 2.4 billion by the year 2022, showing that sales of the drink aren’t slowing down anytime soon.

global kombucha market cagr technavio businesswire - gt's kombucha gts kombucha word of mouth

via TechNavio: Kombucha market will grow and grow 

The mass commercial growth of this bubbly beverage wasn’t by chance. It was all because of a man called George Thomas Dave (GT Dave) and his hand-me-down scoby.* Dave and his family brewed the drink as an at-home hobby after receiving the culture from a friend. It wasn’t until his family and friends started asking to buy the home brew that he considered making the hobby into a business. And when it helped his mother with her battle against cancer, GT Dave knew that it was time to bring kombucha to the masses.

What is a SCOBY?

‘SCOBY’ is an acronym for symbiotic culture of bacteria and yeast, kind of like a starter for baking sourdough. It’s a living culture that sometimes appears as a flat pancake-like disc, and a single ‘SCOBY’ can brew multiple batches of kombucha

Starting From Scratch

When GT’s emerged in the health foods market in the late 1990’s, the idea of kombucha was foreign to most. What are probiotics? How can fermented foods help the body? These were the many questions Dave had to answer on a daily basis. While it may have been easier to explain the new beverage in major press releases and on TV commercials, Dave humbly pursued a one-man promotion operation instead.

His strategy? Walking into health food stores across Los Angeles and pitching his product face-to-face. His mom often appeared in stores alongside the drink to pitch its health benefits, sharing her personal recovery story with both skeptics and followers.

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GT brewing small batches in really early day. Via GT’s Living Foods

While the product gained moderate momentum through this technique, it didn’t become a commercial success overnight. In fact, GT was turned down by many of the stores he approached. Then, a pivotal moment occurred in 1999: Whole Foods got word of GT’s Kombucha. The drink’s health benefits aligned perfectly with the Whole Foods mission, and GT’s was soon made available to wellness warriors across the country.

The word continued to spread. Celebrities like Gweneth Paltrow and Naomi Campbell, both of whom consumers looked to for health and beauty advice, praised GT’s kombucha across interviews. Soon, more celebrities were hailing the drink as a longevity-boosting elixir. The fermented, probiotic-rich nature was said to improve digestion and ward off disease.

Many people also touted kombucha as an antioxidant powerhouse for boosting immunity and ensuring a more youthful body inside and out. Consumers ran to stores to stock up on the drink. These initial adopters believed that kombucha was an essential ingredient to a long and healthy life, and they wanted their friends and families in on the fermented fad, too.

Since GT’s didn’t partake in traditional marketing efforts, this word of mouth was critical for their success. As more people found out about the drink and tried it for themselves, both the taste and the health benefits were enough to keep the momentum of sharing going strong.

Standing Out in a Bubbling Market

When understanding how the kombucha market grew — and where it might be headed — taking a look at the craft beer market can offer an interesting analogy on the industry.

The Boston Beer company, was largely responsible for taking craft beer mainstream with its Sam Adams product. As consumer tastes and demand for craft beer grew, more craft breweries popped up across the nation, making it harder for Sam Adams to stay relevant in a sea of IPAs and goses brewed by small, local businesses.

Like Boston Beer Company, GT’s faces a difficult question: how do you stay relevant in a category you created? As more craft kombucha companies pop up across the nation, maintaining a strong presence is harder than ever. GT’s no longer has to answer the question “what is kombucha?” and is instead grappling to explain “why our kombucha is better.”

Standing out on the shelves was a breeze in 2000, when GT’s was the only major kombucha brand on the market. Today there are over 350 kombucha brands, with the majority being in the United States (GT’s primary market).

Most of these brands are saying the same thing. According to a report from Lumina Intelligence, 54 percent of kombucha brands market themselves as offering general wellness, while 23 percent tout digestion and 17 percent talk about immunity benefits. The same report shows that, in the United States, 70 percent of kombucha products are labelled as non-GMO, 60 percent feature a no preservatives claim and 50 percent say they’re organic.

GT’s knows that rising above the noise requires more than just healthy labeling. Their raw, high-quality product inherently checks all these boxes. It also goes a step further with strict brewing controls and a rejection of pasteurization. These factors have earned GT’s a cult following among “purist” drinkers who believe this is the best way to enjoy the drink.

GT Dave, the outspoken owner and face of the brand, regularly confirms these beliefs both in interviews and across the brand’s marketing channels.

“At GT’s Kombucha, we’ve stayed true to the authentic brewing process of this sacred elixir for over 20 years. Our #1 selling Kombucha is raw, organic, naturally effervescent, and handcrafted in small batches – always cultured, never compromised,” explains the company’s website.

These firm stances may seem risky for a brand of its size, but they help GT’s set a standard for quality in the industry. And for kombucha aficionados, who understand that the benefits of raw kombucha are killed during pasteurization, these details mattered. Despite a number of weeks off the shelves, GT’s was still able to cultivate loyalty among its most dedicated fans.

Dedication to Product and Quality

GT’s commitment to its product and customers was best demonstrated during the kombucha recalls of 2010. After it was discovered that most kombucha being sold in retail stores was above the legal alcohol limit, all brands were pulled from stores and forced to change their recipe.

Most brands apologized with press releases and media appearances, assuring fans of a quick return. Most brands turned to pasteurization to reduce the alcohol content (some quit making it altogether) and returned to the stores weeks later.

GT’s wasn’t so fast to say sorry. Instead of coaxing customers and assuring them of a safer future, GT’s got back to the kitchen. Keeping his fierce loyalty to the raw product, GT took three times as long as other companies to create a new product that was less fermented, lower in alcohol and, just as before, unpasteurized.

Fans patiently awaited the return of GT’s Kombucha after the recall, especially since they hadn’t heard from the brand about what would happen. This kept them holding their breath, driving up the scarcity principle. For purists that wanted the raw drink, a new store shelf full of pasteurized products made them long for GT’s product even more.

When GT was finally ready to launch the revised recipe, it was met with sighs of relief from fans across the country. GT’s was back.

Defining the Fermented Food Lifestyle

Rising above the noise would be easier with help from investors (a route many of GT’s rivals have taken for years), who could support with marketing efforts and product positioning. This is the strategy of GT’s rival Health-Ade, which has raised $30 million from major investors, according to PitchBook.

Unsurprisingly, GT’s isn’t following through with the status quo. Instead, GT Dave is set on maintaining his company’s share of throat by taking his brand to a whole new category.

The first step in redefining GT’s kombucha was renaming the parent company as GT’s Living Foods. This gave the brand agency to branch out to additional health food products, including fermented coconut water, probiotic coconut yogurt, hard kombucha and herbal mushroom tonics. Everything fits into the lifestyle of a health-conscious customer.

 

Similarly to kombucha, many of these foods have been consumed for hundreds, if not thousands of years. By taking these folk remedies mainstream, GT’s has another opportunity to do what it knows how to do best — create a new market, then dominate it.

These aren’t just any products. They’re exactly what the new name suggests: living foods. This repositioning helps GT’s stake its claim as a master in the probiotic and fermented foods category. This is especially relevant as more people turn to foods that are healing and free from dairy, grains and gluten.

Diversifying its product offering wasn’t just a smart branding move; it was also strategic financially. As the millennial market (one of GT’s core audiences) continues to obsess over all things health and wellness, innovative health food products are more coveted than ever.

In the $3.7 trillion dollar global wellness economy, however the standard salad or juice won’t do: people want fresh, exciting products.

“Wellness has become a kind of religion for some consumers, leading to the rise of nontraditional sources for creating healthier, happier, and more balanced lifestyles,” says a market report from CB Insights.

 

As more consumers buy into this proverbial religion, more brands buy into the trend. One of the most powerful ways brands are winning over wellness customers is by selling aspirational lifestyles. Whether its pictures or videos, scenes from healthy lifestyles inspire consumers to make healthy changes and buy new products.

This is also effective because millennials love to share aspects of their life on social media. Being part of the latest health craze helps millennials feel like they’re doing a good thing for themselves, and like they belong to a community.

Cultivating Culture, Community and Brand Influence

Today, GT’s continues to use community-building and lifestyle creation as a core marketing strategy.

This is seen primarily on the brand’s Instagram page, which shows GT’s as a sponsor and partner of various festivals, causes and events. From Governer’s Ball in New York, to Eat Drink Vegan, to California’s Lightning in a Bottle, these sponsorships help GT’s further its mission of wellness and collective enlightenment.

By appearing at a large event filled with members of its target audience, GT’s spreads brand awareness by foot traffic and word of mouth alone.

Another one of the core messages on GT’s Instagram page is that of equality. This is seen through imagery of both everyday customers and products celebrating the cause. GT’s also connected its product to this message by using Words of Enlightenment — inspirational bottle messages — that echo the idea of equality and universal love. By taking a stand

 

While this message won’t resonate with everyone, it has a significant impact on brand image for those who feel loved and supported by it. In turn, these people are much more likely to remain loyal to GT’s over other brands that they don’t openly feel supported by.

These two examples show how GT’s establishes itself as a brand that’s lighthearted and approachable, yet loyal in its values.

How GT’s Kombucha keeps growing and growing

Standing out in a saturated market can be daunting — especially when you’re the one that created it. GT’s kombucha offers an inspiring look at how to excel in an entirely new category. From adhering to strict product standards, to creating a strong community and diversifying its product set, the GT’s brand continues to evolve and adapt to the changing times.

Michelle Polizzi

Michelle Polizzi

Michelle Polizzi is a wellness writer, journalist, and a yoga teacher.