At the core of Aqua ViTea founder Jeff Weaber’s business lies a simple idea: that kombucha—a fizzy probiotic drink made from tea—promotes good health and can change lives.
It was with this idea in mind that Weaber, formerly a brewer for Lucky Labrador in Oregon, started making kombucha in the basement of his Salisbury, Vermont farmhouse back in 2005, primarily to support his wife’s newly opened naturopathic clinic.
Believed to support gut health, Weaber originally thought kombucha would be a way to educate the community about the principles of natural medicine, which rely heavily on the root causes of health, such as nutrition and lifestyle. “No one was making kombucha in 2005,” said Weaber, who started brewing in the basement while his wife saw patients upstairs. “No one was really talking about the role of the gut in mental, physical and emotional health.”
Weaber brought his kombucha to the Middlebury farmer’s market, promoting it as a low-sugar wellness drink to replace soda and juice.
“As Americans, we eat way too many carbs and sugars,” said Weaber. “We hoped kombucha might convince people to instead drink something healthy that could change their lives and invite them into the idea of food as medicine.”
The response was overwhelmingly positive. So much so that Weaber realized he had found a product with potential well beyond the local farmer’s market.
A Kombucha Pioneer
“We knew that when we moved to Vermont, we would need to bring jobs with us,” said Weaber. “Kombucha was the perfect combination of my background in brewing and our deep belief in naturopathic medicine.”
As the kombucha craze began to take hold, Weaber was well-positioned to be an early leader in the growing industry. To meet demand without increasing production costs, Weaber pioneered the idea of kombucha on-tap, which allowed him to postpone investing in bottling equipment and reduced packaging costs for customers.
The company began experimenting with flavors such as Blueberry Social, Blood Orange, and Ginger, which proved popular among both craft beer aficionados and the naturopathic crowd. “There were less than a dozen companies making kombucha in the country at the time,” said Weaber, “and we were the only ones in Vermont.”
In 2012, he moved out of the farmhouse and into a facility in Bristol, continuing to build the on-tap business, a model that required the purchase and installation of refrigerated kegerators at retail locations. Within a few years, however, he had saturated that market, maxing out the number of machines the company could provide and service.
Around the same time, Weaber became one of the first in the industry to take a strong stand on alcohol extraction, purchasing a $2 million dollar spinning cone column that allows the company to extract any alcohol from the product. “The fermentation process naturally produces alcohol,” said Weaber. “Even in small amounts, we felt it was important to be transparent in what our customers were putting into their bodies.” Aqua ViTea rebranded its original kombucha as the “Tea-Totalar” and added an Alcohol Extracted Verified Seal on its label.
Finding Capital Mid-Growth
Between the spinning cone column and a realization that the company would need to finally invest in bottling equipment, Weaber found himself “in a bit of a pinch.” After receiving early support from local banks, he discovered that securing capital mid-growth would be more challenging. “We had some debt, so were considered a higher risk bracket,” he said, “and we had tapped out local angel investors, but we knew we needed to invest in bottling equipment to grow.”
Weaber connected with Janice St. Onge, president of the Flexible Capital Fund, who was impressed by the company’s health mission, commitment to jobs in Vermont, and local purchasing relationships. In 2017, the Flex Fund made a $300,000 investment into Aqua ViTea, which Weaber used to build out bottling capacity. “Janice is an impact investor,” said Weaber, “she puts money into the companies that will change Vermont for the better.”
With that investment in hand, the company was able to flip from 65 percent of sales coming from the keg side of the business to 60 percent bottled volume—a serendipitous move prior to COVID-19.
Good Health as Medicine
When the pandemic arrived, the 40 percent of revenue coming from self-serve, kombucha on-tap disappeared virtually overnight. At the same time, says Weaber, Aqua ViTea saw an uptick in bottle sales, especially medicinally-based flavors, such as Elderberry, which is said to have antiviral properties. Their new, highly-efficient bottling equipment enabled them to keep on their manufacturing staff and continue production at full tilt.
“While no one could have seen COVID-19 coming, the Flex Fund investment could not have prepared us better for the year we just had,” said Weaber. “We had the right-sized staff and the right equipment. With some creative thinking, we were even able to replace the lost keg business.”
Working with their neighbors at Caledonia Spirits, Weaber was able to put his spinning cone column to work in an unexpected way, selling the extracted alcohol to the distillery to make hand sanitizer.
Weaber has noticed growing interest in naturopathic and preventative medicine over the past year—a trend that was accelerated by the pandemic.
“The idea that a healthy gut is foundational to good health is no longer in the shadows,” he said. “It gives me hope for the future that we may come out of this pandemic more empowered to be proactive with our health, and not just wait for traditional medicine to cure us when we get sick.”
We’ll raise a kombucha to that.
About the Flexible Capital Fund
The Flexible Capital Fund, L3C is a Community Development Financial Institution (CDFI) and impact investment fund that provides flexible risk capital in the form of subordinated debt, revenue based financing (also known as royalty financing) and alternative equity structures, to growth-stage companies in Vermont and the region’s food systems, forest products, and clean technology sectors.