UK/Belgium: Duvel Moortgat acquires majority of Jarr Kombucha

Belgium family owned brewer Duvel Moortgat has acquired a 60 percent stake in UK-based kombucha producer Jarr Kombucha for an undisclosed sum. Jarr was founded in 2015 by Adam Vanni, Tom and Jess Seaton, and Neil Hinchley. It is brewed and bottled by hand in Hackney Wick, an area of the London Borough of Hackney, east London, England.

Since then, the team have opened the UK’s first dedicated kombucha bar, and distribution of the bottled product has extended to bars, restaurants and cafes across the country as well as Soho House, Selfridges, Planet Organic, Harrods and Sourced Market.  Moreover, Jarr has installed the UK’s first draft kombucha dispense system in Whole Foods Market.

Through the partnership with Duvel Moortgat, Jarr Kombucha can invest in a new site in London and will benefit from the expertise and distribution network of its Belgium partner.

Duvel Moortgat, founded in 1871 and managed by fourth generation descendant Michel Moortgat is one of the fastest growing brewing groups in Europe. Besides its own business, the company owns 50% of Rodinný Pivovar Bernard in Humpolec/Czech Republic (acquired 2001), Brewery Ommegang from Cooperstown/New York (acquired in 2003), Brasserie d’Achouffe from Houffalize/Belgium (acquired 2006), Brouwerij Liefmans in Oudenaarde/Belgium (acquired 2008), Brouwerij De Koninck from Antwerp/Belgium (acquired 2010), Boulevard Brewing Company from Kansas City/Missouri (acquired 2013), Firestone Walker Brewing Company from Paso Robles/California (acquired 2015) and Brouwerij 't IJ from Amsterdam/Netherlands (acquired 2015).

Last in line so far was Birrificio del Ducato, a 5,000 hl artisanal brewery from Roncole Verdi, a small Italian village near Parma halfway between Milan and Bologna. Duvel Moortgat acquired 35 percent of the brewery in 2016 and increased its stake to 70 percent last year. (inside.beer, 16.7.2017)

“As a family owned brewery, specializing in drinks of the highest quality, we are delighted about this partnership with JARR,” said Michel Moortgat in a press statement. “The way of producing kombucha is very similar to that of beer. It is the result of all natural ingredients brewed to a tasteful drink by highly passionate people; we can now offer our consumers a different yet equally high quality brewed premium drink.”

Jarr co-founder Adam Vanni commented on the deal: “We are hugely excited to be working with Duvel Moortgat. As a family business with a distinct focus on quality, Duvel shares our values and vision for the future. We are looking forward to teaming up with them and bringing great kombucha to more people than ever before.”

Kombucha is the newest absolute must-have amongst brewers and soft drink bottlers, next to cider. The vinegary drink was first introduced to the retail market in the U.S. by family owned GT’s Living Foods in 2005. As a pioneer of the industry it has still a 55% in the domestic kombucha market. (inside.beer, 9.7.2018)

Soft drink giants like The Coca Cola Company and PepsiCo fear the growing pressure of levies on sugar-sweetened drinks and therefore have diversified lately in related markets, like kombucha. In November 2016, PepsiCo entered into a definitive agreement to acquire KeVita, which holds the number two position in the U.S. kombucha market. (inside.beer, 25.11.2016)

The same year Coca-Cola bought Health-Ade, another leading U.S. kombucha maker which follows on position three.

However, also breweries see their traditional business endangered and have tapped the growing kombucha market.

In 2016 AB InBev’s venture capital arm ZX Ventures bought Kombrewcha, maker of low-alcohol, organic kombucha drinks. Molson Coors followed this June by buying Top Shelf Beverages, a company which operates a kombucha brewery in Fairfield, California and sells its products under the Clearly Kombucha and C Botanicals brands. (inside.beer, 7.6.2018)

In September this year, Coca Cola also acquired Organic & Raw Trading Co from Willunga, South Australia, which makes organic kombucha drinks under the Mojo brand.

Currently Kombucha accounts only for $1.5 billion in global sales. Despite the tiny share of the whole beverage market experts believe that Kombucha has the potential to be “the next big thing”, especially considering the decline of the soda market in the United States (-3% in 2017) and the minus in overall beer sales (-1% in 2017, despite a rise in craft beer sales). Expected compounded growth rates of kombucha sales of 23% over the next five years seem quite tempting for the beverage industry. (inside.beer, 9.7.2018)

 

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