Kombucha Market Size, Industry Share & COVID-19 Impact Analysis, By Type (Natural and Flavored), Distribution Channel (Supermarkets/ Hypermarkets, Convenience Stores, Health Stores, and Online Retail), and Regional Forecast, 2024-2032

The global kombucha market size stood at USD 1.84 billion in 2019 and is projected to reach USD 10.45 billion by 2027, exhibiting a CAGR of 23.2% during the forecast period. North America dominated the kombucha market with a market share of 52.72% in 2019.

Kombucha is a sweetened fermented tea beverage, usually made by utilizing black or green tea. The drink is fermented using a symbiotic culture of bacteria and yeast strain (SCOBY), which results in a light, effervescent tea beverage with a slight alcohol content of 0.5% due to the natural fermentation process. The beverage is a potential probiotic drink that offers several health benefits to consumers such as aiding the growth of gut microflora, infusing into the body, and potentially reducing heart disease risk. The rising awareness about the health benefits of this drink among consumers is projected to fuel the global market.

Increasing Consumption of Fermented Tea Beverages amid COVID-19 to Favor Growth

The outbreak of the COVID-19 pandemic has resulted in the closure of various factories and warehouses across countries as a result of the governmental implementation of social distancing and lockdowns to stop the spread of the virus. However, this market has experienced a slight uptick as convenience stores and medicinal shops remained functional to provide consumers with essential health supplies. According to a study by the National Center for Biotechnology Information (NCBI), 2020, consumption of kombucha aids in supporting the immune system due to its antioxidant, anti-inflammatory, and cholesterol-reducing properties. Various probiotic drink manufacturers have been increasing their production capacities to fulfill the consumers' demand for immunity-boosting beverages amid the pandemic. For example, the Malaysia-based brand WonderBrew aims to double its sales by expanding its e-commerce presence amid the pandemic. The firm says it has surpassed its last year's sales of USD 48,000 in June. Further, the demand for functional food and beverages to support the overall health of consumers have contributed to market growth.

Kombucha Market Trends

Growing Inclination towards Innovative Non-Alcoholic Drinks to Propel the Market

According to the World Health Organization (WHO), nearly 3 million deaths occur every year as a result of harmful alcohol consumption, representing 5.3% of all deaths, which has shifted consumer preferences towards fermented tea and other low or non-alcoholic drinks around the world. The surging popularity of refreshing drinks and their availability in ready-to-drink forms has further encouraged this shift. Consumers, especially millennials and Gen Z, are embracing healthier lifestyles, leading to their growing preference towards low to no-alcohol beverages and healthier alternatives to alcoholic drinks. According to a research paper published in BioMed Central, in 2020, the greater availability of non-alcoholic drinks, their increased online selection, and reduction in alcohol purchasing have geared consumer preferences towards kombucha. The introduction of innovative flavor variants in the global marketplace is also expected to boost market growth during the forecast period.

DRIVING FACTORS

Rising Popularity of Functional Beverages to Augment Market Growth

Growing consumer preference towards functional beverages that are capable of adding beneficial health effects has positively increased both the consumers’ interest and demand for drinks such as kombucha. For example, according to the Institute of Food Technologists (IFT) 2017, functional beverages held 76.4% market share in the overall beverage sector in the U.S. Probiotic drinks are generally made using fermented milk such as yogurt and kefir. However, this has a distinct edge over other probiotic drinks as it can be consumed by people suffering from lactose intolerance and celiac disease since it is obtained by fermenting sweetened tea. According to the International Probiotics Association, the probiotic supplements market value in 2015 stood at USD 4 billion and is expected to grow decently, which is also likely to benefit this market since it is a probiotic drink. Further, the integration of the drink in daily diets has significantly augmented the growth of this market.

Availability of Numerous Flavorful Options to Drive the Market

Consumers nowadays are becoming bold and are not refraining from experimenting with new innovative flavors. This has nudged manufacturers to incorporate new flavors and ingredients to draw consumer attention towards their products. Some of the new attractive flavors include hibiscus lime, lavender, blueberry, guava, and many more. Various spices, herbs, fruits, and juices are utilized for flavoring kombucha. For instance, in July 2020, Kombrewcha launched two new flavors – blood orange and mango pineapple – in the U.S. Coupled with this, the availability of the drink in cans and bottles, owing to the rising mainstream trends of on-the-go convenience, lures the consumers into purchasing them.

RESTRAINING FACTORS

Regulatory Stringency on Alcohol Content to Hamper Growth

 Various regulatory bodies have been strictly monitoring the alcohol content in different drinks as it poses a public health risk. One of the biggest risks includes the high alcohol content that may interfere with people undergoing some form of medication. Further, there may be changes in the alcohol ratio as the product travels from the manufacturer to the retailer due to secondary fermentation. Sometimes, the addition of flavorings may also affect the alcohol content in the beverage. To counter these issues, regulatory bodies impose strict rules governing the alcohol content in beverages. For example, according to the United States Food and Drug Administration (FDA), the alcohol content in a drink can never be above 0.5% alcohol by volume (ABV) during production, at the time of bottling, or after bottling. The Canadian Food Inspection Agency states that a product is considered non-alcoholic if it has less than 1.1% ABV. The numerous regulatory scenarios and their negative impacts on the operations pose a restraint on the kombucha market growth.

SEGMENTATION

By Type Analysis

Flavored Variant to Account for the Major Share

On the basis of type, the market is segmented into flavored and natural. The flavored segment holds a larger share in the market due to the growing inclination of consumers towards new and innovative beverages. This opens several opportunities for manufacturers to infuse natural flavoring agents and botanicals owing to the increasing awareness among the consumers about the detrimental effects of synthetic flavors. Changing consumer preferences regarding probiotic beverages and the willingness to explore new flavors will aid in strengthening market growth. Moreover, various manufacturers are launching new flavors in beverages, which are expected to further propel market growth. For instance, in February 2020, the Australian manufacturer Nexba launched a range of original and flavored kombucha in the U.K. in strawberry & peach, elderflower & lemon, and mixed berry flavors to meet the growing demand for this novel drink.

By Distribution Channel Analysis

Mass Merchandisers to Lead the Retail Sales Channel

Mass merchandisers such as supermarkets and hypermarkets are aiming to provide consumers with a wide variety of probiotic drinks and functional beverages. The aggressive approach of these entities is pushing retailers to stack up refrigerators and chillers with products offering flavourful options in various price ranges and brands. They also offer attractive price discounts, have product-specific aisles in stores, and numerous bundling schemes to entice consumers into purchasing the product.

On the other hand, health stores and online retail channels are gaining immense popularity owing to the detailed product descriptions and guidance provided by the sellers.

REGIONAL INSIGHTS

North America is currently leading the kombucha market share and is anticipated to retain its position in the forecast period due to the increasing popularity of the drink among consumers. Growing health consciousness in consumers and the availability of the drink as a healthy alternative to soft drinks and sodas in the U.S. and Canada have influenced the regional market growth.

Functional beverages are becoming highly influential among consumers. According to Glanbia Nutritionals Inc., the U.S. functional beverage market size was USD 39 billion in 2018 and is expected to witness exponential growth in the upcoming years. Further, the presence of numerous prominent key players in the market such as GT’s Living Foods, which accounts for a USD 1 billion share in the overall market, contributes to the regional performance of the market. Domestic manufacturers are launching new innovative variants of the product to support the health and wellness of the consumers amidst the COVID-19 outbreak. For instance, in July 2020, Health-Ade Kombucha launched Booch Pop for health-conscious consumers as an alternative to traditional soda.

Europe is projected to hold the second-largest share in the market. The trend of consuming probiotic drinks and functional beverages has fuelled the demand in the region. Countries such as the U.K. and Russia are among the major consumers of the drink as it is growing popular among the consumers as an ‘adult soft drink’.

In Asia Pacific, substantial market growth is being witnessed as it is a traditionally consumed drink in China, where it is also known as the “elixir of life”. The increasing awareness about its health and wellness properties to boost gut health and immunity along with rising disposable incomes is likely to fuel the regional market growth.

Growing consumer preference towards probiotic drinks coupled with kombucha’s non-alcoholic nature and high affordability in the Middle East & Africa is supporting and driving the growth of this market.

KEY INDUSTRY PLAYERS

Coca-Cola Company to Focus on Strategic Acquisitions for Business Expansion

The market is consolidated with the presence of a few key global players. Companies such as The Coca-Cola Company, Molson Coors Beverage Company, The Humm Kombucha LLC, The Hain Celestial Group, and Revive Kombucha are focusing on new product launches and strategic acquisitions for their business expansion and fortification. For instance, in September 2018, the Coca-Cola Company acquired Organic and Raw Trading Company, which makes the MOJO brand of organic fermented drinks, to expand its product portfolio.

LIST OF KEY COMPANIES PROFILED:

• The Coca-Cola Company (Georgia, United States)


• Molson Coors Beverage Company (Chicago, United States)


• PepsiCo, Inc. (New York, United States)


• GT’S Living Foods (CA, United States)


• Health-Ade Kombucha (United States)


• Reed’s Inc. (Connecticut, United States)


• LIVE Soda, LLC (Texas, United States)


• Humm Kombucha, LLC (United States)


• The Hain Celestial Group (New York, United States)


• Revive Kombucha (California, United States)

KEY INDUSTRY DEVELOPMENTS:

• In May 2021, Qumba Kombucha, a US-based company, announced two flavors of fermented kombucha tea in the market. The different flavors of Kombucha include Qumba Hibiscus Blood Orange Kombucha Powder and Qumba Gingerberry Kombucha Powder. These products do not contain artificial sweeteners.


• In April 2021, US-based Harris Tea Company announced the complete acquisition of Tetley Harris Food Group shares, which was formerly a part of Tata Consumers Product company. The company's product portfolio includes wonder drink Kombucha, Southern Breeze, Ready Sweet, Newman's Organics, and Red Rose. The company aims to provide integrated end-to-end services to its clients.


• In March 2021, Congress reintroduced Kombucha Act to amend the current taxation policies on fermented beverages. Under the current law, fermented beverages which contain 0.5% or more quantity of alcohol are classified as beer and are subject to federal taxes. Under this new amendment, the company aims to exempt Kombucha from excise taxes and other regulations imposed typically on alcoholic beverages.


• In January 2021, Habib Bakshi, CEO of SkyDiamond Elite, acquired The kombucha Shop, a company specializing in kombucha home brewing kits. The company also has its proprietary blend of ingredients that are used for preparing Kombucha. With the growing health awareness among the consumers, the company intends to expand its business through digital marketing and help consumers make an affordable change in their lifestyle.

REPORT COVERAGE

The market report provides qualitative and quantitative insights into the market. It also offers a detailed kombucha market analysis of the market size and growth rate for all possible segments in this market. Various key insights presented in the report are an overview of related markets, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.

Report Scope & Segmentation