In a retail world dominated by cutthroat competition at a national level — think McDonald’s launching its McCafe product line to take on Starbucks — two St. Petersburg beverage companies are taking a different approach.
Grassroots Kava House and Mother Kombucha are rapidly expanding companies that are working to ensure their industry’s well-being continues to mirror the health benefits that are attributed to the drinks they sell.
Leaders of the two businesses closed out Startup Week Tampa Bay on Friday, describing their efforts to promote positive impacts for their workers, their communities and the environment, while also building their brands.
Kava and kombucha are beverages that relatively few people were familiar until recently but are now moving into the mainstream. Kava is a drink originally from the South Pacific known for its calming effects, while Kombucha is a living probiotic tea.
There are about 150 kava bars in the United States, according to kalmwithkava.com, with a heavy concentration in Florida.
Kava especially has caught on in St. Petersburg, where there are 13 or 14 kava bars and about three dozen locations that serve kava, said Kenneth Hoyumpa, co-founder and co-owner of Grassroots, located in downtown St. Petersburg.
“Pinellas has the distinction of having the most kava bars in the United States, the largest concentration of kava,” said Hoyumpa, adding that Visit St. Pete Clearwater even features a video about kava on its website. “But we’ve never considered any of them competitors. They’re industry colleagues.”
Kava is made from the root of a plant in the pepper family that is ground into a fine powder. Because it is not well-known, local retailers want to educate the public about it.
“The more we educate people and the more we put out a good product for everyone, the more people will be interested,” Hoyumpa said. “It’s important for us to have a good reputation for all of us. We all prosper because of it.”
Kombucha — brewed by combining tea and sugar with a fermenting culture — has a higher profile. U.S. retail sales of refrigerated kombucha and other fermented beverages were $556 million in 2017, up 37.4 percent over the prior year, according to Food Navigator, in a report on KombuchaKon, the industry’s annual gathering.
“We get together once a year, we talk a lot about brewing practices, we share ideas on processes and equipment,” said Elizabeth Vanneste, sales director at Mother Kombucha, a St. Pete company that brews kombucha and distributes it to retailers. “It’s a pretty close-knit community. As much as we compete — and we do compete pretty fiercely, the space is getting quite crowded — there’s still a lot of respect, even from the big four national brands. They still come up to us and say, ‘We think what you are doing is great, we love the idea of local and regional players.’ It’s an industry that’s growing 39 percent to 42 percent a year and there’s plenty of room for lots of local people.”
Mother Kombucha is in the process of becoming a certified B Corporation, or one that meets prescribed standards for transparency, accountability and performance and other principles associated with conscious capitalism.
“Our relationships with our suppliers, our employees, our customers and our final consumer, everything along that path, we want to make sure we are doing it in a way that’s ethical and sustainable,” Vanneste said. “From a marketing perspective, it’s also a good thing to do but that isn’t why we’re doing it. It’s because we’re committed to this idea that businesses can be profitable and do good at the same time.”
Mother Kombucha has raised between $500,000 and $1 million in capital, according to PitchLyst, and becoming a B Corp is key to growth.
“You have to think about what’s going to happen to the company in the next five years, 10 years, whether someone offers to purchase the company, whether we do another larger round to increase our investor pool,” Vanneste said. “Whatever happens along the way we wanted to protect what we built, our purpose and mission, so that if anyone does purchase us, as much of the baby that’s been created can be retained.”
Grassroots’ approach to business is to “invest in customers,” providing not only cups of kava, but space for remote employees to work and network, Hoyumpa said. “Our goal is not to sell products, but to sell experiences. We’re creating communities to bring people together.”
Grassroots Kava House expects to open a second location in Seminole Heights this summer.