How the CEO of a Kombucha beverage company is avoiding layoffs

Sales of fermented foods and beverages have been on a tear and are expected to see continued growth this decade.

“The first three weeks [of the lockdown] in grocery we saw a surge,” Daina Trout, co-founder and CEO of Health-Ade Kombucha, told Yahoo Finance’s On the Move last week.

Kombucha is a fermented tea made from sugar, water, tea and and SCOBY, which is short for symbiotic culture of bacteria and yeast. The beverage originated in China and is hailed for being rich in both probiotics and healthy acids.

Scoby with Kombucha tea popular fermented healthy drink natural high probiotics. Image: Getty

“As traffic declined into stores so has sales but … it hasn’t been a major hit,” Trout says. She estimates her company has seen a 10% decline in sales overall since the lockdowns began, but it’s a mixed bag. She says consumption on the whole of her product is up, but the number of customers is down. 

Sales have been enough though to keep her vertically-integrated business healthy, she says.

‘A slight decline in sales’

So far, the company has not had to lay off or furlough any workers during forced lockdown and shelter-in-place orders across the country. That’s despite having to enhance safety measures and change protocols in their factory to protect the safety of workers.

“We have seen a slight decline in sales but it hasn’t been enough to substantiate the need for that,” says Trout.  “So we are just basically working to cut costs on expenses before we cut any headcount.”

Trout is hopeful in this environment that foods with health benefits will continue to resonate with consumers though likely not in a “grandiose” way.  “I think all fermented foods will benefit a slight amount from just continued focus or new focus on eating foods that improve immunity,” says Trout.

Health-Ade has pledged to donate $1 million of its products to food banks, hospitals, and medical centers. Last week, it sent 5,200 cases to first responders and medical workers at five different hospitals in the Los Angeles area.

“We figure that physicians and nurses and doctors maybe don’t only want coffee at 2 in the morning and [we’re] hearing that they actually love the bubbly break that Kombucha brings.” 

“Hopefully that helps them too from an immunity standpoint,” she says.

Founded in 2012, Health-Ade Kombucha sells its products in 30,000 U.S. retailers like Whole Foods (AMZN), Target (TGT), Publix and Trader Joe’s.

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