It’s said that Genghis Kahn and Japanese samurai sought kombucha for its energizing properties, and that an ancient Chinese emperor credited his longevity to the fermented tea-based beverage. Siberians scoured their native birch forests to source ingredients for it. In recent times, after the rationing of tea and other goods during World War II, it became ever more difficult to procure.
Now, Middlebury-based AquaViTea is meeting the growing demand for kombucha with a great product, expanding distribution, fresh new flavor blends like Peachmint and Watermelon-Habanero, ‘adult beverage’ line extensions…and, of course, financing from the Vermont Community Loan Fund.
AquaViTea CEO and founder Jeff Weaber started out in the beer industry “at the bottom of the ladder” of a Portland, Oregon micro-brewery. He started climbing, exploring and growing the business, “so I had some experience with fermenting,” he recalls.
Weaber’s wife Katina had been attending naturopathic medical school in Portland, where she’d learned about the health benefits of kombucha. Sensing an opportunity, Weaber decided to tap in, and began trying out kombucha batches at the brewery.
By 2005, the couple had relocated to Vermont, where Weaber started test-marketing his concoctions at the Middlebury Farmers Market. Met with an enthusiastic response and many raised glasses, Weaber launched AquaViTea in 2007.
Kombucha is created when a SCOBY (an acronym for symbiotic culture of bacteria and yeast, a dense cellulose ‘mat’) develops at the top of a brew tank of tea. The SCOBY feeds on sugars within the tea mix and ferments, yielding kombucha, said to aid digestion and boost immunities. (Weaber acknowledges that kombucha’s health benefits are not yet clinically proven, though devotees swear by it.)
As sales rose, Weaber moved production from his Salisbury farm to a facility in Bristol, and began thinking beyond bottles.
“Jeff was the pioneer of kombucha on tap,” says Laura Smith, AquaViTea’s Executive of Special Operations. The now-prevalent AquaViTea taps, a bar-top-like set-up, allow customers to reuse glass containers or growlers, in synch with the healthy, mindful stance of the company, she explains. “That had a lot to do with our getting more mainstream traction,” Smith notes, referring to the brand’s entrance into Hannaford supermarkets, larger health food outlets and even convenience stores.
Continued growth propelled AquaViTea beyond the start-up stage, ultimately necessitating even bigger digs. In 2015 AquaViTea relocated from Bristol to still larger quarters in Middlebury.
Soon, other mid-stage business needs and considerations came into play. The fermentation process of kombucha naturally leads to a certain percentage of alcohol in the product. The Alcohol and Tobacco Tax and Trade Bureau regulates alcohol content within the beverage industry. If AquaViTea were to be marketed as a non-alcoholic beverage, per its business plan and distribution, the naturally-occurring alcohol would have to be extracted. That led to the inevitable question of what to do with all of that deliciously kombucha-kissed alcohol? The answer: kombucha vodka.
The matter of how to extract that alcohol led Weaber to the Vermont Community Loan Fund. “We needed an alcohol spinner. It’s a stainless steel machine about 30 feet tall, 20 feet long and eight feet deep. It looks like a rocket ship. It’s a feat of engineering,” Weaber says, a hint of awe in his tone. “We’d taken on a lot of early investments on our own, so we were shopping for a lender who could look beyond the typical balance sheet,” he recalls.
It was a match. The Loan Fund, many of whose borrowers have been declined by traditional lenders, considers potential for job creation and community impact for a strong local economy, rather than focusing on numbers alone. Granite State Development Corporation also contributed to the financing.
“We saw AquaViTea as already having gained significant ground in a growing category segment,” says Loan Fund Executive Director Will Belongia. “We saw sustained growth, talented management, and a great product to boot,” he adds.
Vodka production is underway, and kombucha distribution now flows in-store and at events throughout New England. A top-secret new category extension is in development. Anticipated new hires will allow Weaber to “focus more on innovation.” He’s liking this trajectory.
Weaber credits the Loan Fund with providing great opportunities for mid-stage businesses like AquaViTea.
“In Vermont, there’s a good network of investors for start-up businesses getting off the ground, and, if you’re a mature business, there are resources there, too. But there’s a big gap for mid-stage companies. The Vermont Community Loan Fund understands the needs of mid-stage companies, and they specifically look at growing Vermont versus just a borrower’s bottom line,” Weaber says.
Additional financing, bringing 4th quarter lending to a total of $985,000, was also provided to:
Baby Steps Childcare, Proctor
Heather and Matthew Martin came to the Loan Fund with plans to start up a new infant/toddler child care program, operating out of their home. They’ll use Loan Fund financing, as well as a grant from the Building Bright Spaces for Bright Futures Fund, to convert their garage into the new program’s home, with a kitchenette and ½ bath, creating care opportunities for 12 children and their families, one part-time and three full-time jobs.
Hilltop Welding, New Haven
Hilltop Welding owners Randy and Marie Boise sell welding supplies and safety clothing. Previously, Randy was a self-employed welder and metal fabricator. The couple used Loan Fund financing to construct a 4,000 square foot shop building on their residential property, so that Randy can resume his welding and metal fabrication business while continuing the welding supply sales business. Financing led to the preservation of two existing jobs, and the anticipated creation of two new ones.
Pulmac Systems International, Williston
Pulmac Systems manufactures, distributes and services precision instruments that measure the quality and strength of fibers and pulp in paper manufacturing. The majority of the largest U.S. paper mills utilize Pulmac instruments. Having successfully stepped up production to meet increased demand with help from previous Loan Fund financing, they requested a renewal of their line of credit to support continuing growth. Financing resulted in the preservation of one part-time and six full-time jobs. pulmac.com
Sweetland Farm, Norwich
An 80-acre, diversified vegetable and livestock farm, Sweetland Farm sells its products primarily through a community supported agriculture (CSA) program via wholesale accounts and out of their barn-housed farm stand. They’ll use Loan Fund financing to fund improvements to the barn including a vegetable wash and pack station, more coolers, and more. Financing, provided through the Loan Fund’s SPROUT deferred-payment loan program, led to the preservation of four jobs, and the creation of three new ones. sweetlandfarmvt.com
Tattle Street Cattle Farm, Reading
Kevin Channel used financing from the Loan Fund’s SPROUT deferred payment loan payment program to purchase livestock for his start-up Tattle Street Cattle Farm. The operation raises pigs and cross-bred Wagyu and Devon cattle that produces superior beef. Financing resulted in the creation of one new job, and the preservation of another.
Vermont Natural Beef, Benson
Vermont Natural Beef raises grass-fed beef, delivering custom- cut sides throughout New England, Northern New Jersey, and parts of New York. They used Loan Fund financing to complete renovations and furnish a recently acquired events space and bed-and-breakfast property, with the goal of attracting tourism revenue. Financing led to the creation of three jobs. vermontnaturalbeef.com