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Launched at a Sonoma County Farmer’s Market in 2010, Revive Kombucha, founded by co-owners Sean and Rebekah Lovett, is being taken to a new level with an infusion of capital that its founders say will enable them to expand Revive’s brand awareness, grow brewery operations and broaden its distribution network.

On Dec. 20, Peet’s Coffee announced it was taking a majority stake the maker of the fermented, lightly effervescent, sweetened black or green tea drink.

“Peet’s approached us in early 2017, becoming an investor later that year,” said Sean. “As we worked together over the last 18 months, we had a number of discussions about what it takes to be an evergreen, sustainable, purpose-driven and profitable business. We saw the greater opportunity to fulfill this vision if we became business partners.”

Under terms of the agreement with Peet’s, the Lovett’s will keep their equity and leadership positions at Revive while maintaining the brand’s innovative approach to batch brewing and natural fermentation methods, according to the Peet’s Coffee press release. Sean is CEO at Revive, and Rebekah is director of operations and the director of compliance.

“We were self-funded for the first six years,” said Sean. “Seeking outside capital was not an easy decision or anything we ever considered when starting. Investors provided an initial $2.1 million in 2016. After moving into a new facility in Petaluma, we knew we didn’t have enough resources to sustain operations and fund growth. We’re very grateful for the partners that believed in the vision we had for revive.”

The same partners, with addition of Peet’s Coffee, funded another $7.5 million round of capital in late August of 2017.

In 2018, Revive experienced rapid growth in California of more than 168 percent versus the year before, based on 52 weeks of IRI multioutlet market research as of Nov. 4.

Nationwide, the kombucha market was up 41 percent last year, and the wholesale market is estimated to be $354 million, up by triple digits, according to Beverage Marketing Corporation data. This category is expected to reach $1.2 billion wholesale by 2021.

TECHNOLOGY AND A DASH OF STARBUCKS EXPERIENCE

The Lovetts lived in the Chicago area before coming to Sonoma County. While there, Sean began his career during the booming dot-com era. Together his older brother, Jim Lovett, the duo founded Integrated Computer Services, a company building data centers and fiber optic networks for many Fortune 500 companies. They ramped that business to over 100 employees by 2001, when Sean decided to start his own enterprise.

“I was born into a family of tech entrepreneurs," Sean said. "Dad built several successful businesses in the car audio and electronics sectors. As a kid I loved taking apart — and blowing up — speakers and amplifiers. Technology and innovation have always been attractive to me, but like many kids, I really didn’t know what I wanted to do.”

While paying his own way through college, he worked at Starbucks learning about important aspects about the beverage business and the retail sector.

“I was a pretty darn good barista!" Sean said. "Then my brother called me in 1995 and asked if I would help him with his new venture. It was a once in a lifetime wild ride, we grew fast and I worked in many different environments building computer networks, from railroad steel mills, injection molding plants, True Value distribution centers, to MCI call centers in London. I quickly learned how hundreds of different businesses operate.”

In Chicago, Rebekah was working at Whole Foods Market. She introduced Sean to kombucha as a way to kick the Coca-Cola habit.

“I was not impressed with the taste, but I kept drinking it and loved the affect it had on my body.” said Sean.

“In 2007, I exited my last business, a high-end custom home integration firm. Rebekah supported me while I searched for my next entrepreneurial journey. At the time, I was focused on improving my personal health, working out 40-50 hours a week, but I still loved to drink soda. After trying kombucha, I said to myself, I can make this better with a flavor as delicious as the beverage is healthy — something my fellow Midwestern’s would drink.”

The Lovett’s move to the west coast was originally inspired by a desire to learn more about the wine business.

“We have property in India that we wanted to turn into an estate winery. While I had some sommelier experience, I had never made wine. I also had never finished my degree, after dropping out to run the business with my brother. I heard that Sonoma State University had a Wine Business program. So, I figured I could finish my degree and get hands on experience working in wineries at the same time. Since Rebekah could get a job at Whole Foods anywhere, I said, let’s move to California. She replied, ‘Let’s do this.’ So, we packed up a truck with our two dogs and drove to California in May of 2009.”

SCALING UP, FINDING BACKERS

Sean worked at Trione Winery while taking classes at SRJC. He never made it to SSU. Instead, he started brewing kombucha on the back porch of their rental house and set up a small fermenting operation in a walled-off portion of their Santa Rosa garage.

The fledgling business soon moved into Tierra Vegetables commercial kitchen to establish Revive’s first official fermentation center, with just Sean and a few part-time young people brewing and distributing products through local farmer’s markets, grocers and restaurants.

“We started with one brew, our version of a craft cola, and poured our hearts into making it as good as we could. We rode bicycles with custom trailers to take kegerators (small refrigerators designed to hold a keg) to local farmers at night. From day one till now, it has been a very scrappy DIY process of building the business. During the early years, we built everything ourselves or modified used equipment for our brewing, bottling and bottle wash operations.”

Sean said Revive scaled organically, taking over additional 1,000-square-foot units year by year in the business park behind Home Depot in Windsor off Shiloh Road beginning in 2010. In October 2015, Revive moved into 30,000 square feet of commercial space at 3900 Cypress Drive in Petaluma.

“In 2013, investors were coming to us, but despite having real need for additional capital, we were not interested at the time, nor were we ready," he said. "However, we did approach more than a dozen banks who initially said yes, but later said it was not the right time to finance us, resulting in a lot of wasted energy and time. The process was extremely discouraging and frustrating. Later that year, we found a small equipment finance company who helped us purchase our first mini bottle filler. The following year, we finally found our ‘banker,’ Paul Yeomans, formerly with Umpqua Bank. His support was critical to our expansion in 2015. Paul believed in us and came through, he and his team supported us with a line of credit and equipment financing.”

By 2015, Revive was delivering its innovative brews through its award-winning bottle exchange program, to six states, from Oregon and Washington to Utah, Arizona and the Rocky Mountains as well as Southern California. This process was hampered when an exclusive distributor went out of business, causing the founders to start thinking about changing its route to market and packaging options.

“You have to point your ship toward a north star to stay on course, otherwise you might not like where you end up," Sean said. "It’s not a perfect process, but I was focused on choosing the right short term — and more importantly — long-term partners that could help us drive our vision. We wanted to find partners that shared our values, culture and ethos.”

WHAT COST OPPORTUNITY?

Three years earlier, Sean met Blair Kellison, CEO of Traditional Medicinals, when they both were part of a CEO panel at Santa Rosa Junior College addressing entrepreneurship. Through this contact, Sean started attending meeting of the Food Industry Group (FIG), a group which supports food production in the North Bay.

“My goal was to support a friend who was also a member of the North Bay FIG,” said Kellison, who served on Revive’s board of directors for more than two years.

“Sean and Rebekah have truly mainstreamed the taste of kombucha with a significant point of difference in a category that has lots of potential, and one that is both sparkling and non-alcoholic. Peet’s Coffee is trending toward cold beverages, so this is a good move for Revive,” Kellison added.

Kellison observed that the product line Revive’s founders developed uses fair trade, organic, non-GMO certified natural ingredients, that are vegan and raw, to deliver a traditionally fermented kombucha that is tastes good. The brews are gluten free and lactose free and offer a variety of probiotic and health-related benefits.

GETTING A GRIP ON GROWTH

Revive continues to be nimble when it comes to refining and innovating the business, while also economizing and streamlining operations.

“We want to be the best at what we do, and sometimes this means changing our product menu," Sean said. "We discontinued three of our 10 brews. We once had over 50 employees in 2016, now we have a really strong team of 20. Our objective today is building an efficient, sustainable and profitable business.”

Sean said his team continues to re-center itself around the company’s original brand vision and purpose, distilling down and focusing on what Revive’s brand stands for. He said it involves discipline and focus, plus realizing that there are only a few things you can do well at the same time.

“We have taken on a lot of ambitious passion projects over the years, from using all biodiesel vehicles for delivery to building a 250-plus location bottle-exchange program, which we ran for over seven years, with a return rate of over 70 percent," Sean said. "We reused millions of bottles and washed them with reclaimed water from the brewing process. At the same time, you have to survive, pay bills, and most importantly make a great product. Sure, you have to face a couple of challenging years. When starting up and scaling you need great ideas to aspire to as well – but it takes profits to get there.”

Sean and Rebekah Lovett held an all-hands meeting at the start of 2019 to set company goals.

“I feel like we have the opportunity to reach our vision now more than ever before," Sean said. "We have a partner that is aligned with where we’re going and with the resources to execute that plan. We’re making a radically unique kombucha while building a radically authentic brand. It all starts with a leader, but more importantly requires a committed team to make that dream a reality. Today we consider our 20-member crew and the Peet’s team as part of be a big family helping us to bring our unique and innovative brews to market, fulfilling our purpose one bottle at a time.”