Craft accelerator Founders First has topped a busy few weeks of investment by backing alcoholic kombucha brand K.BOOCH.

K.BOOCH, which is based in the Victorian seaside town of Torquay, is looking to accelerate expansion plans with the help of the investment.

Nick Cogger, founder of the fermented beverage business, said that he was connected with Founders First after looking into fundraising for the company.

“They’re really onto something I think. The industry has been crying out for access to capital and their distribution network is looking pretty good as well,” Cogger explained.

“We built out the business and what we were trying to do, and got some distribution under our belts, and approached them to see if they had some interest.”

Cogger said that he would use the investment and support from Founders First to drive its growth programme, and aims to position the K.BOOCH brand as a leader in the category.

“We were looking for a capital injection primarily at the start, we’ve got a pretty aggressive growth plan over the next 18 months, which includes involvement in maybe 30 or 40 music festivals over the next six months, different packaging types [including moving to cans to enable them to supply festivals and more retailers], and we’re looking to set up a mini taproom in Torquay.”

He explained that it was the experience of the Founders First team that made a partnership with the craft accelerator so attractive.

“The opportunity to do something with Mark and the Founders First guys was pretty appealling, they have done and know how to scale businesses. They were our number one option.

“Being a business owner you’re generally on your own most of the time, you’re hoping you’re doing the right thing. It’s good to be able to use them as a resource and someone to talk to during the week.

“For example Cam Buckland [sales director at Founders First] who was at CUB and then Dan Murphy’s, talking through strategy stuff with him has been pretty great.”

The partnership differs from those in recent weeks, with Ballistic Beer and Slipstream Brewing, in that K.BOOCH will not be making use of the Founders First Indie Craft Collective, effectively a shared national sales team.

“The normal model is sales and distribution too, but we’re keeping our sales team for the foreseeable future.

“We went to market in February and had sales people in every state from the beginning of the year. We started with a national plan and a national footprint, whereas I think some of the other craft beer investments are very local,” Cogger said about the decision.

He said that K.BOOCH was tapping into a growing demand for health-focused products from more wellness-conscious customers.

“There isn’t an article relating to beer, wine or anything like that that isn’t talking about being “better for you” at the moment – all the low calorie, low sugar, lower abv products that lump into that category.

“We want to be that category leader given that we are low sugar and low calorie.

“Normal kombucha in Australia has the highest household penetration in the world, everyone knows what kombucha is generally, now we need to educate consumers so when they walk into a bottleshop they know where to find it, and that’s the tricky bit.”

He said that because kombucha was a relatively new product to the market, it had been difficult for everyone, from bottleshops to the Australian Tax Office, to define.

“We’re in an RTD fridge, when we’re a brewed product, probably closer to a cider or ginger beer.

“The hard part is we get RTD taxed, because it’s in a non-category. The ATO don’t have a ruling on alcoholic kombucha specifically so it gets lumped in with RTD or ‘Other’ alcoholic beverages – we’re in the ‘Other’ category,” he said.

K.BOOCH’s products undergo a 50-day fermentation process, initially fermenting the kombucha for 30 days and then undertaking a secondary fermentation for another 14 days.

“We feel like that process needs to be rewarded in a better tax bracket, but the benefit of being in the RTD fridge is that because it is an RTD tax product, our pricing doesn’t look out of place.”

Cogger said that he has high hopes for the growth of alcoholic kombucha in the market, and K.BOOCH can already be found in 600 retailers across Australia.

“I definitely think it will be a permanent product, it’s not a fad-type drink like some other RTD products can be because there are a lot of barriers to entry in launching an alcoholic kombucha.

“We definitely think it’s going to grow significantly, with this being the first summer that there are alcoholic kombuchas on the market, we’re expecting consumes to really pick it up,” Cogger predicted.