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Saturday, Oct 1, 2022

JuneShine Completes Celebrity-Led Series A Funding Round

In 2019, JuneShine, Inc., the Scripps Ranch-based maker of hard kombucha, tripled its revenue. It opened wholesale distribution in close to 30 states and increased production capacity, according to Co-Founder Forrest Dein, adding the brand is available in close to 10,000 doors across the country.

Now the 2018-founded company with roughly 100 employees, is planning to further accelerate its growth. It recently closed a celebrity-led Series A funding round, securing investments from a host of stars. This includes famous names like DJ Diplo, Comedian Whitney Cummings and U.S. Women’s National Soccer Team members Ashlyn Harris and Ali Krieger. Existing investors Peter Rahal, Litani Ventures, Amberstone Ventures and Plus Capital also contributed funding this time around.
While terms weren’t disclosed, Dein confirmed this round was larger than its 2019 seed round, valued at $5 million. He added, the company is expected to double its revenue from 2020 to 2021, reaching close to $30 million by the end of this year.

Key Cultural Driver
“Building a category takes time. So, to help jumpstart it, one way is to integrate the category into culture and music is one key cultural driver,” said Dein, who co-founded JuneShine with partner Greg Serrao. “By working with musicians, we can bring JuneShine to something that already feels familiar. It would’ve been harder to do this on our own. This is a way for us to kickstart that category growth. The unique thing is that all of our celebrity investors found JuneShine on their own – they either bought it at a store or a friend gave it to them. And, so, we saw them with the product and reached out. It all happened authentically. Now, the first time someone tries JuneShine at a Diplo concert, they are more likely to remember that moment.”
Added Diplo, born Thomas Wesley Pentz, about how he discovered the drink: “As I’ve gotten older I’ve become much more aware and intentional about what I put in my body because it makes such a difference in my overall mood and energy levels. Last year I made hard kombucha my drink of choice because I feel better when I drink JuneShine.”

Triple Its Revenue
While the Series A will speed up expansion for the company, JuneShine was already on an organic growth path.
Its goal was to triple its revenue from 2019 to 2020, which it achieved in spite of the pandemic, said Dein. It also went from about 10,000 barrels in 2019 to 20,000 in 2020. In 2021, it increased to 60,000 barrels, he said.
“When COVID-19 hit mid-2020, it changed our business,” said Dein. “At that time, we were around 70% off-premise, like grocery chains, and 30% on-premise, including bars. Overnight, we lost 30% of that business with bars and restaurants closing. To make up for that, we increased our grocery distribution and launched our direct-to-consumer channel. In the alcohol industry, the demand wasn’t severely impacted. So, shifting our sales and marketing staff across the country from bars and restaurants to grocery stores overcame the dip. We were able to still hit our forecast in 2020.”
JuneShine began delivering only in select markets in California in 2020, said Dein. By January 2021, the direct-to-consumer channel grew to 44 states, he said.

New Flagship
The Series A investment comes just as JuneShine opened its new flagship Santa Monica tasting room in late April, said Dein. The 2,000 square-foot venue has 16 flavors of JuneShine on tap, he said, adding that patrons can also buy merchandise there.
“West L.A. and Santa Monica are the heart and soul of the brand’s roots and we are next to world class retailers here,” he said of his decision to set up shop there.

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237.1% CAGR
Overall, the kombucha category is growing.
IWSR, a drinks market analysis company, reports hard kombucha volume in the U.S. grew more than 237.1% CAGR (compound annual growth rate) between 2016 and 2020. According to trade group Kombucha Brewers International, sales of hard kombucha have grown from $1.7 million in 2017 to more than $12 million in 2019. In 2020 alone, volume was over 177.5% in the country, it states.
“Millennials and Gen X like to experience different alcohol options – they are putting down beer, wine and liquor and trying new alternatives,” said Dein. “In the last two years, hard seltzer was the trend and now it’s graduated to hard kombucha, hard teas and other better-for-you alcohol. People are looking for more mindful ways of consuming and we are perfectly positioned here. The timing is right as people are looking for different options of alcohol.”


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