Peet's Coffee and Tea invests in Petaluma's Revive Kombucha

Revive Kombucha announced Thursday that Peet’s Coffee & Tea has made an investment in the Petaluma brewer that will allow it to ramp up its operations and national distribution as the fermented tea category continues to rapidly grow in popularity.

The partnership brings together a beloved Bay Area brand that pioneered selling specialty and gourmet coffee in the United States and has grown to be major force in the competitive retail market with a business started by a local couple who seven years ago began peddling their product at the Santa Rosa farmers market and now employs 50 people and distributes in 48 states.

Under the deal, Peet’s is the lead backer in a $7.5 million financing round with other investors who include Blair Kellison, chief executive officer of Traditional Medicinals of Rohnert Park. That follows a $2.1 million financing round completed at the end of 2016.

Revive co-founder Sean Lovett said he was especially attracted to Peet’s culture because it was similar to his business, which produces organic and vegan drinks with ingredients that are not from genetically modified organisms. They also are sourced under fair-trade practices. He saw that firsthand when he met with Peet’s executives at its Emeryville headquarters during investment discussions.

“I walked in and there was all-gender bathrooms; a (LGBT) pride flag was hanging up. Everybody was actively moving around there with purpose,” Lovett said. “I like that to be a legacy for the future we can learn from.”

Lovett and his wife, Rebekah, and their family will still retain majority ownership under the latest transaction.

The partnership also will open other business opportunities, such as Revive gaining the ability to access Peet’s sourcing for craft ingredients used in its non-alcoholic brews, Lovett said.

“We walked away from other opportunities,” Lovett said. “We believe the cultural alignment and the craft alignment is what matters.”

Notably, Revive will now also be distributed under Peet’s chilled distribution network, Coldcraft, which can reach more than 1,600 food service, grocery stores and Peet’s locations throughout California. The unit also has a sales team that can help leverage Revive to be placed on the crowded supermarket shelf competing with a wide array of drink selections, Lovett said.

“Our investment reflects our belief in the strength and promise of the Revive brand and our own mission to build an outstanding portfolio with multi-channel reach. In so doing, we will enable Revive to better engage with its customers and accelerate its business,” said Eric Lauterbach, chairman of Coldcraft and president of consumer at Peet’s Coffee. Lauterbach has joined Revive’s board of directors.

The kombucha market in the United States grew by an estimated 41 percent last year to $534 million in wholesale value, according to Beverage Marketing Corp., a New York research and advisory firm.

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