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How Revive Kombucha pursues growth amid California labor shortage, high housing costs, blackouts

Backing from Peet's Coffee has allowed Revive to expand its reach and hone its production, but the Petaluma-based company is challenged to recruit and keep key talent in a tight labor market with high cost of living, while planning for more power outages.|

As Revive prepares to enter its 10th year in business, the Petaluma-based brewer of probiotic teas is concerned about attracting and keeping key staff to support growth as a sizable player in the fast-emerging kombucha beverage market.

But now the company, among others, faces prospect of a decade more of dayslong power outages and employee evacuations each fall. That has brought back to the front burner for Revive an enterprise resiliency plan first contemplated when it opened its new brewery four years ago, according to Sean Lovett, co-founder and chief innovation officer.

'We've been looking at it since we moved in here, but I think we'll take it a little more seriously now about getting our wiring set up for a generator,' Lovett said. 'Whether we can size it for the whole facility, at least we could keep critical tanks and product cold.'

He said he wants to have that backup plan in motion before the next period of extreme fire danger.

'I think it's going to be a big conversation in this county and the counties around us,' Lovett said.

High winds are common in early fall in Northern and Southern California. In 'red flag' conditions, gusts can combine with low humidity and warmer temperatures to whip up wildlands blazes into fast-moving firestorms like Tubbs, which destroyed thousands of Santa Rosa-area homes in 2017, and this year's Kincade, fully contained by Nov. 6 but not before burning nearly 78,000 acres and 374 structures, forcing the evacuation of nearly 190,000 in northern and western Sonoma County.

Started in 2010, Revive tripled the size of its production plant in a 2015 move from Windsor to 30,000 square feet of a former commercial bakery on Cypress Drive in Petaluma, also in Sonoma County.

That facility didn't lose power in the three September or October shutdowns this year, but the late October evacuations of Healdsburg, Windsor, areas of Santa Rosa, and west Sonoma County did leave a couple of brewery workers unable to get to the work and a few of the sales team operating remotely, Lovett said.

After managers checked in on the welfare of workers that weekend, the company decided to open for business Monday, Oct. 28, with about 90% of its workforce.

'Obviously, we weren't forcing people to come in,' Lovett said. 'But that's going to be a conversation as well, right? Because everybody responds differently to emergencies.'

But doing more as a company with fewer skilled production and marketing workers has been a challenge for Revive and other Bay Area businesses as the regional economy has been in a prolonged period of high employment and increasing outmigration to states with lower cost of living. Revive is competing for workers familiar with the food and beverage industry, particularly wineries and breweries, Lovett said.

'Over the years, we've had a lot of people move to Idaho or different areas, relocating for their own reasons, like cost of living,' he said.

Positioning itself to thrive in a tough talent market also has come as Revive has been repositioning itself in operations, finances and distribution. The workforce has been reduced from 50 in 2016 to 25, about the size of its staff in Windsor before the move.

But the more modern facility also has allowed for scaling up the business with technology, Lovett said.

'The beauty of beverage production or (consumer-packaged goods) production is that almost anything's automatable, but it all comes at a cost,' he said, noting that the cost is not only in capital but in operational knowledge. 'You still ultimately still need a skilled workforce around to make quality and safety decisions. There needs to be a breaking point where you can start to get a return on that investment or you can pay it off in a certain amount of time.'

Sean Lovett and his co-founder wife, Rebekah, brought in outside investors in 2016 and 2017. Peet's Coffee participated in the second round of investment and late last year became the majority shareholder ahead of the Lovetts.

'Peet's has been a great strategic partner in running toward our goals,' Sean Lovett said.

In addition to continuing investment, the relationship with the beverage retailer has helped Revive develop relationships with Peet's sales and marketing retail contacts. In February of this year, Revive also landed nationwide distribution in 7-Eleven convenience stores. The brewer also sells its beverages online via the Thrive Market membership retailer.

But Revive's marketing effort is primarily in California, Lovett said. It is the top kombucha producer in Northern California and among the top three such brands in total sales in the region. Thus, setting up a production plant in another county or state isn't a current focus, he said.

The core market is natural foods stores such as Oliver's Markets, Nugget Markets and Community Market, but the brews also are sold in traditional grocery stores such as Safeway and to restaurants, including a number of Petaluma venues. Distribution is handled entirely by third parties, including Morris Distributing and Rock Island Refrigerated Distributors, both of Petaluma.

Jeff Quackenbush covers wine, construction and real estate. Contact him at jquackenbush@busjrnl.com or 707-521-4256.

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