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When Remedy Drinks’ founders began brewing kombucha on their kitchen bench 10 years ago, there was barely a market for the fermented health drink. They knew they would have to help build it up with a high-quality product and captivating marketing.
Their efforts produced impressive results, and as demand grew, the company moved to a small facility in Melbourne, where it quickly ran out of space. They then faced a challenge that every startup hopes for – how to respond to a swelling number of orders without sacrificing quality.
Some other beverage companies were beginning to enter the market, but those were merely outsourcing the production of their kombucha and then selling it through their own channels. For Remedy, that wasn’t good enough; production had to stay in-house to ensure the best quality. So the company opted for rapid, ad hoc expansion of its manufacturing capacity.
“We were very determined to make our own kombucha from the beginning, but as the business grew, we ran out of space,” Managing Director Chris Gillard says. “So we rented the place three doors down in order to maintain control of the manufacturing process. Then, when we ran out of space there, we went around the corner and rented another place.”
Eventually, Remedy had four different facilities operating to keep up with demand. It may not have been the most cost-effective set-up, but it was vital in order to stay true to the company’s founding mission to “shake up fizzy drinks for good” by offering a genuinely healthy and delicious product.
“Maintaining your own manufacturing is a very important part of protecting your brand and the quality,” Gillard says. “We’re damn good at making kombucha, and we now know we’re good at scaling the production of it. That’s something that separates us from a lot of brands that get other people to make their kombucha.”
“Maintaining your own manufacturing is a very important part of protecting your brand and the quality.”
Gillard says Remedy’s focus on quality is a vital differentiator. “Fermenting drinks and creating ones that taste good at the end of the process and have no alcohol in them requires quite a bit of sophistication, know-how and technical knowledge,” he says.
He joined the company as Managing Director in 2019, at a time when Remedy had already done a lot of scaling up but needed his expert guidance on perfecting the company’s structure, processes and organizational evolution. “One of my key focuses since arriving was to develop a longer term supply strategy that would support our marketing plans,” he explains.
On top of this, developing and maintaining strong, long-lasting relationships with suppliers is also of high importance at Remedy. “Our partnership with Teavision, for example, goes back many years. The level of commitment to quality, service, innovation and sustainability that they demonstrated has led to us increasing their scope of supply to include multiple other raw materials over that time with multi-year contracts in place,” Gillard says.
Opened in August 2022, Gillard’s innovative strategies began to pay off when Remedy opened a new, purpose-built facility in Melbourne’s Dandenong South, which brought all of its manufacturing processes back together under one roof and set the company up for, what he anticipates will be, an even more rapid expansion.
At 18,268 square meters – the size of a MCG football field – the new US$16.6 million facility marks Remedy as the third largest producer of kombucha in the world. “We’re leading the way making the best tasting, healthiest drinks going around, and the new Remedy Fermentary will allow us to deliver on the significant increases in demand forecast for the coming years as more and more consumers look to reduce their sugar intake and seek out healthier options,” Gillard says.
The move enables Remedy to consolidate production under one roof and streamline its supply chain, without compromising on quality or its traditional small batch brewing process. “We are particularly excited about the opportunities the new Remedy Fermentary will provide for innovation, both within our kombucha range and in creating new products,” Gillard explains.
“While we are very pleased with how we’ve built the brand over the last few years, we still see huge amounts of growth in the kombucha segment of the market. If you looked at the total non-alcoholic, ready-to-drink landscape, kombucha would be about one-to-two per cent of total sales, so there is an enormous amount of opportunity to grow there.”
As well as growing sales of kombucha, Gillard is also pursuing expansion by moving into other beverages. “We started as a kombucha brand that was very much rooted in health,” he says. “Over time, we’ve taken our kombucha strategy and built it into a broader soft drink play.”
Early this year, Remedy launched Sodaly, a fermented prebiotic soda available in six flavors. The company’s new offerings also include apple cider vinegar switchels and a range of shots – 60-milliliter drinks that boost immunity and aid digestion. “The idea is that it’s a little dose of goodness,” Gillard says.
While other countries, including the US, have well-developed markets for these non-alcoholic shot drinks, such products have struggled to take off in Australia despite several attempts by other companies to launch them over the past two decades.
“Various people have tried it here, but in general they were targeting the energy drinks part of the market, whereas we’re focusing very much on the ‘better for you’ aspect of shots,” he explains.
“We started as a kombucha brand that was very much rooted in health. Over time, we’ve taken our kombucha strategy and built it into a broader soft drink play.”
There are signs that this segment of the market is heating up. Local competitors in the kombucha space, as well as in juice, are also starting to sell shots of their beverages, while some new brands are entering the segment, too.
“The retail marketplace is excited about growing the category because it’s an efficient use of space,” Gillard says. “I think the consumer likes the idea of having something that’s good for them that’s not a large amount of liquid, that they can consume quickly on the go. So we see that being a great area of growth.”
Remedy also has a range of other innovations in the pipeline that it will roll out over the next two years. “Rest assured, we’ve got lots of ideas,” Gillard says. But he cautions that while it’s great to have a creative team bursting with new ideas, it’s also vital to be meticulous about how and when you try to bring them to market.
“It’s really important to make sure you take the time before you go out to market to ensure that your proposition is going to work,” Gillard says. “Innovation’s important to growth, but it can just as easily be an expensive exercise if not done well. So we’re trying to do fewer bigger, better ideas, sequenced out over an appropriate time frame.”
The company is also innovating with different packaging formats. Remedy’s kombucha was first launched in a brown glass bottle, which is one reason it was able to cut through and grab shopper’s attention on the shelves.
“The brown glass bottle probably helped disrupt the industry, because most people felt brown glass bottles were the domain of the beer industry,” Gillard says. “People weren’t used to seeing brown glass bottles in a soft drink aisle.”
“The brown glass bottle probably helped disrupt the industry, because most people felt brown glass bottles were the domain of the beer industry. People weren’t used to seeing brown glass bottles in a soft drink aisle.”
Now that consumers are more familiar with the product, Remedy is trying other packaging formats, such as colorful cans.
“In addition to expanding our portfolio, we’ve spent a lot of time getting our pack price channel architecture right,” Gillard says. “That’s industry speak for which products should go into which outlet, in which sizes, at what price points.”
While Remedy works on carving out a bigger space in the Australian and New Zealand markets, it is also expanding its international footprint. The company already has a firm foothold in the US, Canada, the UK, Singapore and Hong Kong and is now building on that.
“Increasingly, you’ll see us in the Philippines, Thailand and Korea,” Gillard says.
As that expansion continues, Gillard will work to ensure that Remedy stays true to its founding values. “We’re big on authenticity; it cuts to the very heart of the drink we make,” he says.
“Think back to our founders,” he adds. “Who would’ve thought of creating a kombucha business 10 years ago in this marketplace? Most people told them they were crazy and it wouldn’t work, and so there’s a ‘have a go’ attitude in our culture. Don’t die wondering.”
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