Americans are craving Quebec kombucha

13 December 2019 by National Bank of Canada
Julian Giacomelli, Co-founder and President of RISE

For years, RISE's fizzy drink proved to be so popular with Quebec consumers that the manufacturer could barely meet demand in the summer. The Saint-Léonard SME is now ready to hit the U.S. market with the help of major investments that enabled it to expand production.

Bottling flavours from around the world

Other than the Quebec-produced glass bottles, most of the ingredients used to make kombucha are bought all over the world. The drink's key ingredient is the "mother," a bacterial culture that metabolizes sugar and caffeine during fermentation. "It's a living ingredient that was first brought back from Hawaii by two of the company's founders, Mathieu Gallant and David Côté," explains Julian Giacomelli, RISE Co-founder and President.

Our teas are imported from Asia, while the sugar comes from a Paraguayan cooperative. "We mainly work with local importers," specifies Mr. Giacomelli. "But we are simplifying purchasing management by entrusting procurement, logistics and contacts with foreign suppliers to specialists. This allows us to focus on researching and studying product trends."

The United States: A huge market right next door

The company has been eyeing the Northeastern U.S. for many years now. "Less than 1,000 km from Montreal, this area represents a pool of potential clients that is twice as large as all of Canada. Three years ago, we took the plunge by choosing Vermont as our test market. They have a great food culture, Canadian food companies are well respected and kombucha was already popular," summarizes Mr. Giacomelli.

Today, RISE has a U.S. subsidiary with its own sales force to ensure the company is close to consumers. Exports still only represent a modest part of sales, but RISE's expansion to other states in the Northeastern U.S. last summer should increase sales south of the border.

A partner in this international adventure

Thanks to the help of seasoned National Bank experts, RISE was able to easily open bank accounts and do business on U.S. soil. "We also hedge against exchange rate fluctuations by buying U.S. dollars in advance with National Bank," adds RISE's president.

To meet increasing U.S. demand, the manufacturer expanded and automated its Saint-Léonard factory. Investments of $7 million, thanks to financing from National Bank, have enabled the company to double installation space and quadruple production capacity. "We are now well equipped to meet U.S. demand for at least three years," says Mr. Giacomelli.

The company is open to expanding into Europe, but not in the short term. RISE trademarks have already been protected in Europe and several Asian countries. Since the glass bottles are heavy and kombucha must be refrigerated, exporting the product overseas would be quite expensive. Instead, the company would set up its own manufacturing plants abroad. 

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