Petaluma’s Biotic Brands navigates COVID-19 challenges while giving back to Sonoma County

The coronavirus pandemic has not been easy on Sonoma County’s small businesses, many of which are struggling to navigate choppy, uncertain operating conditions.

That’s been the case for Biotic Brands, a Petaluma drink company started in 2014 by Michael Johnston and his sons Adam and Ryan. The business produces kvass, a traditional eastern European drink the Johnstons have updated from their Polish heritage for the 21st-century American consumer. In the process, they have developed a small cult following for those who want a healthy drink without a lot of additives or sugar.

Biotic makes the drink from bacteria fermented with organic carrots and beets, then flavors it with cold press juices to produce flavors such as lime, turmeric, ginger and pineapple. The probiotic drink carries no refined sugar, allowing the company to carve a niche for consumers concerned about their intake. That has helped Biotic find increasing success in the natural foods sector with the organic drink, after the pandemic delivered an early punch to the bottom line. The business went from selling its beverage to 60 retail accounts in September 2019 to 350 across the West Coast at the beginning of the year.

Then COVID-19 struck in March.

“2020 was set to be a big growth year for us, but when COVID-19 hit expansion slowed to a near halt,” said Adam Johnston, chief executive officer of Biotic Brands.

His brother, Ryan, head of marketing and impact, said that company sales were initially cut in half.

But the Johnston family persisted along with the one other employee who works at Biotic, even though each has taken big pay cuts to stay in business.

Despite the challenges, Biotic has found time to give back this holiday season with a promotional campaign through the end of the year that stands to boost business going into 2021. For every Biotic bottle bought locally at Oliver’s Market or Community Market, the company will donate another one to Redwood Empire Food Bank, where demand for the nonprofit’s sustenance has grown almost 200% during the economic crisis brought on by the pandemic.

“There's incredible food insecurity going on ... then there's a real lack of healthy food and a great many of the people that use their services are diabetic,” Ryan Johnston said of the food bank’s clientele.

The philanthropic effort also paired well with Biotic’s own business plan to source raw materials in the area and keep money in the community. It uses renewable energy from Sonoma Clean Power and sends food waste to Green Star Farm in Sebastopol. That commitment has carried through as it became a B Corporation this year, after meeting standards for environmental commitment, treatment of workers, overall relationship with the local community and business governance to achieve such a status.

Oliver’s and Community Market were natural allies for the promotional product campaign, Ryan Johnston said.

“Those are two great local retailers and partnering with them, especially through these times, is important because they've been on the front lines in so many ways,” he said. “We sell almost exclusively through retail. ... Everybody was amazingly overwhelmed when COVID hit and it's been incredible to watch how those teams have bounced back from this.”

The partnership also helped place Biotic drinks back on the shelves at Oliver’s stores. Dustin Canter, the natural grocery buyer for the employee-owned regional chain, remembered that Oliver’s had previously stocked the Biotic product and was waiting until the new year to decide whether to carry the local brand again. The fundraising effort influenced Canter to get the organic drink back in stock this fall.

“It was like a no-brainer,” Canter said of the partnership with Biotic. “I want to help another brand and vendor in our community. ... At the same time, I can also directly help folks that are in need.”

The Community Market cooperative became a supporter, too, as it has seen strong sales of Biotic in its Sebastopol taproom where it is a popular nonalcoholic alternative to the beers. (Biotic also had done a small test deal with Lagunitas Brewing Co., pairing its product with hard seltzer, a drink only available at the brewery’s Petaluma taproom.)

Sales of Biotic drinks can rival those of other more well-known similar beverages, such as kombucha produced by larger companies GT's and Revive, the latter also based in Petaluma, said Lynette Day, a merchandise manager at Community Market, which has two Sonoma County stores.

“They definitely hold their own in popularity in our store,” Day said of Biotic.

Biotic Brands is poised to capture growth in 2021 when the pandemic recedes, since it had previously expanded its production center to 7,000 square feet and added an automated bottling line. It made capital investments while still retaining family ownership, and hasn’t had to take on investors like other rivals. Revive eventually sold to Peet’s Coffee and Sebastopol’s Guayaki has investors, such as Sonoma Brands operated by entrepreneur Jon Sebastiani.

“We're still 100% family funded and kept control, and it's allowed us to really own our own destiny and have the positive impact that we want. And so it's been steady growth since 2017,” said Ryan Johnston, the company’s marketing leader.

The company is looking to rebrand in 2021 to deemphasize the “kvass” heritage aspect and focus more on the healthiness of its drinks, he said.

“We are feeling like it was maybe too much of a sticking point for folks,” he said of featuring kvass on the drink label. “You ask how do you pronounce it? At the end of the day, it doesn't matter. The product in the bottle is freaking rad; it's super approachable.”

That may be a good move as the kvass drink category doesn’t even register as a product line tracked by national marketing firms, said Roger Dilworth, a senior editor at Beverage Marketing Corp. The larger kombucha market is close to $1 billion in wholesale dollar sales in the United States, though it is seeing slower growth, Dilworth said.

“It may be perceived as too alien from mainstream American tastes. However, there has been a recent mini-boom of so-called gut-health sodas or gut-health sparklers like OLIPOP and Poppi,” he said.

“The bottom line, though, is there's still enough potential in the overall gut-health space for the best companies and brands to flourish,” Dilworth said.

Approaching a new year, Johnston said his family thinks the pandemic has forced many Americans to refocus on their health. That could give Biotic a good road map for growth in more normal times, while still retaining the company’s business ethos.

“It's (the pandemic) been a big reset in a lot of ways and it's helped people re-prioritize — hopefully for the better and for the healthier,” Ryan Johnston said.

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.