HomeMy WebLinkAboutHumm Kombucha Business Loan RequestBRIEFING PAPER FOR
Humm Kombucha
Request for Deschutes County Forgivable Loan
June 12, 2014
Number of Employees: 8
Company Request: $ 50,000
EDCO Recommendation: $ 50,000
Proposed Job Creation by end of 2016: 25 full-time family wage jobs
Average Pay for New Employees (all positions, excluding commissions): $ 36,782
Capital Investment: $4,000,000
Industry: Manufacturing, Brewing
Website: www.hummkombucha.com
Company Background:
Humm Kombucha (formerly Kombucha Mama) brews kombucha beverages. Kombucha is a raw, fermented, and
naturally carbonated tea loaded with probiotics and B vitamins.
The family has been brewing kombucha for over 20 years as the recipe was passed down from a mother to a
son, from that son to his wife and from that wife to her best friend.
In February of 2009 Michelle Plantenberg and Jamie Danek started a producing Kombucha in Michelle's kitchen.
They brewed one gallon at a time to start and in March they sold the first two gallons. Demand quickly grew to
the point where they were no longer able to meet the demand from the kitchen. Total sales that year were
$28,000.
In 2010 they moved into the first commercial production facility. Sales tripled to $82,000 while cost of goods
and expenses decreased. Sales grew to $100,000 in 2011, but lack of capital and production capacity prohibited
substantial growth. In 2012, with 150% growth, additional brewing equipment was purchased from 6 -month
advance orders providing the needed capital.
In 2013 the company moved into a new production facility that took them from 500 gallons of output a week to
6,000 gallons per week. Revenue was over $950K with $500K of that coming in Q4 after the new facility opened.
When running at full capacity this facility will be able to produce around $7M in product annually.
In April of 2014 Kombucha Mama rebranded and became Humm Kombucha. The company founders are pushing
into unchartered territory in the kombucha beverage space. This drive has led to the creation of the first
kombucha tasting room in the country, as well as putting kombucha on tap in retail spaces. Further, the
company is raising capital to purchase another facility to grow production to meet growing demand.
Funding from the Deschutes County Forgivable Loan will be used to hire and train 25 new employees with an
average family wage as defined by the Oregon Labor Market Information System (OLMIS) on the date a loan
agreement is executed and to purchase supplies and equipment for expanded production - kegs, bottles, labels,
and caps.
EDCO Recommendation
EDCO is recommending to Deschutes County an award of $2,000 per job for this request for a total forgivable
loan of $50,000.
July 25, 2014
MEMORANDUM
To: Deschutes County Commissioners Tammy Baney, Tony DeBone and Alan Unger
From: Due Diligence Committee for the Deschutes County Forgivable Loan Fund
Bruce Barrett, Windermere; Eric Strobel, BBSI; Robyn Sharp, EDCO
Re: Deschutes County Forgivable Loan for Humm Kombucha
Humm Kombucha applied for a forgivable loan in February of 2014. EDCO employee turnover, needed
clarification of company information and rapid company growth all slowed the Due Diligence Committee's work
in determining its recommendation.
On June 5, 2014 the Committee finalized their assessment and recommended the Commissioners approve the
loan. The Committee was aware that one of the company's leaders, Eric Plantenberg, was involved in serious
legal matters, but made an assessment that his case was a separate issue from the company's potential success
and based on a thorough review, agreed to recommend support for the loan.
On July 8, 2014, one day prior to the scheduled meeting with Commissioners, the Committee learned through a
news article associated with Eric Plantenberg's sentencing, that the company was going to be sold, in part to
help cover some of the fines facing Eric. With very little time to investigate that information, Judith Ure was
contacted and asked to remove the loan request from the Commissioner's agenda, and Robyn Sharp asked for
time to verify the information and investigate the company's plan.
On July 23, 2014 the Due Diligence Committee again met at Humm Kombucha. Jamie Danek, CEO; Kate
Dunning, Director of Finance and Jim Schell, Advisory Board member were present. Clarification was made that
the company is not for sale and business is proceeding as planned. A strong Board of Advisors has been put in
place to include Jim Schell, current Board Chair Boys and Girls Club; Si Camerata, Director ESRI Inc.; Gary Fish,
President, Deschutes Brewery Inc.; Bill Owens, retired U.S. Navy Admiral; Martha Bejar, CEO, Flow Mobile;
Michelle Mitchell Plantenberg and Jamie Danek, co-owners of Humm Kombucha. Additionally, funding targets
have been met for the first phase of fund raising.
Given the strong leadership of the Board of Advisors, a keen focus to maximize production in the existing facility,
clear investment success, and a growing demand for the product, the Due Diligence Committee once again
affirms its support and recommends the Deschutes County Commissioners approve a forgivable loan in the
amount of $50,000 to Humm Kombucha.
Respectfully Submitted,
Robyn Sharp
Bend Manager, EDCO
Bruce Barrett
Windermere
Eric Strobel
Regional Manager, BBSI
Board of Advisors
Jamie Danek, Michelle Plantenberg, Jim Schell, Gary
Fish, SJ Camarata, Martha Bejar, Bill Owens
Jamie Danek, CEO
National Sales Manager.
Contract
Retail
Dayna Taus,
Manager
Operations
Dave Naftalin,
Director of Operations
Demos
Tim Stanton,
Wholesale
Sean Engel,
Lila Owen
DEMOERS
Melissa Carter,
Sasha Lawless,
Brittney Murphey,
Jade Danek
V
Brewing
Mackenzie Stabler,
Jeff Clason,
Elysse Boarman
Packaging
Jeff Blaylock,
Production Manager
Finance
Kate Dunning,
Director of Finance
Jamie Woelk
(Eli Stabler, Logan Beaulieu,
KeIIi Birchell,
Matt Anderson,
Ryan Houlzhouser