An introduction to Whalebird Kombucha
The origins of kombucha are somewhat mysterious, though some scholars at the Smithsonian report findings that it was first consumed in Russia and Ukraine by prisoners of war. The fermented mushroom tea was no doubt made out of necessity and scarcity back then. Today, the beverage has bubbled to popularity all over the globe and San Luis Obispo’s favorite (and only) local brewer is Whalebird Kombucha. The company now boasts a large warehouse space at the south end of town where they have the capacity to brew multiple flavors each day, but their beginnings were a much humbler operation.
Mike Durighello (CEO/Founder) and his friends Molly and Alex started brewing/fermenting kombucha in their garage in 2012 using a Kickstarter campaign to fuel their hobby business. Once they realized they made some pretty tasty booch, Mike began to market it around town. In 2013 Jake Pritzlaff became Mike’s roommate and immediately was interested in the kombucha business. Armed with an MBA, Jake had ideas on how to grow the burgeoning operation and the two became business partners.
The first item of business was a rebranding. Mike and Jake found a new name and marketing tactic for the business, calling it Whalebird Kombucha in order to better reflect their values and goals. They strive to make their production environmentally sustainable, adding efficiencies and recycling wherever possible. They have also sought to keep their independence so that they have autonomy over the business and product. Most important of all, they have worked extra hard to maintain the best working environment in SLO, valuing people over profit. In line with that value is the way they approach kombucha. Their drink is not just for the elite or health conscious or earthly folks. It is for anyone and everyone from kids to grandparents, and all the folks in between. Whalebird encourages drinkers to “dive deeper, fly higher”, a phrase that inspires action, intention, excellence, and fun! At Whalebird Kombucha leaders and team members alike are fueled by these values and, of course, by the delicious beverage they create.
“We wanted the business to feel like us. We have an amazing team and fostering that community is really, really important to us.” - Jake
Photo courtesy of Whalebird Kombucha. The team celebrates the launch of new product line, hard kombucha, in October 2020.
The Challenge
Once Jake and Mike understood their goals and launched their new brand, they quickly found that they needed to grow in order to keep up with demand. SLO citizens were falling for their as yet relatively unknown product and wanted more! This meant they would need to purchase equipment and build infrastructure to brew more booch, a project that required an infusion of roughly $155k. The business was not yet eligible for bank loans and so the question they asked themselves was, ‘how can we finance our growth without becoming beholden to investors or having to sell part of Whalebird?’ The entrepreneurs wanted to remain independent and hold on to the business with its goals, mission, and vision intact.
“We needed to grow. We wanted to stay in control of the business, and we weren’t sure what the future held. Someone coming in as an equity partner would have had a major stake in the business and we wanted to stay independent and not sell too much of the company. Debt financing made a lot of sense for our goals.” - Jake
The Slow Money SLO Solution
The business partners got connected with the small business development center (SBDC) hosted at Cal Poly’s Center for Innovation and Entrepreneurship (CIE) and gave a presentation on the company and growth plans. Jeff Wade (Executive Director of Slow Money SLO) was on the listening panel and approached the business owners to learn more about Whalebird. He knew they would be a good fit for Slow Money SLO and encouraged them to get involved. Mike and Jake could not believe that Slow Money SLO would gather potential lenders, host a presentation, and coordinate loans, all at no cost to Whalebird! About 25 local lenders enabled the company to raise funds in two rounds of lending in 2017 and 2018 for a total of about $350k, allowing them to quadruple their production capacity and expand versatility.
“It sounded too good to be true. He (Jeff Wade) basically said, ‘I’ll help you raise all this money at super reasonable rates from people who are stoked on local food businesses and investing in the local community.’ We said, ‘Where do we sign up?’” - Jake
The Result
The Slow Money SLO lending projects have resulted in more kombucha for the Central Coast and beyond. Whalebird initially packaged exclusively in kegs so that their product was always served on tap. This approach was intentional – kegs are much more environmentally sustainable, which is one of the company’s driving missions. Furthermore, Whalebird found a lucrative niche in having their product on tap in office buildings including Facebook, Airbnb, Google, and more.
Additionally, these lending projects allowed the business to invest in canning the beverage. After extensive research and intentional brainstorming, this addition to the Whalebird line up was found to, again, be the most environmentally sustainable option. Aluminum cans are recyclable, durable, and portable – all qualities that made them the best option. This expansion in 2018/2019 came at a very opportune time as well, given the impact that the COVID-19 pandemic had on their office building niche business.
Another exciting result of Whalebird’s involvement with Slow Money SLO has been achieving the goal of independence, and maintaining it throughout their history. Local investors enabled the small business to grow to the point where they are now bankable, and they were approved for their first bank loan in 2019. This success story is great for the business, the Slow Money SLO community, and the Central Coast community at large.
“One of the stated missions of Slow Money SLO is to get companies to the point where they are viable for next level fundraising whether that be equity or bank financing. We followed that path to a tee.” - Jake
What’s next for Whalebird Kombucha
Whalebird Kombucha is enthusiastic not only about their product and its organic and sustainable production, but also about giving back to their community and the environment. Their team participates in ECOSLO beach clean ups, hosts events that amplify environmental issues, and was the third San Luis Obispo business to receive the Green Business Certification. The company looks forward to hosting events (safely outdoors with social distancing and masks) that raise environmental awareness, and support local charities that work on sustainability initiatives. They remain committed to participation in Slow Money SLO events and initiatives, and plan to encourage other local entrepreneurs to get involved with the nonprofit. And, of course, they are continually innovating new kombucha flavors, products, and seasonal specials for local, regional, and California consumers to enjoy!
Find their products on their website, on the shelves at local grocery stores, or on tap at cafes and in their tasting room at 3576 Empleo Street, Ste #1, San Luis Obispo!
Slow Money SLO is constantly amazed by the talent and work ethic of our community's entrepreneurs! We are always ready to connect with new and/or growing businesses who would like to take the slow money approach. Head over to our Grow Your Business page and let us know how we can support your project!