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View ProfilesPublished January 17, 2024 at 10:00 a.m. | Updated January 18, 2024 at 10:49 a.m.
Five years after Jovial King sold her digestive bitters and herbal tonics company, she called the new owner to ask how sales of the products were going.
The response surprised her: Would she like to take Urban Moonshine back?
King learned that Traditional Medicinals, the California tea company that had purchased Urban Moonshine for an undisclosed sum in 2017, had struggled to expand distribution of the herbal supplements. Rather than drop the brand and write off its losses or sell it to another entity — as would be typical in such a situation — Traditional Medicinals took a nontraditional step and gifted Urban Moonshine back to its founder, according to King.
"They are a really ethical, thoughtful company," she said, calling the unconventional offer "amazing. And I think that is not business as usual."
Gary Gatton, Traditional Medicinals' CEO, declined in an email to confirm that his company returned Urban Moonshine to King for free, saying it doesn't disclose financial details.
King, who revealed few details herself about the Traditional Medicinals deal, insists she paid nothing to repossess her Vermont company. In her view, the boomerang of Urban Moonshine signals not a failure of the business or its products but an opportunity to redefine her ambitions. She said she's learned the value of keeping her homegrown entity in its niche.
"Small is beautiful," King said. "And not every product is destined for national distribution in Walmart and every corner store."
Traditional Medicinals stopped manufacturing Urban Moonshine products at the end of 2022. Its popular tinctures, including Citrus Bitters, Clear Chest Syrup and Immune Zoom, slowly disappeared from store shelves.
"People were panicking," King said. When she and some former employees reclaimed the business, "we heard from more people than we ever would have imagined."
Railyard Apothecary, an herbal products shop in Burlington, has carried Urban Moonshine for several years. When its products went out of stock, some of Urban Moonshine's devoted customers tried to substitute favorite tinctures — such as Joy Tonic, to boost depressed mood, and Simmer Down, to minimize anxiety and aid sleep — with "copycat" custom mixes, said Jessica Churchill, one of the apothecary's buyers and a member of its cooperative ownership. Churchill recalled that one customer, an acupuncturist, swore by Clear Chest and insisted nothing else would work.
"People were really excited when they came back in, and the first order that I placed I think actually sold out in a few months," Churchill said, adding that Urban Moonshine's formulas "have proven to be supereffective."
King and four of her previous employees spent nine months rebuilding Urban Moonshine nearly from scratch. They picked a Vermont manufacturer to handle production, redesigned the bottle labels and built a new website. They reached out to wholesale customers to create new accounts and boosted efforts to sell directly to consumers online.
In October, Urban Moonshine relaunched under its new-old leadership. King now serves as creative director and guiding star for the business, even as she pursues her next project, a botanical spa she plans to erect on a remediated brownfield at the old Barge Canal lakefront site in Burlington.
Lexie Daly, who joined Urban Moonshine in 2012 and served as chief operating officer before the Traditional Medicinals sale, has taken over as president. She said few businesses get the chance to pause, assess their strategies and reboot with a clean slate the way Urban Moonshine did.
"I feel grateful that we had the time to reset," Daly said.
The story of Urban Moonshine begins in 2002, with King crafting bitters from fresh herbs in her Burlington kitchen. She was an early adopter of the belief that "the root of good health is good digestion," she said.
Finding almost no products like hers on the shelves of health and natural foods stores, the herbalist recognized a market niche. She sold her goods at farmers markets and craft fairs, where most would-be customers were baffled and wanted a tutorial on their intended benefits.
In 2007, King launched Urban Moonshine with several gut-enriching products. The company rode a wave of national interest in herbal wellness and increasing medical attention on digestive health. When the craft cocktail trend took off, a whole new cadre of customers clamored for Urban Moonshine bitters.
That demand kick-started the business, but King didn't want to focus on the beverage market, she said. Instead, she positioned Urban Moonshine squarely in the herbal supplements channel, which created its own challenges.
U.S. Food & Drug Administration regulations for herbal supplements are stringent, requiring detailed tracking to verify the composition of every ingredient in products. Those rules created a major headache for the small Urban Moonshine team.
In those days, Urban Moonshine's 20 employees in downtown Burlington were mixing, selling, labeling, packaging and shipping products themselves, providing customer service, and overseeing back-end regulations and bookkeeping. After issuing multiple citations for failure to comply, regulators looked poised to increase oversight of the company or even shut it down.
In 2015, King decided to outsource manufacturing to a West Coast certified-organic producer that could more easily manage the regulatory morass, as well as the company's growth. The giant Whole Foods chain had begun selling Urban Moonshine, presenting massive production demands.
Outsourcing freed King to concentrate on seeking investment and raising capital to expand the business. "When you grow rapidly," she said, "you realize it's hard to do everything."
King said she hadn't considered selling the company until Traditional Medicinals made an offer. The tea maker wanted to expand into herbal supplements and saw Urban Moonshine as the ideal fit — "a like-minded herbal brand that provided efficacious organic herbal medicine to more customers," according to Gatton, the CEO.
The new owner had plans to scale distribution of the brand to more outlets, King said: "The goal of the acquisition was to make Urban Moonshine stronger and more resilient."
King and Traditional Medicinals declined to disclose the sale price or terms of the 2017 deal. But the eventual return of the company was not among the conditions set for transferring ownership, King said, and she had no plans to take it back.
"It was really hard to let it go, but, you know, life is a wild ride," King said of the original sale. "Urban Moonshine is the biggest success of my life."
As part of the sale, King remained involved with Urban Moonshine to help shape its trajectory. "The plan was to stay on and support the brand and work on innovation," she said.
After a couple of years, though, she stepped away and shifted her attention to her new project: Silt Botanical Bathhouse, with a "thermal circuit" of saunas and steam rooms, cold plunges, and hot coals. She stayed in touch with Traditional Medicinals' executives to keep tabs on Urban Moonshine's progress.
In summer 2022, the founder noticed that the new owners had discontinued some Urban Moonshine products, specifically Calm Tummy chamomile bitters and apple cider vinegar tinctures. When she called Gatton, he told King that his team had concluded it couldn't increase sales of Urban Moonshine the way it had envisioned and needed to relinquish it.
Urban Moonshine "represented an extremely small percentage of our overall sales," Gatton wrote in an email, adding that the ingredients for the bitters and tonics relied on a more complex supply chain than Traditional Medicinals' teas do. "We found it difficult to give Urban Moonshine the focus and attention that it needed without impacting our core business."
The primary problem, in King and Daly's view, was that the big tea company had no background in marketing herbal tinctures. It added Urban Moonshine to its usual distribution network but lacked the "hand-to-hand" wholesale relationships required to move a specialty product, King said. Most retailers understand tea — put boxes on store shelves, and they sell — but know little about the nuances of enticing shoppers to buy digestive bitters and herbal tonics.
"Urban Moonshine requires a high level of consumer education targeted towards a very specific consumer base," Gatton wrote.
Churchill has done a lot of that education at Railyard Apothecary and attested to its importance. "As a buyer but also as a consumer, and also as an herbalist in the store who's recommending products to people, I feel like there's more integrity when I have those kinds of personal relationships," she said.
After Traditional Medicinals offered to give the company back to King, she gathered former employees at her Burlington home and asked if they were on board. The group studied the Urban Moonshine financials.
"It wasn't tanking or anything," Daly said of the products' sales under California ownership. "It just was small potatoes compared with the rest of their company."
The Vermonters initially expected to continue manufacturing with the West Coast contractor. But since production had already halted, they took advantage of the hiatus to bring it back home. King and Daly declined to identify the local company now making the products, saying they want to see how the collaboration works before going public with it. Urban Moonshine also is trying to source more of its ingredients in Vermont when possible, Daly said.
The company has picked up most of its old wholesale accounts, with the exception of a few stores that may return in the future, Daly said. Web orders direct to consumers now constitute about 60 percent of Urban Moonshine's sales revenue, up from 30 percent before the Traditional Medicinals takeover, she added.
Urban Moonshine no longer sells to Whole Foods or the Sprouts Farmers Market supermarket chain on the West Coast. King and Daly said they've lost interest in the holy grail of the big account with big-name recognition — and the big pile of debt that would allow them to pursue it.
"What we tout as being successful is the most possible growth and revenue, regardless of how much cash you're burning," Daly said of U.S. business in general. "It's just not sustainable from a financial standpoint to operate like that."
Urban Moonshine's sales "exceeded our expectations" for the company's first three months back in operation, she added, though she and King declined to provide specific sales figures.
"We're not chasing wild growth, and we're really wanting it to be a sustainable business," King said. "We really want to keep it local forever."
Correction, January 18: This story has been updated to reflect that Traditional Medicinals had no experience in marketing herbal tinctures.
The original print version of this article was headlined "'Shine On | Herbal tonics business Urban Moonshine returns to Vermont ownership"
Tags: Business, Seven Days Aloud, Seven Days Aloud, Seven Days Aloud, Wellness Issue, digestive bitters, herbal tonics, Urban Moonshine, Seven Days Aloud, Seven Days Aloud
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