Tea products are is a well-loved beverage that U.S. consumers can’t get enough of, with the market being worth an estimated $13 billion in 2022 alone.
However, one clean-label kombucha and seltzer has faced major financial uncertainty, leaving loyal consumers on edge while waiting to see what will happen next.
Market Pressures Intensify
Demand for health-focused beverages continues to grow in the U.S. Mintel notes that Americans are increasingly choosing drinks with functional or natural ingredients.
Kombucha has seen a rise in popularity, with an estimated market value of $2 billion last year. This has created tough competition for other popular drink brands to thrive.
Real McCoy’s Roots
Chris McCoy founded Real McCoy Tea in 2011, flooding the consumer market with kombucha and sparkling seltzer long before many other rivals entered the market.
According to reporting by The Street, these all-natural drinks helped the brand stand out in the growing “better-for-you” beverage movement.
Costs Press Down
Economic reports from FCC and Mintel highlight that beverage producers’ costs increase as ingredients and packaging are affected by global supply volatility and tariffs.
This has hit many brands, including Real McCoy Tea, which has seen rising costs and lower profits. Other factors affecting brand profitability are rival brands taking up stock shelves and driving down sales.
Bankruptcy Filing Revealed
The Street reports that these profit losses led to Real McCoy’s filing for Chapter 11 bankruptcy protection on July 30, 2025. The company’s listed assets were between $100,000 and $500,000.
However, the company’s assets are dwarfed by its liabilities, totaling more than $1 million. Major creditors include the U.S. Small Business Administration and IRS, owed for unpaid taxes in 2017.
Distribution Disrupted
After the bankruptcy protection announcement, Real McCoy Tea products quickly vanished from shelves across many Washington and Oregon stores.
The Street reports that local retailers found their usual orders canceled, and loyal fans noticed their favorite flavors missing from grocery store shelves.
Fans and Employees React
The Street notes that many loyal consumers were left in uncertainty and expressed concerns over social media platforms. Meanwhile, employees’ livelihoods were put in question as many wonder what the future will hold for Real McCoy Tea.
Many supporters still hope that a successful restructuring could offer a viable path forward for the beloved brand.
Rivals Move In
Other brands are expanding their presence in grocery stores as Real McCoy faces financial struggles. GT’s Synergy and Health-Ade have both been seen on new shelves, only exacerbating the company’s issues.
As the kombucha market grows nationwide, stronger competitors quickly move in to replace weaker brands.
An Industry in Flux
Probiotic drinks like kombucha remain popular with health-conscious consumers, but the U.S. market has become increasingly crowded with new entrants.
According to Grand View Research, smaller regional producers face serious risks from better-financed rivals as the kombucha market expands.
Financial Gaps
Court filings cited by The Street show that Real McCoy Tea’s total debts exceed its available assets by at least $500,000.
Most debts are owed to investors, ingredient suppliers, and tax authorities, which makes financial recovery difficult without significant new investment.
Supplier Concerns
Small ingredient suppliers are now at serious risk of not being paid for previous deliveries made to Real McCoy Tea.
The Street reports that some cautious suppliers have paused new shipments until the complex bankruptcy process is resolved.
Leadership Remains
Founder Chris McCoy has remained actively involved in the company’s operations during this challenging period for the business.
Company statements cited by The Street indicate management hopes to keep the business running and seek new investment while restructuring under bankruptcy protection.
Restructuring Plan
Real McCoy Tea filed under Subchapter V of Chapter 11, a special U.S. bankruptcy process designed to help small businesses reorganize more quickly.
The Street reports that limited production continues at the company’s facilities while management actively seeks a buyer or new investor.
Expert Warnings
Industry analysts caution, as reported by The Street, that most beverage company bankruptcies ultimately end in liquidation rather than successful recovery.
Real McCoy Tea’s survival depends entirely on its ability to attract meaningful investment or find a buyer willing to take over operations.
What’s Next?
Real McCoy Tea’s future hinges on its established reputation for clean ingredients and its loyal customer base throughout the region.
The Street notes that with new financial backing, there could still be hope for a turnaround—though the road ahead remains challenging.
Retail Changes
According to Grand View Research and industry observers, grocery stores are shrinking shelf space to allow smaller brands to focus on faster-selling products.
Many industry experts believe this significant shift in retail strategy contributed directly to Real McCoy Tea’s current financial struggles.
Global Trends
Kombucha brands face similar economic pressures and market challenges beyond just the United States domestic market.
Market research shows new tariffs and increased competition in regions like Europe have made conditions even tougher for smaller beverage companies.
Tax and Legal Hurdles
Real McCoy Tea’s bankruptcy filings list significant back taxes owed to the IRS, with debts dating back to 2017.
These substantial legal obligations complicate any potential recovery efforts or company sale, as The Street reported.
A Changing Market
Today’s consumers are shifting toward low-sugar, probiotic, and functional drinks with proven health benefits rather than traditional options.
Mintel and other market reports emphasize the critical need for beverage brands to adapt quickly or risk falling behind competitors.
The Big Picture
The bankruptcy of Real McCoy Tea highlights just how challenging the current environment is for smaller beverage makers nationwide.
Street and industry research suggests that only companies that are able to respond to changing tastes and tough economic realities are likely to survive.