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The gig:Daina Trout, who
turns 38 this week, is a co-
founder and chief executive
of Health-Ade Kombucha in
Torrance, considered one of
the dominant brands in the
rapidly growing global
market for the fermented
tea. Health-Ade was
founded in 2012 by Trout,
her husband, Justin, and
her best friend, Vanessa
Dew. Justin Trout serves as
chief operating officer; Dew
is chief sales officer. Health-
Ade, which has grown to
more than 200 employees,
produces 16 flavors of kom-
bucha, which can be found
in more than 26,000 stores.
The company is on track to
sell more than 4 million
cases in 2019.

Health kick:Young Daina
Slekys discovered her love
of science during high
school in Plymouth, Mass.
She studied pre-med and
health sciences at George-
town University and dietet-
ics at Simmons University,
then obtained master’s
degrees from Tufts Uni-
versity in nutritional bio-
chemistry and public
health. She had been in-
spired by an internship with
Artemis Simopoulos, one of
the authors of “The Omega
Diet.” “I really fell in love
with nutrition sciences and
how it could have an impact
on health. That was my
entryway.”

First clue:Trout still didn’t
have any sense of how she
was going to employ this
knowledge, but the first hint
emerged during her time at
Tufts, when she got hooked
on cooking and fermenta-
tion. She even self-pub-
lished a book, jokingly titled
“Someone’s in the kitchen
with Daina.” She had begun
drinking kombucha, but
found the flavor lacking in
store-bought versions of the
probiotic drink. “I learned
how to make a really good
kombucha. Mine always
tasted better to me and my
friends.”

L.A. bound:Tired of the
East Coast’s cold weather,
Daina and Justin headed for
Los Angeles in 2007 without
jobs. “I started looking for

work but I really had no

interest in anything aca-

demic. Dietitian jobs just

didn’t pay very much and I

had home mortgage worth

of college debt.” She wound

up being recruited for a

sales job with British phar-

maceutical giant Glaxo-

SmithKline. On her first

day, she was paired up with

future best friend Vanessa

Dew.

Practice ground:GSK put

Trout in a position in which

she was working with teams

of employees to help them

become more effective and

“more engaged with the

company,” she said. “I

worked with over 300 teams.

It was this unbelievably

robust case study on how

teams work, which do well

and on what types of leaders

do those successful teams

have. I was just a sponge

soaking up all this informa-

tion.”

Unfulfilled:But the job was

only temporary and Trout

found herself back in sales.

In two months, she quit.

Justin was a struggling

musician who worked with a

successful entrepreneur on

the side and had the dubi-

ous distinction of depos-

iting his rather large pay-

checks. Dew was feeling

uninspired at GSK. The

three brainstormed on what

type of business they might

start. “The biggest thing in

our way was money. We had

none,” Trout said.

Modest beginning:Dew

used her connection to a

friend with the Brentwood

Farmers Market to get the

trio a tryout selling Trout’s

kombucha. “It was cheap to

make. We had our first 60

cases of kombucha on

March 25, 2012. The labels

were something we scotch-

taped onto the bottles. We

couldn’t even buy labels.

But we sold out in about an

hour. The whole summer

went like that. We saw that

there was a lot of demand

for our kombucha.”

Great partners:From the

start, the three meshed

well. They patrolled the

farmers market, giving out

samples. “We already had

trust and good communica-

tion under our belts,” Trout

said. “I think that was im-

portant to have for a foun-

ding team. We didn’t have to

develop that. And the three

of us were in turbo mode. We

were ‘succeed at any cost’

types of people. We called it

our trifecta. We were each

equally dedicated to win-

ning. This was our chance to

build something great. We

all quit our jobs, even

though we had almost no

savings.”

Carry on:The credit cards

were maxed out, Trout said.

Bank accounts were

drained. Relatives were

tapped for loans, “everyone

on the family trees,” as

Trout put it. Her apartment

neighbors were complain-

ing about the smell of fer-

menting kombucha in sev-

eral 2.5-gallon jars. Others

complained about them

running a business from

their apartment. Eventu-

ally, it led to an eviction

notice. “We were scared as

heck, but we had an unusual

drive to work hard and

achieve success. That got us

through. We were so dedi-

cated to it. Then Cameron

Diaz was in a photo holding

one of our kombuchas. That

was big for us.”

The big break:Health-Ade

had a foothold in some

small stores, but the goal

was to get into one of the

more prominent grocery

chains. Finally, after more

than 10 tries, the trio got

Erewhon Market to give

them a little shelf space, in

2013. The Trouts and Dew
      were at the store all day,
      working in shifts, handing
      out samples. “We were not
      going to let this fail,” Trout

said. “We knew that

Erewhon had to be our story

of success.”

The cash crunch:“We

didn’t have enough money

to meet our demand,” Trout

said. Their $50,000-limit

credit card was shut down

and banks weren’t inter-

ested. That’s when they

heard from First Beverage

Group, also in 2013. “They

had been following the

kombucha market. They

were our first big investor.

One of their managing

partners tried us, saw my

mobile phone on the bottle

and called.”

The distribution problem:

The three delivered prod-

ucts using their personal

cars until they could rent a

refrigerated truck, which

sucked up gasoline in traffic

jams. They needed a distrib-

utor, but the one they

wanted wouldn’t agree

unless they signed with a

big chain. “ ‘If you get Gel-

son’s, we’ll take you on,’ ”

Trout said she was told. In

2013, “I think eventually

Gelson’s took a meeting

with us out of pity,” Trout

joked. “They were told it

wouldn’t work. Kombucha

was too small a category.

They already had a kom-

bucha product that was

selling well,” she said. “They

gave us 16 weeks in eight

stores. We did really well.

That was how we unlocked

our distribution problem.

Once we had third-party

distribution through Na-

ture’s Best, we started get-

ting into more stores across

the West Coast. When we

opened up with Whole

Foods in 2014, that con-

nected us to another dis-

tributor. Now, we have 150

distributors across the U.S.”

Personal:When she isn’t

working or parenting the

couple’s two small children,

Trout likes to mentor young

entrepreneurs. To balance

it all, Trout said, she gives

herself break time from

work every day. Exercise is a

big part of her life, but hard

to fit in. Currently, she fa-

vors Peloton, the indoor

stationary bike that can

also include a monthly fee

for online classes. “Before

kids it was yoga classes and

CrossFit classes. I’m up at 5

a.m. at home while my kids

are still sleeping. I love it.”

HOW I MADE IT: DAINA TROUT

‘The biggest thing in our way was money’

Being broke posed

challenges but didn’t

stop Health-Ade

Kombucha’s CEO and

her two co-founders.

By Ronald D. White

THE FOUNDERS of Health-Ade Kombucha are, from left, Chief Executive Daina Trout, husband and Chief

Operating Officer Justin Trout and Chief Sales Officer Vanessa Dew. From the start, the three meshed well.

Health-Ade Kombucha

Dear Liz: I am 49, single,

with no kids. Until about

three years ago, I wasn’t

even sure how much credit

card debt I had. I had less

than $200 in savings and I

was just plugging along

making minimum pay-

ments. It turns out I had

over $14,000 in credit card

debt and $12,000 in student

loan debt. The credit card

debt was accumulated not

from extravagant purchases

but rather from living in an

expensive city and trying to

pursue a dream career. (I

worked only three days a

week in my “day job” for

about 12 years.)

My living expenses have

always been modest, but I

made a budget, lived even

more frugally, and made

large monthly payments. In

the process I also cashed

out my small 401(k), as I

have done a couple of times

previously. Fast-forward to

now — my credit card debt is

paid off, my student loan is

paid off, I have about five

months of living expenses in

savings and a reasonable

annual income of $60,000. I

have no retirement savings,

though. What is my next

best step to get money accu-

mulating for my old age?

Answer:You’re to be con-

gratulated for taking charge

of your financial life, but it’s

unfortunate you sacrificed

your 401(k) to do so. It rarely

makes sense to cash out

retirement funds to pay

debt. The interest you saved

is typically far outweighed

by the taxes, penalties and

lost future tax-deferred

returns you incurred by

tapping your 401(k) prema-

turely.

Fortunately, the

budgeting skills you learned

will come in handy now that

you’re focused on saving for

retirement. Continue to

make large monthly pay-

ments, but direct the money

into your 401(k) if you still

have one or an IRA if you

don’t. If you max out your

tax-deductible options, you

can continue to put money

into a taxable brokerage

account.

You should plan to con-

tinue working as long as

possible and to delay start-

ing Social Security, prefera-

bly until your benefit maxes

out at age 70. Social Security

is likely to be your largest

source of income, so the

bigger your check, the more

comfortable your ultimate

retirement will be.

Also, take steps to pro-

tect and enhance your big-

gest current asset — your

ability to earn money. Many

people are derailed finan-

cially in their 50s by unex-

pected layoffs and health

problems. You can improve

your chances of being able

to earn well into your 60s by

taking good care of yourself,

investing in new skills and

trying to be a top performer

at work.

Redirecting a 529

college savings plan

Dear Liz: Years ago when

my children were young, we

established 529 college

savings plans for them.

Unfortunately, both chil-

dren ended up in the wrong

crowds and never entered

college. We still have the

funds. What are our op-

tions? We do have a grand-

son now; would it be pos-

sible to change the benefi-

ciary?

Answer:Yes. You can

change a 529 plan’s benefi-

ciary without triggering a

tax bill as long as the new

beneficiary is a “qualifying

family member.” By the IRS’

definition, that includes the

original beneficiary’s child

or other descendant.

(Qualifying family members

also include spouses and

siblings, parents, in-laws,

uncles, aunts, nieces, neph-

ews and cousins.)

When to sign up

for Medicare

Dear Liz: Is it mandatory to

sign up for Medicare at age

65, and how is it paid for?

I’m 64, don’t have any assets

and I’m not working (I’m

living with a friend for free).

I’d like to wait until 70 to

collect Social Security. Is

that possible? Someone just

told me that I have to sign

up for Medicare, and to pay

for it, I have to sign up for

Social Security. Is that true?

Answer: No. You’re not

required to get Medicare at

65. You should, however, at
    least sign up for Medicare
    Part A. Part A is the portion
    of Medicare that’s free and
    covers hospital visits. You
    sign up for Medicare
    through Social Security,
    either online or in a Social
    Security office, but you don’t
    have to start your Social
    Security benefit to do so.
    The other parts of Medi-
    care — Part B, which covers
    doctor’s visits, and Part D,
    which covers prescription
    drugs — require paying
    premiums, but you can pay
    those without signing up for
    Social Security. Some peo-
    ple are confused about this,
    because most people who
    get Medicare have those
    premiums deducted from
    their Social Security checks.
    But that’s not required.

Liz Weston, Certified

Financial Planner®, is a

personal finance columnist

for NerdWallet. Questions

may be sent to her at 3940

Laurel Canyon, No. 238,

Studio City, CA 91604, or by

using the “Contact” form at

asklizweston.com.

MONEY TALK

Avoid this costly mistake

when chipping away debt

By Liz Weston