For the fifth year in a row, the KOMBUCHA Act was reintroduced to Congress. If the legislation passes, kombucha beverages would be exempt from excise taxes intended for alcoholic beverages. The act proposes to raise the alcohol by volume (ABV) threshold for kombucha from its current level of 0.5% to 1.25%.
“The past year has been incredibly hard on businesses in Oregon and across the country, especially as supply chains have been disrupted. Still, kombucha is one the fastest growing beverage industries in the world,” says U.S. Rep. Earl Blumenauer (D-OR). “There’s no reason why kombucha brewers and sellers should get taxed like beer. Our common sense legislation would eliminate this burden and support a burgeoning industry that has a major impact on Oregon’s food and beverage economy.”
U.S. retail sales of kombucha sales grew 2.4% over the twelve months though mid-July 2020, to $703.2 million, according to SPINS.
“Modernize Taxes & Regulations”
Blumenauer first introduced the bill in 2017 — and has reintroduced it every year since. Senator Ron Wyden (D-OR), the Senate Finance Chair, is the bill’s co-sponsor.
The word “KOMBUCHA” also has a double meaning — it is an acronym for Keeping Our Manufacturers from Being Unfairly taxed while Championing Health Act. The legislators understand kombucha is a fast-growing beverage category, especially in their home state of Oregon, home to many kombucha brands.
“The growth of kombucha production in Oregon and nationwide creates jobs and a beverage folks enjoy,” Wyden said. “It’s been a particularly difficult year for small businesses, and our bill would modernize taxes and regulations so these businesses can continue to grow and sell their products in stores across the country.”
Kombucha Brewers Lobby
Commercial kombucha brewers are especially concerned with the regulation. In 2010, Whole Foods and other retailers pulled kombucha off shelves as the Alcohol and Tobacco Tax and Trade Bureau investigated whether alcohol levels in kombucha were higher than what was printed on the label. And since then, consumers — and even other brands — have filed lawsuits against various kombucha brands, alleging alcohol levels higher than indicated.
Kombucha can keep fermenting after it’s made, as the yeasts continue to eat sugars. Under current law, if kombucha leaves a processing facility at 0.4% ABV, but increases to over 0.5% by the time it’s placed on grocery store shelves, the brewer would have to pay federal alcohol taxes like a beer brand.
Hannah Crum, co-founder and president of Kombucha Brewers International (KBI), the trade organization for kombucha brewers, emphasizes that kombucha producers fear constant repercussions from the law.
“These numbers were created over 100 years ago during prohibition,” says Crum, and notes there are no scientific studies on these ABV values. “Kombucha labels say ‘Alcohol is present’ — no one is trying to trick the consumer.”
Reads a statement from KBI: “ These laws were never intended to make kombucha subject to taxes designated for beer. Passing the KOMBUCHA Act under the next appropriations bill will relieve this unnecessary burden on kombucha brewers. Only kombucha above that level (1.25%) will be subject to federal excise taxes when this Act becomes law.”
KBI has actively lobbied for the bill’s passage. Big kombucha brands (GT’s and Health-Ade) have supported the bill actively. KBI — for the first time — is asking consumers to write to their government representatives (via a form on their website) to urge them to support the bill.
When Julie Smolyansky began working at her family’s Lifeway Foods business, her father advised her: “Don’t talk about the bacteria. People in America freak out about the bacteria on their food.” So when Lifeway became the first company in the U.S. to put “probiotic” on a label in 2003, it wasn’t a big surprise when customers began calling, asking for the company’s non-probiotic version of kefir.
Americans have come a long way. Consumers today search for the “live, cultured” label on fermented dairy, and gut health is a critical component of the modern diet. Smolyansky and Raquel Guajardo, author/educator, shared their thoughts on kefir during the TFA webinar The Many Sides of Kefir.
“Fermented foods were not part of the American diet, and the way that kefir and fermented foods in general were used in other parts of the world from Asian to Eastern Europe to even India and Mexico, these cultures all have fermented foods as one of their pillars as their foods sources and their health and wellness cultures,” Smolyansky says. “It wasn’t until immigration from all these other countries that we started talking about kimchi or kefir or lassi or you name your cultured kind of special food.”
In the U.S., the average person consumes 9-10 cups of fermented dairy a year. Contrast that statistic with Europe, where the average consumption is 28 cups a month.
“When you’re born consuming it and you’ve developed that taste palette, then it’s very easy to play in the space and have a diet that’s very rich in probiotics and kefir and all sorts of other fermented foods,” Smolyansky says, adding that the situation is changing in the U.S. Now, “people are hungry for it, they want it, once they learn about it, once they taste it, they fall in love with it, they’re hooked.”
Lifeway’s kefir’s sales have soared. The company was valued at $12 million when Smolyansky took over in 2002 — now it’s valued into the hundreds of millions. And even more customers have found kefir during the COVID-19 pandemic, as they adopt healthier lifestyles.
Guajardo has seen her online classes increase during COVID. The Mexico-based educator co-authored the book “Kombucha, Kefir, and Beyond” with Alex Lewin, TFA advisory board member, who moderated the webinar.
“People say ‘You’re crazy, why do you teach what to do at home what you can buy in the supermarket?’ But my business has been growing that way,” she says, adding that health benefits are the main selling point for her classes. “Why would people buy sauerkraut or kefir if you’re not explaining the benefits?”
Dairy Kefir vs. Water Kefir
Guajardo, who makes both dairy kefir and water kefir (also known as tibicos) stresses that the grains used to make each are “totally different.” Kefir grains are living bacteria and yeast microorganisms clumped together with milk proteins and sugars. They are gelatinous and white, almost like cottage cheese. Water kefir grains are also made from living bacteria and yeast microorganisms, but they’re clumped together with sugar and have a translucent, crystal-like appearance.
“Water kefir” is not the appropriate term, Guajardo and Smolyansky agree, instead calling it by its traditional Mexican name, tibicos. And they feel that using kefir or tibicos grains in coconut or almond milk and calling it kefir is also inappropriate. Smolyansky favors using a description like cultured coconut milk or beverage, but not kefir.
The National Dairy Council and Codex Alimentarius, the international food code, both state kefir is a fermented dairy product made from the milk of a lactating mammal. Smolyansky points to the many peer-reviewed studies on kefir, verifying it is full of probiotics and nutrients. Water kefir and non-dairy kefir have not been studied, and can’t guarantee the same health benefits.
“Just by throwing the name onto anything and just bastardizing the definition, we completely dilute any of the research that’s ever been done [on kefir], it would dilute the history, the folklore. So we are very passionate about protecting the name,” Smolyansky says. “My ancestors made sure that kefir survived for 2,000 years, and it’s critical that we don’t dilute it now that it’s having a moment, now that it’s popular.”
Smolyansky’s family emigrated to the United States from the then Soviet Union in the late ‘70s. Her father, Michael, began Lifeway Foods in Chicago in 1986.
“We have to respect the standards and what these definitions mean or it will be the Wild West and people won’t know what they’re buying,” she adds. She shares the labelling of ice cream as an example — ice cream is considered dairy while non-dairy products have other names, like sorbet, gelato or non-dairy frozen dessert.
Can Kefir Grow Like Yogurt?
Yogurt has paved the way for kefir to expand its consumer base in the U.S. Both are fermented dairy products with tangy tastes. But for kefir to achieve widespread, mainstream adoption like yogurt, significant education is needed. Thousands of peer-reviewed studies prove kefir contains a higher concentration of probiotics than yogurt — and a wider range of beneficial bacteria. For kefir to grow, this message needs to reach consumers.
“It’s a different set of microbes,” Lewin says. “Kefir is fermented with yeast and yogurt isn’t. Kefir has a larger family of microbes.”
Smolyansky is passionate that kefir cannot be compared to the products of the major. yogurt companies.
“The yogurt produced in the United States is so over-produced and so over-pasteurized that there’s practically nothing living in it after it’s been processed,” she says. “It’s one of the biggest problems with yogurt in the U.S.”
Lifeway regularly sends their products to be tested for probiotics, measuring Colony Forming Units (CFUs), the active microorganisms in a food product. Smolyansky says eating probiotics is critical in a germ-phobic, antibody-heavy society, where we’re over-sanitizing due to the coronavirus pandemic.
“If our bodies aren’t fighting an outside kind of pathogen, it starts to fight itself,” she says. “One of the ways to counteract this disruption in our microflora is by the use and the introduction of consistently replenishing microflora including diversity of bacteria, a variety of food sources that offer bacteria, the diversity and kind [of bacteria] is always the king. It makes for great food environments in the gut.”
Shelf-stable fermented sauces are growing tremendously. In the past year, fermented sauces grew 41%, with sales reaching $275 million. Soy sauce still dominates with 70% of the market share, but sales of both fish sauce and gochujang increased over 50%.
“I think a lot of brands are thinking ‘Are we going to hang onto this new [normal], this new baseline?’ This is a segment of products that’s really having its baseline reset,” says Kevin Snodgrass, solutions architect for SPINS. Snodgrass shared insights in a TFA webinar, Retail Trends for Fermented Sauces. “Brands are going to continue to experience this great growth in the months and years ahead.”
The increase is significant — sales growth in the one year from 2019 to 2020 was 5.7%. This improvement is attributable to multiple trends across the food industry — more people are buying healthy food and cooking at home, the American kitchen is becoming more globalized, and more consumers are embracing the unique flavors of fermented sauces, especially those from Asia.
“It definitely coattails a lot on the acceptance and growth of the fermentation market as a whole,” says Jared Schwartz, a TFA Advisory Board member who moderated the webinar. Schwartz is the founder of fermented sauce producer Poor Devil Pepper Co., and director of operations and quality for Farm Ferments, a facility in Hudson, N.Y., that is home to Hawthorne Valley Farm. “As consumers are becoming more open to reaching for fermented foods, kind of the next step is adding a flavorful, fermented hot sauce.”
Brands Growing, but Room for More
The top 10 selling fermented sauce brands in both natural retail grocers (like Whole Foods) and traditional (MULO) outlets (like Wal-Mart and regional grocery chains) are all experiencing double-digit growth. “That’s a great sign,” Snodgrass notes.
Kikkoman, Bragg, San-J, Coconut Kitchen, Lee Kum Kee and Big Tree are among the top 10 brands in both the natural and MULO channels. Smaller brands like Red Boat, Mother-In-Law’s, Ohsawa and Yamasa thrive in the natural channel,; La Choy, BetterBody Foods and Chung Jung One are strong in MULO.
The category is ripe for continued innovation, Snodgrass says. Smaller brands can emerge, even with competition from larger, established brands, so it can be worthwhile to start a fermented sauce brand.
Label Claims & Consumer Education
SPINS found certain product attributes on fermented sauces help sales.. Certified gluten-free fermented sauces grew 40.8%; USDA organic, up 40% and non-GMO increased 33.8%.
Since many sauces don’t put “fermented” on their label, many consumers may not be aware they are, notes Snodgrass. He says that these products could benefit from using “fermented,” as it would suggest that there may be health benefits to the sauces.
Schwartz agrees. He points out Tabasco as a fermented hot sauce, even though producer McIlhenny Company doesn’t market it as such. Educating the consumer would also help the category. Probiotics are a selling point but they confuse buyers. And there’s a clear difference in health benefits between shelf-stable and refrigerated fermented sauces. Refrigerated sauces may have live, beneficial bacteria; shelf-stable ones are pasteurized, killing any good bacteria in the process.
“At the end of the day, I think it comes down to flavor,” Schwartz says. Fermented sauces are “funky and vinegar-free. It’s got this like natural layers of complexity that you can’t really achieve without fermentation.”
In the past decade, more cideries have begun clubs as a way to connect with their customers, keep year-round sales and sell rare ciders.
But during 2020, when the COVID-19 pandemic closed taprooms and cancelled restaurant sales, cider clubs became critical to earn revenue. The American Cider Association (ACA) reported 22% of their members started a club in 2020.
“Our cider club was the one bright spot of 2020. That was really the one thing that kept growing, kept us motivated and got us excited,” says Talia Haykin, founder of Colorado-based Haykin Family Cider. Her products were sold in local fine dining establishments, but those sales evaporated during the pandemic.
“Everyone has kegs they can’t sell during the pandemic,” says Christopher Shockey, who co-authored the book The Big Book of Cider with wife Kirsten (a TFA Advisory Board member). “Cider clubs are keeping them afloat.”
Guaranteeing Sales & Creating Fans
Cider clubs are a subscription service where the cidery ships new, rare, seasonal or limited edition ciders to members multiple times a year. As both online shopping and access to direct-to-consumer alcohol shipping have expanded, subscriptions to cider, wine and other alcohol assortments have become feasible and increasingly popular.
“It’s taking customers who are already excited about you and converting them into a model that’s going to have them buy more from you regularly” says Eleanor Leger, founder of Eden Speciality Ciders. Leger and Haykin shared their tips on cider club growth opportunities during 2021 CiderCon.
“That’s money you know you’re going to have versus just duking it out on the store shelves where a new store manager can just decide they don’t want you and they want somebody else and you lose that shelf space,” Christopher says during the TFA webinar on “The State of the Art of Cidermaking.”
An ACA survey found that cider clubs generate up to 10% of a cidery’s total revenue.
Quarterly shipment of ciders is standard. Haykin and Leger advise cideries to ship more than twice a year, so members won’t forget they joined a club.
“You want to continually remind them that you exist,” Haykin says.
Shipping costs for cider — a fermented product which must be kept cold and is often sold in glass bottles — can be pricey. But, Haykin notes, even though he bears that high cost of shipping : “the repeat business of a club member is worth so much more to us.” Many clubs offer local pick-up to eliminate shipping costs.
Attracting & Keeping Customers
In the crowded alcohol market, cider clubs are a way to differentiate a brand.
While there are not specific stats on the demographics of Americans who subscribe to alcohol clubs, product subscription services overall are rapidly growing. Millennials are the dominant users of subscriptions — 31% currently have one or more, and another 38% say they will in the next six months.
Cider sales grew 9% in 2020, and they represent 11% of the craft beer category (where cider sales are tracked). Wine is struggling with Millenial and Gen Z consumers, who view it as a drink for an older demographic. Kirsten Shockey says younger consumers gravitate to cider instead.
“People are looking for funky flavors,” she adds. “I think the biggest battle cider makers have is feeling like the wine cooler crowd is their crowd. But that is changing, people are looking for more flavor.”
Member offerings vary for cider clubs, and can include:
- Discount on tap room products.
- First chance to try new items.
- Exclusive taproom tastings.
- Forage days (members help pick cider apples from local orchards).
- Volunteer opportunities at local farmers markets and food festivals.
The No. 1 reason people cancel a membership is because of a bad experience. Haykin stresses the importance of responding to a customer within, at most, 12 hours. “Communication is one of the most important things you’ll offer as a club,” she says.
Leger adds: “We jump all over someone who has had a problem to make sure they know we are sorry and we take care of it right away. Handling a problem really well creates incredible loyalty. People can be out there building your brand for you because they love you and they’re telling all their friends. If they have a bad experience, they’re destroying the brand for you.”
After Dr. Bob Hutkins finished a presentation on fermented foods during a respected nutrition conference, the first audience question was from someone with a PhD in nutrition: “What are fermented foods?”
“I thought ‘Doesn’t everyone know what fermentation is?’ I realized, we do need a definition. Those of us that work in this field know what we’re talking about when we say fermented foods, but even people trained in foods do not understand this concept,” says Hutkins, a professor of food science at the University of Nebraska-Lincoln. He presented The New Definition of Fermented Foods during a webinar with TFA.
Hutkins was part of a 13-member interdisciplinary panel of scientists that released a consensus definition on fermented foods. Their research, published this month in Nature Reviews Gastroenterology & Hepatology, defines fermented foods as: “foods made through desired microbial growth and enzymatic conversions of food components.”
“We needed a definition that conveyed this simple message of a raw food turning into a fermented food via microorganisms,” Hutkins says. “It brings some clarity to many of these issues that, frankly, people are confused about.”
David Ehreth, president and founder of Alexander Valley Gourmet, parent company of Sonoma Brinery (and a TFA Advisory Board member), agreed that an expert definition was necessary.
“As a producer, and having started this effort to put live culture products on the standard grocery shelf, I started doing it as a result of unique flavors that I could achieve through fermentation that weren’t present in acidified products,” Ehreth says. “Since many of us put this on our labels, we should be paying close attention to what these folks are doing, since they are the scientific backbone of our industry.”
Hutkins calls fermented foods “the original shelf-stable foods.” They’ve been used by humankind for over thousands of years, but have mushroomed in popularity in the last 15. Fermented foods check many boxes for hot food trends: artisanal, local, organic, natural, healthy, flavorful, sustainable, innovative, hip, funky, chic, cool and Instagram-worthy.
Nutrition, Hutkins hypothesizes, is a big driver of the public’s interest in fermentation. He noted that Today’s Dietitian has voted fermented foods a top superfood for the past four years.
Evidence to make bold claims about the health benefits of fermentation, though, is lacking. Hutkins says there is observational and epidemiological evidence. But randomized, human clinical trials — “the highest evidence one can rely on” — are few and small-scale for fermented foods.
Hutkins shared some research results. One study found that Korean elders who regularly consume kimchi harbor lactic acid bacteria (LAB) in their GI tract, providing compelling evidence that LAB survives digestion and reaches the gut. Another study of cultured dairy products, cheese, fermented vegetables, Asian fermented products and fermented drinks found that most contain over 10 million LAB per gram.
Still, the lack of credible studies is “a barrier we have to get past,” Hutkins says. There are confirmed health benefits with yogurt and kefir, but this research was funded by the dairy industry, a large trade group with significant resources.
“I think there’s enough evidence — most of it through these associated studies — to warrant this statement: fermented foods, including those that contain live microorganisms, should be included as part of a healthy diet.”
A sustainable food industry will be built by flavor, says David Zilber, noted chef and food scientist.
Zilber made major headlines and surprised many in October when he left his job as head of the fermentation lab at Noma for a food scientist position at Chr. Hansen, a global supplier of bioscience ingredients. Noma, a two-Michelin star restaurant in Copenhagen, Denmark, has been regularly ranked one of the best restaurants in the world. In 2018, Zilber co-authored a bestselling book on fermentation with Noma co-owner Rene Redzepi.
In an Instagram live interview last week with Al Jeezera’s Femi Oke, Zilber elaborated on why he traded an apron for a lab coat. The global food system, Zilber says, is unsustainable. Waste is prevalent, food is created with long footprints, agricultural production is shrinking, meat is heavily consumed and large corporations control the industry.
“What I’m trying to do in my work is to make vegetables as God damn tasty as they can possibly be by using microbes, using things that are already at our disposal, and convincing people that this might have to have a little bit of a longer inventory life while you let it ferment, while you build a stockpile, but this is the result, this is why you’ll be able to convince people why eating this way is healthy for them and the planet,” he says. “Flavor is king.”
Ingredients created by Denmark-based Chr. Hansen (the company has 40,000 microbial strains used as natural ingredients) feed 1-1.5 billion people a day. These include microbes in yogurt and yeast in beer.
“I work with them to try and make the food system more sustainable, to get more people eating vegetables,” Zilber says, adding that 30% of every calorie consumed by humans is fermented by bacteria, microbes or fungus. “No matter what we eat in the future, that’s still going to be the case. That slot of the human diet still needs some form of microbial transformation, whether it’s meat or dairy or oat milk or peas. I work to figure that out.”
It’s a different philosophy compared to the food technology many new companies are utilizing to create alternative proteins like Beyond Burger. He complimented the company for their high standards, but he says a Beyond Burger patty is not a replacement for a juicy, beef burger. People pay more for an inferior eating experience.
“At the end of that day, that will not cut it,” Zilber says. “Why does food have to be that processed to be purportedly that delicious? With some skilled tricks in the kitchen, with some ninja jiu jitsu behind the stove, you can make vegetables really, really delicious.”
Sustainable Food Systems
A sustainable food system will look much like one from 300 years ago, Zilber hypothesizes. It will be localized, where people purchase food produced close by. Modern practices of shipping ingredients and processed food around the globe are harmful to the environment.
“A truly sustainable food system looks far more decentralized than [the current one] does right now. There are [only a] very few stakeholders that are responsible for really a lot of calories,” he continues.
Oke questioned how Zilber could change a broken food system controlled by large companies when he now works at one of the major companies.
“If you want to be an idealist, that’s great, you might end up being a martyr,” Zilber says. “Sometimes you have to work within those contradictory institutions to try to do as much good as possible.”
Restaurant Industry’s Responsibility
The restaurant industry plays a part in it too, Zilber says. Workers are stretched thin, overworked, underpaid “and then extremely vulnerable in a time of crisis.” The pandemic has exposed and highlighted these problematic parts of the restaurant business.
Zilber says there are still too many restaurants. It’s hard to find good cooks, and staff is often undertrained.
“I took a step into food production myself. Maybe more of these cooks, more of these people who are passionate about food, need to consider options beyond just the restaurant setting and see value in becoming a farmer, becoming a distributor, becoming someone who decides how those calories are made because restaurants aren’t the full picture of the food system,” he continues. “There are a lot of talented people within it who know food, who understand it, who understand the human experience of what it means to make good tasting food and satisfying food. There’s other places for them to work as well.”
Probiotics and fermented foods are not equivalent, says Mary Ellen Sanders, PhD and executive science officer of the International Scientific Association of Probiotics & Prebiotics (ISAPP). She advises fermented food producers that don’t meet the criteria of a probiotic to use descriptors such as “live active cultures” or “fermented food with live microbes” on their labels rather than “probiotic.”
“There are quite a few differences between probiotics and many fermented foods. You cannot assume a fermented food is a probiotic food even if it has live cultures present,” says Sanders. She highlighted her 30 years worth of insight into the field during a TFA webinar, Are Fermented Foods Probiotics?
Some fermented foods do meet these criteria, such as some yogurts and cultured milks that are well-studied. But many traditional fermented foods do not.
Using multiple peer-reviewed scientific studies and conclusion from expert panels in the fields of probiotics and fermented foods, Sanders shared the ways in which fermented foods and probiotics differ:
- Health benefits
By definition, a probiotic must have a documented health benefit. Many fermented foods have not been tested for a health benefit.
“If you are interested in recommending health benefits from a fermented food in an evidence-based manner, many traditional fermented foods fall short. They don’t have the controlled randomized trials that will provide a causal link between the food and the health benefit,” she says. “A food may be nutritious, but probiotic benefits must stem from the live microbe, not the nutritional composition of the food. Otherwise you just have a nutritious food that happens to have live microorganisms in it. You don’t have a probiotic food.”
- Quality studies
In her presentation, Sanders shared multiple randomized clinical trials on human subjects with supported health evidence for probiotics. But there are few randomized, controlled studies on fermented foods. Most are cohort studies, which inherently have a higher risk of bias and cannot provide a causal link between consuming fermented foods and a health benefit.
“A strong hypothesis is not the same as proof,” Sanders says. “Evidence for probiotics must meet a higher standard than small associative studies, many of which are tracking biomarkers and not health endpoints.”
She noted, though, there are some studies on fermented milk and yogurt that show a conferred health benefit.
- Strain designation
Though many fermented foods do have live microbes, a probiotic is required to be identified to the strain level. The genus and species should also be properly named according to current nomenclature. Many fermented foods contain undefined microbial composition. Without that strain designation, one can’t tie the scientific evidence on that strain to the probiotic product.
- Microbe quantity
Another key differentiator is that probiotics must be delivered at a known quantity that matches the amount that results in a health benefit. Probiotics are typically quantified in colony forming units (or CFUs).
“A probiotic has a known effective dose. But fermented foods often contain unknown levels of microbes, especially at time of consumption,” Sanders says.
What Can Brands Do?
If food brands keep using the word probiotics as a catch-all to describe a fermented product, the term will lose its utility. Using “probiotics” on food with unsubstantiated proof of probiotics is a misuse of the term.
“When I see a fermented food that says probiotics on it, I very often think what they’re trying to communicate on that label [is that it] contains live microbes,” Sanders says, “because I’m doubting, at least some of the products I see, that they have any evidence of a health benefit. And so they’re just looking for a catchy, single word that will communicate to people that this has live microbes in it. ‘Live active cultures’ is something that resonates with people as well. So why not use that?”
Sanders encourages fermented brands to standardize the terms “live active cultures,” “live microbes,” “live microorganisms” or “fermented food with live microbes.” For products pasteurized after fermentation, there’s a term for them too: “Made with live cultures.”
Controlled human studies on fermented foods can be challenging, Sanders admits. Such studies can be difficult to properly blind, since placebos for foods are hard to design. The fermentation process affects the product taste so that study subjects may know what they are consuming. But the health benefits of fermented foods could be studied, though. She also advises producers to focus on the nutritional value of their food.
“That’s one thing that really has me excited about this concept of core benefits,” says Maria Marco, PhD, professor of food science and technology at University of California, Davis (and a member of TFA’s Advisory Board) and moderator of the webinar. “I think it kind of opens the doors to the possibility of fermented fruits and vegetables where there’s certain organisms, microorganisms that we’d expect to be there but again we need to know really if those microorganisms are needed to make those foods healthy.”
Natural and organic products had a record year in 2020, growing 12.7% to $259 billion in sales. Sales were fast-tracked by the pandemic, as consumers cooked more meals at home in quarantine and developed a greater interest in healthier food and beverages.
“2020 was a challenging year. But natural and organic brands face a bright future. We are positioned where a growing number of consumers are headed,” says Carlotta Mast, senior vice president and market leader at New Hope Network. Mast shared industry highlights during her State of Natural & Organic address at New Hope’s Spark Change virtual conference earlier this month.
Natural and organic food and beverages (39%of total sales) and functional food and beverages (31%) dominate the industry. The natural and organic category alone grew 13% to $186 billion in sales. Produce accounted for 24% of those sales. Beverages were 17% of the total; dairy, 15%; packaged/prepared foods, 13%; breads and grains, 11%; snacks, 8%; meat, fish and poultry,7% and condiments, 5%.
Here are some key trends from this banner sales year:
- Consumers Prioritize Health
Consumers want immunity-boosting foods. Brands should consider adding vitamins and minerals to their products, as nutrient-dense food will be core to the future of food production.
Nutrient density “is very difficult to market,” says Nick McCoy, managing director and co-founder of Whipstitch Capital, a food-focused investment bank. “It manifests itself as superfoods over time, but it’s one of these things, if you’re in a natural grocery store, historically not many shoppers are going to take the time to read the label. It’s really encouraging to see that this is reversing.”
Adds Kathryn Peters, executive vice president at SPINS, a data company for the natural and organic industry: “Consumers are expecting more from the products they buy. But another key piece is consumers are expecting more density of nutrition in the products they buy.”
- Wellness is Challenging to Maintain
Consumers are focusing on health and wellness more than ever — 77% of New Hope Network survey respondents said personal health is more important to them now than it was in 2019.
But research shows consumers are struggling to maintain healthy lifestyles. People said they ate more junk food, exercised less, felt more anxious and slept less during 2020. Binge drinking is up an alarming 41% among women since the start of the pandemic.
Brands, Mast says, can help people fix bad habits.
“I think this is our big opportunity for 2021 and beyond,” Mast says.
- Diet as Lifestyle
SPINS’ Peters says she anticipates that, “as we look to resurrect our former selves,” shoppers will look for new eating plans, ones they can personalize to their needs.
She highlighted a few trends. Consumers want less sugar and fewer carbs and additives. They’re also shifting buying habits based on the trend to Paleo and Keto diets. Plant-based products, too, are estimated to grow at twice the rate of their traditional counterparts. Plant-based products grew 30% from 2019 to 2020, hitting $5.7 billion in sales.
Pantry staples, frozen foods, meat/fish/poultry and plant-based alternatives experienced the highest growth rates. Snack foods and packaged and prepared foods — which had previously experienced large sales gains — took big hits in 2020 as fewer people chose grab-n-go offerings during quarantine.
“How is your brand interacting with what consumers are looking for today?” Peters says.
- Multicultural Foods Grow
Of health and wellness products in the U.S., only 20% are multicultural, according to the Nutrition Business Journal.
“That tells me there’s a lot of room for better-for-you multicultural foods to grow into the profile of all the other categories,” Whipstitch’s McCoy says.
- Differing Preferences for eCommerce or Brick-and-Mortar
The pandemic accelerated ecommerce sales, which grew 60% in 2020, generating $16.5 billion. Natural products are outpacing traditional ones in ecommerce, with natural product shoppers spending nearly twice as much as those who buy “traditional” items via ecommerce. And, while “traditional” shoppers spend 22% of their dollars at WalMart, natural product shoppers only use WalMart for 12% of their purchases.
“As you all know, organic is mainstream now,” Mast continued, noting that natural sales remained high in 2020 even as unemployment rates soared. “During other economic downturns that we’ve experienced, the organic sector has typically taken a hit when it comes to sales growth. But not in 2020.”
A new project is aiming to provide accurate information and resources to the public around the microbial mysteries of fermented foods. EATLAC is a University of California, Davis, project putting scientific knowledge and research behind fermentation.
“A good understanding of food and beverage fermentation is particularly important for people making fermented foods at home so that the foods are made properly and minimize the risk of foodborne illness,” says Maria Marco, PhD, microbiologist and professor in the department of food science and technology at the university (and member of TFA’s Advisory Board). “Access to accurate information about fermented foods is quite important for understanding their roles in healthy diets and what properties about them are different from the starting ingredients.”
EATLAC officially launched in 2019, with the help of funding from California Department of Food & Agriculture. Led by project directors Marco and Erin DiCaprio, PhD, a food safety expert and extension specialist at UC Davis, the EATLAC team is composed of grad and undergrad students helping to develop science-based guidance on fermented vegetables and fruits. Resources being developed in the project include recipes, consumer surveys, and webinars. This information will be available to the general public, from home fermenters to commercial producers.
The name EATLAC stands for Evaluating And Testing Lacto-ferments Across the Country, but LAC is also a play on words for lactic acid bacteria, the beneficial bacteria present in fermented foods.
Project objectives include:
- Developing educational materials on fermented foods.
- Conducting public education workshops on fermented foods.
- Measuring the bioactive properties of unpasteurized (fresh) fermented fruits and vegetables produced from specialty crops in California.
- Disseminating research findings to food processors.
“It is very important to spread reliable information and vetted recipes so that everyone can create something that is great but, more importantly, safe,” says Zoe Mitchell, undergraduate student at UC Davis. “Fermentation requires that food be left out on the counter (in the microbial temperature danger zone) for days on end. To create a safe fermentation environment that supports the growth of the microbes we want, recipe ingredients include things like acid and salt to inhibit pathogens. However, because just a little too much or too little of these ingredients can grow the wrong and potentially dangerous microorganisms, it is paramount to have reliable sources.”
An important role of the student team, Marco says, is to “perform laboratory research to study the microbiota and bioactive properties in fermented fruits and vegetables.” Students will also be responsible for developing informational materials on fermented fruits and vegetables and run the social media accounts.
Natália Ribeiro, doctoral student at UC Davis, has developed aspects of the project communication. She manages the EATLAC Instagram account, coordinates the posts on FaceBook, and is helping create fermentation fact sheets that will be available on the website. Riberio says she decided to join the project because she wanted to study further the health benefits of fermentation.
“There’s so much more to know about fermented foods and map out. We want to spread that information in a more validated way,” Riberio says. “People associate fermented foods with flavor, but in a society where we see so many people dealing with diseases, making fermented foods part of your habits could actually alleviate or improve your health in a very easy and even tasty way. Educating people about what is known (and not) is important.”
Since most of the team is not allowed to be in the laboratory due to the pandemic, they are collecting home ferments for analysis. EATLAC is calling on home fermenters around the country to send in their fresh fruit or vegetable ferments. Fresh ferments are samples taken right after fermentation, before refrigeration. The research group will then study the nutritional content and beneficial bacteria. Mitchell adds this allows the team “to create an extensive database on the microbial ecology of various fermentations.” Elements like ingredients, location, salt percentage and vessel type are all tracked to see how these factors affect fermentation.
The team is currently studying samples from home during the COVID-19 pandemic, but they’re anxious to return to the lab.
“There is a great and long history of food fermentation research at UC Davis,” Marco notes. The team will update existing informational resources and write new ones within EATLAC.
For more information about the educational resources, visit EATLAC webinar series.
Fermented dairy foods have been shown to lower the risk of chronic diseases, inflammation and weight gain. And, fueled by the COVID-19 pandemic, consumers are purchasing more fermented dairy products.
“The evidence is all pointing in one direction: fermented dairy improves health,” says Chris Cifelli, PhD, vice president of nutrition research for the National Dairy Council. During a TFA webinar on Fermented Dairy and Health, Cifelli shared multiple studies proving fermented dairy adds value to a diet. “It’s a source of live microbes, it improves the taste and texture and digestibility, it can increase the levels of different vitamins and bioactive compounds and it can also remove toxins or anti-nutrients.”
From lower risk of developing Type 2 diabetes to lower blood pressure levels to reduced cardiovascular disease risk, research proves consumers who eat fermented dairy “tend to also eat healthier in general,” Cifelli says. “Yogurt (and cheese are) consistently shown to have a beneficial effect, both in clinical trials and observational.”
Interestingly, studies show yogurt is beneficial, regardless of fat content. Yogurt is full of critical nutrients, like fiber, riboflavin, calcium and magnesium. This “halo of health” surrounding yogurt has driven a recent sales surge.
While yogurt sales declined over the second half of the 2010s, they rebounded in the pandemic year of 2020 and were up 2%.
“Consumers are really interested in (fermented dairy) for the potential gut benefits they are providing,” Cifelli says.
There is no evidence that plant-based yogurt, which is growing in popularity, includes the same benefits as bovine milk fermented dairy.
Kefir sales are on the rise;, too, are also growing. gGlobally, itkefir is expected to reach $1.84 billion in sales by 2027. Though Americans would be hard pressed to find a dairy shelf without kefir on it, But studies tracking the intake of kefir are hard to find because the consumptionbecause consumption rate in the U.S. is still low. Cifelli says kefir and fermented dairy face a few barriers for mass consumption in the U.S.
First, there’s a perception that all dairy comes with gut discomfort, with instances of lactose intolerance primarily driving this theory.
“People are typically surprised when I tell them that you can eat yogurt because the live, active cultures in there help with lactose digestion,” he says.
Second, consumers are nervous about hormones coming from cow products. But, Cifelli notes, all food has hormones.
Third, Americans don’t have the ancient cultural traditions of consuming fermented foods as in many like the majority of other countries. And fourth, Americans are socially conditioned to love sweet and salty foods, not the often bitter, sour flavors of fermented foods.
“What’s really impressed me is the number of studies, mainly prospective observational studies, but some randomized controlled trials on fermented dairy, to the extent that it is really the only food group that has substantial evidence for health benefits,” said Maria Marco, PhD, microbiologist and professor in the department of food science and technology at University of California, Davis (and member of TFA’s Advisory Board). Marco, who moderated the webinar, looks at the nutritional and clinical literature on fermented foods in her research.
Cifelli said this is because, in the U.S., milk and cheese have been actively consumed and studied for decades. The bulk of yogurt research is only from the last 20 years. Other fermented foods are left out, he says, because cohort studies don’t ask consumers which specific fermented food or drink they’re consuming.
“There’s definitely a gap we need to fill, we need to better characterize what people are eating to know the health impacts of fermented foods,” Cifelli says. “Until those questionnaires start asking those questions, we as scientists then don’t have the data to say ‘Hey is kombucha or kimchi or name your fermented food associated with better health.’”