Fermentation was the No. 2 trend on the North America Flavor Trend Report for 2020, but with a twist: sweet foods are the new star of fermentation. The trend report was released by Symrise, an international producer of flavors and fragrances.
“Over the past few years, we’ve seen fermentation has really come to dominate the condiment category with foods like kimchi, that have really led the charge,” says Julia Gorman, Symrise digital marketing specialist. Now, “fruit is getting funky.”
Pickling berries, fermenting tropical fruits, using sour fruits and incorporating pulp byproduct into fermented dishes are some of the key flavor trends among chefs. Adds Dylan Thompson, Symrise marketing and consumer insights manager: “It’s all about the evolution of fermentation.”
Fermentation was particularly high on the list because of gut health components. Fermentation encompasses some of the mega trends Symrise is seeing this year. Consumers are buying simple foods that benefit a healthy lifestyle. Fermentation’s “health benefits remain a huge bonus,” Gorman says.
Symrise polled chefs and mixologists for their survey, and found four fermented fruit flavor trends:
- Pickled Berries. Made popular through the cookbook “Noma’s Guide to Fermentation,” Scandinavian cuisine is making a major impact on America’s acceptance of fermented fruit.
- Tropical Fermentation. Mixologists have been particularly experimenting with tropical fruits in drinks. Fermented pineapple, for example, is used to “add flavor funk to what is otherwise a classic beach cocktail,” Gorman adds.
- Ume (and Ume Boshi). More chefs are using Ume, the salty, sour Japanese plum. It can be pickled, brined or traditionally served with rice.
- Fermented Cacao Pulp. Usually a wasted byproduct of cacao bean production, the pulp has an array of health benefits. Chefs are salvaging the pulp to use in a variety of dishes.
In the weeks since the coronavirus pandemic forced restaurants around the world to remain open only for takeout or to close until stay-at-home restrictions are lifted, food icon David Chang has emerged as an advocate for the industry.
The founder of the Momofuku restaurant group says government intervention is desperately needed for food service to survive — without it, only big chains will remain. “I have a hard time seeing [smaller establishments and even chef-driven eateries] survive and making it through the end of this.”
“Telling restaurants they should close or only do delivery or just be 50% open was a death sentence,” Chang says. “And I think all restaurants would have happily have done so if we were given some type of safety net.”
The restaurant industry has suffered significant job losses since the outbreak of COVID-19. The Momofuku Group laid off 800 employees during the pandemic. According to the National Restaurant Association, 8 million restaurant employees have been laid off or furloughed.
Chang and Marguerite Mariscal, CEO of Momofuku group, shared their thoughts on what can be done to save the restaurant industry in Vice Media’s new “Shelter in Place series.”
“Right now, any small business owner in New York is put in a very precarious position where they either are closing, which means they can’t financially afford to pay their staff, or they’re trying to stay open to get any sort of income that will then allow them to keep people have,” Mariscal says.
Though restaurants have business interruption insurance, that only covers physical business damage. Restaurants can still remain open for takeout, but with great risks.
“I think we’re all looking for a little guidance,” Mariscal says. “If restaurants are going to be deemed an essential business, then treat it that way, right? Like, what are the protocols or safety procedures that we should be using to make sure that we’re operating in the, you know, safest, best light? But instead, you have business-to-business everyone making these calls. And I don’t think we feel were the best equipped to make them.”
Like who is regulating proper PPE use among restaurant workers? Should staff all be wearing gloves? Is a cloth mask good enough or should cooks wear a N95 mask? Where is the supply chain for restaurants to get this gear that wouldn’t hurt the medical supply chain? Chang says the lack of guidance from government leadership “it was so bad, it was embarrassing.”
“We need the state-level authorities, because it’s not going to happen from a federal level to say, ‘Hey, it’s dangerous to make food, in a COVID-19 world, this is what you need to do,’” he says. “There are a lot of people serving food in maybe not a safe situation.”
Government aid to help the restaurant industry is only short-sighted, Chang adds, because it’s not covering beyond summer. Unemployment will only cover a few months. There is no unemployment coverage for undocumented workers. Businesses can only receive money from the economic stimulus bill, CARES Act, if they rehire 100% of their workforce by June 30. Chang points to the aftermath of September 11 as an example. Restaurants closed for only a few days, but it took years for the New York tourism industry took years to recover.
The restaurants that will survive the pandemic will be large chain restaurants with big pocketbooks and corporate power – like McDonald’s and Taco Bell.
“That’s unfortunately the future that I feel we’re headed to unless we can have proper intervention and guidance and support and leadership from the government,” Chang says. “There’s a good chance Momofuku may never reopen again. Or the restaurant that you loved to go to so much in your neighborhood may never reopen again. If we don’t support the supply chain and the purveyors and the farmers and the workers all surrounding it, there may not be a new restaurant that’s going to be delicious, that’s going to have the vibrancy that you want, for a considerable amount of time. People are going to realize just how important the food industry is and the workers that have been neglected for so long, I think they’re going to realize, holy shit, we didn’t realize how much we depend on the food industry.”
What will restaurants look like, after the pandemic? Sanitation standards will be increased, there will be greater oversight from the FDA and CDC. But the future “is going to be predicated on something that we have no preparation for,” Chang says. Ghost kitchens, delivery and e-commerce will become the driving force of restaurants, operations most restaurants are not set-up to implement.
“What you’re going to see is maybe there’s less of a restaurant industry and it’s more of a food industry,” Mariscal says. “Everyone’s going to have to reimagine how they make money.”
Chang says big corporate, quick-service restaurants are prepared. Large chains “they’re never touching the food, it’s just an assembly process,” Chang says. Smaller restaurants, independent diners and even upscale chef-driven eateries rely on culinary touches, though. Chefs taste the food and experiment with dishes.
“It would be hard to live in that world where there isn’t variety,” Chang says. But “in terms of food, I think there’s going to be less choice.”
Though the March Natural Products Expo West conference and trade show were cancelled this year because of the coronavirus pandemic, New Hope Network (producers of the event) hosted a virtual webinar this month to share their annual report on industry trends. Leaders from New Hope Network, SPINS and Whipstitch Capital shared insights on natural product sales trends.
“We definitely believe that this unfortunate health crisis is going to bring the bright spot of making health and wellness more mainstream,” says Kathryn Peters, executive vice president of business development at SPINS (who also are scheduled to present at TFA’s FERMENTATION 2021 conference next May).
The report typically encompasses sales numbers for the previous year, but SPINS included insights from short- and mid-term consumer behaviors during the COVID-19 crisis.
Read on for five takeaways for the fermentation industry from the data.
1. Thanks to Mass Market Saturation, Natural Sales Slow in 2019
Sales of the natural and organic industry in the United States slowed in 2019, growing 5.3% to $230.7 billion in sales.
The slowing growth signals an optimistic takeaway: mass market saturation. There are more natural products on retailer’s shelves than ever before.
“Despite the slower growth, the mass market channel – which includes big box retailers, large grocers like Walmart – that channel added 6.5 billion in new sales last year, which is very significant,” says Carlotta Mast, senior vice president for New Hope Network.
Sales data over the last decade shows the natural industry has grown from being a small player in the consumer products industry with only 11% of sales to a larger player with 20% of sales.
“We’re not a little kid anymore – we’ve kind of grown up,” says Nick McCoy, the managing director and co-founder of Whipstitch Capital.
Natural brands are getting larger, McCoy notes, experiencing an average of 10% growth two years after their start date. Growth of smaller brands is outpacing growth of larger brands. Brands in the 1,000-2,000 sales spots grew at a rate of 6.1% in 2019, while the top 1,000 selling brands grew at a rate of 5.2% in 2019.
2. Americans Want Functional, Science-Backed Products
Despite slower industry growth, the natural, functional food and beverage industry grew two times faster than conventional food and beverages in 2019. Functional products improve overall health by providing additional nutrients. Fermented food and drink fall into the functional category.
Functional food and beverage sales grew 5.3% in 2019, hitting $71.4 billion in sales.
Consumers are purchasing products with ancient wisdom, a trend defining the nutrient-dense, time-honored food that is made of simple, clean ingredients.
“This has been an underlying driver of the industry for many years,” Mast says. Consumers are “seeking science-backed health and wellness offerings positioned to address modern conditions.”
Consumers want optimized products that address eye health, stress support and, especially in today’s health climate, immunity.
The natural industry experts expect functional foods to continue to grow, fueled this year by the COVID-19 pandemic.
3. Coronavirus Outbreak Causing Big Boost in Sales
During the week America went into quarantine during the coronavirus outbreak, 15 million additional buyers bought natural products.
“At the end of the day, virtually everything sold,” Peters says. A key trend: “Natural products were still in demand; they did outsell all products.”
Peters notes some of the natural products may have sold because they were the last available product on the shelf. Time is the best indicator if these shoppers will convert to regulars. But those products are now on consumer’s shelves – and a lot product trial is happening across the country, trial that is an expensive element of product development. “It’s a huge opportunity for this industry,” Peters says.
“What we’re finding as a real highlight for the industry is the consumer values that built and grew the natural and organic industry for years and years are holding strong in the face of COVID-19,” Mast says. “One hypothesis of what the world may look like in a post-COVID era is that consumers will increasingly prioritize health and wellness…A number of long term macro forces and trends that have driven growth of the natural and organic products industry up until now position us well for a world in which consumers increasingly prioritize health and wellness.”
As unemployment soars and consumers cut back on expenses, Peters does not expect economic pressures will slow down natural product sales.
“Our bodies are our best line of defense, and consumers are realizing this,” she adds. “While comfort food is important in this phase, we are still seeing a strong influence of health and nutrient-dense food.”
A survey of consumers during the week of April 13, 2020 found that 77% say personal health is most important to them today than it was in 2019. In addition, 43% say eating healthy food is more important today than it was in 2019.
Sales of kombucha, for example, plateaued in 2019, after years of positive growth. But during the peak coronavirus grocery stock up period, refrigerated kombucha sales were up 28%, refrigerated pickle and marinated vegetables were up 58% and refrigerated yogurt sales were up 39%.
The coronavirus is increasing challenges for the industry, too. Supply chains are disrupted, there is a lack of new product development and a dearth of investment capital.
“That is slowing the flow of innovation, which we can expect to affect the flow of offerings to the market later this year and into 2021,” Mast says.
4. E-Commerce Sales Growing Fast, Driven by Natural Shoppers
In 2019, e-commerce sales accounted for only 4% of total natural product sales. In 2020 so far, e-commerce has generated almost $10 billion in sales. Estimates put total e-commerce sales at 17% in 2020.
“E-commerce is the big story for 2020 with COVID-19 and the rapid increase of consumers buying online,” Mast says.
Interestingly, natural shoppers were using e-commerce channels at a higher rate than regular shoppers.
5. Sustainability is of Greater Importance
Early consumer research indicates an aspirational trend: COVID-19 may change consumer’s viewpoints to become more sustainability focused.
During the week of April 13, 2020, a survey of consumers found that 67% said environmental health is more important to them today than it was in 2019. Purchasing behaviors that support environmental causes are also on the rise. Of more importance to consumers in 2020 verses 2019: food waste (36%), buying plant-based foods (29%), buying responsibly sourced meat, seafood and dairy (26%), buying organic (22%), and buying products with environmentally-based packaging (18%).
Sustainable packaging “which is really the Achilles heel to the natural and CPG industry,” Mast says, is becoming of greater important to consumers as single-use packaging is demonized. Brands are also looking for ways to keep their waste out of landfills, upcycle ingredients and putting byproducts back into circulation.
Three fermentation experts weigh in on one of the most common problems in fermenting vegetables: mold prevention. The fermenters include fermentation chef David Zilber (head of fermentation at Noma) and fermented sauerkraut producers Meg Chamberlain (co-owner of Fermenti Farm) and Courtlandt Jennings, (founder and CEO of Pickled Planet and TFA advisory board member).
How do you handle prevent mold in sauerkraut?
David Zilber, Noma: That is something you are constantly trying to fight back, especially when you lacto-ferment in something like a crock. There are so many variables that go into making a successful ferment. How clean was your vessel before you put the food in there? How clean were your hands, your utensils? How much salt did you use? How old was the cabbage you were even trying to ferment in the first place? Every little detail is basically another variable in the equation that leads to a fermented product being amazing or terrible. It’s a little bit like chaos theory, it’s a little bit like a butterfly flapping its wings and Thailand and causing a tornado in Ohio. But with lots of practice, you’ll begin to understand that, if it was 30 degrees that day, maybe things were getting a little too active, maybe the fermentation was happening a little bit too quickly. Maybe I opened it a couple times more than I should of and it was open to the air instead of being covered. So there’s lots of variables. But I would say that, if you’re having a lot of trouble with mold, just up the salt percentage by a couple percent. It will make for a saltier sauerkraut, but it will actually help to keep those microbes at bay. (Science Friday)
Meg Chamberlain, Fermenti Farm: You must allow the ferment to thrive by creating a favorable environment with “Good Kitchen Practices.” So, to prevent mold in your ferment start by using only purified water, like reverse osmosis, distilled or boiled and cooled and-no tap water(municipal). Only use vegetable-based soap that is NOT anti-bacterial, like a good castile soap. Finally, only use dry fine Sea Salt, no mineral/no gourmet or iodized. Keep Fermenting and do not get discouraged! #youcanfermentthat #diyfermentation #idfermentthat
Courtlandt Jennings, Pickled Planet: Preventing mold when making sauerkraut is all about a controlled atmosphere. How well you maintain your situational cleanliness and fermenting atmosphere is my best clue for you. There are many ways to control atmosphere and every situation will be different based on many factors but be dillegent and your ferments will improve with practice.
This may not seem like an answer but it’s directional… as is most advice unless dealing with a consultant. Good luck and may the ferment force be with you!
Kheedim Oh never aspired to start a food brand. The self-described “accidental entrepreneur” began Mama O’s Premium Kimchi in Brooklyn in 2007, in the midst of the Great Recession. With just $50 to his name, he started hauling giant jars of homemade kimchi to retailers on his skateboard.
Thirteen years later, Oh has grown the brand into one of the top fermented kimchi sold in the United States. Handcrafted kimchi is a labor-intensive food craft, but Oh doesn’t cut corners. He has never received a dime of funding and employs only a small team that uses his mother’s kimchi recipe.
“Everything we do is the time-honored, traditional way. From the experience of having to do it myself for so long, I’ve learned how to be as ruthlessly efficient in doing the steps to make the kimchi,” Oh says. “It takes time. But, to be honest, I don’t know how to do it another way. My goal is to make the best product.”
His kimchi, kimchi paste and kimchi kit have been praised by Food & Wine magazine and Williams Sonoma. Oh spent decades prior to Mama O’s building a name for himself in the entertainment industry as a DJ. It’s only been in the last few months that he stopped working regular DJ gigs “and that’s only because I’ve had to dedicate so much more energy into making the kimchi.” Oh still incorporates music into his work, creating novel stop-motion recipe videos incorporating Mama O’s kimchi. He also hosts Kimchipalooza, an annual festival in Brooklyn with live music and kimchi-centric tastings, demos and DIY workshops.
“I never had a 40 hour week job in my life. All I’ve done is hustle for gigs. I’m a hustler,” Oh says, adding: “I don’t mind it.”
Oh bounced from locations while growing his brand. From his apartment kitchen to a commercial kitchen space to a basement kitchen in a friend’s restaurant to a kitchen of a deli in Queens and, finally, to his current space in the Pfizer Building in Brooklyn.
“I’m not trying to grow this company and then sell it. That’s not my motivation. I’m blessed to be able to do something I enjoy, that’s positive, that’s good for people, that helps people. Ultimately, that’s what I’m doing: helping people.”
Below, a Q&A with the dynamic founder.
The Fermentation Association: Why did you start making kimchi?Kheedim Oh: I never set out to start a kimchi company. I needed kimchi for myself and all the kimchi in the stores were not to my liking. I asked my mom to teach me how to make it. I live in New York, my parents live in Maryland. It’s just too far to go bum a jar to kimchi so i asked my mom to teach me how to make it. I would take the Chinatown bus down to Maryland to make it. I would make a batch, but when you make a batch of kimchi at home, you typically do a 50-pound box of vegetables at a time. I would make it, bring it back in a cooler, then I’d wheel it back to my house on a skateboard because I couldn’t afford a taxi.
TFA: When did you move from making it as a hobby to selling it?
Oh: So I was making the kimchi and, at the time, I lived by myself. Fifty pounds is just way too much for your personal stash. I would give it away to my friends and they were like “This is so good, you should sell it.” I didn’t put much too much stake into that. But I was buying ribs from my butcher (Jeffrey’s Meat Market) and he was like “If you have kimchi and rice, you eat like a king.” So I gave him a batch, checked up on him a week later, and he said “I love it!” I said “You know I sell this shit?” and he said “I want to start carrying it.” At that point I had to come up with a name, incorporate, get insurance, all that stuff. I was making it out of the kitchen in my apartment, bringing it to him, he was only a couple blocks away. He was a total angel. He didn’t want any money, he just wanted to give me the opportunity to promote my business.
TFA: Tell me about the brand name, Mama O.
Oh: It was an homage to my mom because she taught me how to make it and what’s better than moms? You eat with your eyes before you eat with your mouth. So we call it Mama O’s Premium Kimchi, not Mama O’s Cutrate Kimchi. We strive to make the best tasting, highest rated, best kimchi. That went into it with our branding, how we wanted to portray ourselves. We may not be the biggest kimchi brand, but we’re definitely making the best.
TFA: Kimchi has traditionally been a recipe passed down through generations of Koreans. Today, that’s not happening as much. Do you think handcrafted kimchi is a dying food craft?
Oh: Yeah. It’s really sad. That was part of the reasoning why I wanted to learn to make it, because my mom makes really good kimchi. All of the stuff in the stores was just terrible. It was a link to my heritage that I really didn’t want to lose. I wanted to know how to make it just so I could have it. I invented Mama O’s Premium Kimchi Paste, which is the first paste for making kimchi at home. It’s my mom’s recipe. What’s great about the paste is it takes all the guesswork and grunt work out of it. What normally takes 3 hours takes 10 minutes because all the measuring and chopping is done.
TFA: You also created a homemade kimchi kit. Why sell a DIY kit?
Oh: It sells well around the holidays, especially. It’s a 7-inch cube, it’s a perfect gift size and it’s super cute. It’s the first kit of its kind. That kit took me two years to develop. I had to create the paste, then create the kit for it.
What’s great about the kit is it works every time — it takes the guesswork out of making kimchi. I have so many people tell me they tried to make kimchi on their own and it didn’t work. Kimchi tastes totally different when you’re making it to when it’s done fermenting it and eating it. With lactic acid fermentation, it’s transforming the food on the molecular level. So people, when they’re making it, they try to mess with the flavor to make it taste how they want, but the flavor changes through fermentation.
I’m trying to educate consumers and retailers on how they can use this paste with their vegetables. Retailers can take any vegetable past their prime and make kimchi with it, add value to things they potentially have to throw away. It’s the art of how to transform your vegetables. It’s a great way to maintain food sovereignty. You’re in control of what you make and what you put in your body.
TFA: How have Americans’ perception of kimchi changed from when you started to now?
Oh: It’s interesting because, definitely, there’s a greater awareness of it. It’s kind of confusing on two ends because people don’t know what good kimchi is. There are a lot of chefs that put kimchi on their menus, but it’s not really kimchi. It’s quick kimchi, they acidify it with vinegar.
I’m curious how exactly it will end up in the American diet because kimchi is part of the American food zeitgeist. Kombucha is fully incorporated — it’s an American thing now. But kimchi, I don’t know. I’m curious how people are going to want to eat their kimchi. I think it will possibly be in the form of salad or salad accompaniment. I think a lot of people like kimchi with their eggs in the morning. My favorite way, personally, is on a hot dog, with Western food. I fulfilled a lifelong dream – -one of my neighbors in Brooklyn is Joe’s Pizza. He made a kimchi pizza. I like it better than pepperoni. Kimchi and cheese is like Starsky and Hutch, it’s a great combination.
TFA: Where do you see the future of the industry for fermented products?
Oh: I see more of it, especially after whenever this outbreak settles. Though I got to say, what’s been interesting, the media and journalists have not been touting naturally fermented foods which they should be. I get the resistance to promoting probiotic supplements, I don’t think they’re good either. But I don’t get why no one is promoting fermented foods naturally to people because this has been saving people’s health since the beginning of time.
I see the fermented space growing. I’m curious to see if the supplement industry is going to blow up. I’m not a proponent of the probiotic supplement industry.
TFA: What’s your advice for other startups wanting to start a fermentation brand?
Oh: (Laughs) Besides don’t. Food is tough. Especially now because I think it’s going to get even harder. Really, I wouldn’t want to discourage anyone. But coming out of this, so many people are going to want to start a food brand. You’ll have people coming in that have funding.
That said, you have to love food to do it. But only do it if you love it. But if you don’t love it and you just want to make a killing at it, that’s not going to work. As they say, it takes 10 years to be an overnight success in the food business.
TFA: What are the future plans for Mama O’s Premium Kimchi?
Oh: Right now, I want to start more partnerships with restaurants when they open again. A lot of restaurants don’t have the time to make it, but I don’t want them making quick kimchi and passing it off as real kimchi.
We are launching our first hot sauce — Kimchilli — in May with Whole Foods. I’m super excited to launch the hot sauce.
I’m super lucky — I wish people would acknowledge luck in their success. I was fortunate with my timing, the new science with the mind-gut connection was starting to come out. I’m really trying to make things that people need. And do a lot of education.
Ultimately my goal is to change how Americans eat and encourage them to eat more like Korean people. I totally get the appeal of a Western diet. I love a good steak. But you can’t just eat a steak. You have to have sides and all of that with it. Just a steak is obscene. I’m really trying to encourage people to eat in a way where meat isn’t the main thing, it’s just an accompaniment. Eat more traditionally fermented foods. One interesting thing with fermented foods is it’s not all the same probiotics. Kombucha affects me differently than when I eat kimchi. Even yogurt, I feel it does the least for me. But it’s based on your personal chemistry as well. It all depends on what works for you, then incorporating things in your diet. There’s a lot of education that needs to happen.
While trying to keep up with increased demand during the pandemic, fermented food brands can’t lose sight of their core values and business strategy.
The COVID-19 outbreak has altered retail sales, with fast-paced, constantly changing sales and production cycles. Customers are going out of their way to find natural and fermented products, believing healthy food will be one of their best defenses against the global virus. But there is also pressure on pricing, with soaring unemployment and large segments of the economy shut down.
Dan Lohman, author of Brand Secrets and Strategies, says brands that sacrifice quality in order to compete on price will suffer.
“We as a natural (industry), we need to do everything we can to help leverage this storm,” he says “The mainstream retailer’s Achilles Heel is price – and you’ll struggle to compete if you just think about price. … Don’t apologize for quality. Always, always focus on the quality of the product.”
Lohman, an organic and CPG industry strategic adviser, shared business advice in a webinar sponsored by Whole Foods on “How Do You Future Proof Your Store in Uncertain Times.” Here are four of his strategies to help brands survive the pandemic.
1. Focus on Quality
As consumers experience wage loss and unemployment, brands will be tempted to drop their prices and offer a cheaper product. Lohman calls this a tired strategy.
“When you’re thinking about gluten-free, plant-based, some of these other things that we champion that start in our industry, these are the things that are driving sustainable sales across every single channel,” he says. “We should never have to apologize for good quality. Understand it’s our products, our industry, that’s responsible for growth across every category.”
Nielsen Data shows total U.S. food sales are up 1.9%, but natural and organic sales are up 11%.
The modern consumer frames their shopping list by the adage “You are what you eat.” They know eating a healthy, nutritionally dense food will keep them full for longer than a cheap, generic product.
“If I buy the cheap generic bread, I’m hungry almost before I finish eating it. If I eat the best mainstream bread, I may be satiated for a few hours. But if I eat the organic bread and that organic bread provides me the nutrition I need, that might satiate me longer. Even though I’m paying more (for the organic bread), I’m paying less overall. That’s the argument this industry needs to make,” he says. “Unfortunately, this is where we need to rethink how we need to go to market. Its not about price, its about value.”
“Focus on that, focus on how you are delivering that real value to your customer.”
2. Know Your Shopper
The natural shopper stereotype is someone who eats a salad and takes a walk. Defining the shopper in a small scope is limiting. Today’s natural shoppers are diverse and united in a common purpose: craving healthy food.
“Creativity is our single greatest asset. This is how we stand out on a crowded shelf. This is all about having a purpose. Natural is really good at that because were all purpose driven,” Lohman says.
3. Maintain a Score Card
Critical during the pandemic is continuing to track sales measurements. Brands need to tell retailers average turns, anticipated sales, ideal backstock, customer insight and category trends.
“A lot of brands today are reactive. They need to be proactive. It’s your name on the package,” Lohman says. “When a customer sees your product out of stock, they’ll blame the brand, not the retailer.”
Eighty percent of natural food brands fail in the first year of operation. Measurements are key to surviving, Lohman says. They show the retailer “the contribution a brand brings to the store.” Your band may not be the top-selling brand in the category, but it may be bringing the most dollars to the category.
4. Market Intentionally
As grocery store shelves quickly deplete of essential goods and medical supplies, natural brands can market their product as a health alternative.
Shoppers are struggling to find cold medicine. How does your product help alleviate cold symptoms? Grocery stores are selling out of flour. Is your product a healthy alternative to a carbohydrate?
“Help customers understand you’re there to solve their unique problems,” Lohman says.
In a matter of days, the novel coronavirus outbreak dramatically changed grocery shopping. Empty grocery store shelves have become a ubiquitous symbol globally of home quarantine.
Sales exploded for pantry staples like dried beans (62.9%), powdered milk (126.3%) and rice (57.5%). But another grocery quarantine must-have item is emerging – fermented food and drink. Sales are up for kombucha (10.1%), natto is selling out in Japan, yogurt is selling out in Europe and pickle and sauerkraut sales in Russia are up 79%. Fermentation brands are reporting some of their biggest sales during the month of March, as much of the nation was forced into self-isolation to prevent the spread of COVID-19.
“For fermented food, it’s an interesting time. We’re an immune boosting type of food, so our sales are skyrocketing. We’ve had the best month we’ve ever had in business,” says Drew Anderson, CEO of Cleveland Kitchen and TFA board member. Cleveland Kitchen makes sauerkraut and fermented dressings and marinades. “It is bittersweet. Obviously, we want this virus to go away. But we’re seeing the fermentation industry as a whole, the one benefit is it’s driving a lot of trial. People say ‘I heard fermented food is supposed to be good for you, I’m cooking more, why not grab a pack of kraut.’”
Though sales are high, brands are changing their operation model. Rather than running two shifts of processing at Cleveland Kitchen, they’re down to one. Employees must take daily temperature readings before work, stop for mandatory handwashing breaks and use new Purell hand sanitizing stations.
“Sales are up overall, but we have had to implement our emergency sanitation protocols to continue production,” says Meg Chamberlain, CEO of Fermenti, LLC. The North Carolina-based brand sells a variety of vegetable ferments, teaches fermenting workshops and hosts annual the annual WNC Fermenting Festival. Their staff is under voluntary home quarantine – which means staff only goes from work to home. “Overall our company is proving resilient and we are hopeful to continue to provide Fermenti to our community.”
Because food production is considered essential business, licensed fermentation companies have not been forced to stop working during the coronavirus outbreak.
Aneta Lundquist, CEO of 221 B.C. Kombucha, has been posting videos to her Instagram stories of the Florida based kombucha processing facility. Lundquist says employees are working overtime to deliver orders.
“Our orders during the global pandemic have spiked. Consumers have gone full blown ‘healthy’ food during this health crisis,” she says. “Now is the time to make a switch from over-processed and denaturalized pseudo foods to real, natural and unprocessed foods that nourish our body, mind and spirit and help building a strong immunity.”
Lundquist adds customers need to “think of kombucha, kimchi, sauerkraut and other fermented fruits and vegetables as microbiome rock stars!…Always choose wildly fermented foods.”
“Remember it is about diversity and the quality of microorganisms, not just quantity. You can only achieve this by fermenting traditionally.”
Keenan Smith, CEO of Goodwolf Kefir in Portland, agrees. He says: “The probiotic and fermented space will increase as people have an increase in health awareness and want a better functioning immune system.” They are home delivering their kefir, and donating a
Brands are getting creative with their marketing, too. Goodwolf Kefir is home delivering kefir to the Portland area and donating a proceed of sales to their local food bank. Cultured South and Golda Kombucha have setup a pick-up fridge at their Atlanta location where customers can prepay for an order online, get a secret code to unlock the fridge and grab fermented food and drinks. Wild Kombucha in Baltimore is offering free, local, “no human touch” home delivery for their 12 pack bottles. 28 Mile Vodka & Distillery in Illinois have converted their distillery to make hand sanitizer that they call “Fool’s Gin.” The CEOs of Miyoko’s Creamery and Lifeway Kefir are both using the brands Instagram accounts to share recipes using their product.
Outside the U.S., though, different government rules are restricting fermentation brands from operating during the global outbreak. In India, Mountain Bee Kombucha has halted operations during a 21-day lockdown.
“There is no question that our business is impacted immensely, one for the fact that we are still quite small-scale which supplies directly to a handful of local grocery stores. Currently those grocery stores have been working at limited capacity and/or temporarily shut,” said founder and head brewer Honey Islam. “Another reason for lesser business in these times is due to the lack of awareness in the Indian market about fermented foods, especially kombucha. We are engaged in educating our customers as well as spreading awareness in the community via workshops, classes, 101 sessions, pop-ups, all these channels are education are currently disrupted which stalled our efforts in bringing kombucha awareness to the masses.”
Mountain Bee Kombucha is focusing on educating through Instagram videos and YouTube tutorials.
Americans are hearing the term “microbiome” a lot lately. It’s become a common phrase in health food marketing. But the microbiome is still uncharted territory in science.
Dr. Shilpa Ravella, a gastroenterologist and professor of medicine at Columbia University Medical Center, says a large army of trillions of bacteria lives on or in us, and we can alter that bacteria by fueling it with the right (or wrong) foods.
“There are also ways of preparing food that can actually introduce good bacteria, also known as probiotics, into your gut. Fermented foods are teeming with helpful probiotic bacteria, like lactobacillus and bifidobacteria,” Ravella says.
Fermented food and drink are critical to caring for gut bacteria. Because fermented products are minimally processed and provide nutrient-rich variety to diets, she adds.
But that doesn’t mean all fermented products are created equally. Yogurt is a beneficial food, for example, but some brands add too much sugar and not enough beneficial bacteria that the yogurt may not actually help.
Ravella shared her insight in a TedED talk. As the director of Columbia’s Adult Small Bowel Program, she works with patients plagued by gut issues.
“We don’t yet have the blueprint for exactly which good bacteria a robust gut needs, but we do know it’s important for a healthy microbiome to have a variety of bacterial species,” she adds. “Maintaining a good balanced relationship with them is to our advantage.”
Gut bacteria breaks down food the body can’t digest, produces important nutrients, regulates the immune system and protects our bodies from harmful germs.
Though multiple factors affect our microbiome – the environment, medications and even whether or not we were birthed vaginally or through a C-section – the food we eat is one of the most powerful allies for the microbiome.
“Diet is emerging as one of the leading influences on the health of our guts,” Ravella adds. “While we can’t control all these factors, we can manipulate the balance of our microbes by paying attention to what we eat.”
In addition to fermented food and drink, fiber is also key. Dietary fiber in foods like fruit, vegetables, nuts, legumes and whole grain are scientifically proven to colonize the gut.
“While we’re only beginning to understand the vast wilderness inside our guts, we already have a glimpse of how crucial our microbiomes are for digestive health,” Ravella says. “We have the power to fire up the bacteria in our bellies.”
When Keenan Smith made his first batch of water kefir, it was for his kids. He wanted something more nutritious for his young daughters, avid sparkling water drinkers.
Tangy, bubbly and packed with probiotics, water kefir hit all the right notes. The next year was full of home kitchen experiments, creating enticing flavors and perfecting the four-core formulation — purified water, kefir cultures, cane sugar and mission figs.
“My daughters are my best taste testers,” Smith says. “We used to be big kombucha drinkers, but water kefir is providing a different alternative. Water kefir is lighter, less sour and it has no caffeine. The kombucha flavor doesn’t work for some people, and water kefir is a perfect entry into the probiotic drink space. It’s a bridge between kombucha and sparkling water. People can still have a yummy, probiotic drink with water kefir.”
Smith is hardly a kombucha hater, though. He’s a big fan of the fermented tea. Smith was a sales broker for many natural brands for almost two decades — including Health-Ade Kombucha, one of the nation’s leading kombucha brands.
“When I was their broker, they majorly grew their company. But they’re still fermenting in individual glass vessels,” Smith says. “I look to that model because they’ve been so successful without sacrificing the fermentation process.”
By November 2016, Smith rented a commercial kitchen near his home in Portland, Ore. and began brewing kegs of water kefir under his label: Goodwolf Feeding Company. His first customer was Airbnb’s corporate offices. By late 2017, Goodwolf opened their own manufacturing facility, scaling up without sacrificing small batch fermentation. Even now as Goodwolf expands from a Pacific Northwest brand to the West Coast, Goodwolf continues to ferment in 50 gallon stainless fermentation vessels, cultivating additional kefir cultures as the business grows.
“Production is moving very quickly. It feels like we’re in a rocket ship,” Smith says. “It’s a great time for water kefir.”
A few months after his big win as the Expo East Pitch Slam winner, Smith shares how he responsibly built a fermented drink brand.
The Fermentation Association: You were formerly a sales broker for natural food and drink brands. How did your background help you launch Goodwolf water kefir?
Keenan Smith: Knowing the industry, understanding how retailers and distributors work, knowing the cost of doing business upfront. That’s why it’s taken so long for us to grow — we didn’t raise venture capital out of the box. We’ve been slow and steady. We haven’t taken on much investment at all.
A lot of brands will start selling at farmers markets, then pitch to stores, but I had the connections to the retailers. We went right to the retailers.
It’s been a blessing and a curse. The blessing is we’ve been able to get into a lot of the retailers, but where we’ve been short-sighted is the on-premise channels. We haven’t done much with food service and the alternative channel side — like local offices, beer distributors and bars, they’re wanting non-alcoholic options. We’ve missed out on that keg business. These were things I didn’t think about when I focused on the retail challenge.
TFA: Functional beverages are shaking up the drink industry. How do you stand apart from other functional drinks?
Smith: Our best IP (intellectual property) is definitely our recipes, our flavor. We have really good recipes because we really came into it, that was our main goal, to create a very good tasting and nicely packaged product. We announced our social mission at Expo East around mental health. We didn’t want to lead with that though, we wanted to make sure the product and the branding was dialed in.
And also our packaging and position stands out. If you look at the kombucha case, there’s a lot of yoga, spiritual, Hindu vector art. Everything screams yoga. It’s a lot of white. And our packaging is black. We are trying to be a challenger brand. We don’t want anything that’s superfluous in there. We want to position ourselves as a challenger brand to the industry norms. We’re trying to stand out that way — with our marketing and positioning that we’re a little different.
TFA: Tell me about the genesis of the name, Goodwolf.
Smith: Before I started Goodwolf, I was dealing with a lot of depression and anxiety. I was working on eating better and exercising. I was running one day and listening to a podcast and heard the popular good wolf legend story — the classic story on the good wolf, bad wolf. The good wolf is full of joy and love, you feed it by eating healthy. The bad wolf is angry and succumbs to fear, and you feed it a box of donuts. The one that wins is the one you feed. So I had this idea of the Goodwolf origin story.
TFA: What’s your most popular flavor.
Smith: Ginger. But our Gold is creeping up there. It’s cold pressed organic ginger, lemon, lime, pineapple and spices like turmeric and a little bit of black pepper. Our newest flavor is Habanero Fire, it’s our 5th flavor. It’s a nice addition because most brands don’t think about habanero, there’s a lot of cayenne cleanse, but no habanero. I tasted a habanero-infused cider and it had more of a round flavor, while cayenne is more of a single note of heat. Habanero is more well-rounded. We add cayenne, but the habanero really comes through. And it’s cold-pressed with ginger and apple cider vinegar.
TFA: It sounds like a lot of work goes into crafting your flavors.
Smith: Yes. There’s a lot of R and D. Our No. 2 ranked SKU is called Bloom. That was originally called Wolf Berry because Wolf Berry was another name for goji berry, which we were fermenting with in the beginning. The way we use figs now, figs are used to culture the wild yeast out of the air, they float to the top of the water when fermenting, then you throw them out. We were doing the same thing with goji berries. But something happened in fermentation that made it very foamy with goji berries. So we stopped using the goji berries and now we’re using figs.
TFA: You announced a social mission at Expo East. Tell me more about your social mission.
Smith: Coming from a broker world, I worked with a lot of brands that were social mission first. “Buy our product and we’ll give our product to someone that doesn’t have this product!” But this doesn’t always work. Maybe this product isn’t something needed, or it’s not as good as something else on the market so it didn’t make sense. We didn’t want to lead with that social mission.
We could slap 1% for the planet on the bottle, that would be easy. But I struggled with anxiety, I have family members who have struggled with depression. I can really get behind that interest because I relate to it. This felt unique. It’s part of the challenger brand position. And it’s feeding the good wolf, making the right choices.
We’re trying to do something harder, align our brand with mental health awareness. We can’t just donate our money to it because we don’t have money yet, all our money is going back in the business. You can’t really volunteer unless you have a degree, they don’t just want anyone off the street working with people suffering with mental health issues. A friend who is a doctor is consulting with us on how we can best use it. Maybe profits go to the National Association On Mental Illness. Right now it’s an intention versus a full fledged mission. It will be baked into the company as we grow.
TFA: How can brands effectively advertise the health benefits of their product?
Smith: I personally think you have to be crafty. You don’t want to scream health at the customer because you alienate people who think it won’t taste good because it’s healthy. Or you’re preaching to the choir because the healthy people know it’s healthy. You need to be able to imply the benefit without being too forward.
TFA: What challenges do fermented food and drink producers face?
Smith: Education. Even though we’ve made strides, there’s still so much education to be done. One of the big challenges is how do we stay true as smaller brands that are doing traditionally fermented products against larger brands with tons of venture capital and are adding probiotics. It’s apples and oranges when you’re talking about products sitting on a shelf together. Are they a brand funded by Coke? We have to tell our story. It’s advantageous when you’re going into retailers and say we’re small, we’re traditionally fermented. If you can tell that story to your buyers and convey it to your customers. We pushed the traditional fermented aspect.
TFA: What are the fermented food and drink industry strengths?
Smith: Well look, there’s a global pandemic happening and I think that ultimately, you will begin to understand that health is your only wealth. Health and your family are the only things that matter. When people understand that, your product is like gold because you’re providing health to people. And that’s the most important thing we have.
TFA: What’s your advice to other entrepreneurs starting a fermentation brand?
Smith: My advice is some advice I heard recently: Find a space that isn’t already crowded. Maybe we don’t need more sauerkraut and kombucha brands or water kefir, frankly. But try to focus on how you can expand to your maximum potential locally and regionally. Don’t just look at national chains and distributors, but look at on-premise sales. How can you get your product into universities, schools, tech campuses? Think outside the box, find something truly unique that the markets are not flooded with. Or else we’re all just cannibalizing each other.
The new wave of protein is not plant-based — it’s fermented.
“Fermentation is really cultivating microbes,” says Thomas Jonas, CEO and co-founder of Sustainable Bioproducts. “And it’s incredibly efficient. Microbes duplicate very fast. So when you think about the double time for a cow or a pig, you’re talking about years. When you talk about microbes, you’re talking about hours. … This is nature’s technology. Nature is really the No. 1 biotech engineer in the world.”
The current agriculture system is incredibly inefficient. Livestock continues to be the world’s largest user of land resources. Pasture land consumes 80% of total agricultural land. Fermented organisms are emerging as new sources of proteins and ingredients.
Leaders in the biotech industry shared how science is looking beyond plants to create food at a panel sponsored by The Good Food Institute.
Is Microbe Fermentation the New Era of Farming?
Sustainable Bioproducts creates a 50% protein based food ingredient from a microbe cultivated in the volcanic springs at Yellowstone National Park. Jonas explains that these fungal strains, called extremophiles, naturally produce a complete protein when grown in a controlled environment. Sustainable Bioproducts will soon move to a 36,000-square foot facility in Chicago’s former meatpacking district for production. The facility will take up just 0.7 acres. Compare the amount of food Sustainable Bioproducts produces to the equivalent of cow meat and 7,000 acres of grazing land would be needed for the cows.
“It’s the next generation of very efficient farming. I think what we want to get through farming are the nutrients that we need for our food. And microbes can do this tremendously efficiently,” Jonas said.
By fermenting proteins in bioreactors versus deriving the protein from plants or raising it and slaughtering it on a feedlot, food scientists can do a lot with the health profiles.
Michele Fite, chief commercial officer for Motif FoodWorks, said they work with microbes to adjust sensory attributes, like taste, smell, flavor and texture. “We can help so we don’t have to compromise taste or nutrition when consumers are looking to access plant based foods,” she said.
Adds Anja Schwenzfeier, business development manager for Novozymes: “You want to produce specific proteins that might already exist, but you want to do that more efficiently and more sustainably. You deal with molecules you’re already familiar with.”
“It’s not so much about creating a completely new protein. Right now we’re looking into how we can improve ingredients we already work with through fermentation.”
Fermentation as a Marketing Advantage
Panel moderator Jeff Bercovici, a writer for the Los Angeles Times, asked how biotech companies are meeting consumers in the development of fermented meat alternatives.
“(There is an) evolution of consumer attitude towards their food, which in some ways are really driving them very quickly to embrace meat alternatives, but in some ways there are some counter currents in terms of people wanting to eat whole foods, natural foods, foods with shorter ingredient lists,” Bercovici said.
The panel noted fermentation has long been a stable in the history of food, from beer to yogurt to cheese. As fermentation is making a comeback, it’s a “marketing advantage,” Bercovici notes, “now it’s a net positive, it generates consumer excitement.”
Fite at Motif FoodWorks said they’ve conducted research on meat alternative users. These consumers are currently buying meat alternatives because they believe it’s healthier than red meat and even chicken. “They want to be in this space,” she said. Consumers voice that meat alternatives are more sustainable, better for the environment, better for animal welfare and equally nutritious.
“They’re open to technology helping to solve that issue for them,” she said. “These consumers are more open to technical solutions than consumers that are a lot older have been in the past…there’s a gateway for these consumers to technical advancements, because they believe it aligns with their values.”
Adds Mark Matlock, senior vice president of food research at Archer Daniels Midland Company: “To me, it’s really refreshing to have some consumers who are embracing technology to this degree, to the extent that they may lead the mainstream their direction.”
Battling Land Use Challenges
As the global population grows, the great challenge to the environment over the next decade will be making more food with less space.
The average American consumes 215 pounds of meat a year. Raising that meat uses 32 million acres of land, and produces 82 million metric tons of greenhouse emissions.
“The real challenge for the planet is not going to be ‘Are we going to have enough oil or carbohydrates?’ it’s ‘Are we going to have enough protein?’” Matlock said. “We create protein the way a cow creates protein. … we have to think: where are our rare resources going to be put?”
A third of the corn crop grown in America feeds livestock.