Kimchi, fermented sauces and tempeh are driving growth in the fermented food and beverage category, a $9.2 billion industry that’s grown 4% in the last year.

“We’re excited about the growth potential for fermented food. While fermented food represents about 1.4% of the market today, there are segments that are tracking well above the growth of food and beverage [overall] that are poised for disruption in the future,” says Perteet Spencer, vice president of strategic solutions at SPINS. Spencer shared this information in a recent webinar hosted by The Fermentation Association. “There’s a ton of opportunity to scale and increase the footprint of these products.”

SPINS spent weeks working with TFA to define the fermentation industry’s sales, drilling into  10 fermented product categories and 57 product types. Wine, beer and cheese sales were  excluded from the data — those categories are  very large, and would obscure  trends in smaller  categories. (All three are also  well-represented by other organizations.)

Pickles and fermented vegetables “is a space that’s seen [a] pretty explosive uptick in growth over the past year,” Spencer says. Every segment is growing — kimchi, sauerkraut, beets, carrots,  green beans, sliced and speared pickles and all other  vegetables — with  pickles the largest, nearly 60% of the category.

The biggest growth, though, is coming from products other than pickled cucumbers. Kimchi is at the center of numerous consumer retail trends. Consumers are purchasing healthier food made with fewer ingredients, and they want food with international flavors. Kimchi  makes up only 7% of the  category, but sales are increasing at an explosive 90% growth rate. 

More people are experimenting with fermenting while they’re at home during the coronavirus pandemic, but these kitchen DIYers do not appear to be detracting from sales.

“The more people make fermented foods, they appreciate what’s available in the store that maybe didn’t exist five or 10 years ago,” notes Alex Lewin, author and TFA advisory board member who moderated the webinar. “Anyone who has made kimchi knows it takes a lot, it makes a big mess, you get red pepper powder stuck under your fingernails and onion in your eyes. I can make kimchi (at home), and then once I’ve made kimchi, I’m like ‘Ok, maybe next time I’ll buy it.’”

Fermented sauces are also growing, up 24% in 2020. The largest segment in sauces is, of course, soy sauce, almost 85% of the category. But gochujang, less than 2% of the category, is increasing at over a 56% growth rate.

Versatility is helping sauces, pickles and fermented vegetables, Spencer says. Any food product with multiple uses is selling well. The condiments and sauces can be used as a topping on eggs, hamburgers or pizza, or mixed-in a salad, rice dish or soup.

Sake, plant-based meat alternatives and miso had combined annual growth of $75 million in 2020. Sake grew 16%, and both plant-based meat alternatives and miso each grew 26%.

Yogurt and kombucha still dominate the fermented food and beverage market. Yogurt is 81% of the market; if yogurt is removed, kombucha is 51% of the remainder.. Both have experienced slowdowns in sales from their peaks. Kombucha sales have slowed recently, as grab-n-go opportunities have shrunk during the pandemic. 

Yogurt giant brands Chobani, Yoplait and Dannon still dominate the category, as do GT Kombucha, Health-Ade and Kevita reign for kombucha. 

Spencer notes the 4% growth rate of fermented products overall would be higher without yogurt. It’s a large category that — despite an uptick in 2020 during the pandemic – has been fairly flat in recent years. Core (traditional) yogurt has been growing at a 1.6% rate;  Greek yogurt, at about twice that pace. Those two segments account for roughly 80% of the category. 

“This is an opportunity for disruption for emerging brands,” Spencer says. “We’re already seeing some of the legacy segments start to get disrupted by new innovation, so I’m excited to see the evolution of that innovation and where that goes and kind of what opportunities peek out of that.”

“Overall, we’re seeing historically small segments gaining traction in the marketplace,” Spencer adds. “The pandemic has brought a renewed consumer focus on the fermented space.” 

Though fermented products have an added healthy benefit, customers are looking for delicious flavor first.

“In these fermented categories we covered today, taste first is always really important. I think people are going to these categories for different taste experiences,” Spencer says. “If you can level up with a functional benefit, that’s fantastic, but we have to balance the taste first. If it’s highly functional but doesn’t taste good, it just doesn’t have the same success.”

As a biochemistry grad student with a penchant for homebrewing, Chris White never thought his growing collection of yeast strains would amount to anything outside a hobby. But when White graduated with his PhD and was offered a lucrative job in the biotech field, one caveat kept him from accepting the offer — there were no side jobs allowed. 

“I never had some big plan to start a company. But I liked all the fermentation stuff I was doing and didn’t want to let go of my yeasts,” says White, CEO and founder of White Labs. “I said no to the job, and from there White Labs kept going and going and getting bigger and bigger.”  

Today, White Labs is a powerhouse in the fermentation industry. They provide professional breweries with liquid yeast, nutrient blends, educational classes, analytic testing and private consulting. 

White Labs is celebrating a landmark 25th anniversary this year, despite a global pandemic that has shuttered breweries. They have released their own line of beer, created a new nutrient blend for hard seltzer brands, began a YouTube series and launched free how-to education classes for homebrewers. White Labs will host a year in review webcast on Dec. 9.

“We’ve had a lot of success and we’ve made a lot of mistakes, and we’ve tried to learn from those mistakes. But we’re a team. And we really got lucky that we hired people interested in fermentation that helped build this company,” White says. “Everyone really pulled together during COVID and did whatever was needed. It’s been a great experience because we had solutions and we had teamwork. And I think it’s taken 25 years to get to that team, that tribe.” 

A yeast guru, White is a co-author of the book “Yeast: The Practical Guide to Beer Fermentation.” Below, check out our Q&A with White. 

The Fermentation Association: You studied biochemistry at University of California, Davis, then got your PhD in biochemistry at University of California, San Diego. What made you decide to dive into yeasts?

CW: I was always interested in science since high school chemistry, and then in college was interested in how cells work, how DNA worked. It drove me to where I am today, really. Most people I went to school with at UC Davis, they were studying biochemistry to be a physician. But that’s not what I wanted to do, I was more interested in biotech and grad school.

Meanwhile, I was homebrewing. It was a great combination of things that happened. The science and homebrewing is what led me to put that together and make yeast for homebrewing, then yeast for craft brewing. 

TFA: Is that what led you to start White Labs?

CW: It really was. I like beer. I was fascinated with how it could be made. It’s pretty simple to make beer — simple, but not easy. It’s difficult to make a great beer. But it’s fairly simple since it’s only four ingredients if you include the water. That’s what’s great about a lot of fermentation, the raw materials are all around you. They’re simple. Making it taste good is the hard part, that’s the art of it. I liked beer, I really got into homebrewing, then the people I was making homebrewed beer with started a store in San Diego, Home Brew Mart, in 1992. We became friends and that’s who I was homebrewing with every weekend. Then my friend from the store said “Hey, we need yeast,” and I started a little company on the side to make yeast. It wasn’t like I had some big plan to start a company, I thought I’d just make a little each week. And then other people asked and other people asked. By the time I got closer to finishing grade school, I just didn’t want to stop doing the yeast for brewing.

TFA: Now there are over 1,000 strains of yeast in the White Labs yeast bank. Tell me about it.

CW: We have a yeast bank that I spent a lot of time building in the beginning, more for my own brews, but obviously later on, it became more and more. The foundation of our company is our yeast strains and the way we store them. We’re collecting strains all the time. But what I did in the beginning was collect different strains from travel, from different yeast banks. We created our own private yeast bank at White Labs, but there are yeast banks around the world. Especially in Europe where brewing really began in an industrial way and where yeast was discovered and started to get collected. There’s a great yeast bank in Denmark, Germany, the UK. I spent a lot of time acquiring strains from those.

You get to know the yeast in a different way, the strains, what they do. Performance, conditions. But for beer especially, it’s really how they taste, which is so important. We only make those flavors through fermentation. We still continue to acquire strains. People send them to us, we bank private strains for companies, sometimes they buy them in a liquid form we make for them, sometimes we just store it for them. But usually, they’re banking it for us to make something with it.

TFA: Besides yeast, White Labs offer testing services as well.

CW: White Labs Analytical Lab is really separate in the fact that a lot of people that work in that lab don’t really have anything to do with the yeast. It’s just testing samples. They’re usually fermented beverages. Yes, there’s beer there, but that’s just a part of White Labs Analytical Lab. There’s the spirits that come for testing, kombucha, cider, mead, any kind of commercial business making a fermented beverage that needs some kind of testing. Sometimes it’s regulatory for export. Sometimes it’s just for their own data, like actual alcohol by volume instead of calculated, sometimes it’s microbiology or tracking down a problem or contamination. It’s all confidential, like everything at White Labs. But we get to work with a lot of cool companies, a lot of them may not get yeast from us, that’s really not a requirement. The yeast and testing run separate.

TFA: Have you seen kombucha brewing grow?

CW: Oh yeah. Originally, that’s how we got into analytical testing because people were asking for alcohol lab evaluations, which is so important in kombucha. We all know what happened there (Whole Foods pulled all kombucha bottles off shelves in 2010 after several brands tested at higher alcohol beverage levels then what was printed on the bottles). And it happened because it’s a biological process. You put that thing in a bottle and it’s going to keep fermenting. People had to really try to figure out what to do with that. So a lot of alcohol testing, and a lot of that is regulatory in kombucha. 

But then we started making SCOBYs because a couple of our staff got really into it. Just like I started making yeast in my own home brewing, they started making SCOBY in White Labs for their own kombucha making. So we said “Let’s sell it.” And now we make a bunch of it.

TFA: That’s forward-thinking, expanding your offerings to all fermented drink products. 

CW: Yeah and the different facilities allow us to do different things. We grow all the SCOBYs in North Carolina because it was a new facility at the time and had the space, San Diego is full. 

TFA: White Labs released their own canned beer in July. Tell me about it.

CW: A lot of the things that came out of this year really were not new ideas, like canning. Someone gave a presentation at White Labs during one of our internal innovation summits that’s open to anyone in the staff about canning beer. But during this time of COVID, when we’re not focusing on growth, we were able to work on a lot of those projects and really build a better company. Once we gave up the idea that revenue is not going to go up right now, we worked on other things. And it’s been great. A lot of cool things have been coming out of our teamwork this year, and one of those was canning. 

So we said let’s do that because we’re not selling beer in our tap room — we’ve got a tap room in San Diego for White Labs Brewing Company and a kitchen and tap in Asheville, it’s more of a full restaurant. We weren’t selling a lot of beer and we have a lot of beer, so why not can it? We have done three different beers now in cans. The IPA, a hazy IPA and the pilsner. And we’re going to do another lager and IPA next month. It’s been fun for the brewers to be able to brew it. I think it’s been a nice boost for everyone in the company, not even money wise, just to have another milestone: we put our beers in cans. It’s a nice billboard for the brewery. And they get to have fun with graphics, and how to tell our story, and really share what we’re doing in the tap rooms. 

People are amazed that it’s the same beer, same exact batch but put into smaller fermenters and pitched with two different yeast strains. They say “Wow, you created different flavor beers? They taste different?” Yeah, because that’s fermentation. Fermentation makes these flavors and when people taste that it’s the same exact beer made with two different yeast strains, they get it in 30 seconds. “Oh that’s what a yeast does?” But you have to come to our tap room to experience that. And obviously during these times, you can’t come to the tap room. But canning is a way to share that with people outside the tap rooms. 

TFA: Who buys more yeast from White Labs commercial producers or homebrewers?

CW: Commercial because of volume. But we’re available for everything in homebrew. We try to mirror every test, every yeast strain, and make those available for home brewing because that’s our roots and I think it’s important. There’s been growth in home brewing during COVID. People at home with a hobby are buying yeast. That’s kind of nice, I like to see that.

TFA: Craft brewing has been hit so hard by pandemic. What have you seen your clients doing to survive?

CW: They’re getting creative. People had to figure out the to-go thing, first of all. That maybe involved buying software or creating a new website. Each company I talk to, regardless of what industry, they had to do something technology wise. Very few could close the bar door and were all set up to sell everything through the warehouse. 

I think customers were also really good about supporting local businesses, wanting to help them. There’s been a lot of to-go. But it still doesn’t compare to all the beer they could sell, all the stuff that gets sold through bars. Even if one little meadery sells more to go, it doesn’t replicate all the tap room business that just disappears.

TFA: What do you think is the future of the fermented drink industry?

CW: It’s up to them. We pay attention so we can be there to help. But really these things come from creative people. New things have to come out. That keeps the industry growing. And I don’t know what those new things are, but we try and pay attention.

I think transparency and honesty is a hallmark of fermentation industries — whether craft breweries or wineries — and I hope that stays. That’s been a big part of the trust with consumers, and the fact that you can do these things at home too, so you know how it’s done. And with new techniques or things that get introduced, I think the industry needs to keep the transparency part of the business. Because fermentation being such an old, old method — a lot of people would like to replace fermentation with something else. They say “Let’s just mix these things together rather than do that weird fermentation.” But weird fermentation is what makes it so special.

Pandemic Prompts Premium Purchases

More Americans are purchasing premium foods during the pandemic. Growth is fueled by Millennial consumers looking to have an “experience” from home, eating fancy food from their kitchen table during the pandemic rather than going out. Many fermented products are considered premium. According to market research firm IRi, five of the top 15 food categories with a “premiumization” effect are fermented products: spirits, beer/ale/cider, wine, coffee and yogurt.

Read more (IRI Worldwide

As hard kombucha continues to top “best of” lists for 2020’s most popular alcoholic drink, brewers must find ways to differentiate themselves in a crowded marketplace.

“If you’re thinking about coming into hard kombucha, my main point to you would be you’re not in the kombucha business anymore, you’re in the alcohol beverage business now,” says Bart Watson, chief economist for the Brewers Association (a trade group for small craft brewers). “You have to think about this competition more holistically than just within hard kombucha because, as we’ve seen in recent years, customers don’t think in neat categories as they used to.”

The percent of Americans who drink alcohol has remained fairly static over the years (Gallup polls indicate between 60-70%), but what they’re drinking has changed. Beer is losing favor with consumers, and other hard, fermented drinks — like kombucha, cider and mead — are now climbing in the craft brewing market.

“If (people) are drinking more of one thing, they’re drinking less of another,” Watson says. “You’re not going to add to the drinking, you’re just going to have to take from someone.”

Watson shared this data during the “Trajectory of Craft Brewing” panel at the Kombucha Brewers International (KBI) Virtual KombuchaKon 2020. Hannah Crum, president of KBI, said kombucha is a craft beverage, too. She added: “Hard beer has paved the way for hard kombucha. It’s opened up people’s idea to the concept of craft, and kombucha can thankfully take advantage of people’s knowledge of craft.”  

Watson suggests four lessons from the craft beer world that hard kombucha brands can use to grow. 

1. Consumers Crave Experiences

If you want to succeed in the hard kombucha industry, you must have on-premise sales. 

Sales of craft beer are about 25% on-premise, and are especially strong in experiential channels — tasting rooms, music festivals, sporting events or even ax-throwing clubs. These are entertainment-driven settings where people can experience an event while drinking (but watch those axes!). 

“This means they’re not just going to drink, but going to do something and drinking while doing it,” Watson says. “Many of the reasons that people say they go (to a brewery) is less about the product and more about the experience you provide.” 

Over 50% of craft drinkers purchased more of a product after visiting the tap room, driven by having had a good experience.

“Kombucha tap rooms are going to be part of that experience that helps build the market and educate consumers about the product,” he adds. “This has been a challenge for a lot of distributors, but I actually think this is an opportunity for a smaller segment like kombucha.” 

2. Go Where the Consumers Are 

Craft brewers are most successful in bigger cities where there’s already a base of craft drinkers. The growth in the craft beer industry is coming from these concentrated geographic areas.

The craft beer market has steadily expanded over the last 10 years, but growth has been strongest in the West. Kombucha has followed a similar pattern..

“The West is still the strongest place for growth, even if it’s in the highest market share,” Watson says. “Most of the growth has continued to come from the densest market.”

3. Consumers Trade Up

Craft hard kombucha will sell better than a value version. Over the last 30 years, consumers have been purchasing more craft, imported and super premium beer compared to simply premium or value versions. Drinkers are “upcycling” their preferred brands.

“This is true in a lot of industries right now, where they’re not necessarily drinking more product, they’re drinking better,” Watson says.

In the overall beer market in 2015, craft beer makes up over 40% of the dollar volume, while premium beer (like a BudLite or Miller Coors product) are 35% and value brands are 20%.. Compare that to the 1980s, when premium beer peaked at over 60% of the volume, value beer was around 30% and craft was under 10%. 

4. Go High or Low with ABV

When making a hard kombucha brand, think about your alcohol levels. Alcoholic beverages with  higher or lower alcohol levels sell better, what Watson called “a hollowing of the middle.”

Sales are higher for drinks below 5% ABV or above 7% ABV. This is part of the reason hard kombucha, cider and mead have climbed in sales, since the drinks traditionally have higher alcohol levels. 

“This is a market that’s competitive and getting more and more competitive, but at the same time, there’s more and more niches popping up as the consumer base diversifies and more people look for a specific product,” Watson says.

Restaurants in Crisis

A new restaurant survey shows 1 in 6 restaurants have closed during the pandemic. And 40% of restaurants say that ”it is unlikely their restaurant will still be in business six months from now if there are no additional relief packages from the federal government,” according to the survey by the National Restaurant Association. The association called the results “startling” and asked Congress for more help.

“For an industry built on service and hospitality, the last six months have challenged the core understanding of our business,” said Tom Bené, president and CEO of the NRA, in a statement. “Across the board, from independent owners to multi-unit franchise operators, restaurants are losing money every month, and they continue to struggle to serve their communities and support their employees.”

The NRA also found consumer spending in restaurants is down an average of 34%, the good service industry lost $165 billion in revenue from March to July and 60% of restaurant owners say their restaurant’s operational costs are higher prior to the COVID-19 outbreak.

Read more (Nation’s Restaurant News)

During a year of dramatically changing consumer grocery-shopping patterns, kombucha sales are continuing to grow, but at a slower pace. U.S. retail sales of kombucha sales grew 2.4% over the twelve months though mid-July 2020, to $703.2 million. But this growth rate compares to 9.8% in the prior 12-month period.

Distribution remains strong in conventional stores (up 5.1%), but is decreasing in kombucha’s core, natural stores (down 6.1%).

“This is a piece that’s one to watch and one to manage because it’s one of the better indicators of category health,” says Perteet Spencer, vice president of Strategic Solutions for SPINS (retail data provider). Spencer shared the stats at KombuchaKon 2020. The natural channel, Spencer explained, is where consumer shopping trends emerge. 

As grab-and-go shopping and restaurant dining declined during the COVID-19 pandemic, so did kombucha sales. “COVID has hurt,” says Spencer, “but I expect this category will certainly rebound.”

KKon 2020, organized by Kombucha Brewers International (KBI), was a virtual event this year after KBI’s annual in-person KKon in April was cancelled due to the coronavirus outbreak. Hundreds of kombucha professionals from all over the world joined digitally for the two-day conference.

Six months into the coronavirus outbreak and more consumers are purchasing health products. Hannah Crum, KBI president, says education in the kombucha industry is more important than ever as consumers seek health drink options. 

“I think this is a really vital opportunity for us as fermentationists,” says Crum. “This is teaching us that health is paramount…this is where kombucha’s opportunity thrives.”

The conference marks the first time industry leaders have met since KBI announced their new kombucha Code of Practice, the first set of safety and quality standards for the industry. 

Kombucha has infiltrated mainstream retail, with 83% of stores selling kombucha in some form — a statistic Spencer said is especially impressive. “Rarely do we see full saturation of categories,” she adds. “Certainly there’s room to expand there.” 

The retail category SPINS tracks represents sales of refrigerated kombucha and fermented beverages. Kombucha is competing with other adjacent fermented drinks, like cider, functional juices, teas, kvass, vinegar drinks and coffee/cold brew. Kombucha still dominates, representing nearly 90% of the category sales.

The entire beverage industry is a $122 billion market, comprising 16 categories, with soda and carbonated beverages the largest portion ($30.3 billion). Categories with the highest growth rates include plant-based milk (13.4%), creams and creamers (11.1%) and performance beverages (8.9%).

“As you can see, it’s incredibly crowded,” Spencer says. “We’re seeing beverages are playing a lot of different roles. This is important because the consumer data would suggest that consumers are not buying one beverage type.” For example, she says a consumer may want a protein drink in the morning, a yerba mate in the mid-day for a boost, then a kombucha at the end of the day. 

“We are seeing the rise of new digestive health benefits and formats really gaining traction, as kombucha and its derivatives scale mainstream,” Spencer says.

Consumers are looking for diverse, nutrient-rich ingredients and flavors. Wellness-focused brands with clean ingredients and holistic ideals are “the engine of growth for the natural products industry…the future is bright for these spaces.” Spencer notes “90% of kombucha brands live and shine in this space.” 

The top-selling kombucha flavors in the natural channel include mixed fruit, pineapple and coconut. In the conventional channel, top flavors are ginger, berry and mixed fruit. Top-selling brands are: GT Kombucha, Kevita, Health Ade, Brew Dr. and Humm.

Hard kombucha brands also thrived in the past year. Prime examples are: Boochcraft ($8.6 million in sales, 72.6% growth), June Shine ($6.1 million, 211.2%) and Flying Embers ($3.5 million, 1,398.1%).

Spencer says another major opportunity for kombucha brands is selling larger-size growlers. The 48-ounce size growler is the second-fastest-growing kombucha size. Shoppers are shifting to purchasing larger sizes as they stock up during the pandemic. 

“This is such a resilient industry,” Spencer says. “What an incredible opportunity to move with your consumers as they embrace the fundamentals of what kombucha delivers, but also experience it in slightly different ways. People are looking for new experiences and a sense of escape, and so I think (kombucha) brands are uniquely positioned to enter that conversation.”

As more people plant gardens during the pandemic, then ferment and can the produce, “the canning industry has seen an unprecedented demand for supplies.” A spokesperson for Newell Brands, owner of Ball, one of the leading producers of Mason jars and other canning supplies, told the Minnesota Star Tribune that the demand has made supply constraints. Ball has “increased glass production, found additional lid manufacturers and expanded its pack out locations.”

The food safety specialist at the University of Georgia and the master garden helpline at the University of Vermont have both reported a huge increase in calls since mid-March from new gardeners.

Read more (Associated Press)

How should an artisanal, fermented food or drink brand spend their time and energy: making the product or selling it?

Both, say John Gray, owner of Bubbies pickles and TFA Advisory Board member, and Steve Rustad, his marketing partner. The two spoke at a TFA webinar “The Bubbies Pickles Story: Food Marketing Fundamentals.”

“You have two jobs if you’re a small businessman. One is making it, the other is selling it,” says Rustad, owner of Rustad Marketing. “If you’re prioritizing making it and putting selling in the back seat, you are not looking at one of the most important parts of your business.”

Marketing should never be considered a distraction — promoting the product needs to be as fundamental to a business plan as making it.

“I’ve seen very few people who can do marketing and making successfully. It is a different world. It takes two people,” Rustad adds.

Sharing Your Brand’s Story

How did Bubbies grow from a small, struggling brand to a financially successful category leader? Good marketing.

Gray, who has a background in finance, decided to purchase the Bubbies brand with his wife, Kathy, in the late 80s. A lawyer friend had recently taken the brand through bankruptcy, and John said he knew that helping the brand survive would “take every last dime we’ve got. And it did.”

The original Bubbies label.

His first step was partnering with Rustad and recreating the label. The original one featured Bubbies written in a bubble font script. It was difficult to read, and people confused “Bubbies” with “Bubbles.” And the image on the label of vegetables wasn’t particularly noteworthy. Gray and Rustad wanted to maintain the old-fashioned look, but in a way that would resonate with customers. 

A picture of Kathy’s Jewish grandma Bubbe (Bubbe is the Yiddish word for grandmother) became the inspiration for the label image. She became the mascot, a Bubbe that stands for valuable cooking principles —  keeping the kitchen  the center of  the home,  the worth of a home cooked meal and, most important, creating great flavor.

Once the new label was introduced,, sales grew  40% the first three months.

“That’s the power (of a good label),” Gray says. “Your label is your face to the world. And you need to spend the right kind of money until it hurts to get it right because it’s probably the most important money you’ll ever spend.”

To market a product, you need to have a story, Rustad adds. The dream to always ferment vegetables is not a story. “What makes your product unique?”

Bubbies used their quirkiness as a selling point, a strategy Rustad recommends for new, artisanal brands. Don’t look to major consumer packaged good brands for guidance on how to market a maker business. “Your quirkiness is your advantage when you’re a maker,” he says.

Marketing Fermented Products

But how do you market a fermented food or drink, with its own unique qualities?

First, Gray advises, do not become an authority on health food.

“We don’t talk about probiotics at all,” he says. “We make no health claims, we’re very careful about it. One of the reasons I got involved with and wanted to get The Fermentation Association started is because the FDA refuses to deal with what natural is and what it means.”

“If you’re going to talk about your probiotics, you better be legally sure that what the consumer is getting when they crack open the jar is what you are promising them, not just what you made originally,” Gray adds. “As a result, we completely stay away from any claims about health, probiotics or anything else because you can’t prove it.”

Though Bubbies includes all-natural ingredients (cucumber, artesian well water and spices) without sugar or preservatives, Bubbies doesn’t put “natural” on the label, either. Rustad notes, when you try to put “natural” on a product label, it becomes contentious, turning your product into “a magnet for people to sue you.”

The health food is a regulated industry. “As soon as you make any health claims, you’re in bed with the Food and Drug Administration. You really don’t want to do that. So when you talk about your food attributes, you need to be careful that you’re not talking about medicine. Your customers may say your food cures cancer, but you can’t say that.” 

Some uninformed customers still consider fermented goods dangerous. Don’t waste time marketing to the uninformed.“It’s very expensive when you have to educate,” Gray advises. 

Bubbies in the early years ran into a  related problem. Because their pickles and sauerkraut are naturally fermented, the brine is cloudy – a natural byproduct of the fermentation process. Bubbies was unsure how to educate those that thought this cloudiness was a problem. So they made it an attribute of the product, a positive, and,   printed “Shake Until Cloudy” on all jars.

Focus on the taste. “If something tastes good, people will put up with a lot of appearance issues,” Rustad says. And taste better than the competition. Bubbies pickles re-launched at a time when big food brands were switching from naturally fermented pickles to processed, shelf-stable varieties.

“By having a naturally fermented pickle, we had a product that was very basic, had no additives other than the spices and was perceived as healthful,” says Rustad . “And tasted delicious.”

Fermented food and drink are difficult to scale, labor intensive and have  unique production processes with different liabilities. But people are willing to  pay a higher price for an artisanal, fermented product. 

“Your market for this product is conditioned to pay a premium for what they perceive to be a superior product. People expect to pay more, ” Rustad says, comparing it to the organic food industry.

Focus on Customers

“Part of that premium should be used for marketing,” he continues. “You need to invest in marketing. And marketing is an investment because you’re buying awareness, you’re buying the tool to establish relevance and hopefully your marketing is provoking trial, action, relationship, social media engagement.”

Bubbies — a certified kosher product — advertised their product in the Jewish press in Los Angeles County in the early days. They knew it was their target audience, and they couldn’t afford advertising in a mass market publication. 

Customer rapport has been vital to Bubbies success. Over the years, retailers have replaced Bubbies with different private labels —  twice at Safeway  and, more recently, at Sprouts. Customers are the first to call and complain to the store’s buyers.

“That happens because of the relationship you have with your customer. Outreach is key. We respond to every single outreach from any customer, whether it’s Instagram, Facebook, email,” Gray says. “How do you relate? People want real stuff. They want real, authentic food, ingredients they can pronounce, that they know what they are.”

Butter or Not?

A ruling has been issued on a lawsuit against the California Department of Food & Agriculture. It will be a landmark in the vegan (and fermented) food industry. A California judge said vegan dairy company Miyoko’s Kitchen can continue using the terms “butter,” “lactose-free” and “cruelty-free” on its packaging. The state’s food and agriculture department told Miyoko’s earlier this year that those terms could not be used on the vegan butter packaging because it was confusing to consumers. They said the term butter is restricted to products containing at least 80% milk fat. But Miyoko’s butter is a cashew cream fermented with live cultures. Miyoko’s also creates the natural flavor in their products by fermenting rosemary, plum and oregano.

“The state’s showing of broad marketplace confusion around plant-based dairy alternatives is empirically underwhelming,” wrote U.S. District Judge Richard Seeborg. Miyoko’s Kitchen, he wrote, is entitled to label its products as “butter” under the protection of the First Amendment. The case has still not been dismissed.

Read more (Food Dive)

Yesterday we shared about the beer industry pushing to change inequality issues among beer brewers. What about the wine industry? According to Sunset Magazine, “progress has been plodding within the more conservative corners of the wine industry.” Carlton McCoy, president and CEO of the Napa house Heitz Cellars @heitzcellar , is one of the few BIPOC leaders in the wine business. He started a foundation, The Roots Fund @rootsfund as a way to help Black and Indigenous people in the wine industry with financial support, mentorships and job placement.

“I’m hoping that people are quiet because they don’t know what to do yet—if I put myself in their shoes I would ask: How do I even start?” Carlton tells the magazine. “They should know that The Roots Fund is a place where they can have that conversation.”

McCoy launched The Roots Fund with sommelier Tahiirah Habibi @sippingsocialite and restaurateur Ikimi Dubose. The hope is the group can raise awareness that a career in wine is possible for BIPOC.

“It’s not really marketed to Black people,” says Carlton. “We’re trying to recognize that has been a barrier to entry and rectify it. It’s a challenge to hire someone who doesn’t look like you and comes from a different background.”

Read more (Sunset Magazine)