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)

Equality in Brewing

Though Black people make up 13% of the nation’s population, they comprise less than 1% of brewers. Amidst rising demands for racial equality, brewers across the nation are trying to change the industry. “It takes nothing to do a one-time act,” says Latiesha Cook, the chief executive of Beer Kulture @beerkulture, a new nonprofit group that brings people of color into the craft-beer world through charitable and educational efforts. “Your brewery is not going to be diverse and inclusive tomorrow, but the work you put in today is going to effect that change five years from now.”

Articles in both the New York Times and Inc. list brewers creating programs to bring more Black people into brewing.

– Brooklyn Brewery @brooklynbrewery (Brooklyn, New York) launches Michael James Jackson Foundation for Brewing & Distilling for brewing and distilling scholarships for Black, Indigenous and people of color.
– Crowns & Hops @crownsandhops (Inglewood, Calif.), a craft beer and lifestyle brand with the slogan “Black People Love Beer,” launch the 8 Trill Pils Fund to give grants to other Black brewers.
– Orpheus Brewing @orpheusbrewing (Atlanta) introduces its Leadership Diversity Program, a six-month paid internship.
– Fremont Brewing @fremontbrewing (Seattle), will offer six- to eight-week internship next year.
– Weathered Souls Brewing @weatheredsoulsbrewing_marcus (San Antonio, Texas), creates Black Is Beautiful project, where participating breweries create a beer with the Black Is Beautiful label and donate proceeds to organizations supporting equality and police reform.
– Finback Brewery @finbackbrewery (Queens and Brooklyn, New York) creates I.P.A. label Breathing: Conversations, with discussions about race printed on the beer’s label to foster dialogue among drinkers.
– Constellation Brands, which imports Corona and other beers, founds a Focus on Minority Founders Program. The company’s venture capital division also announces places to invest $100 million in Black- and minority-owned alcohol beverage businesses over the next decade.

Read more (New York Times & Inc.)

Defining “Gluten-Free”

The U.S. FDA released a final ruling on gluten-free labelling of fermented and hydrolyzed foods. The final rule covers yogurt, sauerkraut, pickles, cheese, green olives, FDA-regulated beers and wines and hydrolyzed plant proteins. Though gluten breaks down during fermentation and hydrolysis, the FDA says there are currently no valid, scientific, analytical methods to determine the gluten protein content in fermented or hydrolyzed food. To comply with gluten-free standards, the new FDA ruling requires food manufacturers to only use gluten-free ingredients before they undergo fermentation or hydrolysis.

“These new compliance requirements for labeling a product ‘gluten-free’ will protect individuals with celiac disease, an incurable, hereditary disorder that millions of Americans, including myself, live with,” said Alex M. Azar, secretary of the US Department of Health and Human Services. “The FDA’s final rule helps to ensure common products labeled ‘gluten-free’ really are gluten-free, equipping consumers to make the best choices for their health and their families.”

Read more (FDA)

California wildfires are destroying an already tough harvest season for wineries in Sonoma County, Napa Valley and the Santa Cruz Mountains. Tony Bugica, director of farming for Atlas Vineyard Management, which farms 3,500 acres on California’s North Coast, says “2020 is like nothing we’ve ever been through.” Even as the fires diminish, wineries are battling power outages and smoke damage. Prior to the fires, the excessive heat, depleted tourism, social distancing restrictions and economic repercussions of the coronavirus pandemic were already making the 2020 grape harvest challenging.

Read more (Eater)

Consumer reports indicate a spike in interest from the general public in fermentation during the COVID-19 pandemic and quarantine. But we wanted the experts to weigh in on whether or not attendance is up at their fermentation classes. We spoke with three chefs dispersed around the globe. Kirsten Shockey (chef and author at Ferment Works and TFA Advisory Board member) in Oregon, Nena Foster (chef at Nena Foster Food) in London and Ken Fornataro (chef at Cultures Group) in New York.

Kirsten Shockey, Ferment Works: “This is an interesting question. I do know that interest in purchasing fermented products is way up, however interest in workshops is less clear to me. As a fermentation educator, I can tell you that my full schedule disappeared by the nature of in person classes being no longer possible. I think there has been a shift, which was especially true during spring when people were at home and had the time and were focused on sheltering in place. The place that I saw a lot of interest in the spring was online live fermentation festivals on Instagram. Thousands of people dropped in because it was something to do, free and people are more interested in their immune system than ever before. This past month a European study came out looking at the “Association between consumption of fermented vegetables and COVID-19 mortality at a country level in Europe.” I have seen this pop up on both honest and not-so-honest clickbait headlines. Yet, as I write this, and the COVID cases are climbing, and we have something more concrete to point to, I am, personally, seeing less interest in learning. I suspect this is because people are trying to claim some normalcy of their summer and don’t want to spend so much time online. I think that when fall approaches, learning to ferment will take off.”

Nena Foster, Nena Foster Food: “I can’t say for certain, but I do think more people are starting to take an interest in making their own fermented foods. Maybe it’s because Lockdown has given people more time in the kitchen and more time — more time to use up what’s knocking about in their fridges, time in the kitchen and time to plan meals and waste less of what comes in their weekly veg boxes. Or maybe it’s because, the fear of a virus that seems to prey on those with pre-existing health conditions as well as those who are seemingly healthy, means people are taking more notice of and interest in maintaining their health. I also think the links between the gut and mental well-being have sent a few people to my sessions, as emotionally and mentally this has been a tough time for most and even more so for those who already struggle with their mental health. I think fermenting also takes us back to a simpler, slower pace of life and reminds us to slow down, something we all desperately needed to do and was forced by the pandemic.  

Based on my own workshops, I seem to be getting a slightly younger, more kitchen-curious demographic than when I ran face-to-face sessions. I think the reasons they come to my sessions very much mirror the above. I was very conscious of being able to move my work online because I knew that the support in terms of health-focused cooking and fermented foods was needed more now than ever, and I am pleased that I have.”

Ken Fornataro, Cultures Group: “It’s been a long time coming. Are more people buying fermented foods because they want to believe they can prevent or even treat Covid-19? Maybe they are bored with the food they have BEEN eating, and have decided to try out that fermented food thing that keeps trending on social media.

A lot of it may be due to long term marketing efforts finally hitting home. In addition to fermented products, some just inferior products mixed with microbes, people are snapping us lots of things with perceived health benefits.

It’s impossible to avoid examination of one’s diet, and one’s health status during this international pandemic. People seem to get that processed foods typically are lacking if not harmful.

But do they like what they are trying? Or is this about the desire to establish a normalcy and feeling of safety that their grandma’s strange smelling foods, once considered embarrassingly ethnic, and to go to a time and place they call home? Tasting home, tasting freedom?

People are desperately looking for alternatives to the current reality.

Sales of raw ginger, turmeric, roots and wild forged plants to make teas and elixirs – almost anything that is believed to be acidic or cleansing to assuage the psychological anxiety that comes from feeling threatened but not knowing what to do about it – have also skyrocketed during this pandemic.

Do fermented foods actually contribute to someone’s health, especially their immune system health? Directly? Highly doubtful. Indirectly or holistically, without a doubt.  

If eaten in the context of healthy living patterns including getting adequate rest, access to a clean environment, not smoking, and eating moderate amounts of any fermented such as kimchi or sauerkraut or natto that replaces some processed, chemical and additive laden food you used to eat is of definite benefit. 

Fermented foods should be considered as the ultimate condiment or accompaniment to whatever ingredient you have. They can add intense flavor dimensions to otherwise plain tasting foods while adding prebiotics and probiotics and increased nutritional value and increased digestibility.  

A couple of tablespoons of sauerkraut or kimchi or natto or miso or shio-koji on top of a bowl of noodles or rice or beans or mixed into a salad is easy.

But fermented foods can also be served on the side, an extremely important consideration when eating with people with different tastes and different sensitivities.

Fermented foods are tasty, sometimes an acquired taste. And healthy, especially if it gives you time to do yoga or exercise. Which surely helps you sleep better. Which helps you maintain your health.”