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Is the future of chocolate in Brazil? Brazil is the 7th largest cocoa producer in the world. A Forbes articles highlights Brazilian chocolatiers that focus on the cacao cultivation process. These “bean to bar” products come from producers practicing sustainable farming methods. There are no preservatives, no dyes and the farm land is “cabruca,” a Brazilian form of agroforestry where much of the farm land is left untouched. The cacao plants are grown in open plantations, adhering to the country’s law that 20% of a farm’s forest floor must be kept intact and undeveloped. Cacao from the Leolinda family farm is fermented twice to improve impurities.
Read more (Forbes)
Food Industry Lessons from the Great Recession: How Will Food Spending Change in an Economic Crisis?
Fermented food producers, it’s time to be vigilant. Economists predict America is on the cusp of a recession. Thankfully, sectors of the food industry remains strong in an economic downturn. Food is a basic necessity consumers won’t cut out of their budget.
But that’s no reason to wait out a recession without caution. That recession-proof statistic only applies to select parts of the food industry. During the Great Recession of 2007-2010, household food spending declined by 7 percent. The United States Department of Agriculture reported it was “the largest inflation-adjusted decline in food spending that accompanied a recession since 1984.” Food purchase patterns also changed, as budget-conscious consumers focused on money-saving methods.
Based on food spending data, there are key lessons fermentation leaders can use to prepare for an impending economic downturn. Here are five ways consumer food spending will change in a recession.
1. Grocery Store Spending Remains Fairly Steady
When the economy is bad, more consumers cook their own food. Spending at grocery stores dropped minimally during the Great Recession, falling only 1.3 percent from 2006 to 2009. The number of home-cooked meals increased, as did the amount of meals eaten in the home with family members.
2. Restaurant Spending Plummets
Restaurant spending rises and falls along with income levels. Dollars spent on food away from home declined 18 percent ($47 billion) during the Great Recession. This large dip in restaurant sales didn’t recover for 10 years. Restaurant sales began decreasing in 2006, and didn’t return to pre-recession levels until 2016. Restaurant Business Online said 2009 and 2010 “would prove to be the
worst two years in the modern era for the restaurant industry.”
3. Consumers Focus on Health
During an economic crisis, consumers are not turning to cheaper, unhealthier food options. USDA data shows adults had “increased concern” for their nutrition during the Great Recession. When the economy was at its worst, more adults were rating their diet as excellent, very good or good as compared with fair or poor. Food quality also improved. Total calories from fat and saturated fat declined; cholesterol content dropped, while fiber intake increased. More adults were also using the Nutrition Facts Panel on food packaging, too.
4. Discount Retailer Sales Rise
As consumers cut their budget, they trade high-end stores for discount, big-box retailers. Sales at Costco, Wal-Mart and Target all climbed 15 percent from 2007 to 2008. Economists point to the purchasing power of big-box retailers. Big-box prices help the retail giants outlast luxury stores and small shops during a recession. Natural supermarket Whole Foods, once criticized for premium prices, shed their “Whole Paycheck” reputation after the recession decreased their sales. In 2008, they began offering discounts, adding store brands and emphasizing value in their marketing.
5. Cost-Cutting Methods Reign
Consumers eliminate discretionary spending in a recession. They clip coupons, watch food sales, shop for generic brands and buy items in bulk. Interestingly, the average number of shopping trips to the grocery store increased during the latest recession, but the amount paid per transaction was 12 percent less. Private-label products (or generic or store brands) expanded faster than well-known, national brands during the recession. A record number 810 new private label food and beverage products was released during the recession, seven times more than the amount released in 2001.
(Photo: Foodies Feed)
More Americans want their food natural, traditionally sourced and eco-friendly — and 2019 food and beverage laws reflect that philosophy.
Thousands of new laws went into effect in the U.S. on Jan. 1 2019. Fermented food and drink producers need to take note because dozens of those new state and municipal laws will aid fermentation businesses and, in some cases, hurt businesses.
From new rules (increased minimum wage in 19 states) to less regulation (lenient homemade food sale laws; fewer restrictions on craft breweries), to planet saving measures (ban on straws in California restaurants; ban on styrofoam containers in New York restaurants) here’s a breakdown of the major laws affecting the fermentation industry.
HB2484 – Food tax is now uniform, a requirement that bans an additional tax for a specific food item. Lawmakers suggested imposing a higher tax on soda and alcohol.
SB1022 – Certain homemade food items can be sold to the public without an inspection by the health department. The food is limited to: fruit jams and jellies, dry mixes, honey, dry pasta and roasted nuts. The food also must be prepared by someone with a food handler’s permit and sales must advertise that it was made in a home kitchen not subject to health inspection.
Arkansas Tax Reform and Relief Legislative Task Force – Sales tax on groceries drops from 1.5 percent to 0.125 percent.
SB946 – Sidewalk vending is no longer a crime under the Safe Sidewalk Vending Act. Vendors can determine where they’d like to operate, without asking an adjacent business for permission. Cities and counties will regulate street vendors.
AB1884 – In an attempt to curb ocean waste, single-use plastic straws are only available at a diner’s request. The law applies to full-service restaurants; fast-food establishments are exempt. Violating restaurants could be fined $25 a day and up to $300 annually.
AB626 – Amends state food code to legalize home-based food sales or “microenterprise home kitchens.” Cities and counties are now in charge of permitting small-scale home cooks who want to sell to the public.
SB826 – Publicly-held companies with headquarters in California are required to elect a minimum of one woman on their board by the end of 2019. By the end of 2021, a company with a five-member board must have two women on their board; a company with six or more directors needs three women on their board. Violators face fines of $100,000-$300,000.
SB243 – An update to an alcohol law passed from the Prohibition-era, full-strength beer can now be sold in Colorado grocery stores. Previously, the law only allowed grocery store beer with 3.2 percent alcohol by weight.
HB4568 – Called the Healthy Local Food Incentives Program, the bill increases low-income residents access to healthy food. Supplemental Nutrition Assistance Program dollars now include food from farmers markets.
HF2391 – The law decreases liability for bars, restaurants and other establishments that serve alcohol to a visibly intoxicated person. Previously, any alcoholic beverage licensee was on the hook for all damages caused by a person who became intoxicated while at the licensee’s establishment. Now, non-economic damages cap at $250,000 for an injury or death. There’s still no cap for economic damages.
HB136 – Repealing an old cap on craft brewers sales to customers, breweries can now sell three cases and two kegs per customer onsite.
LD1693 – Clarifying Main liquor laws, a complete separation of two retail liquor establishments is now amended. A manufacturing facility and retail establishment at the same location do not need seperation.
SB410 – Bakers selling their fresh baked goods can now package their product in wrapped or covered containers, for sanitation purposes. Law formerly required all dry food items to be sold without packaging so products could be sold based on their weight.
A2015 – Food – prepared by a third-party, licensed vendor — is now allowed to be sold at small breweries.
SB8078 – New York’s food service businesses can no longer sell or serve food in styrofoam containers. After a six month grace period, fines will cost $250 for a first offense, $500 for a second offense and $1,000 for three or more.
HB1433 – Known as the “Food Freedom Act,” the bill allows unlicensed cooks to sell homemade products. Meat and raw dairy products are still exempt.
N.C. Farm Act of 2018 – The act includes two sections relating to the fermentation industry. First, vegan, plant-based milk (like almond, rice, soy or coconut) cannot label itself as “milk” — but only if 10 other states adopt similar mislabeling policies. Second, the food and vegetable handler definition has expanded. Anyone dealing with the transfer of fruit and vegetables from a North Carolina farmer will be required to register with the state’s agriculture department.
Malt Beverage & Liquor Tax – Starting in July, the state will collect 6 percent sales tax from breweries and taprooms. Breweries have been tax exempt under state law, helping the state’s thriving craft brewery scene.
S2502 – Eliminates the state’s confusing regulations for street food vendors. The law simplified and streamlined the registration process for food trucks and food carts. Local municipalities now oversee location and hours of operation.
SB173 – Craft and microbrewers can now sell their beer directly to restaurants without a distributor, as long as it’s under 1,500 barrels. Brewers can also make up to 30,000 barrels a year while still keeping licenses that allow offsite taprooms and wine and cider sales. Former law put the limit at 5,000 barrels.
HB345 – The state passed the strictest drunk driving law in the nation lowering the level for driving under the influence as .05 BAC. The National Transportation Safety Board urged all states to drop the BAC to this level in 2017, but many in the alcohol service industry criticize the law for targeting social drinkers rather than drunk drivers.
There’s a major cheese surplus in America – 1.4 billion pounds of cheese. It’s enough for a cheese wheel the size of the U.S. Capitol building, the largest cheese surplus the country has seen. Multiple factors are causing the surplus. First, consumers are shunning processed cheese. Second, they’re buying more specialty, European-style cheeses in small quantities. Third, there’s an excess of milk produced at U.S. farms. And fourth, the current trade wars have dropped cheese shipments to China (down 63 percent) and Mexico (down 10 percent).
Read more (WBur)
Fermentation is dominating 2019 food prediction lists. The New York Times says fermented foods and fermented drinks will rule in 2019. The year’s flavor profile will be “Sour and funky, with shades of heat,” melding fermented ingredients with millennial taste buds. Probiotics and prebiotics will continue to reign as consumers focus on gut health. “As the obsession with digestive health dovetails with the fascination for fermenting, kimchi, sauerkraut and pickled things will work their way into new territory. Smoothies with kefir will be popular, and kombucha will show up in unexpected places like salad dressings,” the article continues. What will you be eating in 2019?
Read more (New York Times)
After fermented milk Yakult was featured in the new romantic comedy “To All the Boys I’ve Loved Before,” stock in the company climbed 2.6 percent. Called a “Korean yogurt smoothie” in the movie, fans spotted the Japanese probiotic drink immediately. After the movie’s release, Yakult’s “mention frequency” spiked on social media. Prior to the product placement, Yakult’s stock shares were dropping 6 percent after slow sales growth.
Read more (Bloomberg)
The new “it” clean food label: Glyphosate Residue-Free Certification. The main ingredient in weed killer, glyphosate is the most heavily used pesticide in the world. A probable human carcinogen, Forbes estimates it’s about to become a household name consumers will cut out of their food. Though glyphosate is banned in organic crops, it still drifts into the organic food supply, especially in anything oat-based. The new label is awarded by 3rd-party The Detox Project, who regularly tests brands for glyphosates. Costing $1,472 per year, the certification was first granted to Foodstirs, the organic baking company launched by actress Sarah Michelle Gellar and Galit Laibow.
Read more (Forbes) (Photo by: Foodstirs)
Brew Dr. Kombucha became the first nationally distributed kombucha brand to receive a B Corporation certification. The prestigious ranking is given to companies that score high in social sustainability and environmental performance. Brew Dr. sources 100 percent renewable energy, implements a closed-loop brewing process and donates 1 percent of revenue to local environmental non-profits. Matt Thomas, founder and CEO of Brew Dr. Kombucha, said the B Corp certification “is one of the proudest moments I’ve experienced since founding Brew Dr. Kombucha.” He stressed that his company places “equal value on people, planet and profits.” More and more consumers want healthy products, but they also want their products to be created using both environmentally and ethically responsible efforts.
Read more (BevNet) (Photo: Brew Dr. Kombucha)
Peet’s Coffee is the second major coffee brand adding kombucha to their portfolio. The craft coffee company announced that it acquired major stake in Revive Kombucha. Revive grew 168% in the last year, and the latest financing will likely help Revive capture the national market. The kombucha will be sold in more than 15,000 of Peet’s grocery store locations. Eric Lauterbach, President of the Consumer Division at Peet’s Coffee, said kombucha is a natural fit since consumers tend to love both coffee and kombucha.
Read more (PR Newswire) (Photo: Revive Kombucha)