Fermented foods are making a comeback, but an education gap needs addressing for fermentation to move “from fashionable buzzword to become a sustainable long-term trend.” A group of panelists spoke at the UK The Ingredients Show on what’s driving and developing the fermentation market. The panel agreed there is a disconnect — people want fermented foods, but few understand what they are. Tom Lee, editor of Food Spark, said fermented food producers should look at supermarkets as part of the solution. Supermarkets are “keen to explore fermented products.” Lee said: “A lot of developers and buyers we speak to at the supermarkets are looking for products around things like plant-based fermentation. They are constantly on the look out for exciting products in this area because they are emerging trends and therefore maybe less affected than more traditional items by range trimmings.”
Icelandic skyr yogurt sales are up 24% to $173.9 million in 2018 while Greek and traditional styles dropped 3.4%
Sake is sliding from the sushi bar to the dinner table. The Japanese sake industry is exporting more of the popular rice wine to America than ever before. More sake brands are putting English descriptions on their labels, which has surged sales growth. Kristin Breshears, a Certified Sake Professional and distributor for Vine Connections, says most Americans drink sake hot, served in a small ceramic cup along with sushi or dropped in a beer. Breshears, though, says sake is “a really beautiful beverage that should be served chilled and hopefully out of a wine glass so you can smell the aromas.”
Read more (New Orleans Gambit)
Could a cork-topped wine bottle become a thing of the past? Use of cork closures are down compared to 10 years ago as more brands opt for alternative closures. But bottle closures influence a person’s perception of a wine, according to three separate studies. Natural corks are still the preferred favorite and glass stoppers are considered an adequate replacement for luxury brands. Despite, more wine brands are using screw top closures – they’re on average .95 cents cheaper a bottle compared to cork and, after years in the cellar fermenting, show better than a cork-topped wine.
Read more (Forbes)
When Drew Anderson was ready to sell sauerkraut he homemade with brother-in-law Luke Visnic, Drew knew just where to start — the farmers market. His mother started farmers markets all over Northeastern Ohio, markets where Drew and his little brother Mac spent their weekends working as kids.
“We saw how small food businesses would start. Farmers markets a great way to test your products, to pitch, to get direct feedback on what’s working and what’s not. You’re getting paid for market research,” says Drew, who started Cleveland Kraut with Luke and Mac (chief marketing officer) over six years ago. “Farmers markets are going to be some of your most honest customers, and those original farmers market customers are still some of our best customers to this day. We raised our first capital at farmers markets.”
Sage advice from the fastest growing brand in the fermented foods industry. Cleveland Kraut continues to grow since its humble beginnings in 2013 as a side hobby of three brothers. Back then, when Cleveland Kraut was ready to expand to retail, Drew liquidated his savings to buy equipment, slept in the warehouse and drove truckloads of kraut himself to avoid shipping costs. Today, Cleveland Kraut will produce 4 million pounds of sauerkraut this year, thrives on capital from backers like NBA star George Hill, employs a growing staff of 20 full-time employees and will expand internationally later this year.
Check out our Q&A with Drew, a Forbes “30 Under 30” honoree and board member of The Fermentation Association.
Q: What is your advice for other fermented food producers who want to sell in retail stores?
Honestly, you have to grind. It’s a category that buyers are just now waking up to, so getting in the door is difficult. Especially when you have established players who are doing really well. You have to go in and say “How am I going to compliment the competition? How am I going to add these other flavors?” It takes time. It’s a lot of grind, you’re going to lose some sleep.
Q: Where do you see the future of the industry for fermented products?
Obviously, you have a lot of beverages out there that really paved the way, kombucha has been a huge success story. But fermented vegetables I think are, one, you’re getting a ton of free press from dietitians and doctors who are saying you need to eat this stuff, the rest of the world eats this every day, Americans need to eat it, too. Second, gut health is tied into everything, and that’s pushing fermented product sales. There are studies proving gut health is linked to your mental well-being, its liked to weight managements, its linked to your skin health. Then third, exciting flavors and new and exciting brands. Fermented products need to be approachable products for the American palate, and I’m proud to say that we’re a big driver of that. We’re showing what can be done with a simple product.
Q: What problems do you see facing the fermentation industry?
It’s not a huge category right now. The challenge is continuing to push consumers. We have to taste test, teach consumers what is this, what are the benefits, we need to get the mass market to understand what real fermented foods are and to test them out. We need to expand the category by showing people how good fermented foods are and how good they are for you. That’s going to be a big challenge.
I also think, the challenge on the retail side, buyers are continuing to expand the set. I think there’s room for a lot of different brands in one fermented set. When we go in to the market, we have a lot of competition. But competition brings the whole category up. It’s less cannibalization, it’s opening up a category and growing it.
Q: What about strengths, do fermented producers have unique strengths for the food industry?
There are not many co-manufacturers that make a quality product. So you have young companies who are still manufacturing their product. It’s not just a brand with a manufacturing facility miles and miles away. These young companies are putting really quality products out there. And I think that’s a real strong suit. The product is the same as everybody else when you have co-manufacturers involved. Brands that own their manufacturing, I think you get more interesting, higher-quality products.
Another strength is fermented foods can be something that’s delicious and exciting but also super beneficial for you. This is true health food, this is not fake healthy. This directly impacts people. If more people were eating fermented food products every day, our country would be a lot healthier. I think that’s a huge strength for us and we’re going to lean on that hard.
Q: Tell me about Cleveland kraut. What makes it so unique?
We are a manufacturer but we’re culinary branded. We really care about taste, texture and health. If you’re doing fermentation right, then its always going to be healthy. But we want the crunchiest, most vibrant sauerkraut. We’re the taste leader, we’re the fastest growing brand in fermented foods. We’re about flavor. You go to Asia and they eat fermented foods every day. For us, we’re creating the fermented foods that Americans will eat every day. And we’re seeing that with our customers. They’re eating it with their eggs for breakfast, they’re putting it on their salads for lunch, they’re making it traditionally and eating it with meat and sauerkraut for dinner. It’s fast, quick meals, throwing it on rice bowls, soups, burgers.
Q: A lot of Americans are still scared to eat a fermented food. They’re unsure of trying the food, they don’t know what it is. Do you think that’s starting to change?
Oh yeah. One of our taglines here is “People try it, they like it.” You walk into a room and ask 100 people “Do you like sauerkraut?” and 75 percent of them are going to say no. We flip that after they try it. They try our product, they go “Wow, I never knew that was what sauerkraut tasted like.” It’s a natural fermentation, its crunchy, its vibrant, its bright, its fresh – that’s real sauerkraut. We change minds.
Q: You have a business background and were an analyst in finance industry. What made you decide to move over to the food industry?
Our mother started farmers markets in Northeastern Ohio. She was a chef, she had a degree in biology and she was super into where food comes from and what she’s feeding her kids. We grew up running farmers markets on the weekends, cooking in the kitchen, everything was central around food. We learned early on how to cook, how to prepare our own food and how to identify good products. It kind of helps you see why we’re so tall, we ate really well.
Fast forward, I went to school at Cleveland State University. I have a degree in statistics, so I was hired by a bank to build models and forecast. I moved to Virginia on the east coast where I couldn’t really get authentic, Eastern European fermented food, the sauerkraut and sausages which we grew up with in the Midwest. I started fermenting my own sauerkraut and making my own sausages. I got hired by a bank, moved back to Cleveland, and I found out my brother-in-law (COO Luke Visnic) was also making sauerkraut. He has a history – his grandmother is from Germany and they always had a crock bubbling away. One night over a beer in 2013, we’re eating some really fresh sauerkraut right out of a Mason jar. We’d been reading about this huge movement of fermented foods and probiotics. So we said “Let’s take it to the farmers markets.”
For a couple years, we would work our day jobs – Luke’s an architect, me in finance and my brother Mac who had just graduated college and was working in finance. We were teaching Mac how to ferment while he was in college. So all three of us, we’d work our day jobs and then come to the commercial kitchen in suits and start making sauerkraut until 2 in the morning, packing, processing. And then on the weekends we’d sell it at the farmers markets and to restaurants.
Q: When did you finally decide Cleveland Kraut was big enough to make the switch from your day jobs to working on Cleveland Kraut full-time?
In the second half of 2015, when we launched retail. We built a new commercial kitchen in this big factory, this old warehouse, that we cleaned out and made a nice fermentation space. I slept in an office way above the floor. There were no showers, so I joined the Y up the road, and I would shower there and then go into work and sleep in the office at night. It was great.
Q: Tell me about your unique flavors.
We have the traditional Classic Carraway that’s very Bavarian style. We have a Whiskey Dill where we add a little bit of whiskey, it gives it a subtle sweetness on the back end and a lot of dill up front. Roasted Garlic is probably our best seller besides the classic. It’s made of raw garlic, black pepper, its fantastic, super savory, people put that on everything. Beet Red is huge for us – it’s red cabbage, beets, carrots. This is the really fresh, super healthy sauerkraut that people are throwing on salads. Think of like an arugula salad with a little bit of spice, a goat cheese, almonds and then a light vinaigrette then with a Beet Red sauerkraut on there. Oh, its beautiful. Curry Kraut, that’s definitely going to be our healthiest. You have turmeric in there, ginger, garlic, it’s got a little bit of zip to it, a beautiful yellow color.
But our game changer, our conversion kraut is the Gnar Gnar. This one’s interesting. We knew we had to make a spicy kraut because our favorite is to eat a spicy sauerkraut like a kimchi. When we were first testing out flavors in my mother’s cellar, we had this spicy concoction going and this super, super potent smell and we were like “Man, this is going to be so gnarly!” and my mom starts saying “What’s that gnar gnar down there?” So we had to name it Gnar Gnar. That’s the one chefs are using. Iron chef Michael Symon, he’s got a BBQ restaurant at the Palms in Vegas, every plate serves Gnar Gnar.
We’re bringing excitement and life with our flavors, our crunch, our branding. We’re really brightening up this category and bringing a lot of new consumers.
When we go in to the market, we have a lot of competition. But brings the whole category up. It’s less cannibalization, it’s opening up a category and growing it.
Q: Your brand name, you wanted to true to the Cleveland area?
For us, fermented foods really come from the Midwest. It’s a lot of Eastern European roots, it’s a working-class food that comes from farmers. It’s a blue-collar food, its simple food, cabbage is cheap. It’s a way to preserve foods when you didn’t have refrigeration. People have been surviving on cabbage for thousands of years.
For us, growing up, sauerkraut was a food that was local. It comes from the Midwest. We have glacial till soil here, super nutrient-rich soil. All our cabbage is hearty, it’s delicious, you eat the raw cabbage and it has a spice to it, it’s fantastic. We’re super proud of where we are in the Midwest. Building a factory and putting our city on the front of the package has been key to us. Honestly, it creates a local vibe wherever you go. People in Southern California are buying us at Lazy Acres and Gelson’s and Bristol Farms and they’re saying “I like the Cleveland stuff. They know what they’re doing in the Midwest. They know how to ferment things.”
Q: Tell me about the Cleveland food scene.
The Cleveland food scene is growing. We have a lot of good chefs, we get a lot of ex-New York chefs who want to open their own spot and they come to Cleveland because there is a lot of wealth there so it can support the fine dining and experimental restaurants.
And the business food scene, the manufacturing, its growing. There’s a popsicle company from Cleveland that’s taking off, Chill Pop. Nooma is an organic electrolyte beverage that is taking off nationwide, they’re in stores like Walmart and Whole Foods. There’s a lot of us, we’re paving the way. Then the Akron, Canton, Cleveland areas, there’s a lot of big, big manufacturers that are behind the scenes, you’ve never heard about them, but there’s a lot of food being made here. Cleveland is young – we’re not a Boulder, we’re not a San Francisco, but its popping up. We’re going to give Brooklyn a run for their money in 10 years.
Q: Last year, you started putting your kraut in new packaging, you switched from glass jars to resealable pouches. Tell me about that.
The issues with glass jars is you’re putting in a live product. When you’re at natural stores, a Whole Foods, and you have early adopters buying it, they understand that when you twist that lid, it might bubble it, it is still alive. But when you get into a place like Walmart, Giant Eagle, Target, these people are later on the adoption curve, they may not know so much about what a fermented live product is, so when they open it up and see a bubble, they think “Whoa, something’s wrong.”
The other thing is we couldn’t fully automate the jar the way we wanted too. Our demand was so high, we were in there packing jars, and we couldn’t find the right equipment to automate it. We searched for years. And so the pouch solved the issue, because it has a vent and allows the kraut to breath, to exhale. And it can be automated.
We’re cutting down our carbon footprint significantly. A full truckload of glass takes so much diesel because it’s so heavy. Pouches can fit on a single palate and they’re fully recyclable. We have a great customer base, so I trust people are going out and recycling.
Q: What’s next for Cleveland Kraut.
We’ve got a lot of new products coming out. We’re going to really take hold of the fermented space, the fermented category, were going to drive a ton of growth. I’m excited for the next year and a half, you’re going to see some exciting things out of us, we’re going to keep pushing the brand.
We don’t just play in natural stores anymore. We love those stores, that’s where we started, we’re always going to be there, that’s where our best relationships are. But were pushing into conventional heavily. That means mass market people are getting the experience. On the back of our products, it says “Fermented foods for all.” This is not just a high-end product that only wealthy people who are super focused on health need. This is going to sell at Walmart, this is going to sell at Whole Foods. We’re going to get fermented foods everywhere. We’re going to push it very hard. In five years, people are really going to be eating fermented foods every week, every day, and were going to be a big driver of this.
The head of the fermentation lab at NOMA, David Zilber, says fermentation is not making a comeback — fermentation is “undergoing an understanding.” He adds: “Fermentation is definitely a commitment. It is committing to something. It’s being responsible for life and watching it grow. It’s a slow and patient process. But it’s also being rewarded.” The Guardian’s recent interview with Zilber offers insight into the chef’s background in fermentation and NOMA’s lab, which houses 10 fermentation rooms at varying temperatures. He says his food is an artist’s statement.
Read more (The Guardian)
The fermentation industry is on the cusp of a renaissance. Engaged consumers are seeking functional food and drink with health benefits. And fermented products provide the nutritional value and unique flavors today’s consumers crave.
Staff at The Fermentation Association attended Natural Products Expo West in Anaheim, Calif. this month. Expo West is the world’s largest organic and natural healthy products event, and we spent four days with 88,000 other attendees listening to industry experts in education sessions and meeting fermented food and beverage brands on the show floor.
Here are six takeaways from Expo West for the fermentation industry:
- Natural Products are King. Natural food and beverages grew 6.6 percent in 2018, for a total of $152 billion in sales, according to info from the Nutrition Business Journal. The category is growing so much that organic supply is lagging behind consumer demand. Meanwhile, for the first time in history, the conventional food and beverage category began to shrink last year.
- Major Focus on Gut and Microbiome Health. Once terms only used by scientists, prebiotics and probiotics are at the forefront of consumer’s grocery list. Digestive health is critical for modern consumers, as more nutritionists focus on the gastrointestinal tract’s critical immune system support. Consumers want food and drinks that nourish their microbiome. Sales numbers show people are moving away from purchasing pills and supplements to aid their gut; they’re instead looking for prebiotics and probiotics in actual food.
- Ancient Foods are Experiencing a Revival. The future of food is in practices of the past. From turmeric, ashwagandha, ghee and fermentation, the foods of our ancestors are back on our plates. These old-world cooking styles and ingredients are standing the test of time and coming back in modern cuisine.
- Industry is Selling to Educated Consumers. Today’s consumers know more about the food they eat than ever before. Consumers are studying ingredient lists, seeking product sources and researching brands. Clean food and clean labels are not a trend; they’re a movement. People are becoming more aware of the dangers of eating processed food. They want nutritious ingredients from ethical brands. The functional health benefits of fermented products are piquing consumer interest.
- Snacking Trumps Mealtime. Snacking today is a $1.2 trillion-dollar industry. The modern consumer is busy, and convenience food readily accessible in a grab-and-go format is a grocery store staple. Snacking in 2019 is not filling up on a soda and a bag of fried chips. Consumers want healthy, fresh snacks, especially refrigerated snacks in the produce aisle. This is great news for fermented brands. Grabbing a bottle of kombucha or kefir and a bag of snacking pickles or miso soup fits into the convenient dining lifestyle.
- Brands Need More Plant-Based Products. A major shift in food philosophy, more consumers are buying plant-based products – whether or not they’re vegetarian or vegan. Plant-based options are becoming tastier and readily available. Brands are experimenting with fermenting vegetables for plant-based cheeses, spreads, sauces and drinks.
It’s an exciting time for fermented food and beverage producers. The aromatic, tangy flavors and healthy, live bacteria in fermented products are qualities propelling fermentation to become one of the most popular food categories.
The New Mainstream: Natural & Organic “Defining the Future of Food”
Once specialty items only found in small nutrition shops, today natural products are the new normal for consumers. Annual consumer sales in 2018 were $219 billion across the natural and organic products industry, a 7 percent increase.
“Natural and organic has tipped into the mainstream and is now defining the future for food, nutrition and CPG,” said Carlotta Mast, senior vice president of content and insights for the New Hope Network which. Mast shared an overview of 2018 sales and growth at “The State of Natural and Organic” education session during the 2019 Natural Products Expo West.
The 39th Expo West hosted 88,000 attendees and 3,600 exhibitors. Mast shared sales and growth numbers from the Nutrition Business Journal, research that estimates the natural products industry will surpass $250 billion in sales by 2021.
That’s rapid growth – and amazing news for the fermentation industry. Food and beverages remain the largest category for the industry (numbers include food and beverage, supplements and natural living). Food and beverage make up 70 percent of the industry.
Natural food and beverage sales grew 6.6 percent in 2018 to $152 billion in sales. Organic food and beverage grew 5.6 percent in 2018 to $45 billion in sales. Organic has burgeoned into a huge force – organic supply is lagging behind growing consumer demand. Mast noted: “That’s a challenge the industry needs to continue to address.”
Sales for conventional food and beverage products began to shrink for the first time in history in 2018. Major conventional food brands – like Kraft Heinz – are reporting losing billions in sales.
Consumers are looking for functional ingredients in their food and drink. They’re viewing their food as medicine, and they want health benefits from the food and beverages they consume. Functional food and beverage sales grew 7.5 percent last year to $68 billion in sales.
Great news for fermentation producers: probiotics are of the fastest growing functional ingredients. And consumers are moving away from supplements and pills. They want their probiotics in food and drink.
“The growth in probiotic food and beverages, this represents the continued blurring of the line between dietary supplements and food and beverages as consumers show a growing preference for non-pill and non-capsule delivery form for function products,” Mast said.
Mushrooms, Hemp and CBD and ashwagandha are other growing functional ingredients categories.
Though e-commerce is currently driving less than 5 percent of industry sales, those numbers will flip. Growth of e-commerce sales are outpacing brick and mortar sales.
E-commerce is the ideal platform as the “launch pad” for new brands and products, Mast said. Half of all new natural companies that entered the market between 2015-2018 started selling online before moving to retail. Mast notes: “That’s a huge shift for our industry.”
Mast outlined seven “staying trends to shape the industry.” She noted these are not fads, but “big shifts that are shaping who we are and what we sell and how consumers are driving what’s happening in our industry.”
The macro forces and trends include:
- Plant Wisdom. Mast: “This is one of the most powerful macro forces in our industry today as consumers are waking up to the social, environmental and health benefits of plant-based foods. And natural and organic brands are meeting this growing interest with innovative products that make is easier, healthier and more delicious than ever to ditch traditional meat and dairy, even if it’s only temporarily.”
- The World is Fat. Brands are “responding in creative ways to changing consumers perceptions around nutrition, including the growing appreciation for healthy fats,” Mast said. Consumers are realizing sugar is dangerous for health and weight management.
- A Life of Vitality. Mast: “Amidst the pressure of modern life, consumers are seeking out diets to help stave off and prevent disease, treat conditions and perhaps most important optimize how they feel today and every day. This is leading to many opportunities for innovative products that support a healthy microbiome.”
- Modern Pantry. “Today’s pantry looks very different than perhaps the pantry that our parents have.” There are opportunities for brands to update stale product categories, meeting the need for convenience with the need for nutrition and taste. Modern pantry products incorporate more veggies and less sugars.
- The Power of Science. “Science and technology are improving nearly every category in our industry,” Mast says. Science is connecting consumers with “science-based products and values-driven innovation that has the potential to change the world for the better.”
- Material Optimization. Brands are looking at ingredient waste, creatively reinventing packaging in creative ways to reduce, reuse and recycle.
- Inventive Business Models. Companies are running mission-driven brands that work for a higher purpose.
The natural and organic industry is shaping the future of consumer’s diets and lifestyle. Fermented food products – which are full of functional nutrition and science-backed microbiome benefits – are a major part in the industry’s growth.
The cider market will grow at a CAGR of 3.5% until 2022. Driving the market is the increasing number of pubs and bars. Women are key to the industry, as they prefer cider’s sweeter, fruity taste.
Read more (Market Research Future)