Tequila sales last year were 60 million gallons, 800% higher than two decades ago. This agave-based spirit has become so popular that distillers are “selling it at the price of gold.” What caused the boom? Celebrity endorsements.
From George Clooney to Arnold Schwarzenegger, LeBron James to Nick Jonas and Dwayne “The Rock” Johnson to Kendall Jenner, celebrities have made billions off their tequila brands.
A Los Angeles Times article highlights the pros (a booming local economy in Mexico, tequila being introduced to more people) and the cons (environmental concerns, agave plants harvested too young, diverse crop fields and forests turned into monocultures of agave, foreigners taking over a traditional drink) of this growth. The article continues:
“Pre-Hispanic Indigenous groups in Mexico had been fermenting agave into a viscous alcoholic drink known as pulque for centuries when Spanish conquistadors arrived in the 16th century and first distilled tequila. It has since evolved into an $10.8-billion-a-year industry.”
Read more (Los Angeles Times)
More specialty coffee producers are developing unique approaches to their coffee bean fermentation, isolating native microorganisms to create a flavorful cup or working closely with rural farmers to utilize fermentation control techniques on small-scale operations.
“Practically all the coffee we drink has been fermented in one way or another. But there is huge room for improvement, innovation and development in the realm of coffee fermentation,” says Mario Fernández, PhD, Technical Officer with the Specialty Coffee Association (SCA). The SCA partnered with The Fermentation Association for the webinar The State of the Art in Coffee Fermentation.
Fernández continues: “Coffee is produced by millions of small coffee producers around the tropics that have very little capital to invest in fermentation equipment. Oftentimes, the price is too low for them to add fermentation controls as part of the cost equation. Therefore, for perhaps 99.9% of coffee in the world, it undergoes wild fermentation, in which the microbes grow on the mass of mucilage in a wild fashion and the coffee producer only controls certain parameters, such as the length of the fermentation.”
Two industry experts on the forefront of coffee fermentation technique and technology joined Fernández — Felipe Ospina, CEO of Colors of Nature Group (multinational specialty coffee trader) and Rubén Sorto, CEO of BioFortune Group (a coffee, upcycled and food ingredient manufacturer based in Honduras).
Post Harvest Processing Technology
Sorto is adapting fermentation technology to coffee, mapping the microbiota of the bacteria and yeasts that are present at Biofortune Group’s farms.
“We realized that fermentation was one of the key aspects of the coffee production that hadn’t been addressed,” Sorto said, noting fermentation is controlled in industries like dairy, wine, beer and bread but not in coffee. “We learned that our soil, our water, our coffee trees, our leaves, our [coffee] cherries, had a large compendium of bacteria and yeast that were involved in the posterior fermentation process…some of the yeasts and bacteria were definitely beneficial and were urgently needed during the fermentation but some of them were not.”
To maximize flavor, they focus on that complex array of bacteria and yeasts, preferably indigenous to the countries of origin. These microorganisms thrive in their local environment, reflecting altitude and temperature. To control the fermentation of those bacteria and yeasts, Biofortune reduces the variables, including monitoring pH levels, alcohol content and container contaminants.
“If you are able to control the fermentation, you are also able to offer a higher-quality product, a consistent quality product…and that’s what the market is looking for, consistent quality in a cup,” Sorto says.
Educating Coffee Farmers
Ospina, meanwhile, is researching fermentation techniques accessible to small-holder coffee producers and training them. The goal is for them to understand the role of each microorganism, discover how to use it in fermentation, then scale that knowledge to small-scale operations, so they can produce incredible coffees.
At La Cereza Research Center, the Colors of Nature facility in southern Colombia, they are experimenting with fermentation processes. Some alcoholic fermentations result in coffees that produce coffees that taste of whiskey, cognac, champagne, sangria or even beer. Lactic fermentations might produce coffees with flavors of banana, mango, papaya, grapefruit or even cacao. “This is showing us the potential is humongous,” Ospina says.
“Wild fermentation is the ultimate expression of the terroir and it’s very important for us because the terroir produces unique coffees,” Ospina says. “The thing is, we don’t understand wild fermentation yet, but I’m very against demonizing wild fermentation. Why? Because we have seen hundreds and hundreds of outstanding, amazing coffees from all over the world that have been produced with wild fermentation.”
There are challenges. Food safety is a big concern. Ospina teaches the use of disposable gloves at the farm level to prevent contaminants, and to put a new plastic bag in the bioreactor for each batch of beans to avoid cross-contamination.
The cost of implementing fermentation technology can be high. Sorto recommends to start by buying each farmer a pocket pH meter and a refractometer to closely monitor the fermentation.
“Translating science and technology to small farmers with very little investment will help them increase the possibility of a higher income because if you are not able to control fermentation, you are risking the effort of a one year harvest,” Sorto advises.
In America, where 40% of the population identifies as nonwhite, why do grocery stores still have an ethnic aisle? The outdated aisle initially began after World War II as a way for soldiers to buy the food they ate while in Italy, Germany or Japan. But the European foods, like pasta sauces and sauerkraut, eventually became integrated with the rest of the store, while foods from BIPOC countries stayed put.
Heads of ethnic food brands and grocery chains have been pushing for a change, but it’s been a hard sell. Doing away with the aisle is a layered problem — and still not the most popular approach with food professionals.
“Several food purveyors of colors see the aisle as a necessary evil — a way to introduce their products to shoppers who may be unfamiliar with, say, Indian food — though a barrier to bigger success,” reads an article in The New York Times.
Some ethnic brands come to store buyers with little capital to get their products on the shelf, so the only spot for them is on the ethnic aisle. They will never break out unless they’re acquired by a larger company. Larger corporations, like Pepsi or Nestlé, can afford to pay stores to put their products on shelves with prime product placement. And large ethnic brands (like Goya beans and Maruchan ramen) are placed on both ethnic aisles and their respective traditional product section because they’re considered broadly recognized.
But many products with international flavors made by nonwhite brands are not placed on the ethnic shelf. The Times shares the story of Toyin Kolawole, who runs the African ingredients brand Iya Foods. Kolawole tried to get her cassava flour into the flour aisle with a Midwestern retailer with no success. But when cassava flour began trending as a substitute for traditional flour, bigger companies launched their own cassava brands — which were put in the flour aisle.
On the flip side, other food professionals note that consumers turn to the ethic aisle in search of international flavors. Customers like the convenience. There is a fear that unique ingredients (like tamarind or pomegranate molasses) without a clear spot in a grocery store would get lost in a conventional aisle. And, even worse for some brands, integration in an American grocery store means being “divorced from its cultural background.”
Read more (The New York Times)
Tea consumption globally is increasing. But consumers don’t want a cheap, poor quality tea bag. They’re buying premium teas — and increasingly, dark, fermented teas.
“What’s trending right now seems to be authentic tea, tea that has great flavor, more closely married to the terroir. People are beginning to understand that it’s just fine to have tea. You don’t have to have coloring in it, you don’t have to have a lot of bits and pieces of fruit and flowers, there’s a genuine benefit to just understanding the terroir and keeping it simple,” says Dan Bolton, the founder, editor and publisher of Tea Journey. Bolton and two tea experts discussed two lesser-known fermented tea varieties in the TFA webinar Beyond Kombucha: Pu’erh, Jun and Dark Tea. “Tea just isn’t as good as it could be, without fermentation.”
A new study on tea demonstrates how important fermentation is to tea quality, Bolton says. Researchers from the Anhui Agricultural University in China recently studied the effect of surface microbiomes on the quality of black tea. The results found microbial fermentation in non-sterilized control tea samples produced complex compounds and more flavorful teas than with sterilized tea leaves. The results were published in the Journal of Agricultural and Food Chemistry.
“It’s a remarkable finding because, certainly for the last century or so, there’s been a lot of discussion about whether fermentation plays a role in the production and processing of tea,” Bolton says. The study proves “black tea is actually a result of both fermentation and oxidation.”
Jeff Fuchs — author, Himalayan explorer and co-founder of Jalam Teas — shared details of pu’erh tea. Pu’erh is a tea style from a strain of camellia leaf cultivated and produced in the Yunnan province. Fuchs spent over a decade living in there and is the only Westerner to have traveled the Tea Horse Road through Sichuan, Yunnan and Tibet.
“Pu’erh is a tea that certainly I think it’s been deliberately mystified to some degree,” Fuchs says. “It’s interesting that you have this very simple, raw material green tea that is now arguably one of the great boutique commodities.”
Fuchs stresses consumers need to research tea sourcing. Where is the tea coming from? How was it stored? Who stored it? Older tea cakes are being sold for large amounts of money, but can have questionable provenance.
“Young teas I think are making a big assertion in the tea world right now because they represent a closer line to the terroir, a closer line to the origin point,” he says, adding dark teas are becoming more popular in North America. He sees more bartenders experimenting with dark teas, playing with flavor compounds. “I think dark teas will come into the sway more and they’ll remain.”
Jun is another tea style making waves in the fermented beverage market. It is a type of kombucha, but the base is green tea and honey instead of black tea and sugar. Brendan McGill shared his experience making jun — he is a chef and James Beard nominee; he owns the Hitchcock Restaurant Group in Seattle and the newly-launched Junbug Kombucha.
“Jun is a very special style of kombucha,” McGill says. “It’s shrouded in mystery, where these cultures originated. What we do know is how they’ve been developed and manipulated in fairly recent history. One of the joys I’ve had with this is just being extremely creative because i found that while the fermentation isn’t necessarily a delicate process, it has allowed us to modify and use a lot of different inputs that it’s actually a pretty robust fermentation process.”
McGill began making kombucha over a decade ago, as a replacement for beer and wine. He liked jun for its similar flavor to alcohol, the additional bioactive compounds that create a more nutritious drink and it’s made with honey instead of added sugar.
Junbug Kombucha uses filtered water, organic green tea, wild honey and, of course, a SCOBY. In the secondary fermentation, fresh herbs, berries and even mushrooms are added. Junbug flavors include Chaga Root Beer, Chili Raspberry and Maui Mana.
The Fermentation Association recently surveyed our community to better understand who has engaged with us, how their businesses are doing and to gauge the impact of the pandemic. We want to share the very interesting results.
A few qualifying comments first, however. This survey should not be interpreted as producing a profile of the fermented industry — it reached only those with whom we have connected since TFA was launched in 2017. This group is heavily weighted to Food and Beverage Producers and those in the Science, Health and Research fields. And, even as we note surprisingly high response rates below, the quantities of responses to certain questions were small and would not meet standard analytical thresholds of statistical significance. So please treat the comments and conclusions that follow as directional rather than definitive.
We received 450 full or partial responses — nearly twice the number we had expected and what we would have considered “good.” Not surprisingly, the bulk of these were from Food and Beverage Producers — just under half — with a strong representation of the Science, Health and Research community, a little less than one-fifth. The balance of the respondents were classified as Supplier or Service Provider (9%); Chef/Writer/Educator (8%); Retailer/Distributor/Broker (3%); Food Service/Hospitality (3%); or fell into a miscellaneous Other category (12%).
We will be presenting further analyses and follow-up discussions in the coming weeks. This article focuses on the two largest segments: first, Food & Beverage Producers; then, Science, Health, and Research.
FOOD & BEVERAGE PRODUCERS
- We found that over 80% of our Producers are small businesses with 25 or fewer employees, and 65% had 2020 sales of less than $500,000. That said, over 11% of the companies represented are toward the other end of the spectrum, with 100 or more on staff, and 13% with revenue of over $10 million.
- We reach a lot of Owners/Founders/Senior Executives, over 70% of respondents. The next most well-represented functional areas are Operations and Product Development.
- These businesses are spread across the developmental timeline — a little over 40% are selling at the local level, or earlier in their growth cycle (selling at farmers market or still in testing/pre-launch mode). Yet 45% are selling regionally, nationally or internationally.
- Retail is still the largest (45%) channel of sale for these producers, but Direct-to-Consumer (DTC) is just slightly behind at 40%, with the remaining 15% through Food Service/Hospitality.
- Sauerkraut/Kimchi, Pickles, Condiments/Sauces and Kombucha were the most frequently-listed product categories, each mentioned by more than 20% of the producers. Kefir, Vinegar/Shrubs, Wine and Miso also were mentioned often. Of the 25 product categories listed, we had respondents involved in every one — except poor, slimy, and unrepresented natto.
- Nearly half of producers selling at retail and/or DTC had sales gains in 2020 and another third maintained their revenues. Not surprisingly, nearly 40% of producers selling into food service saw sales take a hit — only 15% reported gains.
- The Covid-19 pandemic caused a host of issues for producers, though their prevalence seemed to vary depending on the size of the company. Among larger producers, over 90% had issues meeting demand, with the primary problems being shortages of raw materials, packaging and staff, as well as distribution delays. Fewer of the small producers reported issues, but their problems fell into the same categories. Financial difficulties were cited more often among small producers.
- Nearly 30% of producers took advantage of the government’s Payroll Protection Plan.
- This year appears to continue or build on the sales levels achieved in 2020 for most producers. Nearly 40% report first quarter 2021 sales at the same level as last year, and nearly 50% reported further increases. And producers are optimistic about continuing these trends, with a mere 5% anticipating sales declines.
- Most (nearly two-thirds) of responding producers did not participate in tradeshows and conferences, and therefore felt no business impact from show cancellations in 2020.
- The producers that did participate in events favored the Natural Products Expos, Fancy Food Shows and IFT Show. While some felt that they lost short-terms sales and their future growth was hurt by the shows being cancelled, nearly 30% noted that they saved money and time by not attending. Some of those savings were reinvested in increased marketing, DTC sales and virtual events.
- Interestingly, half of the producers plan to continue their involvement as events resume at the same level as before the pandemic, and fully one-third plan to increase activity.
- Looking ahead, producers see numerous challenges on the horizon, led by a need for expanded distribution. They expect many of the recent shortages to continue to challenge, compounded by production, facility and financial constraints. While Covid protocols and food safety concerns persist, they are joined by the need for product development, e-commerce skills, and consumer marketing
- The clearly-articulated top priority for producers is a better-educated consumer. When asked what would foster increased consumption of fermented foods and beverages, the top item for nearly 70% is consumer education as to the nature and benefits of fermentation. The next highest priorities all support this same goal — more research into health impact (+40%), greater familiarity with flavors of fermentation (+40%) and more exposure at retail (+30%).
SCIENCE, HEALTH & RESEARCH
- The bulk — nearly 75% — of these respondents work in an academic environment, with very small clusters in government and medical/health organizations. It’s a well-educated group, with over half holding doctorates, plus another quarter with Master’s degrees. Roles are split quite evenly into thirds — professors, science/technical support and students/postdocs.
- Over 60% of these respondents are looking into connections between fermentation and health; roughly half are specifically focused on gut health and the human microbiome. Overall, three-quarters are currently researching fermentation and fermented products. Their activities, though, span the full spectrum of product categories. All the key categories among our producers — Sauerkraut/Kimchi, Pickles, Condiments/Sauces, Kombucha and Kefir — were well-represented in research. But they were joined by meaningful work across the board — Yogurt, Beer, Cheese, Alternative Proteins, Koji, Wine, Sourdough, Tempeh, Tea — even Natto!
- Slightly more than a third of this group is involved with fermented alternative proteins – an important, emerging category.
- Funding for research showed more declines (30% of respondents) than gains (under 15%) over the last year. But half of our sample expects funding to increase in the coming 12-18 month.
- Our Science, Health & Research respondents were split in how they viewed the interest in fermentation research — 60% felt the focus was increasing, but the topic was not yet a top priority. Yet a third saw fermentation as a hot topic, with more emphasis and activity than ever.
- Respondents in this group shared the views of producers that the key activities that would drive increased consumption of fermented products are:
- Consumer education about fermentation
- More research into health benefits
- Greater consumer familiarity with fermented flavors
Forty years after the U.S. Food and Drug Administration (FDA) released its first legal definition of yogurt, the government agency has now updated that standard of identity. But, according to the International Dairy Foods Association (IDFA), this new final rule is so outdated and out-of-touch with yogurt makers that popular products could be removed from grocery store shelves. The IDFA, which represents the nation’s dairy manufacturing industry, submitted an 87-page formal objection to the FDA.
“The result is a yogurt standard that is woefully behind the times and doesn’t match the reality of today’s food processing environment or the expectations of consumers,” says Dr. Joseph Scimeca, senior vice president of IDFA’s Regulatory and Scientific Affairs.
The IDFA is particularly concerned that the FDA crafted its final rule using comments made when the agency first pitched the guideline 12 years ago. Scimeca continues: “the final rule is already out of date before it takes effect…as if technology has not progressed or as if the yogurt making process itself has been trapped in amber like a prehistoric fossil.”
The revised standard does not include IDFA’s recommended revisions.
Read more (IDFA)
Restaurants have been under tremendous economic pressure, suffering from business losses during the Covid-19 pandemic. And there’s now a staffing shortage, as long hours and low pay have driven many away from the industry.
Bloomberg columnist Bobby Ghosh explored how restaurant dining may change in an Instagram live interview with Rene Redzepi, owner and co-owner of Noma, Copenhagen’s two-Michelin star restaurant world-renowned for its experimental fermentation lab. Pandemic restrictions shut down Noma twice, forcing Redzepi to create additional revenue streams outside the traditional dining room.
Below are highlights from Ghosh’s interview with Redzepi.
Ghosh: What did you learn about how people were feeling about returning to restaurants?
Redzepi: Restaurants, you don’t need them to stay alive but you need them to feel alive. That was very, very clear, that people were ready to go out. You know they say it’s the catch-up effect, and that definitely happened here in Copenhagen. People were everywhere, they were in piles to get a bite to sit down, have a glass of wine and meet other people.
Ghosh: When you began to think about reopening the proper dining space and planning your menu for the reopening, did you have any particular thoughts or concerns about whether people’s habits in restaurant dining might have changed in the course of the year that they were all locked up?
Redzepi: Yeah, so we went through the first lockdown, opened up, we were open for about five months and then it all came back and we had to close (again during the second lockdown). On the second lockdown, we were shut for six months and, in that time, we were very worried about everything, I mean we still are, but I guess we’re a little less worried now than before because we’re finally open again. We did think “Would people even sit for hours in a restaurant? What is it that everyone wants?” Besides that, people in Denmark, they started really cooking at home again. Takeaway offerings had become quite common, even from some of the best restaurants, something that would be considered completely impossible five years ago. If you had takeaway as a fine dining establishment, you sort of sold out in a way and that was starting to happen.
But I decided with myself, and that was a personal decision, is that in my life I need this creativity, I need to have guests, I need to work on a menu on a daily basis, so during the lockdown I went to work every day in the kitchen as if we were going to open the following day. We actually made two full menus and one of them will never be served because we ended up being closed throughout it. And then we said “OK, let’s just open up and see what happens, will people still want to come out?” and we opened up our reservations knowing that we would cater only to 100% local crowd and it’s gone really well, really really well.
Ghosh: The thrill of being in a nice restaurant and being able to talk to people and enjoy a meal is incomparable um and I do appreciate the value of fun after the year and a half that we’ve all had. Can you give us an example of a dish that you have in your menu now that reflects this attitude of fun, the surprise.
Redzepi: Swedish saffron believe it or not, it’s really, really strong and tastes amazing. We make this fudge with it and we found out that you can actually use the sort of the cutting of walnut as a wig for candles because the oil content in the walnut makes it flammable. And so we basically shaped or molded this little toffee into a candle. It sounds complicated but it’s quite easy to do when it’s hot and then we put this walnut light into it and it comes to the table when they’re drinking coffee and people think it’s you know for coziness and then as it burns out people are then instructed to eat it that’s a that’s a moment where that’s fun you know it’s creativity, it’s delicious it surprises people and it just really makes it makes a difference to people you can feel that they’ve been needing something like that.
Ghosh: What have you learned that you didn’t already know about restaurant economics over the past year that now factors in your thinking about what Noma is and what Noma needs to be in the future.
Redzepi: Oh man, you’re hitting something that we’ve been talking about for the past two years because, particularly in the last year-and-a-half, restaurant economics, they’re terrible. We’ve had 18 years of operation and we’ve had an average profit of 3%. It’s just enough to keep us running and keep painting the house, so during this pandemic we did think to ourselves “Are we going to continue like this for another 18 years, where we don’t have any money to change anything, even if we want it?” You know we’re going to have to find different ways of operating so that we can have a different economics in it. We have to figure out a way if we want to be here for another 18 years because you know it won’t continue like this. So we have definitely thought of many many things and recently we launched this thing that we call Noma Projects. Noma Projects is a sort of a platform to launch a myriad of things, it’s a for-profit company, but we only want to attack projects that also connect to some sort of a worldly issue, and the first project one is is a vegan and a vegetarian garum sauce that you use as a flavoring to add umami to your vegetarian and vegan cooking. It’s a way to help people eat more vegetarian so that’s project one, that’s something that we worked on almost almost since the first lockdown that happened to us we were like we need to step into this.
Ghosh: About six months ago, I did a piece about restaurant economics and the pandemic. I talked to your friend David Chang of Momofuku. We’re saying that we have to figure out more ways to find revenues outside of the dining room. You know, can we get 50% of the revenue from outside of the dining room where the margins are larger to sustain, to underwrite the amazing creativity that goes on in your kitchens? Is that possible? Have consumer tastes or consumer behaviors now changed in a way that will allow that kind of thing?
Redzepi: I think what happened during the pandemic is that it’s been considered more OK for restaurants of say Momofuku caliber or Noma to actually think of ways to put better economics into the system. That has opened a new door and for us, we’re grabbing that opportunity, we need to, definitely. Our industry needs to, in general. It’s an industry that’s under copious amounts of pressure, we deal with poor profit margins, low incomes, people are overworked, they’re underpaid, there’s bad management and a lot of it is a result of there’s simply no money in the industry, people can’t afford to do maneuver any new way they want, and we don’t have any business training either. It’s very interesting what’s going on. I think a lot of creativity is going to come out of restaurants in the next couple of years.
Ghosh: Now in addition to being a chef, you’re a thinker in your line of work. Through MAD Academy, which used to be anyway your annual gathering of of great chefs from around the world, you’ve spent a lot of time thinking about your industry and the future of your industry. I imagine that during the course of the past year, year-and-a-half you’ve had many conversations with the kinds of people who would previously have come to that conference. What are some of the common themes, the common challenges for fine dining establishments?
Redzepi: I think in food in general, the most common problem, and I think it’s going to continue for a while, is that there’s a gigantic staff shortage right now. I think in the pandemic, a lot of people have had an opportunity to rethink their life and say “OK, am I in this industry for the next 20 years or is this a moment for me now to start studying or become a farmer or something else.” That is really the biggest issue that we have right now, there’s no question in my mind. This is something that at MAD we’ve been discussing for almost a decade. If we’re not able to help transform (and this includes myself by the way I’ve spoken about this many times) this gigantic lack of leadership that we face as an industry where we have a poor ability to actually just manage ourselves, manage our restaurants and be supportive of people, that will be the first step that needs to happen which is slowly happening. But then providing better pay and better work hours, that are related to economics. I see our industry being far from that, unless we figure out a way to either charge more that there’s more value towards foods and people that work in the industry or we find other revenue streams. Those are the big, big questions that we are dealing with at MAD. At Noma, I deal with this as a employer myself, how to actually be an inspiration, but how to also provide for staff that are having children, and how can we have everyone stay here for 40 years in this industry? That’s really hard questions.
Noma is coming into the home kitchen.
The fermentation-focused restaurant, lauded as one of the top restaurants in the world, is selling its first line of packaged products. Two garums — vegan Smoked Mushroom and vegetarian Sweet Rice and Egg — will soon be available to ship internationally through the brand’s website, Noma Projects.
“It’s a space for us to channel our knowledge, our craft and experimentation into a new endeavor,” says René Redzepi, chef and co-owner of the Copenhagen-based restaurant.
Redzepi shared details of the launch in a video on the site. Noma Projects will include pantry products and community-based initiatives, “a way for us to address issues we care about through the lens of food.”
Noma’s Pantry Staples
The garums are Noma’s “take on a 1,000-year-old recipe that we’ve been developing over the past two decades.” Redzepi says the “potent, umami-based sauces” have been the “key to our success at Noma in our vegetarian and vegan menus.
He hopes the garums will help more people cook plant-based meals, announcing in the video: “We want to help you bring more vegetables into your everyday cooking.” The garums provide the flavor of meat and fish without the animal. The website description notes: “Shifting towards a more plant-based diet is the easiest way for an individual to help the environment. We hope these garums will do the same for you that they’ve done for us, help inspire and create more delicious plant-based meals when you cook at home.”
These products were developed in Noma’s Fermentation Lab, where dozens of pantry staples were tested before landing on the garums. A garum is the “concentrated essence of its main ingredient” with a strong umami flavor, and Redzepi describes it to the WSJ. Magazine (the luxury magazine published by Wall Street Journal): “It has the potency of a soy sauce, except it tastes of what it is.” Both are brewed with koji rice, what Redzepi calls the “mother fungus.”
The garums are currently fermenting and will be ready for shipping in the fall or winter. The expected price point is $20-$35 for a bottle.
And more garums are in the works. Noma Fermentation Lab director, Jason Ignacio White, says a roasted chicken wing garum is next.
“It tastes like super chicken stock with umami,” White tells WSJ. Magazine, ”so it’s a familiar flavor, but there’s something about it that you can’t really put your finger on, that makes your tongue dance.”
Despite Noma’s expensive tabs — the 20-course tasting menu costs 2,800 Danish kroner (or around $447), and the wine pairing is another 1,800 Danish kroner (or around $287) — in the 18 years since it opened, the restaurant has hovered at only a 3% profit margin. Redzepi hopes Noma Projects will make more money. While it is “a family-run garage project,” its goal is to reach a million customers.
Like many restaurants around the world, Noma shut down during the pandemic. They reopened as a burger and wine bar in June 2020, and the walk-up, outdoor dining experience was such a success that it became a permanent restaurant, POPL.
Noma resumed regular operations on June 1, 2021. The pandemic closure allowed Redzepi and his team to finally tackle the retail brand, something he said they had debated for years.
Hoping to spur interest in traditional sake, a Japanese producer has published a picture book What is Sake? that takes readers on a tour of their sake facility. Suigei Brewing Co., based in the western city of Kochi, uses the book to detail how sake is made. The bilingual book includes English translations.
The president of Suigei Brewing Co., Hirokuni Okura, notes Japan’s sake culture is gradually being forgotten. He said he desires to “have both adults and children view sake, an element of Japanese food culture, as something close to them.”
The book’s illustrator, Misae Nagai, featured all 53 employees of Suigei in her charming illustrations.
Read more (The Mainichi)
Running a food or drink business is challenging in today’s market — there’s increasing competition, fast-paced trends and challenging access to retailers. If you run a fermentation-based business with a long production cycle, those market forces are compounded.
“A lot of businesses in this sector are in it because of the passion, they love what they’re doing, and sometimes the finances can feel very mysterious, there’s an aversion to dealing with it, and they aren’t taking the time to really look and understand the numbers,” says Maria Pearman, a principal with Perkins & Co., Portland, OR-based professionals in food and beverage finance and accounting. She shared her expertise during a TFA webinar, Best Practices for Cash Flow Management.
“Cash flow forecasting, it’s not rocket science. It’s not hard stuff. It is just very foreign to a lot of people and they avoid it,” Pearman says.
Matt Hately, a TFA Advisory Board member who moderated the webinar, agreed. Hately is an investor and advisor in fermented food and beverage brands.
“Managing cash…I would argue that it’s even more of a challenge for fermentation companies where your production cycles aren’t instant, they might take a week or three weeks or six weeks and, when you’re starting, your suppliers are probably demanding to be paid up front, your customers want 30-day terms,” he says .
Pearman, author of the book Small Brewery Finance, shared an overview on cash management. Fermentation businesses need to closely manage their cash conversion cycle as production cycles lengthen. The cash flow conversion cycle is the period between when money is spent to purchase ingredients to when payment is received from the sale of the final product.
Fermented products — which can take anywhere from a few weeks to even years to ferment — have a long cycle.
Pearman shared the example of a whisky distiller. After fermentation, whisky ages in barrels for years. All the while — before the product is ever sold — there are ongoing overhead costs for the distillery, like rent, utilities and staff.
“The rhythm of your cash flow is not going to match the rhythm of your income, and cash flow management is about bridging that gap,” Pearman says.
Cash Flow Forecasting
There are three primary financial reports that make up a business’ financial statements:
- Balance sheet (snapshot of the status of a company at a moment in time)
- Income statement (performance over a period of time)
- Statements of cash flows (sources and uses of cash over a period of time)
Often overlooked is cash flow forecasting, the expected inflow and outflow of cash over future periods.
The cash flow forecast, Pearman notes, is not standard in business financial records. It is usually kept outside of an accounting system as it’s information management generally uses. It’s important because a business can’t rely on just their income statement or bank balance to manage cash flow — labor, overhead and cost of inventory must be part of the expenses. She compared managing cash without a cash flow forecast to “building a house without a hammer.”
“One of the biggest pitfalls that I see with businesses is chasing profitability instead of cash flow,” Pearman says. “It is completely understandable because we’re all hardwired to try to do things as efficiently as we can, get the best deal, but truly in the early stages of a company, it’s way more important to manage cash flow than profitability.”
“It’s a high cost for bringing a new product to market. Cash flow issues are going to be prevalent regardless of where you are in your life cycle, and the best way to guard against cash issues is to have a cash flow forecast.”
During the webinar, Pearman shared a detailed look at a sample business’ financial workbook. She noted that it seems arduous to manage that level of detail but, without it, “you’re really flying blind.”
“It will force you to be highly in tune with the rhythms of your business,” she continues. “It will force you to learn it at such a level that it starts to become innate knowledge, you know it like the back of your hand and there’s no shortcut to that.”