The kombucha industry is exploding – sales were up 21 percent to $728.8 million last year. Kombucha and non-alcoholic fermented beverages are now the third largest beverage category, representing 10 percent of total refreshment beverage sales.
Distribution is high at conventional, natural and convenience stores. But velocities (sales) are declining.
“A word of caution – there’s going to be a reckoning,” said Bobbi Leahy, director of sales at SPINS, a natural products market research group. “All these retailers are taking all these lovely kombuchas … they will be evaluating you, probably far soon than you think is warranted. There will be some slashing going on.”
Leahy spoke at KombuchaKon, the Kombucha Brewers International (KBI) annual trade conference in Long Beach. The year’s KombuchaKon was the industry’s largest since the first conference six years ago, with 424 attendees from 17 countries.
“I applaud you all on the growth. I think that’s wonderful,” Leahy said. But “I would be ready with some materials to go in and defend your spaces.”
In her presentation on the kombucha market analysis and future trends, Leahy emphasized that refrigerated beverage shelves are expensive retail space. She shared advice with kombucha brands on how to survive the current high distribution wave. The SPINS analysis is based off 52 weeks of sales ending in February 2019. Her tips:
- Prepare with Sales Materials. If kombucha sales can’t keep up with distribution, retailers will have to answer to their higher-ups. Why is there so much kombucha on the shelf that isn’t selling? Leahy warned brands to be the ones educating retailers, advising brands to share data points and score cards. She added: “I encourage you to go and get ahead of that, be the one talking that message. You tell them what the right set is, you tell them what they should do, you know this industry. If they’re overstocked on something, then let them know. They’re looking to you to be the experts.”
- Conventional supermarkets reign. The bulk of kombucha and fermented beverage sales are coming from conventional supermarkets. “If you succeed in the conventional channel, you’ll have success overall because they represent 70 percent of sales,” Leahy said.
- Don’t ignore convenience stores. Convenience store (like 7-11 and gas stations) sales of kombucha and fermented beverage sales are growing 55 percent. “You have to make it a task to go after convenience,” Leahy noted. “You probably wouldn’t have said ‘That’s my low-hanging fruit, I’m going to go in there.’ But they’re certainly getting the message now … It’s certainly worth having a plan to go after convenience.”
- Craft different sales messages for each channel. Don’t go in to retailers with the same message. Between conventional, convenience, natural and specialty stores, each channel will care about different things.
- Know region’s sales trends. The west coast – especially California – has high kombucha sales. The south central, mid-south and Great Lakes regions are under-indexing in kombucha sales. Leahy pointed out that the west is a ready audience and a great spot to experiment with new flavors. The south and Great Lakes regions, though, need an education focus. Demos are a great idea in the area.
- Highlight brand’s best attributes. Boast about characteristics beyond the label. Features like: clean label, sustainability, brand mission, wellness goals, social impact and great ingredient sources.
- Top selling flavors are solid. Ginger and berry are the two top flavors across all channels. The “fruit – other” is also a top selling flavor and growing (135 percent), which is defined as unique fruit flavors like watermelon, guava and melon. The past year, there has been the strongest growth in flavors: apple (172 percent), grapefruit (155 percent), pomegranate (104 percent) and orange (98 percent).
- Tread lightly with unique flavors. Leahy pointed out, if a unique flavor only appeals to a small audience, a conventional retailer will notice only a small number of customers are buying it. “That small and that low is going to be kind of a perfect storm,” she said. “You really want to be careful.”
- Smaller size bottles sell best. The 14- to 17-ounce size kombucha make up the majority of sales.
- Start sales promotions. Coupons, mailers and sales are great options to get products off shelves.
- Use your social network. Let people know which stores you’re at.
- Maintain a good store locator. Brand’s websites should feature a good store locator detailing which stores carry which flavors of kombucha.
- Top kombucha brands dominate the market. GT Kombucha, Kevita, Health Ade, Humm Kombucha and Brew Dr. account for 88 percent of kombucha sales at conventional retailers and 89 percent of kombucha sales at convenience stores. GT Kombucha, Kevita, Health Ade and Brew Dr. account for 77 percent of kombucha sales at natural stores and 82 percent of kombucha sales at specialty gourmet stores. Those same top brands likely will not change, Leahy noted.
- Know beverage trends. “The trends you are seeing in kombucha are special and unique,” Leahy said. “…as you’re sitting across a buyer or a category manager or retailer, you want to be well-versed in what other beverages are on the shelf and which ones they’re probably going to protect.”
- Natural beverages are contributing more to the growth of the refreshment beverage category than non-natural. The conventional, shelf-stable beverages (like Coke and Pepsi products) account for 63 percent of the refreshment beverage industry, but only 53 percent of growth. Diet soda is especially losing favor among consumers. Specialty and wellness beverages (like energy drinks and Gatorade) make up 29 percent of sales and 35 percent of growth, especially driven by energy drinks. Natural drinks (like kombucha and La Croix) make up 8 percent of sales, but natural is driving 13 percent of growth.
- Of the natural beverage subcategories, shelf-stable performance beverages (like Body Armor) are experiencing the biggest growth at 87 percent. Declining categories include shelf-stable coconut water (-12 percent) and juices (-3 percent).
- Emphasize growth of natural products industry. Natural products are no longer a niche market. The natural products industry is estimated to reach $140 billion in sales in 2019. In 2003, natural products were a $52 billion industry.
When SPINS began tracking kombucha sales years ago, Leahy noted kombucha was “barely a blip on the map.” Current Kombucha sales numbers are also likely higher than noted – major retailers Costco and Whole Foods do not share sales data with SPINS.
“In a way, it’s a good problem to have – you can’t sell if you’re not on the shelf,” Leahy said. “ou’re on the shelf – now it’s time to sell.”
KombuchaKon 2019 starts today in Long Beach! The 6th annual conference by Kombucha Brewers International is the association’s largest-ever conference. Kombucha is a rapidly growing beverage category, projected to grow at a CAGR of 13% to $3.5 billion in sales by 2025. For more information, check out KBI.
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)
Fermented foods are “a ‘new’ health trend with roots dating back to 6000 B.C. in civilizations all over the world” writes nutritionist Danielle Mein from the University of Maryland Medical System in a column for the Baltimore Sun. The amount of probiotics in a food is determined by the length of fermentation, Mein adds. True fermented foods, she argues, “must be refrigerated and unpasteurized” — what do you think, would you still call a product fermented if it was shelf stable?
Read more (The Baltimore Sun)
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.
We’re at Natural Products Expo West this week, checking out the innovations in the natural food industry and learning about the future of food. Here are nine trends from Expo West:
1. Sugar Vilified. Natural products are axing white sugar, using low- or no-calorie sweeteners like stevia and monk fruit.
2. Healthy Fats. The fat-free era is gone; today’s products include full-fat ingredients, like ghee and avocado oil.
3. Eat More Plants. Natural brands ate using more plant-based products with fruits and vegetables instead of meat.
4. Healthy Microbiome. Gut health is big, and natural products are focusing on probiotics and prebiotics.
5. Endocannabinoid System. Brands are experimenting with CBD, hemp and the encocannabinoid system.
6. Nutrition Meets Convenience. Products are adding extra nutritional value – and focusing on grab-and-go convenience.
7. Responsible Sourcing. Transparency is vital to consumers, and brands are sourcing quality ingredients and trade relationships.
8. Responsible Packaging. Single-use plastic packaging is out; products today are put in reusable and compostable packaging.
9. Updating Stale Categories. The pantry is getting an overhaul with better ingredients for classic items.
Read more (New Hope Network)
When Katherine Harmon Courage began investigating the microbiome 10 years ago as a writer for Scientific American, gut health was barely a blip on the public’s radar. It’s hard to believe today. You can’t walk by a grocery store shelf without reading dozens of labels advertising probiotic health benefits.
Today, gut health is at the forefront of the food industry. The probiotics supplement market is estimated to grow at a CAGR of 9.7 percent in the next seven years. And the market for probiotic-rich fermented foods is expected to grow at a CAGR of 4.98 percent in the next five years.
Gut health research from scientists and dieticians surged in the past decade. Courage was fascinated. “Looking at the food around the world and the connection between our ancient diet and microbes, that is really, really exciting,” she says. Courage spent a year travelling the world, exploring the traditional, gut-friendly cuisine of different cultures. She paired her culinary investigation with modern science into an engaging book: “Cultured: How Ancient Foods Can Feed Our Microbiome.”
Below, highlights from a Q&A with Courage on her new book, and her findings on the fermentation industry’s role in American’s evolving diets.
Q: You have been covering the microbiome since 2009. How has the scientific research progressed?
When I started covering it, there were small studies here and there, a lot from the Human Microbiome Project. Researchers were taking a census at the time, that we share our body with trillions of organisms. It was this niche area that I found super fascinating, but no one was talking about it much.
In the past decade, so much has changed. Science has evolved so much to learn about the connection between our health and our microbiome. We were raised to think germs are bad, bugs are bad, but we live with these commensal organisms.
Q: The food industry is taking notice of this research. What do you think of so many food products marketed with a gut health focus?
Talking to researchers, it’s interesting to see their perspective as scientists. They see the extreme of people thinking probiotics and microbes that are a marketing ploy to other people thinking probiotics and microbes will cure every health issue under the sun.
Microbiologists look at this critically. We’ve seen positive impacts on our health from it, but it won’t solve everything. We’re just at the beginning of understanding this relationship between these amazing and delicious fermented foods and our health.
Q: What’s the biggest misconception about microbes and our microbiome?
One of the misconceptions — and the one I had when I was thinking about this book — was the notion that if we eat something labeled probiotic, like a cup of yogurt, that we’re reinoculating our gut and restoring our gut health. Like if we eat a cup of yogurt, we’re good to go.
These microbes that we eat don’t stick around permanently. They’re just along for the ride. Weeks after we consume these, they’re not there anymore. When I learned this, I thought “There goes my research.” But when I looked into it more, in traditional culture and cuisines, people are eating fermented foods all the time, every day. It’s not about that one special food you eat or that one magic pill. It’s having those foods part of your daily cuisine and part of your life.
It’s great for fermentation producers. You don’t eat one jar of kimchi and call it good — you need to keep integrating it into your diet.
Q: Can a pill really fix our gut health?
Not being a scientist, I can’t say if it will or won’t fix our gut health. But talking to microbiologists who study this, it really is about exposing our bodies to these bacteria. We live our lives in such clean and pasteurized lives that we don’t get that microbial exposure. Their perspective is eating as many bugs, exposing ourselves to as many bugs, it will have a positive impact on our immune system as long as we’re healthy. A lot of the probiotic pills have been studied and they have positive health correlations, but we’re still learning so much about it.
Eating fermented foods, especially wild fermented foods, can be even more beneficial. Microbiologists and researchers in this field are really just starting to see what microbes are beneficial to our health. We can expose our bodies to more microbes through wild fermented foods because they’re so much more complex and have so many more microbes, rather than a yogurt with just three different microbes in it. We’re getting so much exposure through wild fermented foods.
Q: Why is it bad if we don’t properly feed our microbiome?
There’s the old friends hypothesis which is similar to the hygiene hypothesis. Our bodies have evolved to expect microbial exposure. But now our immune systems have gotten on this overactive trajectory, attacking these things they don’t need to.
We need to remember our native gut microbes, to feed them the nutrients they need to thrive. When we don’t feed our native microbes the fiber they need to thrive, they’ll eat the mucus lining in our gut, leading to more inflammation and asthma. We need to eat more microbes and feed the native microbes we do have.
Q: Can our native microbes change if we don’t feed them?
There’s been some interesting research out of Stanford’s Sonnenburg Lab. Mice fed on a diet with less fiber tend to have decreased microbiomes. Over generations, as the mice have pups, they pass that microbiome on to their pups. Generations later, these pups have super impoverished microbiomes. And they can’t come back and have a healthy microbiome by feeding them more fiber.
Q: Fermented foods are making waves in the food industry as the next big superfood. Tell me about fermented food in the book?
For the book, I got tor travel all over and explore these different cultures that have different fermented food traditions. I picked four main food places with quintessential fermented food — Greece to research yogurt, Korea to research kimchi, Japan to research miso and Switzerland to research cheese.
One of the cool discoveries I made travelling to these places was I discovered other aspects of the local diet that nourish the microbiome, other fermented foods and whole foods. These countries have different ways of thinking about eating than we do in America.
Q: What was the most eye-opening aspect of exploring other culture’s cuisine?
There were a couple. One, touring one of the big food markets in Seoul, Korea. Kimchi is their national food, but I was shown all these different fermented foods, different sauces, fermented soybean paste similar to miso, fermented veggies. It permeates their culture. Looking from far away in American grocery stores and farmers markets, you wouldn’t see it.
Second, in Japan, speaking with another author, we were talking about nato. Some people find nato challenging because it’s made with basic fermentation rather than acidic fermentation. The Japanese approach to fermented food, they teach at a very young age that “This is a wonderful, healthy food.” In America, we teach food as “Try this because it’s gratifying and yummy.” There’s this dichotomy of healthy foods versus gratifying goods. In Japan, there’s more of an understanding that there’s a wide variety of foods and you’re expected to eat all of them because that’s how you have a healthy life.
Q: Do you think this surge of fermented foods is a trend will disappear or a new food movement here to stay?
It’s here to stay. I expect to see it expanding and incorporating into more people’s lives. There is really compelling research with the health benefits, but there’s also these amazing flavors for those of us who weren’t raised with it. Like kimchi. Once you eat kimchi, food seems bland and lacking without it. Koreans describe it as “You need kimchi with every meal.” They can’t imagine eating it without. The flavor and texture experience is a big part of eating. We shouldn’t be forcing it down for our health, but truly enjoying it.
Q: Ancient foods are making an appearance in our diet again. Tell me what you found most fascinating in your research for this book on ancient foods.
One of the interesting things was how they are being incorporated into contemporary culture and cuisine. I went to a fermentation based restaurant in Tokyo, and I talked to the chef about how he’s integrating more traditional practices into contemporary cuisine and making very elegant meals out of them.
Q: Tell me more about your travels to Greece to learn about traditional yogurt. Modern yogurt is often criticized for the scientifically added probiotics. What did you find about traditional yogurt?
My image of yogurt was this fermented product with a few strains. But I wondered, with fermented yogurt products, are they just dumping strains in after they produced it?
Touring a family-owned, small-scale yogurt making facility in Greece, it was interesting seeing their process. They use backslopping, which is using part of the previous batch to inoculate the next batch. Traditionally, that was the way all of these products were made. It makes a richer microbial environment. We don’t know what strains are in it unless it’s sent off to a lab. Their strains come from the batch before and the batch before. Their yogurt would have strains unique to that product since they’ve made it for decades in that same place.
Q: Can better gut health help Americans notoriously destructive eating habits?
I think one of the keys is getting more fiber, especially prebiotic fiber from whole foods, not just a supplement, to really nourish a diverse gut microbiome. And, of course, eating more fermented foods.
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)
Wall Street Journal called 2018 “The Year of Fancy Water and Kombucha.” Beverages were one of few climbing categories in low supermarket sales. Drinks, according to Nielson, “must now be purpose-fulfilling, light and fizzy.” Kombucha sales rose a huge 43% in 2018 for $400 million in sales. Sparkling water and “value-added water” (beverages with vitamins and electrolytes) rose 17.5% in 2018 for an impressive $2 billion in sales.
Read more (Wall Street Journal)