For the fifth year in a row, the KOMBUCHA Act was reintroduced to Congress. If the legislation passes, kombucha beverages would be exempt from excise taxes intended for alcoholic beverages. The act proposes to raise the alcohol by volume (ABV) threshold for kombucha from its current level of 0.5% to 1.25%.
“The past year has been incredibly hard on businesses in Oregon and across the country, especially as supply chains have been disrupted. Still, kombucha is one the fastest growing beverage industries in the world,” says U.S. Rep. Earl Blumenauer (D-OR). “There’s no reason why kombucha brewers and sellers should get taxed like beer. Our common sense legislation would eliminate this burden and support a burgeoning industry that has a major impact on Oregon’s food and beverage economy.”
U.S. retail sales of kombucha sales grew 2.4% over the twelve months though mid-July 2020, to $703.2 million, according to SPINS.
“Modernize Taxes & Regulations”
Blumenauer first introduced the bill in 2017 — and has reintroduced it every year since. Senator Ron Wyden (D-OR), the Senate Finance Chair, is the bill’s co-sponsor.
The word “KOMBUCHA” also has a double meaning — it is an acronym for Keeping Our Manufacturers from Being Unfairly taxed while Championing Health Act. The legislators understand kombucha is a fast-growing beverage category, especially in their home state of Oregon, home to many kombucha brands.
“The growth of kombucha production in Oregon and nationwide creates jobs and a beverage folks enjoy,” Wyden said. “It’s been a particularly difficult year for small businesses, and our bill would modernize taxes and regulations so these businesses can continue to grow and sell their products in stores across the country.”
Kombucha Brewers Lobby
Commercial kombucha brewers are especially concerned with the regulation. In 2010, Whole Foods and other retailers pulled kombucha off shelves as the Alcohol and Tobacco Tax and Trade Bureau investigated whether alcohol levels in kombucha were higher than what was printed on the label. And since then, consumers — and even other brands — have filed lawsuits against various kombucha brands, alleging alcohol levels higher than indicated.
Kombucha can keep fermenting after it’s made, as the yeasts continue to eat sugars. Under current law, if kombucha leaves a processing facility at 0.4% ABV, but increases to over 0.5% by the time it’s placed on grocery store shelves, the brewer would have to pay federal alcohol taxes like a beer brand.
Hannah Crum, co-founder and president of Kombucha Brewers International (KBI), the trade organization for kombucha brewers, emphasizes that kombucha producers fear constant repercussions from the law.
“These numbers were created over 100 years ago during prohibition,” says Crum, and notes there are no scientific studies on these ABV values. “Kombucha labels say ‘Alcohol is present’ — no one is trying to trick the consumer.”
Reads a statement from KBI: “ These laws were never intended to make kombucha subject to taxes designated for beer. Passing the KOMBUCHA Act under the next appropriations bill will relieve this unnecessary burden on kombucha brewers. Only kombucha above that level (1.25%) will be subject to federal excise taxes when this Act becomes law.”
KBI has actively lobbied for the bill’s passage. Big kombucha brands (GT’s and Health-Ade) have supported the bill actively. KBI — for the first time — is asking consumers to write to their government representatives (via a form on their website) to urge them to support the bill.
In the latest issue of Popular Science, a creative infographic illustrates “the wonderful world of fermented foods on one delicious chart.” It represents “a sampling of the treats our species brines, brews, cures, and cultures around the world,” and is particularly interesting as it shows mainstream media catching on to fermentation’s renaissance. Fermentation fit with the issue’s theme of transformation in the wake of the pandemic.
Read more (Popular Science)
Despite a year when cideries around the world were forced to close down taprooms and cancel restaurant sales due to the pandemic, cider sales grew 9% in 2020.
“I know some of you are barely hanging on — but you are hanging on,” said Michelle McGrath, executive director of the American Cider Association (ACA). “We did not waver, we held our shares and we kept growing.”
McGrath presented industry statistics at CiderCon 2021, the ACA’s annual global cider conference. Because of the ongoing coronavirus pandemic, the conference was virtual this year. Nearly 800 people from 18 countries and 41 states attended the three-day conference.
Smaller, local cider brands sparked consumer interest in 2020. Sales of regional cider brands grew 33%, while national brands declined 6%.
The impact of the pandemic, though, has been severe on certain sectors of the industry. On-premise cider sales (in restaurants, breweries and taprooms) declined nearly 70% from 2019.
“We’re resilient, we’re tough, we’re savvy. You couldn’t have predicted how your business would have stood up to a once-in-a-lifetime pandemic,” said Anna Nadasdy, director of customer success at Fintech, a data company for the alcohol industry.
Nadasdy’s keynote on expected consumer trends in 2021 cited the key drivers influencing consumer behavior — the economy, politics and natural disasters. Here are seven of her takeaways for cideries:
- Consumers Buying all Alcohol Types
Though consumers have long been loyal to one type of alcohol — beer, wine or spirits — the “beer guy or wine gal” label is disappearing. Over one-third of consumers are purchasing from all three major categories.
Hard seltzer is the third largest beer segment (16% of dollar share, behind domestic premium and imported beers), but it’s the fastest growing. This is exciting for cider makers, Nadasdy notes — hard seltzer in 2018 was the size of the cider market today.
- Fruit-Flavored Cider is Growing
Though apple cider still dominates the cider market with 52% of sales, fruit-flavored cider grew three points in the past year to 12% of sales. The top three fruit-flavored products are: Ace Pineapple Craft Cider, Incline Scout Hopped Marionberry Cider and 2 Towns Ciderhouse Pacific Pineapple Cider.
(Other products in the cider category include: mixed flavors, dry cider, seasonal cider/perry, herb/spice cider.)
- Cider is Making Waves in Craft Beer
Cider — tracked as part of the overall craft beer category — is proving a worthy participant.Cider has 11% of the dollar share, second only to the category leader, India Pale Ale (41% of the market).
“That’s really impressive for such a small base,” Nadasdy says. “Even though you guys are a smaller segment, you still have a lot to contribute to the overall beer category. And I think it’s important when you’re having these conversations with retailers that you are able to point out these wins.”
- Hard Kombucha is Gaining Ground
Cideries are competing with hard kombucha. Though hard kombucha is a fermented tea and not a cider, retailers consider hard kombucha and cider comparable drinks. And hard kombucha sales are growing quickly.
“Although small now, keep an eye on (hard) kombucha,” Nadasdy said.
- Prepare for Changed On-Premise Sales
Once wide-spread vaccination is in place and on-premise dining returns, expect fundamental changes such as more online ordering, healthier menu choices and a rise in food tech like tablet menus. The National Restaurant Association listed other significant changes that will impact cideries:
- Streamlined menus. There will be fewer menu items, with 63% of fine dining operators and half of casual and family dining operators saying they will reduce their offerings.
- Alcohol-to-go. Seven in 10 full-service restaurants added alcohol-to-go during the pandemic. Thirty-five percent of customers say they are more likely to choose a restaurant that offers alcoholic beverages to-go.
- Rosé-Flavored Cider is Out
Every brand of rosé-flavored cider is losing sales. The top three brands showing the most significant losses in this category are: Angry Orchard, Bold Rock and Virtue.
- Cans Are King
Cans are leading the dollar share of the market, growing at 1.5 times the rate of bottles. Six-pack (11-13 ounce) cans are now the top share item with 29% of total cider sales. This is followed by six-pack (11-13 ounce) bottles and 4-pack (18-ounce) cans. (These figures do remove shares of Angry Orchard, which sells in bottles. Because Angry Orchard dominates 40% of the cider market, they skew the data.)
One of the biggest hurdles in the food and beverage industry is getting a product to market — an even bigger challenge for fermented food and drink brands featuring live bacteria.
“Fermented foods in general are still relatively new in the commercial marketplace. When we started, most beer distributors knew nothing about it. And that’s still a big challenge, how to communicate what you have. What is a fermented food? Why should people care about it?” says Joshua Rood, co-founder and CEO of Dr Hops Real Hard Kombucha. Rood shared his advice during a TFA webinar, Launching a Fermented Brand.
Rood officially began Dr Hops in 2015 with co-founder Tommy Weaver. They met in a yoga class, and turned their passion for health and great hops into a kombucha beer they started brewing in Rood’s kitchen.
At the time, there was a lot of variety and craft beer and kombucha, but hard kombucha was unheard of. “You don’t have a lot of focus on health in alcohol,” Rood says.
Rood went to investors with a pitch deck that outlined why traditional alcohol products don’t appeal to a health-conscious consumer — craft beer is made with gluten, cider is high in sugar and hard alcohol is too strong for regular use. Dr Hops, meanwhile, is gluten-free, low in sugar, unfiltered, made with organic ingredients and full of active probiotics.
“We have a passion for creating more delightful, health-conscious alcohol, and really pushing the envelope with that,” Rood says. “One of our biggest challenges is still how to communicate that into a very tiny amount of time to consumers, retailers and distributors.”
Starting in a category that didn’t yet exist, figuring out licensing took years. Dr Hops began with $13,000 raised from a Kickstarter campaign, then crowdsourced another $10,000 the following year. By 2017 — with labelling, alcohol licensing and product stability figured out — investors pledged $115,000, enough to start small-scale commercial production. Dr Hops officially went to market in 2018, self-distributing and selling at street fairs and beer festivals.
“Part of the key to selling stuff without a huge marketing budget is focus,” says Alex Lewin, webinar moderator, Dr Hops advisor and TFA Advisory Board member. “Dr Hops started in the Bay Area, and won over relationships we had with some retailers — we had some real advocates. Don’t do a national launch if you have no budget.”
Rood stresses education is a key piece of marketing for the fermentation category.
“How much is the whole community speaking about and educating the world about and celebrating the value of live fermented foods? The more we’re all doing that, the more it works to sell these products,” he adds.
Test audiences, consumer feedback and word-of-mouth marketing have been key to Dr Hops success.
“The fact that we were able to grow our business almost three times in 2020 even in the pandemic with no marketing is one of the best things we have to say about what we have. People want this,” Rood says.
Highlighting strengths helps Dr Hops distinguish itself in a newly-competitive field of hard kombucha brands. Dr Hops’ product line includes flavors that compare to well-known alcohol beverages. Their Kombucha Rose flavor is a substitute for wine, Ginger Lime for a cocktail, Kombucha IPA for beer and Strawberry Lemon for a mimosa.
“While people might not understand hard kombucha, they pretty much already have a preference between beer, wine, cocktail and champagne or spritzers,” Rood says.
Health is core to Dr Hops, but higher-alcohol drinks are also higher in calories. Seltzer has been a key competitor to hard kombucha because seltzer’s calories are low.
“But it’s not interesting,” Rood says. “If you really love alcohol or food or beverage in general, you want something more interesting than that. At this point, we’re willing to gamble on enough people who care about transparency and authenticity that if we put the nutrition label on there and list all the ingredients, even if it doesn’t compare very well on a calorie level, there’s enough else to it that people are going to try it.”
The coronavirus continues to drive sales of fermented drinks. Lifeway’s kefir, Farmhouse Culture’s kraut juice, Probitat’s fermented planted-based smoothies, Flying Ember’s hard kombucha and Buoy Hydration’s fermented drinks all report increased sales as consumers take a bigger interest in the immune-enhancing benefits of fermented beverages.
“As demand ramps up for immune-enhancing products, manufacturers have an opportunity to innovate with immune-supporting ingredients and flavors,” says Becca Henrickson, marketing managed of Wixon, a flavor and seasoning company. “When flavoring beverages with immune support ingredients, selecting flavors that increase or complement a product’s health perception is optimal.”
Read more (Food Business News)
Kombucha and cosmetics are driving growth in the probiotic and prebiotic markets by making products that use non-classic strains of bacteria.
The e-commerce market for probiotic supplements was estimated at $973 million across 20 countries in 2020. America accounts for almost half of those sales. Ewa Hudson, director of insights for Lumina Intelligence, shared this info at the Probiota Americas 2020 Conference. (Lumina and Probiota Americas are parts of William Reed Business Media, the parent company for FoodNavigator.com.) The session, New Horizons for Prebiotics & Probiotics, included Lumina’s insight into non-classic bacteria strains and a panel discussion with leaders in the probiotics field.
In 2020, 32% of all probiotics in America — and 41% of the best-selling ones — contained non-classic species. Hudson said this species classification is a messy space, especially from a consumer’s perspective, because there are so many species. Kombucha includes the most non-classic probiotic species — of those products with probiotics, 93% include non-classic bacteria .
Most products with probiotics include one of the four common bacteria species: lactobacilli, bifidobacterium, bacillus and saccharomyces. Lumina excluded these four from their research to focus on the growth of the non-classic probiotic strains. These include: streptococcus thermophilus, kombucha culture, lactococcus lactis, bifida ferment lysate, enterococcus faecium, streptococcus salivarius, clostridium butyricum and streptococcus faecalis.
Though probiotics are often used in supplements, more fermented food and beverage manufacturers are using probiotic strains in their products, especially in the growing alternative protein market.
Synbiotics are also becoming more widely used; the study found synbiotics were the most prevalent formulate in probiotics. Synbiotics are a combination of both prebiotics and postbiotics. A synbiotic ensures that probiotics will have a food source in the gut.
(Probiotics are live microorganisms, friendly bacteria that provide health benefits. Probiotics can be found in fermented food and taken as supplements. Prebiotics are dietary fibers that feed the probiotics. Postbiotics are an emerging concept in the “biotics” space — postbiotics are the waste byproduct of probiotics.)
“With probiotics, we are really only starting to scratch the surface with the development of synbiotics,” says Jens Walter, PhD, professor of ecology, food and the microbiome at APC Microbiome Ireland.
The new generation of probiotics will depend on strains that are “efficacious in the gut,” Walter noted.
“If you look into the probiotic market, most of the lactobacillus species — and also species like bifidobacterium lactis — are not inherent organisms of the human gut. We’re using a lot of organisms that I would argue have an ecological disadvantage in the gut,” Walter says. “If you’re talking about next generation probiotics, I think what will become is we are looking for the key players in the gut, specifically key players that are underrepresented or linked to certain benefits, and then we are trying to put them back in the ecosystem.”
It’s challenging to find a prebiotic or postbiotic that is precise, he continues.
“Every human has a distinct microbiome. So it’s likely a synbiotic designed for one human may not be as functional in another human,” Walter says. “The opportunities here are tremendous.”
Daniel Ramon Vidal, vice president of research and development and health and wellness at the American food processing company Archer-Daniels-Midland (ADM), also spoke. He noted that the human body is made up of trillions of microbial cells, but we know little about these microbial worlds.
“There is an enormous amount of possibilities to isolate new strains that are living in our body,” Daniels says. “We need as much science as possible, that’s my message”
The panel agreed that postbiotics has become one of the next great concepts that scientists, manufacturers and gastroenterologists have latched onto. But consumers are not as familiar with postbiotics as they are with probiotics and prebiotics , notes Justin Green, PhD, director of scientific affairs for EpiCor, a postbiotic ingredient produced by Cargill.
“This causes more confusion, so I think that’s going to be another interesting aspect of postbiotics — both the identity of what postbiotics are and how it confers its benefits and (how that will be) communicated to the consumer,” Green says.
Kimchi, fermented sauces and tempeh are driving growth in the fermented food and beverage category, a $9.2 billion industry that’s grown 4% in the last year.
“We’re excited about the growth potential for fermented food. While fermented food represents about 1.4% of the market today, there are segments that are tracking well above the growth of food and beverage [overall] that are poised for disruption in the future,” says Perteet Spencer, vice president of strategic solutions at SPINS. Spencer shared this information in a recent webinar hosted by The Fermentation Association. “There’s a ton of opportunity to scale and increase the footprint of these products.”
SPINS spent weeks working with TFA to define the fermentation industry’s sales, drilling into 10 fermented product categories and 57 product types. Wine, beer and cheese sales were excluded from the data — those categories are very large, and would obscure trends in smaller categories. (All three are also well-represented by other organizations.)
Pickles and fermented vegetables “is a space that’s seen [a] pretty explosive uptick in growth over the past year,” Spencer says. Every segment is growing — kimchi, sauerkraut, beets, carrots, green beans, sliced and speared pickles and all other vegetables — with pickles the largest, nearly 60% of the category.
The biggest growth, though, is coming from products other than pickled cucumbers. Kimchi is at the center of numerous consumer retail trends. Consumers are purchasing healthier food made with fewer ingredients, and they want food with international flavors. Kimchi makes up only 7% of the category, but sales are increasing at an explosive 90% growth rate.
More people are experimenting with fermenting while they’re at home during the coronavirus pandemic, but these kitchen DIYers do not appear to be detracting from sales.
“The more people make fermented foods, they appreciate what’s available in the store that maybe didn’t exist five or 10 years ago,” notes Alex Lewin, author and TFA advisory board member who moderated the webinar. “Anyone who has made kimchi knows it takes a lot, it makes a big mess, you get red pepper powder stuck under your fingernails and onion in your eyes. I can make kimchi (at home), and then once I’ve made kimchi, I’m like ‘Ok, maybe next time I’ll buy it.’”
Fermented sauces are also growing, up 24% in 2020. The largest segment in sauces is, of course, soy sauce, almost 85% of the category. But gochujang, less than 2% of the category, is increasing at over a 56% growth rate.
Versatility is helping sauces, pickles and fermented vegetables, Spencer says. Any food product with multiple uses is selling well. The condiments and sauces can be used as a topping on eggs, hamburgers or pizza, or mixed-in a salad, rice dish or soup.
Sake, plant-based meat alternatives and miso had combined annual growth of $75 million in 2020. Sake grew 16%, and both plant-based meat alternatives and miso each grew 26%.
Yogurt and kombucha still dominate the fermented food and beverage market. Yogurt is 81% of the market; if yogurt is removed, kombucha is 51% of the remainder.. Both have experienced slowdowns in sales from their peaks. Kombucha sales have slowed recently, as grab-n-go opportunities have shrunk during the pandemic.
Yogurt giant brands Chobani, Yoplait and Dannon still dominate the category, as do GT Kombucha, Health-Ade and Kevita reign for kombucha.
Spencer notes the 4% growth rate of fermented products overall would be higher without yogurt. It’s a large category that — despite an uptick in 2020 during the pandemic – has been fairly flat in recent years. Core (traditional) yogurt has been growing at a 1.6% rate; Greek yogurt, at about twice that pace. Those two segments account for roughly 80% of the category.
“This is an opportunity for disruption for emerging brands,” Spencer says. “We’re already seeing some of the legacy segments start to get disrupted by new innovation, so I’m excited to see the evolution of that innovation and where that goes and kind of what opportunities peek out of that.”
“Overall, we’re seeing historically small segments gaining traction in the marketplace,” Spencer adds. “The pandemic has brought a renewed consumer focus on the fermented space.”
Though fermented products have an added healthy benefit, customers are looking for delicious flavor first.
“In these fermented categories we covered today, taste first is always really important. I think people are going to these categories for different taste experiences,” Spencer says. “If you can level up with a functional benefit, that’s fantastic, but we have to balance the taste first. If it’s highly functional but doesn’t taste good, it just doesn’t have the same success.”
As a biochemistry grad student with a penchant for homebrewing, Chris White never thought his growing collection of yeast strains would amount to anything outside a hobby. But when White graduated with his PhD and was offered a lucrative job in the biotech field, one caveat kept him from accepting the offer — there were no side jobs allowed.
“I never had some big plan to start a company. But I liked all the fermentation stuff I was doing and didn’t want to let go of my yeasts,” says White, CEO and founder of White Labs. “I said no to the job, and from there White Labs kept going and going and getting bigger and bigger.”
Today, White Labs is a powerhouse in the fermentation industry. They provide professional breweries with liquid yeast, nutrient blends, educational classes, analytic testing and private consulting.
White Labs is celebrating a landmark 25th anniversary this year, despite a global pandemic that has shuttered breweries. They have released their own line of beer, created a new nutrient blend for hard seltzer brands, began a YouTube series and launched free how-to education classes for homebrewers. White Labs will host a year in review webcast on Dec. 9.
“We’ve had a lot of success and we’ve made a lot of mistakes, and we’ve tried to learn from those mistakes. But we’re a team. And we really got lucky that we hired people interested in fermentation that helped build this company,” White says. “Everyone really pulled together during COVID and did whatever was needed. It’s been a great experience because we had solutions and we had teamwork. And I think it’s taken 25 years to get to that team, that tribe.”
A yeast guru, White is a co-author of the book “Yeast: The Practical Guide to Beer Fermentation.” Below, check out our Q&A with White.
The Fermentation Association: You studied biochemistry at University of California, Davis, then got your PhD in biochemistry at University of California, San Diego. What made you decide to dive into yeasts?
CW: I was always interested in science since high school chemistry, and then in college was interested in how cells work, how DNA worked. It drove me to where I am today, really. Most people I went to school with at UC Davis, they were studying biochemistry to be a physician. But that’s not what I wanted to do, I was more interested in biotech and grad school.
Meanwhile, I was homebrewing. It was a great combination of things that happened. The science and homebrewing is what led me to put that together and make yeast for homebrewing, then yeast for craft brewing.
TFA: Is that what led you to start White Labs?
CW: It really was. I like beer. I was fascinated with how it could be made. It’s pretty simple to make beer — simple, but not easy. It’s difficult to make a great beer. But it’s fairly simple since it’s only four ingredients if you include the water. That’s what’s great about a lot of fermentation, the raw materials are all around you. They’re simple. Making it taste good is the hard part, that’s the art of it. I liked beer, I really got into homebrewing, then the people I was making homebrewed beer with started a store in San Diego, Home Brew Mart, in 1992. We became friends and that’s who I was homebrewing with every weekend. Then my friend from the store said “Hey, we need yeast,” and I started a little company on the side to make yeast. It wasn’t like I had some big plan to start a company, I thought I’d just make a little each week. And then other people asked and other people asked. By the time I got closer to finishing grade school, I just didn’t want to stop doing the yeast for brewing.
TFA: Now there are over 1,000 strains of yeast in the White Labs yeast bank. Tell me about it.
CW: We have a yeast bank that I spent a lot of time building in the beginning, more for my own brews, but obviously later on, it became more and more. The foundation of our company is our yeast strains and the way we store them. We’re collecting strains all the time. But what I did in the beginning was collect different strains from travel, from different yeast banks. We created our own private yeast bank at White Labs, but there are yeast banks around the world. Especially in Europe where brewing really began in an industrial way and where yeast was discovered and started to get collected. There’s a great yeast bank in Denmark, Germany, the UK. I spent a lot of time acquiring strains from those.
You get to know the yeast in a different way, the strains, what they do. Performance, conditions. But for beer especially, it’s really how they taste, which is so important. We only make those flavors through fermentation. We still continue to acquire strains. People send them to us, we bank private strains for companies, sometimes they buy them in a liquid form we make for them, sometimes we just store it for them. But usually, they’re banking it for us to make something with it.
TFA: Besides yeast, White Labs offer testing services as well.
CW: White Labs Analytical Lab is really separate in the fact that a lot of people that work in that lab don’t really have anything to do with the yeast. It’s just testing samples. They’re usually fermented beverages. Yes, there’s beer there, but that’s just a part of White Labs Analytical Lab. There’s the spirits that come for testing, kombucha, cider, mead, any kind of commercial business making a fermented beverage that needs some kind of testing. Sometimes it’s regulatory for export. Sometimes it’s just for their own data, like actual alcohol by volume instead of calculated, sometimes it’s microbiology or tracking down a problem or contamination. It’s all confidential, like everything at White Labs. But we get to work with a lot of cool companies, a lot of them may not get yeast from us, that’s really not a requirement. The yeast and testing run separate.
TFA: Have you seen kombucha brewing grow?
CW: Oh yeah. Originally, that’s how we got into analytical testing because people were asking for alcohol lab evaluations, which is so important in kombucha. We all know what happened there (Whole Foods pulled all kombucha bottles off shelves in 2010 after several brands tested at higher alcohol beverage levels then what was printed on the bottles). And it happened because it’s a biological process. You put that thing in a bottle and it’s going to keep fermenting. People had to really try to figure out what to do with that. So a lot of alcohol testing, and a lot of that is regulatory in kombucha.
But then we started making SCOBYs because a couple of our staff got really into it. Just like I started making yeast in my own home brewing, they started making SCOBY in White Labs for their own kombucha making. So we said “Let’s sell it.” And now we make a bunch of it.
TFA: That’s forward-thinking, expanding your offerings to all fermented drink products.
CW: Yeah and the different facilities allow us to do different things. We grow all the SCOBYs in North Carolina because it was a new facility at the time and had the space, San Diego is full.
TFA: White Labs released their own canned beer in July. Tell me about it.
CW: A lot of the things that came out of this year really were not new ideas, like canning. Someone gave a presentation at White Labs during one of our internal innovation summits that’s open to anyone in the staff about canning beer. But during this time of COVID, when we’re not focusing on growth, we were able to work on a lot of those projects and really build a better company. Once we gave up the idea that revenue is not going to go up right now, we worked on other things. And it’s been great. A lot of cool things have been coming out of our teamwork this year, and one of those was canning.
So we said let’s do that because we’re not selling beer in our tap room — we’ve got a tap room in San Diego for White Labs Brewing Company and a kitchen and tap in Asheville, it’s more of a full restaurant. We weren’t selling a lot of beer and we have a lot of beer, so why not can it? We have done three different beers now in cans. The IPA, a hazy IPA and the pilsner. And we’re going to do another lager and IPA next month. It’s been fun for the brewers to be able to brew it. I think it’s been a nice boost for everyone in the company, not even money wise, just to have another milestone: we put our beers in cans. It’s a nice billboard for the brewery. And they get to have fun with graphics, and how to tell our story, and really share what we’re doing in the tap rooms.
People are amazed that it’s the same beer, same exact batch but put into smaller fermenters and pitched with two different yeast strains. They say “Wow, you created different flavor beers? They taste different?” Yeah, because that’s fermentation. Fermentation makes these flavors and when people taste that it’s the same exact beer made with two different yeast strains, they get it in 30 seconds. “Oh that’s what a yeast does?” But you have to come to our tap room to experience that. And obviously during these times, you can’t come to the tap room. But canning is a way to share that with people outside the tap rooms.
TFA: Who buys more yeast from White Labs — commercial producers or homebrewers?
CW: Commercial because of volume. But we’re available for everything in homebrew. We try to mirror every test, every yeast strain, and make those available for home brewing because that’s our roots and I think it’s important. There’s been growth in home brewing during COVID. People at home with a hobby are buying yeast. That’s kind of nice, I like to see that.
TFA: Craft brewing has been hit so hard by pandemic. What have you seen your clients doing to survive?
CW: They’re getting creative. People had to figure out the to-go thing, first of all. That maybe involved buying software or creating a new website. Each company I talk to, regardless of what industry, they had to do something technology wise. Very few could close the bar door and were all set up to sell everything through the warehouse.
I think customers were also really good about supporting local businesses, wanting to help them. There’s been a lot of to-go. But it still doesn’t compare to all the beer they could sell, all the stuff that gets sold through bars. Even if one little meadery sells more to go, it doesn’t replicate all the tap room business that just disappears.
TFA: What do you think is the future of the fermented drink industry?
CW: It’s up to them. We pay attention so we can be there to help. But really these things come from creative people. New things have to come out. That keeps the industry growing. And I don’t know what those new things are, but we try and pay attention.
I think transparency and honesty is a hallmark of fermentation industries — whether craft breweries or wineries — and I hope that stays. That’s been a big part of the trust with consumers, and the fact that you can do these things at home too, so you know how it’s done. And with new techniques or things that get introduced, I think the industry needs to keep the transparency part of the business. Because fermentation being such an old, old method — a lot of people would like to replace fermentation with something else. They say “Let’s just mix these things together rather than do that weird fermentation.” But weird fermentation is what makes it so special.
As hard kombucha continues to top “best of” lists for 2020’s most popular alcoholic drink, brewers must find ways to differentiate themselves in a crowded marketplace.
“If you’re thinking about coming into hard kombucha, my main point to you would be you’re not in the kombucha business anymore, you’re in the alcohol beverage business now,” says Bart Watson, chief economist for the Brewers Association (a trade group for small craft brewers). “You have to think about this competition more holistically than just within hard kombucha because, as we’ve seen in recent years, customers don’t think in neat categories as they used to.”
The percent of Americans who drink alcohol has remained fairly static over the years (Gallup polls indicate between 60-70%), but what they’re drinking has changed. Beer is losing favor with consumers, and other hard, fermented drinks — like kombucha, cider and mead — are now climbing in the craft brewing market.
“If (people) are drinking more of one thing, they’re drinking less of another,” Watson says. “You’re not going to add to the drinking, you’re just going to have to take from someone.”
Watson shared this data during the “Trajectory of Craft Brewing” panel at the Kombucha Brewers International (KBI) Virtual KombuchaKon 2020. Hannah Crum, president of KBI, said kombucha is a craft beverage, too. She added: “Hard beer has paved the way for hard kombucha. It’s opened up people’s idea to the concept of craft, and kombucha can thankfully take advantage of people’s knowledge of craft.”
Watson suggests four lessons from the craft beer world that hard kombucha brands can use to grow.
1. Consumers Crave Experiences
If you want to succeed in the hard kombucha industry, you must have on-premise sales.
Sales of craft beer are about 25% on-premise, and are especially strong in experiential channels — tasting rooms, music festivals, sporting events or even ax-throwing clubs. These are entertainment-driven settings where people can experience an event while drinking (but watch those axes!).
“This means they’re not just going to drink, but going to do something and drinking while doing it,” Watson says. “Many of the reasons that people say they go (to a brewery) is less about the product and more about the experience you provide.”
Over 50% of craft drinkers purchased more of a product after visiting the tap room, driven by having had a good experience.
“Kombucha tap rooms are going to be part of that experience that helps build the market and educate consumers about the product,” he adds. “This has been a challenge for a lot of distributors, but I actually think this is an opportunity for a smaller segment like kombucha.”
2. Go Where the Consumers Are
Craft brewers are most successful in bigger cities where there’s already a base of craft drinkers. The growth in the craft beer industry is coming from these concentrated geographic areas.
The craft beer market has steadily expanded over the last 10 years, but growth has been strongest in the West. Kombucha has followed a similar pattern..
“The West is still the strongest place for growth, even if it’s in the highest market share,” Watson says. “Most of the growth has continued to come from the densest market.”
3. Consumers Trade Up
Craft hard kombucha will sell better than a value version. Over the last 30 years, consumers have been purchasing more craft, imported and super premium beer compared to simply premium or value versions. Drinkers are “upcycling” their preferred brands.
“This is true in a lot of industries right now, where they’re not necessarily drinking more product, they’re drinking better,” Watson says.
In the overall beer market in 2015, craft beer makes up over 40% of the dollar volume, while premium beer (like a BudLite or Miller Coors product) are 35% and value brands are 20%.. Compare that to the 1980s, when premium beer peaked at over 60% of the volume, value beer was around 30% and craft was under 10%.
4. Go High or Low with ABV
When making a hard kombucha brand, think about your alcohol levels. Alcoholic beverages with higher or lower alcohol levels sell better, what Watson called “a hollowing of the middle.”
Sales are higher for drinks below 5% ABV or above 7% ABV. This is part of the reason hard kombucha, cider and mead have climbed in sales, since the drinks traditionally have higher alcohol levels.
“This is a market that’s competitive and getting more and more competitive, but at the same time, there’s more and more niches popping up as the consumer base diversifies and more people look for a specific product,” Watson says.
Today, Whole Foods Market global buyers and experts unveiled their top 10 anticipated food trends for 2021 in the retailer’s sixth annual trends predictions. Hard kombucha, upcycled foods, leveled-up breakfasts and jerky made from produce are among the food influences expected to take off in the next year.
Each year, a Trends Council of more than 50 Whole Foods Market team members, including local foragers, regional and global buyers and culinary experts, compile trend predictions based on decades of experience and expertise in product sourcing, studying consumer preferences and being on the frontlines with emerging and existing brands. Significantly influenced by the state of the food industry, the 2021 trends report reveals some of the early ways the food industry is adapting and innovating in response to COVID-19 for a post-pandemic food world.
“There have been radical shifts in consumer habits in 2020. For example, shoppers have found new passions for cooking, they’ve purchased more items related to health and wellness, and more are eating breakfast at home every day compared to pre-COVID,” said Sonya Gafsi Oblisk, Chief Marketing Officer at Whole Foods Market. “Food trends are a sign of the times, and our 2021 trends are no exception.”
While Whole Foods Market’s predictions for 2020, including regenerative agriculture, new varieties of flour and meat-plant blends, continue to evolve, the 2021 trends represent what’s new and next for the coming year and what consumers should expect to see on the food scene.
Whole Foods Market’s top 10 food trend predictions for 2021:
WELL-BEING IS SERVED
The lines are blurring between the supplement and grocery aisles, and that trend will accelerate in 2021. That means superfoods, probiotics, broths and sauerkrauts. Suppliers are incorporating functional ingredients like vitamin C, mushrooms and adaptogens to foster a calm headspace and support the immune system. For obvious reasons, people want this pronto.
Try the Trend: Cleveland Kraut: Roasted Garlic, Gnar Gnar; Beekeeper’s Naturals B.Powered Superfood Honey; Om Mushroom Superfood Mighty Mushroom Broth; Navitas Organics Superfood+ Adaptogen Blend Smoothie Booster; Health-Ade Kombucha PLUS: Belly Reset, Beauty, Energy; fresh exotic citrus fruits like Buddha’s Hand
EPIC BREAKFAST EVERY DAY
With more people working from home, the most important meal is getting the attention it deserves, not just on weekends, but every day. There’s a whole new lineup of innovative products tailored to people paying more attention to what they eat in the morning. Think pancakes on weekdays, sous vide egg bites and even “eggs” made from mung beans.
Try the Trend: 365 by Whole Foods Market Atlantic Salmon (coming 2021): Hot Smoked, Cold Smoked; Just Egg Folded plant-based “eggs”; Whole Foods Market Dutch-Style Pancake Bites; Meatless Farm: Meat Free Sausage Patties, Meat Free Breakfast Sausages; 365 by Whole Foods Market Organic Gluten Free Pancake & Waffle Mix; Whole Foods Market Uncured Ham & Gruyère Cheese Egg Bites; Birch Benders Pancake Keto Cups: Chocolate Chip, Classic Maple; Breakfast Pizza – found at Whole Foods Market’s pizza venues in select regions
BASICS ON FIRE
With more time in the kitchen, home chefs are looking for hot, new takes on pantry staples. Pasta, sauces, spices — the basics will never be boring again. Get ready for reimagined classics like hearts of palm pasta, applewood-smoked salt and “meaty” vegan soup.
Try the Trend: Whole Foods Market Applewood Smoked Salt; Spicewalla Chai Masala spice; RightRice Risotto (coming 2021): Basil Pesto, Creamy Cracked Pepper; Acid League Living Vinegar: Meyer Lemon Honey, Strawberry Rose; Whole Foods Market Hearts of Palm Linguine; Otamot Sauce made with organic vegetables: Organic Essential, Spicy Organic; Upton’s Naturals Vegan Soup: Chick Tortilla, Italian Wedding
COFFEE BEYOND THE MUG
The love affair between humans and coffee burns way beyond a brewed pot of joe. That’s right, java is giving a jolt to all kinds of food. You can now get your coffee fix in the form of coffee-flavored bars and granolas, smoothie boosters and booze, even coffee yogurt for those looking to crank up that breakfast parfait.
Try the Trend: Jameson Cold Brew Irish Whiskey; Marge Granola Georgetown Coffee Nib Muesli (coming 2021); 365 by Whole Foods Market Coffee & Almond Protein Chewy Bites (coming late 2020); EVOLVED Coffee Keto Cups; Nancy’s Oatmilk Non-Dairy Yogurt – Cold Brew Coffee with Vanilla; Blender Bombs Coffee, Almond Butter & Cacao Smoothie Booster
BABY FOOD, ALL GROWN UP
Thanks to some inspired culinary innovation, parents have never had a wider or richer range of ingredients to choose from. We’re talking portable, on-the-go squeeze pouches full of rhubarb, rosemary, purple carrots and omega-3-rich flaxseeds. Little eaters, big flavors.
Try the Trend: 365 by Whole Foods Market new Organic Baby Food: Pear Strawberry Rhubarb, Apple Pumpkin Blueberry with Ground Chickpeas, Apple Butternut Squash with Ground Oats and Turmeric; Happy Baby Organics (coming 2021): Sweet Potatoes & Olive Oil with Rosemary; Purple Carrots, Cauliflower & Avocado Oil with Oregano; Pumpkin Tree Organic Mango Purée with Oat Fiber & Seeds + a squeeze of Orange; Once Upon a Farm Organic OhMyMega Veggie! with Ginger and Flax Seed
Peels and stems have come a long way from the compost bin. We’re seeing a huge rise in packaged products that use neglected and underused parts of an ingredient as a path to reducing food waste. Upcycled foods, made from ingredients that would have otherwise been food waste, help to maximize the energy used to produce, transport and prepare that ingredient. Dig in, do good.
Try the Trend: The Ugly Company: 100% Upcycled Kiwis, Apricots and Peaches; Pulp Pantry Pulp Chips (coming 2021): Barbecue, Jalapeño Lime, Salt ‘n’ Vinegar; Barnana Organic Banana Bites: Peanut Butter, Dark Chocolate Peanut Butter Cup; Renewal Mill: 1-to-1 Baking Flour made from okara, or upcycled soybean pulp; Spudsy Sweet Potato Puffs snacks: Vegan Buffalo Ranch; ReGrained SuperGrain+ Bars made with an upcycled blend of barley, wheat and rye: Manuka Honey, Cinnamon & Turmeric Immunity, Blueberry, Sunflower & Ginger Antioxidant
Slide over, olive oil. There’s a different crop of oils coming for that place in the skillet or salad dressing. At-home chefs are branching out with oils that each add their own unique flavor and properties. Walnut and pumpkin seed oils lend a delicious nutty flavor, while sunflower seed oil is hitting the shelves in a bunch of new products and is versatile enough to use at high temps or in salad dressing.
Try the Trend: 365 by Whole Foods Market Expeller Pressed Walnut Oil; International Collection Pumpkin Seed Oil; 88 Acres Seed Dressing, Smoky Chipotle Dressing with Sunflower Seeds; 365 by Whole Foods Market Grain Free Cassava Flour Tortillas made with sunflower seed oil; innovative menu items from Whole Foods Market in-store venues like PLNT Burger’s Crispy Chik N Funguy Sandwich and Next Level Burger’s Tots and Fries, both made with organic sunflower seed oil
We tipped you off about hard seltzer bursting on the scene in 2018, and now alcoholic kombucha is making a strong flex on the beverage aisle. Hard kombucha checks all the boxes: It’s gluten-free, it’s super bubbly and can be filled with live probiotic cultures. Cheers to that!
Try the Trend: Strainge Beast Hard Kombucha: Ginger, Lemon & Hibiscus; Passion Fruit, Hops & Blood Orange; Juneshine Hard Kombucha: Blood Orange Mint, Acai Berry; BOOCHCRAFT Organic Hard Kombucha: Grapefruit Hibiscus; Kombrewcha Hard Kombucha: Ginger Lemon; Wild Tonic Hard Kombucha: Blueberry Basil, Mango Ginger; Jiant Hard Kombucha: The Original, Hicamaya; hard kombucha on tap at Whole Foods Market taprooms
THE MIGHTY CHICKPEA
You can chickpea anything. Yep, the time has come to think beyond hummus and falafel, and even chickpea pasta. Rich in fiber and plant-based protein, chickpeas are the new cauliflower — popping up in products like chickpea tofu, chickpea flour and even chickpea cereal. That’s garbanzo-bonkers.
Try the Trend: Biena Vegan Ranch Chickpea Puffs; Peppi’s Greek Gourmet GreekFreez frozen dessert made with chickpea aquafaba: Orange Chocolate, Mint Chocolate Chip; Chikfu Chickpea Tofu; Three Wishes Cereal made with chickpeas (coming 2021): Cinnamon, Honey; Siete Family Foods Chickpea Flour Tortillas; Banza Pizza made with chickpeas: Margherita, Roasted Veggie
FRUIT AND VEGGIE JERKY
Jerky isn’t just for meat lovers anymore. Now all kinds of produce from mushrooms to jackfruit are being served jerky-style, providing a new, shelf-stable way to enjoy fruits and veggies. The produce is dried at the peak freshness to preserve nutrients and yumminess. If that’s not enough, suppliers are literally spicing things up with finishes of chili, salt, ginger and cacao drizzle.
Try the Trend: Snack Jack Jackfruit Jerky: Cracked Pepper, Sweet Chili; Pan’s Zesty Thai Mushroom Jerky; Solely Organic Fruit Jerky: Mango with Chili & Salt, Pineapple with Chili & Salt, Mango with Drizzled Cacao; Wild Joy Banana Jerky: Original, Chipotle Lime, Ginger Teriyaki; Fat Top Farm Spicy Mushroom Jerky (coming late 2020)
“Try the Trend” products include a variety of items available now or coming to Whole Foods Market stores for either local or national distribution. Shoppers can seek out trending products by visiting Whole Foods Market on Amazon.
About Whole Foods Market
For 40 years, Whole Foods Market has been the world’s leading natural and organic foods retailer. As the first national certified organic grocer, Whole Foods Market has more than 500 stores in the United States, Canada and the United Kingdom. To learn more about Whole Foods Market, please visit https://media.wholefoodsmarket.com.