Consumer Sues Hard Kombucha Brand
Fermented Sciences, maker of Flying Embers hard kombucha, is asking a judge to dismiss a class action lawsuit against the brand. The suit alleges the health benefits of Fermented Sciences’ kombucha and seltzers are misleading.
The complaint says it’s confusing the label lists “vitamin C,” “antioxidants,” “real botanicals” and “live probiotics” because the drink is alcoholic and the USDA Dietary Guidelines advise that “alcoholic beverages are not a component of the USDA Dietary Patterns.” Consumers, plaintiff Katie Kuciver says, may believe Flying Embers’ positive ingredients outweigh the negative effects of drinking alcohol.
In the 17-page response memorandum, Fermented Sciences argues the plaintiff’s complaints are “bald assertions” and the consumer’s belief that the implied health benefits on the hard kombucha label could counteract alcohol are “implausible.” The Flying Embers label, Fermented Sciences points out, includes a surgeon general’s warning about the adverse health issues of drinking alcohol.
“Reasonable consumers would understand that the products are alcoholic beverages that may cause health problems, but that defendant’s products also include juices with antioxidants as well as probiotics. There is no deception,” Fermented Sciences writes in their response.
Read more (Law360)
- Published in Business
Food and Beverage Laws Passed in 2021, Part 2
Changes in the global food system influenced the types of laws U.S. legislators passed in 2021. States are loosening the regulations on breweries and wineries, offering more government support to local restaurants, allowing the sale of homemade foods and cracking down on hidden fees from third-party food delivery services.
In our last newsletter, we shared the food and beverage laws passed in 20 states in 2021. The list below completes the balance of the country — Massachusetts to Wyoming.
Massachusetts
HB21 — Allows temporary licenses for nonprofit charitable corporations. Allows alcoholic beverages sold to be donated at no charge to the license holder.
HD1331 — Provides that a license to operate a restaurant may be connected to other on-site premises, even if it is not a grocery store.
SB2475 — Extends to-go cocktail sales through May 1, 2022.
SB2603 — Sets minimum standards for the confinement of chickens, veal calves and pigs, and bans the in-state sale of products that don’t comply. Mandates cage-free conditions for egg-laying hens with welfare enrichments like perches, dust bathing areas, scratching areas and next boxes. The law also expands coverage to egg products and liquid eggs.
SB2841 — Reform state’s franchise laws, allowing a new qualified brewer for craft brewers. Allows craft brewers who produce fewer than 250,000 barrels annually to end their contract with a wholesaler. It repeals the state’s 1971 franchise law, enacted to protect in-state distributors from larger, out-of-state, foreign brewers, during a time when the craft beer industry did not exist.
Michigan
HB4711 — Allows baseball stadiums at Michigan universities to serve alcohol.
SB49 — Allows wineries, breweries and distilleries to operate both an on-premise and off-premise tasting room at the same location.
SB141 — Allows small craft distillers to self-distribute up to 3,000 gallons per year of product to retailers. Also allows craft distillers to ship directly to consumers.
SB142 — Allows a small wine maker to self-distribute directly to retailers.
SB144 — Expands the definition of a mixed spirit drink to allow increased ABV percentage.
SB559 — Amends state liquor code to allow more entertainment complexes to receive liquor licenses; drops number of needed races from seven to two for a motorsports venue to qualify for a liquor license.
Minnesota
SB958 — Raises the sales cap for cottage food sales from $18,000 (formerly the lowest sales cap in the country) to $78,000.
Mississippi
HB562 — Allows online sales of cottage foods.
HB572 — Expands boundaries of resort areas where alcohol can be sold.
HB997 — Authorizes private retailers to obtain wholesaler permits for alcohol sales. Also removes the state’s Department of Revenue as a wholesale distributor of alcohol.
HB1091 — Amends code to increase the alcohol content for alcoholic products. Defines how much product can be produced and sold at a microbrewery.
HB1135 — Allows alcohol delivery from a licensed delivery.
HB1288 — Amends code to allow a charter ship to sell and serve alcohol.
Missouri
HB537 — Allows online sales of cottage foods and removes the $50,000 sales limit on cottage foods.
HB574 — Prohibits inspectors of agricultural grounds or facilities to enforce laws of states other than MIssouri.
SB126 — Legalizes the permanent sales of to-go alcohol. Also expands the sale of alcohol in the state on Sundays.
Montana
HB79 — Provides regulatory clarity for how breweries produce fermented-style beverages, including any alcoholic beverages made by fermentation of malt substitutes, like rice, grain, glucose, sugar or molasses.
HB157 — Removes restrictions for alcohol licensing, allowing brewers and immediate families to both hold a license.
HB226 — Makes permanent the curbside delivery and to-go drink options for licensed retailers established during the Covid-19.
SB199 — Establishes the Montana Local Food Choice Act. The food freedom bill exempts certain homemade or cottage food products from food licensing and inspection regulations. It also expands the types of foods that can be sold.
SB247 — Allows colleges and universities in the state to serve beer and wine at sporting events.
SB320 — Legalizes the home delivery of beer and wine.
Nebraska
LB274 — Amends the Nebraska Liquor Control Act, making permanent licenses to sell to-go alcoholic beverages. Also allows craft breweries and wineries to sell alcoholic beverages at open-air farmers markets.
LB324 — Establishes the Independent Processor Assistance Program, improvising the Nebraska Meat and Poultry Inspection Law. Helps small locker plants make the transition to a federally-inspected facility.
LB396 — Adopts the Nebraska Farm-to-School Program Act, which establishes a structure to facilitate communication between farmers and schools.
Nevada
SB297 — Requires the Council on Food Security to research and develop recommendations on community gardens and urban farms.
SB307 — Prohibits direct-to-consumer (DTC) shipping of alcohol from both in-state and out-of-state breweries, distilleries and retailers. In-state retailers can also make local deliveries from licensed wholesalers. However, DTC wine shipments will still be allowed.
SB320 — Requires food delivery services such as Uber Eats and DoorDash to disclose fees to consumers, breaking down what price is for food, taxes, delivery fee and commission charted to the restaurant. Restaurant committees are limited to 20% of a credit card processing fee during a state of emergency (like the Covid-19 pandemic).
New Hampshire
HB226 — Gives state department of agriculture authority to stop the sale of any produce in violation of state agricultural laws.
HB345 — Establishes a license for wild mushroom harvesters. Allows state department of health and human services to fine people who distribute wild mushrooms without a license.
HB593 — Requires food delivery service to enter into an agreement with a food service establishment before offering delivery service from that restaurant.
SB66 — Allows takeout and delivery of alcoholic beverages.
SB125 — Eases certain regulatory restrictions for a number of beverage manufacturer licenses. Removes limitation on quantity of beer a beverage manufacturer may sell in a day to the public and allows direct-to-consumer shipping to consumers within the state.
SB155 — Allows restaurants to permanently expand dining into a shared space, like a sidewalk or street, with approval from local authorities. This temporary dining space was originally established during the Covid-19 pandemic.
New Jersey
AB1091 — Requires Division of Travel and Tourism to advertise and promote tours of breweries in the State.
AB1478 — Permits theaters with 50 seats or more to apply for liquor license.
AB5906 — Rescinds prohibition on return of certain items purchased from retail food stores during Covid-19 state of emergency. It also provides that future limitations on returns occur during declared public health emergencies.
SB673 — Establishes New Jersey’s first cottage food law (they were the only state in the U.S. without a cottage food law). Allows home-based producers to make food from home rather than a commercial kitchen. These producers must obtain a license every two years, cannot earn more than $50,000 a year and are limited by products that can be sold (though state permission can be granted for additional items).
SB3340 — Expands opportunities for restaurants, bars, distilleries and breweries to operate during the Covid-19 pandemic. Provides outdoor dining space and opens new permits for sales at farmers markets.
SB3364 — Allows certain liquor licenses to acquire alcoholic beverage licenses from a retail food store that is a bankrupt asset.
New Mexico
HM1 — Requests the New Mexico Department of Agriculture to study the economic benefits of regional mobile livestock slaughter units, which would make livestock slaughtering easier for small ranchers.
HB177 — Enacting the Homemade Food Act. Allows anyone in the state to start a cottage food business — and opens sales to be from home and online (cottage food sales were previously limited to events only).
HB255 — Allows restaurants to purchase a liquor license at a more affordable rate ($2,500-$10,000, depending on size) if serving alcohol with dinner. Also allows alcohol deliveries with food.
HB303 — Bans unlawful liquor incentives. No liquor licensee shall accept money or a gift of monetary value to influence the purchase or a certain brand of alcoholic beverage.
SB1 — Allows qualified state food and beverage establishments to claim a temporary gross receipts tax (GRT) deduction on sales of food and beverages from March 2, 2021 through July 1, 2021 as a stimulus incentive.
SB2 — Waives the annual liquor license fees for licensees, aiming to boost businesses hit by the Covid-19 pandemic.
New York
AB952 — Directs the commissioner of agriculture and markets and the commissioner of economic development to work with the state’s land grant university system to produce a report to provide advice, guidance and recommendations on improving the resiliency of the state’s farm and food supply. Also will provide guidance on the related supply chain logistics to address food shortages, food waste and the inability to get New York farm goods to markets that occurred as a result of the Covid-19 pandemic, with the goal of creating permanent solutions beyond the state of emergency to reflect the changing wholesale, retail and consumer marketplace.
AB4613 — Creates a task force on improving urban and rural access to locally produced, healthy foods.
AB5386 — Establishes the New York Soil Health and Climate Resiliency Act to enhance and maintain the health and resilience of agricultural soils. The program will assist farmers in improving the health of their soil. It also establishes a climate resilient farming initiative to promote and encourage farmers to reduce the effects of farming on climate change and to adapt to and mitigate the impact of climate change by improving and maintaining water management systems and soil health.
AB7506 — Requires grease traps at food service establishments be designed to withstand expected loads and prevent unauthorized access, making them safer for the general public.
AB7207 — Authorizes and directs the commissioner of agriculture and markets to conduct a study on urban agriculture, including vertical farming, community gardens and urban farming.
SB1630 — Requires third-party food delivery services to have a valid agreement with a merchant before they advertise, promote or sell the merchant’s products on their platform.
SB2743 — Authorizes the issuance of a temporary retail permit by the state liquor authority to licensees located in a municipality having a population of one million or more persons.
SB6353 — Allows restaurants to utilize municipal spaces like sidewalks and streets for outdoor dining for another year. First granted under an executive order during the Covid-19 pandemic, the law makes restaurant use of public spaces to allow restaurants to recover from the pandemic.
North Carolina
HB4 — Extends ABC permit renewal payment deadlines for bars.
HB890 — Allows consumers to order online and pick-up alcohol from state Alcoholic Beverage Control stores, expands growler sizes from 2 to 4 liters, loosens rules for distillery tours and allows distillers to sell alcohol at festivals.
North Dakota
HB1284 — Modifies special event alcohol permit requirements to remove the rule that persons under 21 years of age must remain out of the area where alcohol is served.
HB1475 — Creates a $10 million agriculture diversification and development fund to provide loans and grants for value-added agriculture businesses in the state.
SB2220 — Moves the sale of Sunday alcohol sales to 8 a.m., the same as the rest of the days of the week in the state..
SB2321 — Allows microberies and taprooms to ship products in-state.
Ohio
HB665 — Increases the amount a county or independent agricultural society receives for operating expenses from a county. Removes caps on junior club membership .
HB669 — Makes to-go alcohol sales permanent.
HB674 — Allows home delivery of alcohol, as long as the beverage is served in an original container.
SB102 — Sweeping liquor reform. Lowers the age for serving alcohol to 18, expands Designated Outdoor Drinking Areas spaces, clarifies that homebrewers are allowed to brew their own drinks, enter them in tasting competitions and share them at local club gatherings.
Oklahoma
HB1032 — Creates the Homemade Food Freedom Act which provides for regulation and oversight for the production, transportation and sale of homemade food products. Now allows almost all types of baked, non-perishable and perishable foods. Also increases sale limits from $20,000 to $75,000, allows direct sales and allows shipment of non-perishable items.
HB2117 — Allows certain communication and interaction via social media by alcohol wholesalers, beer distributors and retailers.
HB2122 — Allows the sale of to-go cocktails, mixed drinks or single-serve wine in a sealed container for off-premise consumption.
HB2277 — Permits licensed alcohol retailers to offer different drink specials at various locations owned and operated under their license, like a happy hour.
HB2380 — Allows customers to self-pour their own beer, wine or mixed beverage from automated machines.
HB2726 — Allows Oklahoma small businesses to offer bottle service to their customers.
SB85 — Authorizes holders of multiple small brewer licenses to sell beer at multiple locations.
SB262 — Requires wine and spirit wholesalers to remit alcohol excise taxes when purchasing alcoholic beverages for sale within the state except for wine shipped by wineries possessing a Winemaker Self-Distribution License.
SB315 — Allows licensed distillers to sell spirits for on- or off-premise consumption on distillery property or in an area connected and controlled by the licensee.
SB385 — Allows retail spirits, wine and beer licensees to host alcoholic beverage tastings.
SB499 — Requires that customer receipts for alcoholic beverages purchased at catered, public and special events include a line item for the 13.5% tax collected.
SB760 — Allows multiple alcohol licensees to designate a common drinking area.
Oregon
HB2111 — Changes name of “Oregon Liquor Control Commission” to “Oregon Liquor and Cannabis Commission.”
HB2264 — Alcohol reform bill. Allows Indian tribe or airline that holds full on-premises sales license to negotiate with Oregon Liquor Control Commission purchase price of distilled liquor for specified sales. Directs Oregon Liquor Control Commission to study alcohol. Changes definition of “malt beverage.” Allows nonprofit organizations to sell alcoholic beverages for up to 45 calendar days per year without license issued by commission. Allows holder of full on-premises sales license to sell, deliver and ship to consumers specified alcoholic beverages for off-premises consumption. Allows holder of limited on-premises sales license to deliver and ship to consumers specific alcoholic beverages for off-premises consumption. Allows holder of off-premises sales license to sell specified alcoholic beverages for off-premises consumption. Allows holder of temporary sales license to ship specified alcoholic beverages to consumer. Repeals license application fee. Allows advertising by liquor store to be visible from outside store. Specifies that retail sales or distillery outlet agent’s deposit with commission is of check and cash receipts. Specifies wine containing more than 16% alcohol by volume is taxed at 10 cents per gallon. Requires manufacturer, purchaser and distributor of alcohol to retain records for three years.
HB2742 — Allows holder of off-premises sales license to sell factory-sealed containers of malt beverages that hold more than seven gallons.
HB2363 — Allows certain holders of temporary event licenses to sell specified alcoholic beverages for on and off-premises consumption at more than one location on licensed premises — or have up to three premises licensed under single temporary sales license and operate for up to 30 day.
HB2395 — Modifies single-use checkout bag prohibition in the state. Changes definition of “recycled paper checkout bag” to include bags that contain non wood renewable fiber.
HB2611 — Permits agricultural building to be used for uses other than uses set forth in definition of “agricultural building” if additional uses are incidental and accessory to defined uses, are personal to farm owner and farm owner’s immediate family or household and do not pose hazard.
HB3361 — Requires third-party food platform to enter into agreement with restaurant before arranging delivery of orders from food place or listing food place on application or website. Requires third-party food platform delivery service to receive written consent from restaurant before arranging for delivery or order from restaurant.
SB806 — Includes “fortified cider” in definition of cider. Allows holder of direct shipper permit to ship up to five cases of wine per month to Oregon residents. Deletes requirement that commission charge application fee for new licenses. Provides that the alcohol commission may allow applicant to defer or waive payment of annual license fee if Governor declares state of emergency.
Pennsylvania
HB425 — Allows a liquor licensee that has closed either permanently or for a long time to sell its liquor license.
HB427 — Gives establishments with liquor licenses a 15% discount (instead of 10%) on the purchase of liquor from the state stores for three years.
SB434 — Alters “sell by” and “best by” dates on milk. Allows processors to apply for Department of Agriculture approval to exceed the current 17 day limit.
Rhode Island
HB5131 — Prohibits a food service establishment from providing a consumer with a single-use plastic straw, unless the consumer requests such a straw.
HB5214 — Eliminates the $10.00 fee requirement for businesses to obtain a sales tax permit.
HB5758 — Establishes the state’s first Cottage Food Law, but only allows farmers to sell homemade products.
SB142 — Allows the sale of alcoholic beverages on New Year’s Day by retail Class A licensees.
SB364 — Entitles dairy farms to the exemptions from taxation already granted to farmland, forestland and open space.
SB555 — Authorizes a Class B liquor license holder to sell to-go alcoholic beverages with take-out food orders (but rule will sunset on March 1, 2022).
SB788 — Prevents third-party food delivery services from using the likeness, registered trademark or any intellectual property belonging to the restaurant to falsely suggest sponsorship or endorsement without the restaurant’s consent.
South Carolina
SB619 — Allows more off-site tasting rooms in the state. Amends 1976 law affecting distilleries, breweries and wineries, to establish off-site “satellite locations” for sale of their products.
South Dakota
HB1109 — Updates state homebrew legislation to include cider as a permissible homemade alcoholic beverage. Allows (in limited quantities) for homemade alcoholic beverages permissible to be sold on licensed premises for certain events, and allows homebrewers to transport homemade alcoholic beverages from their household.
HB1121 — Deregulates the homemade or cottage food market. Repeals requirement that homemade canned goods must be inspected by a third-party authority for pH levels. Replaces lengthy warning that food wasn’t produced in a commercial kitchen and required allergen listing with a shorter summary. Allows sellers to sell their products through third parties without getting a good service license (as long as they aren’t making more than $150,000 a year).
HB1153 — Authorize the Board of Regents to contract for the design and construction of a new dairy research and extension farm on the campus of South Dakota State University, with equipment and furnishings.
Tennessee
HB306 — Extends the Tennessee dairy promotion committee to June 30, 2029.
HB1129 — Adds requirements for farmers to participate in herdshare programs, like maintain owner records, include warning labels on products and notify owners in case of contamination.
HB1514 — Reduces the population threshold (from 925 to 700) to make a municipality eligible to hold a referendum on the sale of alcoholic beverages.
SB17 — Allow breweries to self-distribute 1,800 barrels of beer throughout the state each year without having to go through a wholesaler.
SB269 — Authorizes a delivery service licensee to charge a fee based on a percentage of the sales of the alcoholic beverages or beer being delivered; limits the fee to no more than 10% of the price of each alcoholic beverage sold.
SB299 — Defines “food hall” for purposes of consumption of alcohol on the premises of a food hall; enacts certain requirements governing the operation of a food hall.
SB403 — Requires state to disclose certain information on contracts with wholesalers of alcoholic beverages.
SB591 — Authorizes a person or entity holding liquor license to sell or transfer their alcoholic beverage inventory to another licensee if they’re closing their establishment.
SB681 — Allows to-go alcohol sales for the next two years.
SB705 — Prohibits licensure as a winery direct shipper of in-state or out-of-state wine fulfillment houses.
Texas
HB1024 — Allows permanent sales of to-go beer, wine and mixed drinks for pickup and delivery food orders.
HB1276 — Allows restaurants to sell bulk foods directly to the public.
HB1518 — Loosens alcohol restrictions on Sunday mornings, allowing sales starting at 10 a.m. rather than noon.
HB1755 — Allows customers to take home unopened bottles of wine.
HB1957 — Sets new standards on what can be labeled as a Texas wine. If putting Texas on the wine label, winery must grow majority of grapes (75%-95%) within the state, county and/or vineyard on the label.
HR2002 — Recognizing June 2022 as National Dairy Month in Texas.
SB617 — Allows all food producers to sell food directly to consumers, not just farmers. Limits permit fees.
SB911 — Bans third-party food delivery service from using a restaurant’s trademark or charging a restaurant fees (unless agreed upon in writing). Also protects a restaurant from predatory food delivery services — allows a restaurant to be removed from the third-party delivery services listing if requested, and required third-party delivery services to provide consumers with a means to express concerns with their delivery. Gives restaurants the power to sue a third-party delivery service if it violates the terms. Also prohibits cities and counties from creating interfering regulations than what the state approved.
SB1226 — Allows brewpubs to legally host tastings.
Utah
HB94 — Legalizes microenterprise home kitchens, allowing home chefs to sell their homemade meals.
HB296 — Creates the Utah Soil Health Program.
SB137 — Gives the Utah Department of Alcoholic Beverage Control an additional $4.3 million to raise salaries for its retail clerks, warehouse workers, store managers and assistant managers up to market standards.
SB147 — Prohibits farm owners and operators in the state from confining egg-laying hens to enclosures. Must implement cage-free housing systems by 2025.
HB166 — Criminalizes theft of livestock.
Vermont
HB218 — Expands raw milk sales for producers selling at farm stands and CSA’s in the states.
HB313 — Extends for two years the governor’s executive order to allow curbside pickup and delivery of alcohol.
HB434 — Establishes the Agricultural Innovation Board.
SB20 — Bans the sale of common items containing PFAS (perfluoroalkyl and polyfluoroalkyl substances used to make food packaging grease- and water-resistant). The bill takes steps to restrict harmful phthalate and bisphenol chemicals from food packaging.
Virginia
HB1299 — Allows for the sale of to-go alcohol beverages until July 1, 2022.
HB1902 — Prohibits food vendors from using single-use expanded polystyrene food service containers. Requires chain restaurants to stop using such containers by July 1, 2023, and sets the date for compliance by all food vendors as July 1, 2025. A penalty will be inflicted of $50 a day for violators.
HB1973 — Allows nonprofits conducting online fundraisers to sell and ship wine in closed containers as part of a fundraising activity.
HB2068 — Establishes the Local Food and Farming Infrastructure Grant Program. The governor will award the grants based on infrastructure development projects that support local food production and sustainable farming.
HB2302 — Allows farmers markets to be treated as grocery stores during state of emergency and are allowed to remain open as essential businesses during a state of emergency declared by the Governor.
SB1188 — Establishes the Virginia Agriculture Food Assistance Program and Fund for Virginia farmers and food producers to donate, sell, or otherwise provide agriculture products to charitable food assistance organizations.
SB1193 — Establishes the Dairy Producer Margin Coverage Premium Assistance Program. Gives dairy farmers (with a resource management or nutrition management plan) the ability to receive a refund of their annual premium payment paid into the federal program.
SB1428 — Prohibits the Virginia Alcoholic Beverage Control Authority from selling in government stores low alcohol beverage coolers not manufactured by licensed distillers.
SB1471 — Allows the Board of Directors of the Virginia Alcoholic Beverage Control Authority to increase the frequency and duration of outdoor events that sell alcohol. The laws are expected to provide flexibility to restaurants during COVID-19.
Washington
HB1145 — Allows the use of non wood renewable fiber in recycled paper carryout bags.
HB1480 — Allows sale of to-go alcohol products, including cocktail kits and growlers.
HB5362 — Ensuring the funding of agricultural fairs.
SB5022 — Enacts recycling requirements for plastic beverage containers. Bans polystyrene (EPS) products and sets-up opt-in requirements for dining establishments using single-use foodware.
SB5272 — Waives a one-time annual liquor license and cannabis license fee for those establishments for 12 months.
West Virginia
SB 51 — Requires dairy foods processed in the state to be added to the list of items to be purchased by state-funded institutions.
SB 58 — Creates the West Virginia Farm Fresh Dairy Act.
Wisconsin
SB56 — Allows alcohol beverage retailers to make online or phone sales of alcohol beverages, to be picked up by the customers at a designated parking space that is not part of the retail licensed premises.
Wyoming
HB13 — Increases the amount of wine that a licensed out-of-state wine shipper may ship to any one household address. Allows Wyoming consumers to receive up to 12 cases of wine in a 12-month period (the former limit was four cases per year).
HB51 — Establishes grant program to meat processing facilities suffering during the COVID-19 pandemic.
HB54 — Focuses efforts and resources of the Wyoming Business Council on developing slaughter plant options for producers.
HB118 — Allows sale of eggs under the state’s Food Freedom Act.
HB156 — Allows winery permit holder to be issued an off-premise wine permit for a 24-hour period.
HB159 — Allows any liquor license holder — who then obtains an out-of-state shipper’s license — to ship alcohol to Wyoming households. Increases satellite permits for liquor manufacturers from one to two.
HB229 — Allows Wyoming ranchers the choice of selecting lawful forms of animal identification devices. Rejects USDA mandate to only use higher-cost RFID ear tags for livestock.
Food and Beverage Laws Passed in 2021
After the Covid-19 pandemic shortened their legislative sessions last year, lawmakers across the 50 states had a productive year in 2021. State leaders were able to pass hundreds of bills relating to food, beverages and food service.
Numerous new laws were aimed at helping restaurants survive — permitting permanent outdoor dining spaces, allowing carryout food services and to-go alcohol sales. Many of these regulations had been enacted in 2020 as temporary, emergency measures to aid restaurateurs, but expired this year.
This year was also big for cottage food laws. As more people experimented in their home kitchens during the pandemic, there was pressure to modernize cottage food laws. Over half the states updated their laws in 2021, regulating sales of homemade food.
Below are the key food, beverage and food service laws passed this year in, alphabetically, Alabama through Maryland. We’ll feature the balance of the states — Massachusetts to Wyoming — in TFA’s next newsletter (January 12, 2022).
Alabama
HB12 — Extends protections granted for cottage food businesses to include roasted coffees and gluten-free baking mixes.
HB539 — Increases the amount of alcohol which breweries and distilleries can sell to customers for off-premise consumption.
SB126 — Allows licensed state businesses to deliver wine, beer and spirits to customers’ homes.
SB160 — An update to Alabama’s cottage food law, SB160 allows for most non-perishable foods to be made in home-based food businesses without commercial licenses (instead of just only baked goods, jams/jellies, dried herbs and candies). It also removes the $20,000 sales limit for home-based food businesses. It also allows online sales and in-state shipping of products.
SB167 — Permits Alabama wineries to sell directly to consumers at special events.
SB294 — Authorizes wine manufacturers to sell directly to retailers without a distributor.
SB397 — Allows opening of wineries in Alabama’s 24 dry counties. The wineries will be allowed to produce and operate in a dry county, but they may not sell on premise.
Alaska
HB22 — Legalizes herd share agreements for the distribution of raw milk in the state.
Arizona
HB2305 — Amends law to allow two or more liquor producers, craft distillers or microbrewery licenses at one location.
HB2753 — States that licensed producers, craft distillers, brewers and farm wineries are subject to rules and exemptions prescribed by the FDA. Exempts production and storage spaces from state regulation.
HB2773 — Allows bars, liquor stores and restaurants to sell cocktails to-go.
HB2884 — Exempts alcohol produced on premise in liquor-licensed businesses from food safety regulation by the Arizona Department of Health Services, which adds rules regarding production, processing, labeling, storing, handling, serving, transportation and inspection. Specifies that this exemption includes microbreweries, farm wineries and/or craft distilleries.
Arkansas
HB118 — Permits the sale of cottage foods over the internet. Interstate sales are permitted if the producer complies with federal food safety regulations.
HB1228 — Allows for municipalities in dry counties to apply to be an entertainment district, just like in wet counties.
HB1370 — Establishes mead as an allowed liquor for a small farm winery — and allows wineries to ship mead. Also allows for mead to be taxed in the same manner as wine.
HB1426 — Establishes the Arkansas Fair Food Delivery Act, stating that a food delivery platform (like UberEats) must have an agreement with a restaurant or facility to take food orders and deliver food prepared.
HB1763 — Allows distilleries to self distribute their own products and allows out-of-state, direct-to-consumer shipments.
HB1845 — Restricts advertising alcohol in microbrewery-restaurants in dry counties.
SB248 — Replaces Arkansas’ cottage food law with the Food Freedom Act. Allows all types of non-perishable foods to be sold almost anywhere without a food safety license and certification, including grocery stores and retail shops.
SB339 — Allows permitted restaurants to sell on-the-go alcoholic beverages.
SB479 — Allows restaurants with alcohol beverage permits to expand outdoor dining without approval of the Alcoholic Beverage Control Division.
SB554 — Authorizes beer wholesalers to distribute certain ready-to-drink products.
SB631 — Authorizes a hard cider manufacturer to deliver hard cider.
California
AB61 — Allows restaurants and bars with alcohol licenses that added temporary, outdoor sidewalk dining spaces during the Covid-19 pandemic to continue serving alcohol in these spaces.
AB239 — Allows wineries to refill wine bottles at off-site tasting rooms, similar to breweries reusing growlers
AB286 — Requires third-party delivery companies to itemize cost breakdowns of delivery transactions to both restaurants and customers.
AB425 — Updates regulations regarding definitions, assessments, fees and funding mechanisms for the Dairy Council of California.
AB831 — Mandates that all labels on cottage food must include the disclaimer “Made in a Home Kitchen” along with the producer’s county and cottage food permit number.
AB941 — Establishes a grant program for counties to apply for farmworker resource centers, supplying farmworkers and their families information on education, housing, payroll, wage rights and health services.
AB962 — Requires the creation of a returnable bottle system in the state by 2024. Allows recyclable bottles to be washed and refilled by beverage producers rather than being crushed for recycling.
AB1144 — Updates California’s outdated cottage food laws, raising sales limit to either $75,000 (Class A permits) or $150,000 (Class B permits) and simplifying the approval process for sampling cottage food products. Also allows homemade food to be sold online.
AB1200 — By 2023, no eatery in California is permitted to distribute or sell food packaging that contains regulated perfluoroalkyl and polyfluoroalkyl substances or PFAS. Manufacturers of food packing must use the least toxic alternative when replacing their food packaging. Food packaging includes food or beverage containers, take-out containers, liners, wrappes, eating utensils, straws, disposable plates, bowls and trays.
AB1267 — Allows licensed manufacturers, distributors and sellers of alcoholic beverages to donate a portion of beverage purchases to a nonprofit.
AB1276 — Requires California eateries to only give take-out customers single-use utensils and condiment packets if they ask for them.
AR15 — Establishes Nov. 22 as Kimchi Day in the state.
SB19 — Allows wineries to open additional off-site tasting rooms without applying for a new license (former law allowed for only one off-site tasting room).
SB314 — Allows restaurants and bars that added temporary, outdoor sidewalk dining spaces during the Covid-19 pandemic a one-year grace period to apply for permanent expansion.
SB389 — Allows restaurants and bars to serve to-go alcohol alongside a meal.
SB453 — Establishes an Agricultural Biosecurity Fund specifically for the California State University system’s Agricultural Research Institute. The California State University’s 23 campuses and 8 off-campus branches can then use that fund to apply for grants related to supporting research on agriculture biosecurity, best practices around infectious agents hurting the state’s animal herds and plant crops.
SB517 — Authorizes a licensed beer manufacturer who obtains a beer direct shipper permit to sell and ship beer directly to a resident of the state for personal use.
SB535 — Makes it unlawful to manufacture or sell imitation olive oil in the state. Also restricts using “California Olive Oil” on a label unless 100% of the oil is derived from olives grown in California. The label can also only share that the oil comes from a specific region of California if at least 85% of the olives were grown in that region.
SB721 — Establishes Aug. 24 as California Farmworker Day.
Colorado
HB1027 — Extends sales of to-go alcohol from licensed restaurants and bars to 2026.
HB1162 — The Plastic Pollution Reduction Act, the law bans single-use plastic bags and containers made from polystyrene (styrofoam) for restaurants and other retailers by 2024. All stores will also implement a 10-cent bag fee for plastic and paper bags by 2023.
SB35 — Prohibits third-party restaurant delivery services from cutting pay to a driver to comply with fee limits. Also prohibits third-party delivery services from putting restaurants on their platforms without the eateries’ permission.
SB235 — Sends the Department of Agriculture $5 million for energy efficiency and soil health programs.
SB270 — Allows more Colorado wineries, cideries and distillers to attain a pub license and sell a variety of food in addition to their craft beverage. Current law puts small limits on the amount of craft drink made for a brewery to sell food, leaving out larger Colorado producers.
Connecticut
HB5311 — Enables permitted transporter to sell and serve alcohol on boats, motor vehicles and limousines.
HB6610 — Codifies expanded outdoor dining, allowing municipalities to close off streets and sidewalks for outdoor restaurant dining space.
SB894 — Allows patrons to pour their own alcoholic drinks at restaurants and bars. Will allow self-pour automated systems to be used in the state’s dining establishments.
HB6580 — Expands food agricultural literacy programs of study and community outreach, by increasing certification, education and extension programs with rural suburban and urban farms for students in grades Kindergarten through 12th grade.
Delaware
HB1 — Allows restaurants to continue selling to-go alcohol beverages. The bill also allows restaurants and bars to continue using outdoor dining spaces originally used during the Covid-19 pandemic.
HB46 — Allows brewery-pub and microbrewery license holders to brew, bottle and sell hard seltzers and other fermented beverages made from malt substitutes. Also includes a specific tax on fermented beverages.
HB143 — Reduces the amount of licensed taprooms to only one taproom within a ½ mile from another taproom.
HB212 — Increases minimum thickness for plastic bags (used by grocery stores and restaurants) to qualify as a reusable bag from 2.25 mils to 10 mils.
SB46 — Allows wedding venues and event centers licensed as bottle clubs to allow customers to bring alcoholic beverages on premise.
Florida
HB751 — Authorizes issuance of special licenses to mobile food vehicles to sell alcohol beverages within certain areas.
HB1647 — Allows more Orlando eateries to sell alcohol. Allows eateries with a smaller footprint (80-person capacity; formerly 150-person capacity) to sell beer, wine and spirits in six additional Orlando Main Street Districts.
SB46 — Increases production limits for distilleries from 75,000 gallons a year to 250,000 gallons. Eliminates the “six bottles per person per brand per year” requirement. Also allows craft distilleries to qualify for a vendor’s license to conduct tastings at Florida’s fairs, trade shows, farmers markets, expositions and festivals.
SB148 — Authorizes restaurants or bars also holding a public food service license to sell or deliver alcoholic beverages in sealed, to-go containers.
SB628 — Establishes a new program, the Urban Agriculture Pilot Project, to distinguish between traditional rural farms and emerging urban farms. Exempts farm equipment used in urban agriculture from being stored in certain boundaries.
SB663 — Updates Florida’s cottage food law to allow shipping of products, and raises the sales limit for shipped cottage food from $50,000 to $250,000. The bill also prevents counties or cities from banning cottage food businesses (Ed. note: Florida’s largest county, Miami-Dade, prohibits cottage food businesses).
SR2041 — Establishes a Food Waste Prevention Week in the state to acknowledge the importance of conserving food and preventing food waste.
Georgia
HB273 — Allows local municipalities to pass an ordinance, resolution or referendum election to authorize allowing a liquor store to open in their jurisdiction
HB392 — Allows a person to have a mixed cocktail or draft beer from the hotel delivered to their room by a hotel employee.
HB498 — Expands eligibility requirements for the state’s tax exemption for agricultural equipment and farm products. Any family-owned farm entity (defined as two or more unrelated, family-owned farms) can now share equipment, land and labor without losing ad valorem tax exemptions enjoyed by stand-alone family farms.
HB676 — Creates a legislative advisory committee on farmers’ markets (Farmers’ Markets Legislative Advisory Committee), made up of five members from the state’s Senate and House.
SR155 — Recognized February 17 as State Restaurant Day.
SB219 — Permits small brewers to sell alcohol for consumption on their premise. Allows state’s breweries to transfer beer between locations.
SB236 — Extends the Covid-era rule that allows restaurants to sell to-go alcohol.
Hawaii
HB817 — Requires state agencies to purchase an increasing amount of locally grown food.
HB237 — Earmarks $350,000 to the department of agriculture for the mitigation and control of the two-lined spittlebug, which has damaged nearly 2,000-acres of pasture land.
SB263 — Establishes a “Hawaii Made” program and trademark, to promote Hawaiian-made products.
Idaho
HB51 — Amends existing law to provide nutrient management standards on dairy farms. Allows dairy farmers the option of using phosphorus nutrients.
HB232 — Changes the distribution of tax on high-alcohol-content beer from the state wine commission to the state hop growers commission, helping promote the craft industry.
Illinois
HB2620 — Allows small breweries, meaderies and winemakers to distribute their products to local bars, grocery stores and liquor stores directly rather than through a third party.
HB3490 — Amends Illinois Food, Drug and Cosmetic Act, which says, if a restaurant includes milk as a default beverage in a kid’s meal, the drink must be dairy milk and contain no more than 130 calories per container or serving.
HB3495 — The Brewers Economic Equity & Relief Act, allows for limited brewpub self-distribution, permanent delivery for small alcohol producers, direct-to-consumer shipping for in-state and out-of-state brewers and distillers and self-distribution for manufacturers producing more than one type of alcohol.
HR33 — Creates the Illinois Good Food Purchasing Policy Task Force to study the current procurement of food within the state and explore how Good Food Purchasing can be implemented to maximize the procurement of healthy foods that are sustainably, locally and equitably sourced.
HR46 — Urges the Illinois Department of Agriculture to study the effects and the types of land loss to Black farmers. Calls for state support and capacity building for Black farming communities across the state and a dedication to helping grow agriculture in rural, urban, and suburban areas.
HR117 — Urges the United States Department of Agriculture and the United States Department of Commerce to increase the exportation of Illinois dairy products to other nations.
SB2007 — The Home-to-Market Act, updates the state’s Illinois Cottage Food Law. Expands sales avenues for cottage food producers, allowing sales at fairs, festivals, home sales, pick-up, delivery and shipping (cottage food was previously only allowed to be sold at farmers markets).
Indiana
HB1396 — Updates many of Indiana’s outdated alcohol laws, some from the Prohibition Era. Amended various sections of Indiana’s alcohol code impacting permittees, trade regulation and other various definitions.
HB2773 — Allows bars, liquor stores and restaurants to permanently sell to-go alcohol orders, originally allowed temporarily during the Covid-19 pandemic.
SB144 — Allows bulk wine purchasing limits for farm wineries to apply only to wine sold directly to a consumer and not to wine sold through a wholesaler. Also allows the holder of an artisan distiller permit to also hold a distiller’s permit.
SB185 — Creates a working group made up of industry organizations, food safety experts, Indiana State Department of Health, Indiana State Board of Animal Health and Indiana State Department of Agriculture to submit recommendations to the state concerning home-based vendors and cottage food laws.
Iowa
HB384 — Updates rules regarding alcohol licenses. Lengthens the hours of sale for alcoholic beverages on Sunday.
HF766 — Allows home delivery of alcoholic beverages from bars and restaurants by third-party delivery services, such as Uber or DoorDash.
Kansas
HB2137 — Allows bars, liquor stores and restaurants to permanently sell to-go alcohol orders, originally allowed temporarily during the Covid-19 pandemic.
Kentucky
HR3 — Recognizes March 23 as Agricultural Day in the state.
HR19 — Recognizes June as Dairy Month, honoring the state’s dairy workers.
SB15 — Allows a microbrewery licensee to sell and deliver up to 2,500 barrels of product to any retail licensee and to set forth terms of contracts between microbrewers and distributors.
SB67 — Allows bars, liquor stores and restaurants to permanently sell to-go alcohol orders, originally allowed temporarily during the Covid-19 pandemic.
Louisiana
HB192 — Authorizes credit card payment to manufacturers and wholesale dealers of alcoholic beverages (when previously cash was only allowed).
HB219 — Allows the delivery of ready-to-drink alcohol beverages (sold in manufacturer sealed containers), allowing brewers with a brewing facility to self-distribute.
HB269 — Allows authorized state employees to destroy meat, seafood, poultry, vegetables, fruit or other perishable food of foreign origin which are subject of a current import ban from the federal government.
HB291 — Allows self-distribution to any brewer who operates a brewing facility in the state.
HB706 — Adds microwinery to microdistillery permits.
HR104 — Designates May 19, 2021, as Louisiana Craft Brewers’ Day in the state.
HR210 — Authorizes a state subcommittee to study and make recommendations to the government on the regulation of the growing craft brewing industry in the state.
Maine
SB133 — Clarifies that licensed Maine manufacturers of spirits, wine, malt liquor and low-alcohol spirits products may sell and ship their products to a person located in another state.
SB205 — Allows bars and restaurants to permanently sell to-go alcohol orders through take-out and delivery services if the liquor is accompanied by a food order. Also temporarily permits licensed Maine distilleries that operate tasting rooms but do not operate licensed on-premise retail to sell spirits through take-out and delivery services accompanied by a food order.
SB306 — Temporarily waives certain requirements for relicensing for restaurants that serve liquor to help food establishments during the Covid-19 pandemic.
SB307 — Allows all Maine alcohol manufacturers to sell directly to out-of-state consumers (current law only allows wine to be sold out-of-state).
SB479 — Amends definition of “low-alcohol spirits product” by raising the maximum alcohol level of a low-alcohol spirits product from 8% to 15%.
SB630 — Prohibits shelf-stable products from being sold as cider. Products that do not require refrigeration or are heat-treated cannot be labeled as cider.
SB636 — Establishes the Local Foods Fund, which helps schools purchase produce and other minimally processed foods from local farmers and producers.
SB822 — An act affirming that food seeds are a necessity in the state.
Maryland
HB185 — Prohibits an alcoholic beverages license holder from requiring that an individual buy more than one bottle, container or other serving of alcohol at a time.
HB264 — Requires entities that generate at least two tons of organic waste per week to arrange for disposal alternatives, like reduction, donation, animal feed or composting.
HB269 — Establishes the Urban Agriculture Grant Program in the Department of Agriculture to increase the viability of urban farming and improve access to urban-grown foods.
HB 555 — Repeals a prohibition on allowing drugstores to apply for a liquor license.
HB1232 — Codifies emergency orders to grant permanent to-go delivery of alcohol and online shipment privileges.
SB205 — Authorizes local alcoholic beverage licensing boards to temporarily allow restaurants and bars to sell to-go alcoholic beverages. Also requires Maryland’s Alcohol and Tobacco Commission and the Maryland Department of Health to study expanding alcohol access.
SB821 — Codifies the governor’s 2020 executive order to grant alcohol delivery and shipment. Also allows permitting to serve alcohol at off-premise, special events.
The Regulatory Landscape
Collaboration with regulators, not confrontation, is the recommended course of action for fermenters, experts suggest.
“Producers are speaking one language and regulators are speaking another,” says Abigail Snyder, assistant professor of microbial food safety at Cornell University. “Producers are like ‘Hey, this has been produced forever and it has a history of safe production!’ That’s not super meaningful for regulators. Regulators are used to this codified framework that is not necessarily built around fermented foods. There’s a middle ground.”
Snyder spoke with a panel of experts on health and safety regulations during TFA’s conference, FERMENTATION 2021. The consensus: food regulations exist to protect the consumer, but complying with myriad national, state and local laws can be difficult and frustrating to navigate, especially for a fermented food or beverage that utilizes novel food processes.
“Don’t be afraid, don’t feel like you’re going to tick off the inspector,” says Adam Inman, assistant program manager for the Kansas Department of Agriculture Food Safety & Lodging Program. He advises producers to always ask regulators for help. “Even if we start with your recipe and your process and we just document that, that can go a long way as a starting point.”
Jonathan Wheeler, coordinator for special processes at retail for the South Carolina Department of Health & Environmental Control, says if you’re dealing with a regulator unfamiliar with fermentation, ask for a supervisor. Wheeler manages South Carolina’s team of 80-90 regulators and points out that a health inspection should be an education opportunity for the regulator, too.
“We are partners on the same team, just in different roles,” Wheeler says. “Our approach in South Carolina has been driven by the need to educate as well as regulate. You have a voice, it’s part of collaboration and inspectors…are open to input [from producers].”
Still, compliance is not without its challenges.
Soirée-Leone, writer, homesteader and local food advocate, says that food inspection is one of the biggest challenges for smaller producers — especially in rural areas, where resources can be limited. For example, in Tennessee where she lives, home-based food businesses can sell their goods at farmers markets, as long as those items don’t need to be refrigerated. But there’s no rule for food that needs to be frozen,, so producers are allowed by the health department to sell popsicles.
“It’s very challenging, and a lot of people get very frustrated in the process,” she says.
Erin Leigh DiCaprio, assistant professor of cooperative extension at University of California, Davis, notes that regulations differ from state to state — a ferment produced under cottage food laws in one state could need a processed food license in another. She points out every state or county has an extension educator like herself who has the needed technical expertise to work with producers and regulators. DiCaprio specifically works with smaller-scale processors to navigate regulations in California.
Could the U.S. learn from other countries?In Korea, Japan and China, fermented foods and drinks are common, yet regulations are minimal.
“There’s a cultural aspect there… not necessarily advocating eliminating regulations but saying that a culture — and no pun intended in this case — but a culture that’s been used to eating fermented foods for years and had no negative impact. Is there some education to be learned from that?” questions Neal Vitale, the moderator and executive director of TFA.
“We should not be as regulators in a position of trying to jam fermentation processes… into a mold where they all look the same — because they don’t,” Wheeler says. “Educate me as how you want that process to look.”
- Published in Business
FERMENTATION 2021 Wrap-Up
Nearly 300 individuals from around the world participated in The Fermentation Association’s first conference, FERMENTATION 2021. The virtual event included 35 educational keynotes, presentations, and panel discussions from more than 60 speakers over three days. Topics ranged from the science of fermentation to the art of fermenting to create flavor, from how fermented products are selling at retail to what’s next in the world of fermentation.
“I’ve been in this field for 40 years and, in all honesty, this is one of the biggest honors I’ve received, to be the speaker for this opening meeting of this really cool organization,” said Bob Hutkins, professor of food science at the University of Nebraska. Hutkins presented the conference’s opening keynote, Definition & History of Fermented Foods.
Over five years ago, John Gray, TFA’s founder, envisioned a trade show for producers of fermented foods and beverages, to make those artisanal items a more prominent part of the retail space. John connected with Neal Vitale, TFA Executive Director, and the organization was born out of their collective vision. TFA has grown, with a robust website, biweekly newsletter,a series of webinars and, now, an international conference. TFA has an Advisory Board that includes food and beverage producers, academics and researchers, and food and flavor educators and authors. TFA has formed working relationships with a number of other like-minded trade associations and organizations, and established a Buyers Council to create an active dialogue with food and beverage distributors, brokers and retailers.
“I have to tell you what a thrill it is to have you all here to witness and to participate in the beginning of a dream coming true,” added Gray in his welcoming remarks. Gray is the chairman and CEO of Katalina Holding Co., a food incubator and parent company of Bubbies Pickles.
FERMENTATION 2021 content paralleled TFA’s primary missions: first, help consumers better understand fermentation and its potential health benefits; second, work to improve health and safety regulations as they pertain to fermented products and third, connect the science and health research communities with producers, supporting scientific research and for a better understanding of the “state of the art.”
What made FERMENTATION 2021 unique is that it was the first event to bring together everyone involved in the world of fermentation — producers, retailers, chefs, scientists, authors, suppliers and regulators. The conference was not a how-to fermentation education event, as TFA feels there are numerous, effective resources for the person looking to, for example, make kimchi or learn about using koji.
“”We were delighted with how well FERMENTATION 2021 met — in fact, exceeded — our goals,” said Vitale. “While we were disappointed that the continuing impact of COVID-19 kept us from meeting in person, we were gratified by how all the participants responded, interacted, and engaged during our three jam-packed days. And, with recording of all our sessions now available online for our registrants, we expect that energy and excitement to continue.”,
“Fermentation is experiencing a major surge of interest in restaurants and kitchens around the globe,” says Amelia Nielson-Stowell, TFA Editor. “Our conference was a major milestone for the industry and we are already in the planning stages for FERMENTATION 2022 next summer. And, assuming we will be able to meet in person once again, we plan to host a tasting and sampling event for consumers alongside our conference.”
- Published in Business, Food & Flavor, Health, Science
Craft Kombucha Battles Big Brands
A group of craft kombucha brewers are banding together to fight industrialized kombucha. These small, UK-based companies say a number of big players are entering the kombucha space but taking mass production shortcuts, like pasteurizing and adding sweeteners. Many of the bigger brands, they say, are “kombucha in name only” making lab-engineered fermented tea without the fermentation.
“They don’t have time to ferment, some of them just use an instant mix, which totally goes against the grain of what kombucha is,” says Gary Leigh, founder of Go Kombucha and who that is leading what they’re calling the Real Kombucha Revolution. “Some make the kombucha, pasteurise it, kill off all the natural bacteria and add their own in.”
This consortium of craft brewers says mass-produced kombucha is edging out smaller, authentic brands. Craft brewers are struggling to compete when bigger companies are selling cheaper “kombucha” with a longer shelf life. Many consumers don’t realize what they are buying. Leigh stresses they’re not anti big kombucha brands, they just want brewers to be transparent about their production methods – they need to note on their labels if they’re pasteurized and/or they use sweeteners.
Read more (The Grocer)
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- Published in Business, Food & Flavor
Natural & Health Labels Can be Regulatory Nightmare
Brands need to be extra vigilant over the health claims they put on their labels. A simple phrase like “Supports immunity,” “Aids respiratory health” or “Full of natural flavors” could result in a lawsuit from the Food and Drug Administration (FDA), Federal Trade Commission (FTC) or a state attorney general.
“The FDA is able to set very broad and very narrow regulations in terms of what our labels can look like, what can be included in the products, what kind of claims we can make for the products, who the products can be distributed too, how they can be imported and exported and the like,” says Claudia Lewis, partner at Venable LLP, a Washington D.C.-based law firm.
Complying with these sometimes archaic laws can be challenging. The FDA, which ensures food safety, has a large jurisdictional footprint, regulating about 30 cents of every dollar Americans spend. The FTC is the authority on advertising and marketing claims for food, beverage and supplement products, and it may challenge a food brand if its marketing is deemed false, deceptive and/or misleading.
“Typically, if you’re in an FTC investigation, you’re going to have at least $300,000 in legal fees by the time you’re finished, if not over half a million dollars,” says Todd Harrison, partner at Venable. “The FTC is a very expensive regulatory agency to deal with. They can make your life pretty miserable.”
Harrison and Lewis specialize in representing functional food brands at their law firm and spoke at Expo East on the topic of Legal and Regulatory State of the Natural Products Industry. [The Fermentation Association’s virtual conference, FERMENTATION 2021 will also cover this and related topics — please check our Agenda for the latest sessions and speakers.]
Harrison and Lewis reviewed two main areas where improper labeling can get a food brand into trouble with regulators.
Using Covid-19 as a Marketing Tool
Shortly after the Covid-19 pandemic started, the FDA offered a unique relaxation of their rules and regulations for food products. Brands were challenged with supply chain disruptions and ingredient shortages. The FDA allowed temporary ingredient and formulation changes without a label overhaul, as long as the new ingredient was non-allergenic, 2% or less of the weight of the finished product, not a main or characterizing ingredient and not affecting health claims.
Though the temporary rule allows for flexibility, Harrison advises it still leaves room for litigation. Plaintiff attorneys can still sue for changes in a product’s flavor.
“Minor changes are fine from an FDA perspective, but not necessarily good from a plaintiff perspective,” he adds.
Covid-19 has also spurred a gray area in food marketing claims. Labels claiming the product prevents, treats or mitigates Covid-19 are illegal and being “aggressively pursued.”
“Anytime you mention the word coronavirus or Covid, the FDA is not going to agree with what you say because everyone will think you’re somehow implying something,” Harrison says.
Context is critical, as the agency is cracking down on any brands making health claims implying their product could prevent Covid. Brands using the phrases “immunity support” or “immune boosting” on their labels — or even on their social media pages — could be targeted by the FDA.
“The FDA has historically not liked (brands to use the term) immunity, but it was always low risk (pre-pandemic), you’d likely get a warning letter,” Harrison says. “However, in the world we live in today, the word immunity is persona non grata to the agency. Especially if you add the word respiratory on it. If you put the words ‘immunity’ and ‘respiratory’ on a label, the agency is saying ‘It’s Covid.’”
Harrison also cautions against connecting science-backed supplements and vitamins to treating a Covid infection. He uses the example of vitamin D — plentiful scientific research proves vitamin D boosts immunity, but a food brand cannot legally make that association, and doing so can set it up for litigation. Though vitamin D “is a cheap way of helping reduce your risk of (Covid-19) severity, it’s not going to keep you from getting Covid,” Harrison explains. “The way the paradigm is set up, even if you have really good science in your favor, you can’t make the claim unless you have approval by the FDA.”
“Natural” and “Health Food” Still Debatable Terms
Because there is no FDA or FTC definition of “natural,” lawsuits against brands claiming their product is natural or similar claims are prevalent. (The FDA requested public comments on the term “natural” in 2016, but no rule was issued on the policy.)
And these lawsuits don’t always come from the federal agencies. Class action lawsuits are “still alive and well,” Lewis adds. A formal definition would help protect brands because plaintiffs are filling in the holes and filing costly lawsuits. She uses the example of Welch’s Fruit Snacks, which was sued for being “more candy than fruit.”
“The plaintiffs bar has seized on that and taken these companies to task,” she says. “This wording about ‘healthy’ and this wording of ‘natural’ is also taking on a different dynamic because of consumer perception. How consumers perceive these words and how consumers’ expectations are not keeping with FDA regulations, but the plaintiff bar is using that as an opening and getting pretty good settlements in connection with consumer perception.”
Making a health inference is a slippery slope. The FDA deems a healthy food as one that suggests the product can help maintain “healthy dietary practices.” Health foods are required to be low in fat, saturated fat, cholesterol and sodium.One or more qualifying nutrients must also make up at least 10% of their weight..
For example, IZZE, makers of sparkling juices, was sued for misleading marketing because, though the drink advertised “no sugar added,” it failed to disclose it was not low in calories — a requirement under FDA regulations. Harrison takes issue with the FDA defining healthy in these confusing terms.
“I’d say it’s unconstitutional and I think I’d win that case because healthy is now low fat, low saturated food and a certain amount of macronutrients. It’s a much more complex question than that. But yet this is what plaintiff attorneys seize on,” Harrison says.
Though a new food product may be utilizing health ingredients on the cutting edge of scientific research, Harrison warns the FDA is “notoriously behind nutrition science” and brands need to be careful. He says don’t trust the government agency to keep up.
“Nutrition has evolved and continues to evolve,” he says, noting the FDA regulation to put “low fat” as a nutrient content claim just stripped fat out of food (including beneficial fat) and replaced it with simple carbohydrates. Most members of Congress “don’t know a damn thing” about health food. “We know what’s good for us. We’re not stupid people.”
The Forefront of Alt-Proteins in Africa
Price and regulation are big roadblocks for alternative proteins, an industry that is expanding rapidly, as more consumers turn to animal-free products out of concern for their health, the environment and animal welfare.
“People love meat but, at the end of the day, they’re not really attached to how it got to their plates,” says Brett Thompson, co-founder and CEO of Mzansi Meat, a cultivated meat company in South Africa. Thompson spoke at the TFA webinar The Forefront of Alt-Proteins in Africa with another leader in the South African alternative protein industry, Leah Bessa, PhD, co-founder and CSO of De Novo Dairy.
Alt-protein companies all over the world are bringing cultivated meat and dairy to consumers, but Africa as a continent has lagged.. Thompson founded Mzansi Meat Co. in 2020 and hopes to bring cell-cultured beef, chicken and braai sausages (traditional South African BBQ-style sausages) to retail shelves next year. De Novo Dairy, formed in 2021, is using precision fermentation to create milk proteins for animal-free dairy products, but without cows.
This novel biotechnology is new in South Africa, but it’s a critical element in addressing food security problems in Africa. Africans don’t consume enough food, especially protein, and as drought continues to plague the continent, raising animals for traditional meat products is becoming less and less sustainable.
“It’s a very different conversation to the rest of the world,” Thompson adds. “It’s about getting more protein into more people’s stomachs and plates.”
Big Production Costs in New Alt-Protein Space
Interest is high from investors, but scaling from pilot stage to large-scale production is challenging. Equipment is costly and labor is difficult to recruit to a new industry.
In a survey conducted by Mzansi, 50% of South Africans were willing to purchase alternative protein products — and they’d pay a higher price than for traditional meat.
“But we just got to make it available,” Thompson says. “That’s going to be the biggest hurdle for us, getting it into retail and getting it in front of people so that they can make that decision.”
Bessa says that, critical to the adoption of animal-free dairy, the consumer must receive “nature identical” products. These must replicate the taste, texture and nutrition level of traditional dairy — and precision fermentation is a “powerful tool” to helping achieve that goal.
“It’s going to be a very easy sell,” Bessa adds. “What’s really great about precision fermentation is, as a technology, it’s not limited to just one or two proteins. You can really explore other functional elements and other functional proteins across the food industry. So we’re really looking beyond just dairy, but we want to solve a big problem in the dairy industry because it’s very unsustainable.”
The Good, the Bad & the Ugly — of Government Regulation
Bessa notes regulation is a bigger challenge than technology for De Novo. Three governmental bodies in Africa oversee food production — the departments of trade, health and agriculture. Mzansi is exploring launching in food service, as an alternative to the long, arduous process of securing government approval to sell a product at retail.
“Consumers want something that’s familiar but, now with regulatory hurdles, if you have to classify and label them differently, then how familiar would that label be to consumers?” says Josephine Wee, assistant professor of food science at Penn State University (and a TFA Advisory Board member). Wee moderated the discussion with Thompson and Bessa. “I think it’s an important conversation as well because it might be confusing if it tastes just like milk but is labeled completely different.”
Transparency is a priority for both Mzansi and De Novo. Thompson says companies preaching sustainability can’t be “cagey…or you send out messages that are convoluted.” Bessa agrees, noting a young company may never recover from bad publicity over transparency issues.
“Working with new technologies, especially in food, which is such a personal thing for people, you almost want to get ahead of assumptions, you want to be the one putting out the information and the correct information,” Bessa says. “That’s why it’s so important because you’re working with a novel technology, you’re feeding people with this novel technology, and so it’s important to be transparent so that they feel comfortable and they can relate to what they’re consuming.”
- Published in Business, Food & Flavor
Ireland’s Fermented Drinks Under Scrutiny
After a study found 91% of plant-based, fermented drinks in Ireland make unauthorized health claims, the Food Safety Authority of Ireland (FSAI) has published a guide on how to produce such beverages safely and label them accurately.
The FSAI examined 32 unpasteurized drinks currently sold on the Irish market – including kombucha, kefir and ginger soda – and found that most did not comply with EU and Irish food labelling and health regulations. The study found 13% had alcohol levels above labelling thresholds, and 75% lacked required label information, like the address of the producer and “best-before” date.
“The methods used in producing unpasteurized fermented plant-based products can be difficult to manage,” notes Dr. Pamela Byrne, FSAI chief executive. “The guidance will help producers to achieve consistent production methods, safe storage, safe handling and safe transportation of fermented beverages.”
Read more (Agriland)
Kombucha Brewers Push to Change Outdated Law
Kombucha producers across the U.S. have organized an awareness campaign for the KOMBUCHA Act. The legislation — which was reintroduced into Congress this year for the 5th year in a row — would exempt kombucha from excise taxes intended for alcoholic beverages.
The KOMBUCHA ACT Days of Action, organized by the trade organization Kombucha Brewers International (KBI), is from September 14 to 18. The act would raise the alcohol by volume (ABV) threshold for kombucha from its current level of 0.5% to 1.25%. Producers plan to lobby, emailing representatives, posting on social media and encouraging the public to sign a petition in support of the bipartisan bill.
In a statement from KBI President Hannah Crum, she points out that kombucha is not an alcoholic beverage. The fermented tea rarely exceeds 0.5% ABV, while light lager beers contain about 3.2% ABV and most craft beers are 5% or higher. (Note: hard kombucha, an increasingly popular drink option, is specifically brewed to have higher alcoholic content and is labeled accordingly.). Here are some of the key paragraphs from her statement:
“Today, most kombucha sold in the United States contains trace amounts of alcohol due to the fermentation that occurs during production. The alcohol, a natural preservative, acts to protect kombucha’s live cultures, as well as the safety of consumers, from unwanted pathogens,” Crum says. “Traditionally made kombucha seldom tests above 1 percent ABV, as kombucha cultures are not suited to high levels of alcohol, so this level allows kombucha brewers to feel confident distributing their products by providing ample buffer room to shield them from the threat of this tax.”
“Nevertheless, for the purpose of assessing federal excise taxes on beer for its alcohol content, the Internal Revenue Code defines the term ‘beer’ in a way that encompasses kombucha, if the kombucha contains 0.5 percent or more of ABV.”
“For kombucha brewers, this federal law presents a real dilemma. While their kombucha may be leaving the facility below the 0.5 percent ABV threshold, trace alcohol can increase slightly – in some cases above 0.5 percent ABV – if the product is exposed to temperature fluctuations on distribution trucks or grocery store shelves after it has left the kombucha brewery.”
“Under the current law as written, kombucha brewers have a Damocles sword hanging over their heads. That is, their kombucha can leave the brewery untaxed, only for its ABV level to rise slightly above 0.5 percent once out of their control, thus becoming subject to the federal excise taxes.”
Hard cider makers waged a similar battle in 2015. Federal law had limited hard cider to under 7% ABV, but cider makers (particularly smaller producers) found it difficult to control alcohol levels because of apple varieties and cultures. Congress passed a bill increasing the allowable alcohol content in hard cider to 8.5%.
Crum continues: “While hard cider is an alcoholic beverage and kombucha is not, the two products nonetheless share a similar issue: the alcohol level in each can vary naturally due to fermentation.”
“As with cider makers in 2015, this dilemma and the anxiety it causes kombucha brewers would be easily remedied through the enactment of a similar common-sense update: the bipartisan KOMBUCHA Act (H.R. 2124/S. 892) now being considered in Congress. The bill – sponsored by House Representative Earl Blumenauer (D-Oregon) and Senate Finance Committee Chairman Ron Wyden (D-Oregon) – creates an exemption in the tax code for kombucha, so long as the ABV level of the product is 1.25 percent ABV or lower.”
Crum says many kombucha producers limit growing their business “in order to protect themselves from this risk, as well as facing burdensome costs of testing to comply with the arbitrarily restrictive limit.” There are over 600 kombucha producers in the U.S. Kombucha has “garnered a cult following in the last 20 years for its unique taste and probiotic benefits,” she says, adding:
“We are hopeful that Senator Ron Wyden (D-OR) and Congressman Earl Blumenauer (D-OR) and their colleagues on both sides of the aisle (multiple Republicans in various states have co-sponsored the bill) can succeed in getting this legislation enacted into law this year. If they do succeed, they’ll pave the so-far rocky path for a new and rapidly growing industry that promises to add thousands of jobs with benefits to the economy at a time when they are desperately needed.”
- Published in Business