Probiotic supplements have been the hype of the health industry for the past few years, but the rage is dissipating. Consumers are starting to distrust probiotic pills, realizing a pill alone doesn’t deliver on promised health benefits.

“The thing is, you can’t just pop in a probiotic and get better health,” said Ashley Koff, a registered dietician and CEO of the Better Nutrition Program. “Consumers are waking up to the fact that our digestive health is more complicated than this. We need to start looking beyond probiotics.”

Good gut health requires more than just a single daily probiotic pill. Fermentation brands need to consider all the nutrients needed for a healthy gut as products are evaluated, marketed and advertised.

“You’re actually not what you eat. You are what you digest and absorb…The demands of our digestive health go so far beyond the probiotics,” said Koff, who spoke at Expo West on “Gut Health Revolution: A Radical New Approach Beyond Probiotics.” “When we walk about gut health, we often think about our stomach or our colon. But what were really talking about here are a bunch of different organs. We have to nourish multiple organs with complementary nutrient demands.”

The digestive system is the core to the entire body system. Koff said: “We cannot get and stay healthy without better digestion.” Most digestive health products isolate nutrients specific to one organ, she added. So while a probiotic may help the small intestine, for example, what feeds the probiotic? What makes the probiotic thrive?

Koff said most probiotic supplements and probiotic-infused products ignore other nutrients. What about magnesium, that helps relax the digestive tract? Probiotic supplements have been marketed as a one-time solution when other critical minerals, antioxidants, amino acids, fatty acids and alkaline are just as critical for gut health.

“We want to make sure we’re getting those nutrients that nourish the microbiome,” Koff said. Live, active bacteria will nourish the good bacteria in the gut, building the immune system. “If we’re getting probiotics, we need to get in prebiotics as well.”

Probiotics made $2 billion in sales in 2018, but their sales are slowing. Prebiotics, however, are doubling sales growth.

Simply put, prebiotics are the foods microbes in the gut like to eat. Mayco Clinic describes prebiotics as “specialized plant fibers (that) act like fertilizers that stimulate the growth of healthy bacteria in the gut.” Probiotics, on the other hand, are living organisms in specific straings of bacteria. Fermented foods are full of live, active cultures, like yogurt, sauerkraut, kimchi and kombucha.

Koff said people shouldn’t be getting all their prebiotics from a supplement. Most prebiotics should come from food.

“It should be deliciously easy for us to get the nutrients that help our gut,” Koff said. “No supplement in the world can override a poor-quality diet. …That’s why it’s so important when you look at a prebiotic that you’re looking at something that’s a whole food, (especially) if a whole food gets fermented.”

Relying on food for all nutrients, though, is hard for the majority of people, Koff revealed. If your probiotic choice is granola, for example, are you going to continue eating that same granola and that same service every day to consistently meet your probiotic needs? And a very small number of people actually eat gut-boosting foods daily. “I find that’s a limiting factor,” Koff said.

Koff specifically touted Country Life’s new line of digestive aids, called Gut Connection. The prebiotics contain EpiCor, a whole food prebiotic. The Gut Connection line contains eight products consumers can take for their needs, like balancing digestive, mood, sleep, stress or weight. Country Life sponsored Koff’s education session.

Increasing numbers of brew pubs and high demand for craft beer is growing the brewery equipment market. The brewery equipment market is estimated to be valued at $16.8 billion in 2019 and projected to reach $24 billion by 2025, growing at a CAGR of 6.1%.

Markets and Markets

Kombucha brands biggest competition are not other kombucha brands – it’s soda and functional beverages. Sales continue to hemorrhage in the soda category as consumers shun sugar-filled drinks. And kombucha companies have a great opportunity now to grab that market share.

A panel of leaders in the kombucha and beverage industry shared their insights on the future of kombucha at KombuchaKon, Kombucha Brewers International’s 6th annual conference. They agreed the fermented tea is not a fad, but brands “have to be nimble and creative” to thrive in an increasingly crowded market.

“The future is really, really bright,” said John Peirano, the vice president of marketing at Humm Kombucha. “It’s super exciting – and we’re just getting started.”

Local Brands Will Reign

As more and more kombucha brands enter the industry, the brand’s biggest strengths will be selling to their regional market.

“There are all these local brands retailers are going to want because they care about what’s happening locally,” Peirano said. “Local brands are going to be really, really important.”

John Craven, editor of beverage industry news site BevNET, has covered the beverage world for nearly two decades. He said marketing brands locally works in the kombucha category, but not in any other beverage space.

“Prior to (kombucha), if you said ‘I want to build a regional brand,’ I would have said ‘That’s not a thing,’” Craven said.

Educating Retailer & Consumer

Retailers want to give \consumer’s a variety of product choices, Craven added. They’re more likely to commit to selling kombucha if there are multiple brands and SKUs on their store shelf.

“With (kombucha), it’s OK to like a bunch of different brands,” Craven said. It’s normal for a kombucha consumer to switch between different brands and flavors. “That is one thing this category has going for it that’s really unique. … It definitely has defied traditional beverage logic in that regard.”

Litigation against kombucha brands continues to top headlines, as lawsuits claim alcohol content is misrepresented or sugar levels are understated in different brands. In the next few months, KBI will be releasing their own standards defining kombucha.

Truth in labeling will drive trust with the consumer and the retailer, Peirano said. “It’s important that what’s inside the bottle is on the label,” he added.

“As category leaders, we also have to be category captains. We have to go to the retailers with really strong selling stories. And those selling stories aren’t just about Humm. Those selling stories are about the category and what will drive the most profitability for that retailer category and that shelf set, so they can be successful.”

Refrigerated kombucha and the fermented beverage category has grown 31.4 percent year-over-year, according to data from SPINS market research. And household awareness continues to climb – it increased 20 percent in 2018.

Kombucha is sold in the refrigerated section, some of the most expensive space on a grocery shelf.

“I think it’s all our responsibilities, if we want to continue to grow this category, we’ve got to go out and education and tell people about the magical, beautiful benefits of what kombucha brings to the table from a functional health standpoint,” Peirano said.

Brands Need to Remain Fresh

The kombucha industry is already dominated by a handful of national brands – GT Kombucha, Kevita, Health Ade, Humm Kombucha and Brew Dr. control the majority of market share. The panel agreed smaller brands can still successfully enter the category, but the top sellers are locked.

“There’s not room for a dozen million dollar-plus brands,” Craven said. “But the reality…is that some of these (smaller) brands will be acquired and will probably be absorbed and evolved, ruined, whatever, which makes an opportunity for the next brand to come along.”

“There are a lot of functional products out there…the beverage history lesson is consumers are really fickle,” Craven added. He pointed to Vitamin Water as an example, a brand that rapidly grew popular in the beverage industry but then lost sales. “The consumer keeps moving on to the flavor or the function of the month, so to speak.”

Craven does not think kombucha will be a victim like Vitamin Water because kombucha includes value-added health benefits. The kombucha brands that survive the next decade, though, must be adept to change. They must evolve with new flavors and brewing styles, while maintaining affordability, consistency and health benefits.

Growing Kombucha Enhancement: CBD

One of those kombucha styles keeping the industry fresh: CBD. Conrad Ferrel, founder and CEO of True Büch, said combining the benefits of the cannabis plant with the functional compounds in kombucha makes sense.

“The evolution of cannabis used with kombucha, it’s a natural marriage,” Ferrel said. “If you want to have kombucha for sleep, there will be a specific kombucha for that. If you want it for pain management, it will be there. It will be functional and specific to the certain (medical aid) people want.”

There are 140 compounds in the cannabis plant, but so far only two – THC and CP – have been studied, added Ferrel. CP is a value-added compound, known to aid in improving medical ailments. But science is lagging.

“As the world gets used to the science … the struggle is to sell people something that for years was considered a drug, now we’re trying to sell people on the fact that it’s good for you,” Ferrel added.

Hard Kombucha Gaining Traction

Hard kombucha is another brewing style keeping the kombucha category competitive. It’s evidence of how many beverage categories kombucha bleeds into – like alcohol, tea, juice, flavored water and functional beverages.

Kyle Oliver, quality assurance scientist at Boochcraft, said regular kombucha has an ABV of .5 percent to 2 percent. Hard or high alcohol kombucha goes above that level. Boochcraft has 7 percent ABV. The ABV is higher because hard kombucha goes through a secondary fermentation process, where more yeast and sugar are added.

“Our organisms we want in our kombucha are spoilage organisms in other industries (like wine and beer),” Oliver said. “The higher ABV doesn’t kill probiotics, they’re able to still grow in that environment.”

Craft cheese sales lag behind craft beer sales, despite the similarities in the two industries. Craft beer sales in America totaled $27.6 billion in 2018, while craft cheese sales totaled $4 billion. Experts tell VinePair why cheese doesn’t keep up with beer’s growth: cheese’s short lifespan (less than two months), greater risk of cheese mishandling by a distributor during the supply chain and the high price of artisan cheese. What can a cheese brand do? Experts advise increasing social media promotion. Craft beer has thrived on social media because people love seeing the hops being picked, brewers experimenting near the fermentation tank and the beer displayed in glassware. Craft cheese brands don’t self promote the same creation process, like a goat that made the milk or a family that runs the dairy farm. Cheese brands could also benefit from better merchandising, experts say. Beer labels are constantly and creatively changed and updated, but cheese labels remain the same for years.

Read more (VinePair)

Snacks are a huge $1.2 trillion category, and it’s continuing to grow. Seventy-five percent of the global population snacks every day, while millennials snack four times a day. But consumers are looking for nutritious snacks. They want snacks with functional ingredients, great taste and low sugar.

Fermentation brands looking to grow need to transform their product into snackable sizes. Research by Mondeléz International’s new venture, Snack Futures, found that fruit and vegetables are the most popular snack item, but consumers want more than just a fresh apple. Innovation is key.

“Consumer obsession is driving a new model of snacking,” said Laura Shulman, founder and president of Food Future Strategies, Inc. From beverages to bars and bags to bites, “We’ve become this culture of serial snackers.”

At Natural Products Expo West, Shulman encouraged brands to be “snack innovators,” converting ideas to business.

Snacking’s Staying Power

The snacking surge is attributed to busier lifestyles – commute times are longer, more mothers are working and fewer people eat traditional three meals a day at home.

“Snacking is different than food. Snacking is a behavior. That behavior around the world is growing rapidly, and it’s growing much faster than center store [grocery aisle] food,” said Tim Coffer, chief growth officer at Mondeléz International. “We’re very bullish on snacking, and I think all of you should be, too, as you look for opportunities for growth.”

Snacking is disrupting the food industry, evident on the Expo West show floor where brands are seeing big returns on convenient, healthy food and drink products.

“The movement is more nutrient-dense snacks,” said Rohan Oza, co-founder and managing partner of Cavu Venture Partners. “Every company out there needs to be focused on how they create greater nutritional value on snacks that allow people to feel better about themselves.”

Brands as Health Warriors

Snacking of yesteryear evokes images of bags of potato chips or cans of soda. Those items are a far cry from modern snacking trends. Snacking must be nutritious because consumers are snacking with intention. They want snacks to be natural, simple, authentic and functional.

Brigette Wolf, global head of Snack Futures at Mondeléz International, said brands need to be “health warriors.” She encouraged brands to use medical and scientific studies and consumer research to “actively be the snacks of tomorrow.”

Growing Preference: Prebiotics & Probiotics

Consumers are also focusing on gut health. Research by New Hope Network found that sales of food and beverage with functional ingredients grew 7.5% in 2018 to $68 billion in sales. Probiotics and prebiotics are one of the fastest growing functional ingredients.

Kara Landau, founder of Uplift Food, was an Australian nutrition expert before starting her food company. Known as the world’s first dietitian created functional food, Uplift Food products are gut healthy, prebiotic snacks. The food brand was her dram, as Landau specializes in gut health. The connection between gut health and mood is especially important to her.

“I feel like there was this gaping hole in the market for someone to take that stance,” Landau said.

“Ultimately, I think the science is going to continue to catch up and help in terms of the claims that are being made,” Landau said about food with prebiotics and probiotics. “There’s only going to be benefits to consumer’s diets to getting more of that nutrition into their diet.”

8 Tips to Growing a Snack Product

Food industry leaders stressed that the brands of yesterday will not be the brands of tomorrow. Major food corporations are struggling to maintain sales as modern consumers search for healthier food, sustainable brands and startups with purpose.

Tips from Expo West “How Consumer Obsession is Driving A New Model of Snacking Innovation” panelists:

  1. Be consumer obsessed. Coffer with Mondeléz declared: “We are very clear who our boss is. … If you take care of the consumer, the rest of the stuff will fall right into place.”
  2. Reinvent testing. “The old model of how to innovate, how to test with consumers, that’s yesterday’s news,” Coffer continued. “Get with consumers – not in controlled environments.” Prototyping and testing needs to be at a much more rapid pace.
  3. Build a brand with a mission. Successful brands create a lifestyle around their product. “Build a culture out of it,” said Oza with Cavu Venture Partners.
  4. Don’t be cheap. Brands that have good ideas but aren’t spending the right budget amount to execute their plans are going to fail, said Oza.
  5. Remember: taste is king. “It’s America, we will not sacrifice on taste. In Japan, they certainly will. [But in America], you have to make it taste good,” Oza said.
  6. Experiment with ancient ingredients. From ashwagandha to turmeric, the ingredients of our forefathers are coming back into our food. “I think there’s room particularly in the states for taste buds to expand,” said Janet Planet, head of ideas at Fahrenheit 212.
  7. Start super small. Wolf of Snack Futures suggested putting a new product in a local yoga studio and see how people react. Give it to family and friends to test for feedback. Start with a small attraction, then go bigger.
  8. Convenience stores are ready for a disruption. Convenience stores are arguably the worst places today in terms of health food, but they’re still a hot spot for snacks.

Functional food and beverage sales grew 7.5% in 2018 to $68 billion in sales. Probiotics are one of the fastest growing functional ingredients, and consumers are moving away from supplements and pills. They want probiotics in their food and drink.

Consumers are in favor of allowing plant-based food to use traditional dairy terms on their labels — but dairy farmers are strongly opposed to it. Last year, the U.S. FDA issued a public comment period to examine if plant-based foods and beverages should use the traditional dairy names: milk, cheese and yogurt. The results are out. Of those comments, 76 percent were in favor of using dairy terms on plant-based products, 13.5 percent were against and the remaining 10.5 percent were inconclusive. Of the commenters that identified themselves as dairy farmers, nearly all were opposed. Dairy farmers are concerned consumers will believe plant-based foods are nutritionally similar to cow’s milk (94 percent) and that consumers are being misled with a dairy term on a plant-based item (91 percent).

Read more (Linkage Research)

The kombucha industry is exploding – sales were up 21 percent to $728.8 million last year. Kombucha and non-alcoholic fermented beverages are now the third largest beverage category, representing 10 percent of total refreshment beverage sales.

Distribution is high at conventional, natural and convenience stores. But velocities (sales) are declining.

“A word of caution – there’s going to be a reckoning,” said Bobbi Leahy, director of sales at SPINS, a natural products market research group. “All these retailers are taking all these lovely kombuchas … they will be evaluating you, probably far soon than you think is warranted. There will be some slashing going on.”

Leahy spoke at KombuchaKon, the Kombucha Brewers International (KBI) annual trade conference in Long Beach. The year’s KombuchaKon was the industry’s largest since the first conference six years ago, with 424 attendees from 17 countries.

“I applaud you all on the growth. I think that’s wonderful,” Leahy said. But “I would be ready with some materials to go in and defend your spaces.”

In her presentation on the kombucha market analysis and future trends, Leahy emphasized that refrigerated beverage shelves are expensive retail space. She shared advice with kombucha brands on how to survive the current high distribution wave. The SPINS analysis is based off 52 weeks of sales ending in February 2019. Her tips:

  • Prepare with Sales Materials. If kombucha sales can’t keep up with distribution, retailers will have to answer to their higher-ups. Why is there so much kombucha on the shelf that isn’t selling? Leahy warned brands to be the ones educating retailers, advising brands to share data points and score cards. She added: “I encourage you to go and get ahead of that, be the one talking that message. You tell them what the right set is, you tell them what they should do, you know this industry. If they’re overstocked on something, then let them know. They’re looking to you to be the experts.”
  • Conventional supermarkets reign. The bulk of kombucha and fermented beverage sales are coming from conventional supermarkets. “If you succeed in the conventional channel, you’ll have success overall because they represent 70 percent of sales,” Leahy said.
  • Don’t ignore convenience stores. Convenience store (like 7-11 and gas stations) sales of kombucha and fermented beverage sales are growing 55 percent. “You have to make it a task to go after convenience,” Leahy noted. “You probably wouldn’t have said ‘That’s my low-hanging fruit, I’m going to go in there.’ But they’re certainly getting the message now … It’s certainly worth having a plan to go after convenience.”
  • Craft different sales messages for each channel. Don’t go in to retailers with the same message. Between conventional, convenience, natural and specialty stores, each channel will care about different things.
  • Know region’s sales trends. The west coast – especially California – has high kombucha sales. The south central, mid-south and Great Lakes regions are under-indexing in kombucha sales. Leahy pointed out that the west is a ready audience and a great spot to experiment with new flavors. The south and Great Lakes regions, though, need an education focus. Demos are a great idea in the area.
  • Highlight brand’s best attributes. Boast about characteristics beyond the label. Features like: clean label, sustainability, brand mission, wellness goals, social impact and great ingredient sources.
  • Top selling flavors are solid. Ginger and berry are the two top flavors across all channels. The “fruit – other” is also a top selling flavor and growing (135 percent), which is defined as unique fruit flavors like watermelon, guava and melon. The past year, there has been the strongest growth in flavors: apple (172 percent), grapefruit (155 percent), pomegranate (104 percent) and orange (98 percent).
  • Tread lightly with unique flavors. Leahy pointed out, if a unique flavor only appeals to a small audience, a conventional retailer will notice only a small number of customers are buying it. “That small and that low is going to be kind of a perfect storm,” she said. “You really want to be careful.”
  • Smaller size bottles sell best. The 14- to 17-ounce size kombucha make up the majority of sales.
  • Start sales promotions. Coupons, mailers and sales are great options to get products off shelves.
  • Use your social network. Let people know which stores you’re at.
  • Maintain a good store locator. Brand’s websites should feature a good store locator detailing which stores carry which flavors of kombucha.
  • Top kombucha brands dominate the market. GT Kombucha, Kevita, Health Ade, Humm Kombucha and Brew Dr. account for 88 percent of kombucha sales at conventional retailers and 89 percent of kombucha sales at convenience stores. GT Kombucha, Kevita, Health Ade and Brew Dr. account for 77 percent of kombucha sales at natural stores and 82 percent of kombucha sales at specialty gourmet stores. Those same top brands likely will not change, Leahy noted.
  • Know beverage trends. “The trends you are seeing in kombucha are special and unique,” Leahy said. “…as you’re sitting across a buyer or a category manager or retailer, you want to be well-versed in what other beverages are on the shelf and which ones they’re probably going to protect.”
    • Natural beverages are contributing more to the growth of the refreshment beverage category than non-natural. The conventional, shelf-stable beverages (like Coke and Pepsi products) account for 63 percent of the refreshment beverage industry, but only 53 percent of growth. Diet soda is especially losing favor among consumers. Specialty and wellness beverages (like energy drinks and Gatorade) make up 29 percent of sales and 35 percent of growth, especially driven by energy drinks. Natural drinks (like kombucha and La Croix) make up 8 percent of sales, but natural is driving 13 percent of growth.
    • Of the natural beverage subcategories, shelf-stable performance beverages (like Body Armor) are experiencing the biggest growth at 87 percent. Declining categories include shelf-stable coconut water (-12 percent) and juices (-3 percent).
  • Emphasize growth of natural products industry. Natural products are no longer a niche market. The natural products industry is estimated to reach $140 billion in sales in 2019. In 2003, natural products were a $52 billion industry.

When SPINS began tracking kombucha sales years ago, Leahy noted kombucha was “barely a blip on the map.” Current Kombucha sales numbers are also likely higher than noted – major retailers Costco and Whole Foods do not share sales data with SPINS.

“In a way, it’s a good problem to have – you can’t sell if you’re not on the shelf,” Leahy said. “ou’re on the shelf – now it’s time to sell.”

The gut microbiome is pivotal to human health, and the biggest aid to nourishing a healthy microbiome is our diet.

“The tools of our diet…are a really valuable resource for our microbiome,” says Maria Marco, professor in the UC Davis Department of Food Science and Technology. “They’re noninvasive, easy to use, low cost. We can improve our microbiome using specific ingredients, targeting microorganisms, using foods like living fermented foods or probiotics to directly contribute to our microbiome.”

Marco, a speaker at Natural Products Expo West, shared insight from her research at UC Davis’ Marco Lab, where Marco and a team of students study microorganisms impact on food safety, food quality and gut health. Their cutting-edge research is scratching the surface of the complex microbiome.

Microbiome research has transformed in the past 10-15 years. Marco says scientists had relied on 19th Century microbiology of the prior hundred years. New advancements in chemistry, engineering, data science and DNA sequencing “revealed this hidden world.”

“We’re riding a wave right now. We’re appreciating more than ever before that we are living in microbial world,” Marco said. “The magnitude of what these microorganisms can be doing…is tremendous.”

Our bodies are only 1 percent human – the rest of our body structure is made of trillions of microorganisms. Every human carries about 1 kilogram of their bodyweight in microbial biomass.

Marco said for years we’ve thought of the intestines as an empty tube, but these microorganisms reside in our digestive tract. The microbiome performs critical functions, like digestion, detoxification of food, synthesis of vitamin and development of immune system and brain.

But our microbes may not always aid our body. The beneficial organisms that create a rich microbiome have changed over human history because of the prevalent use of antibiotics, and changes to diet, hygiene and lifestyle.

There are only a few ways to improve the microbiome, Marco says – drugs, fecal transplants or diet. Marco said the best way to achieve a healthy microbiota is through the diet, by eating the microorganisms our gut needs.

The diet, she says, needs to be full of fermentable fiber. Humans eat diet-associated microbes in prebiotics and probiotics.

One study from Marco Lab found that, when adults added fermentable fiber to their diet, the microbes thrived off these nutrients, and the good bifidobacteria thrived. The microbiome was significantly altered.

“How do we get microorganisms? First of all, just by eating fresh foods and vegetables,” Marco says. The second is eating “fermented foods (which give us) exposure to a higher number of these organisms. They hey have to be foods where the microbes are still alive, such as in yogurt or fresh sauerkraut. And then lastly, we can have probiotics, organisms that we either take in supplements or put into foods in an even higher number so were getting an even higher doses of these organisms over time.”

There are specific bacteria strains found in fresh fermented foods, and some are sold today as strains in probiotic supplements. Thousands of clinical studies show probiotics are beneficial to digestive health – but today, microbiologists are seeing probiotics aid other areas of the body, like vaginal health and neurocognitive function.

“As we study these organisms, we’re really guided by a couple questions, practical questions that need to be answered in order to take probiotics to the next level of where we need to have them in our food and medicine,” Marco said. Like what strain should be used, what dose taken and how long should it be used. “We don’t really have answers to this and it’s really hard as a consumer to know which to use.”

Marco Lab studied 42 strains of lactobacillus bacteria, and found each strain has different properties. “The breadth of what we saw was really outstanding,” Marco said.

The future of the field of research is knowing the individual properties of these strains, Marco said. Like can a certain strain alter our mood, another prevent obesity and another support our immune system? The strains are so complex, “we’re starting to get a handle on what specific things they’re doing.”

Safety of the strains is critical. Marco noted the next generation of probiotics need food safety standards. These are organisms that are not found in foods, and Marco said “the bar needs to be quite high.”

“More studying needs to be done. In the microbiome world, we’re really at the starting stages,” Marco says. “But we need the right science so we know if we’re giving the right organisms to the right people at the right time.

Seniors are driving the kefir market, a surprising industry stat since marketing of the fermented dairy drink is targeted at millennials. But new research from the Grocer found 40 percent of kefir sales in the UK were consumed by adults over the age of 65. People aged 16 to 44 accounted for 27.9 percent of kefir consumption. Analysts speculate its because kefir is likely to be consumed for particular health needs, which range from bone-strengthening nutrients to digestive aids, all factors people focus on as they age. “Add that the fermentation process makes it much easier to digest – because humans lose some of the ability to digest cows milk beyond age three – and even in the absence of multimillion-pound marketing budgets, the word of mouth marketing has spread like wildfire,” Bio-tiful Dairy founder Natasha Bowes.

Read more (The Grocer)