More Collective Action Than Kumbaya at KombuchaKon 2016

Screen Shot 2016-02-10 at 3.25.00 PMJust as kombucha has evolved from a community of homebrewers to a $600 million beverage category, Kombucha Brewers International has taken significant steps over the last year to further professionalize its role as the trade association for the industry. Over the weekend more than 200 people interested in the kombucha trade convened at the Long Beach Convention Center for KBI’s third annual KombuchaKon, an educational summit covering all aspects of the business side of the fermented tea beverage. The conference’s theme, “Growing Together,” was demonstrated throughout via an emphasis on spurring collective action from the industry, as kombucha continues its emergence as a mainstream beverage offering.

“This was really a year of leveling up,” KBI President Hannah Crum said in an interview with BevNET. “In years past we were still focused on the organizational aspects of KBI but this year saw [KombuchaKon] come into its own as a conference. We nearly doubled our attendance from last year, added our first trade show, and had two tracks of educational information which was new as well.”

After a members-only meeting on Friday, Saturday’s conference began with Mike Beshore, project manager at Humm Kombucha and part of KBI’s special projects team, providing an official introduction to the KBI Verification Program that the association announced late last year. A pilot program, set to launch in mid-2016 with an introductory round of 5-10 kombucha companies of varying sizes, will guide companies through the process of demonstrating compliance with federal regulatory requirements and KBI’s Best Practices, which looks to set the standard for the industry as it pertains to the areas of business practices, safety and quality, alcohol compliance and labeling of kombucha products.

Companies that achieve verification through the program will bear a KBI Verified seal on their bottles, which Beshore likened to the USDA-certified organic emblem, projecting that in the years to come it could become the standard that consumers, retailers and distributors look for.

“It will add better optics for the industry,” Beshore said. “Like organic certification, we envision a day where shoppers are looking for that KBI verified seal.”

Beshore called the verification program “the logical next step” towards achieving self-regulation for the industry. That’s an effort that KBI has been committed to leading, particularly as lingering issues regarding the trace levels of alcohol in kombucha have resurfaced on the radar of the U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB). While Beshore noted that the industry made a significant amount of headway in 2015, with KBI partnering with the Association of Organic Analytical Chemists to establish a new set of testing methodologies, it was clear the topic remains an important one of interest to those in the business.

“If we don’t self-regulate then someone is going to regulate us,” said Humm co-founder Jamie Danek. “It’s really important that we’re banding together and we’re all one unified voice.”

Live Soda Kombucha founder Trevor Ross chimed in after an attendee inquired about the cost of the verification program for brewers, many of whom are smaller, regional players and not national brands.

“But what’s the cost to not do it?” Ross asked. “If one of us is a bad actor and it creates a panic in the industry, then we’re all in trouble.”

Ross’ remarks recalled the ghosts of kombucha’s past, specifically the 2010 recall that saw the product pulled off shelves. And while the issue’s one of note – Beshore referred to it as “the elephant in the room” earlier in the morning – KBI and its membership actively addressed it throughout the day, with Crum offering a presentation on techniques for controlling alcohol in kombucha fermentation later in the afternoon.

CafRasBWEAUKWRl-2After a two-pronged educational track that was split between a deeper dive into the KBI Verification process and the business and science aspects of the industry, Daina Trout,  co-founder and CEO of Santa Monica-based brand Health Ade, and Justin Prochnow, an attorney at Greenberg Traurig specializing in legal and regulatory issues for food and beverage companies, took on another hot topic within the industry: issues surrounding nutritional panel and label claims on kombucha products. Trout and Prochnow stressed the importance of being able to substantiate product claims made not only on a kombucha bottle but on all its marketing materials, or else risk being targeted by plaintiff lawyers.

“Class action lawsuits are probably the number one risk for companies in the food, beverage and supplement industry right now,” Prochnow said. “If you get a warning letter from the FDA, unless you’re making some egregious claim, they’re going to give you 90-120 days to change your labels. A plaintiff lawyer will say “How much money have you made while making that claim? We want some percentage of that.”

Bobbi Leahy, the director of west coast sales for SPINS, a leading market research provider on natural and specialty products, offered an assessment of the kombucha market using sales data from the natural, specialty and conventional channels. Leahy reported 81 percent growth for the category over the past three years across all three channels. She also noted that such growth recently warranted the formation of kombucha’s own sub-category within the greater refrigerated juices and functional beverages segment.

“Kombucha is now a cornerstone of natural beverages,” Leahy stated. “I couldn’t have said that before but we certainly can now.”

Closing out the conference was a keynote address from Gary Fish, president at Deschutes Brewery and Brewers Association, who said being competitive players in the kombucha market and being unified as an industry are not mutually exclusive, encouraging brands to compete on quality while still working together to protect and further their industry.