Kefir, a creamy fermented and cultured beverage typically made from grains of milk culture, is rich in probiotics and often compared to drinkable yogurt. Although most kefir sold in the U.S. is dairy-based, a convergence of consumer demand for kefir and plant-based beverages is driving new innovation in the category.
According to data from market research group IRI, multi-outlet dollar sales of refrigerated kefir in the U.S. increased 13.8 percent percent to nearly $117.7.5 million over a 52-week period ending on January 22, 2017. Unit sales were up by 13.5 percent in the same timeframe.
Strong growth in the dairy-alternative market — which is expected to reach over $35 billion by 2024, according to a September, 2016 report from Grand View Research — is presenting some companies with added motivation to enter the kefir space. However, some established brands, including Lifeway, are pushing back on new plant-based offerings, which they perceive to be illegitimate because they are not formulated with dairy.
Millennium Products, Inc., the parent company of GT’s Kombucha, became involved with dairy-free kefirs through last year’s acquisition of Tula’s CocoKefir, a maker of coconut-based kefirs and yogurts fermented with vegan probiotic cultures.
GT Dave, founder and CEO of Millennium Products, told BevNET that the company’s recent revamp of CocoKefir under the GT’s label was motivated in part by his affinity for fermented beverages as a whole. He said that despite the two being frequently associated, dairy was not a critical ingredient in kefir and that it was important to educate consumers as to that fact.
“Kefir can exist and be significantly potent without any milk,” Dave said. “The reason why we are advocates of non-dairy kefir is I’m a vegan and all of our products are vegan. We are kind of a ‘powered-by-plants’ type of organization and therefore everything that we do has a plant-based philosophy and ethos to it.”
Beyond individual dietary preferences, Dave said there were other aspects of dairy that consumers should potentially be concerned about, saying it creates mucus in the body.
At the 2017 Winter Fancy Food Show, Leominster, Mass.-based brand Dahlicious, known primarily for its lassis, or milk-based Indian-style smoothies, unveiled its first cultured non-dairy product: an organic almond milk-based kefir. The new line is launching in 24 oz. plastic PET bottles this spring in three varieties: Mango, Vanilla and Strawberry.
In an interview with BevNET, Dahlicious co-founder Jaidesh “JD” Sethi said that the decision to expand into non-dairy offerings came after a two-year process of research and development. In creating a process that grinds whole almonds to an extremely fine consistency before they are combined with water, Sethi said the company’s guiding principle was the desire to replicate the composition and nutritional content of milk as closely as possible.
“Our experience in the production of lassi comes very handy, because lassi and kefir are very similar products,” Sethi said. Dahlicious’s Almond Milk Kefir, set to launch this June, is USDA certified organic and contains 6 grams of protein and 5 grams of fiber.
Forager Project has taken a different approach with a new drinkable version of its cashew-based yogurt product, which it calls Cashewgurt. CEO JC Hanley said that he views the beverage, which is made with kefir cultures, as a natural extension from the brand’s existing line of nut milks and as an opportunity to stake out territory within the category.
“I thought it was a great opportunity to own the name Cashewgurt,” said Hanley, adding that the company chose to use cashews in its drinkable yogurt because of its similarity to dairy.
The products are available in 28 oz. plastic bottles at select Whole Foods locations in Original, Blueberry and Strawberry varieties.
For Julie Smolyansky, CEO of Lifeway, the largest manufacturer and marketer of kefir in the U.S., the issue of what can and can’t be called a kefir is more than a business decision. She said it was the company’s obligation to protect the product in its authentic form, comparing it to a sibling or family member. In her view, kefir is a 2,000 year-old product with a rich, well-defined history and any effort to portray it as something different is fraudulent.
“There’s no such thing as a dairy-free kefir,” said Smolyansky, pointing to a definition issued by the United States Department of Argiculture (USDA) as “a sour brew of fermented milk with the consistency of liquid yogurt, which may contain 2 1/2 percent alcohol.” “Anyone who’s making some sort of non-dairy kefir version of whatever those are is misleading.”
Smolyansky is confident the law is on her side in this case, noting that the U.S. Food and Drug Administration (FDA) has consistently defined kefir as a “fermented milk drink” in its public communications for years. She cited the example of an FDA letter issued in November 2011 to Millennium Products in which the agency warns the company it may be potentially misleading because kefir “is commonly understood to be a dairy beverage of fermented milk from cows, sheep, or goats.”
Lifeway has been aggressive in protecting the term from what it believes is improper usage. The company sued Millennium Products in September, 2016, alleging that CocoKefir “misleadingly suggests” its kefir is made from fermented milk and that “genuine kefir cannot be made from the non-dairy ‘milk’ or ‘water’ of plants.” The case was dismissed in December.
Furthermore, Smolyansky alleged that internal testing at Lifeway of certain dairy-free probiotic beverages revealed that they did not contain probiotics at all.
“I’ve found that every time I’ve tested a quote-unquote non-dairy probiotic whatever, there’s been zero activity whatsoever,” she said, noting the trials were part of the company’s efforts to “see what’s out there.” “It’s pretty fraudulent on all of these companies to not be testing their products for even probiotic activity. It’s a shame, because consumers are paying a pretty big number for basically nothing.”
Smolyansky said she has also been frustrated by what she views as a widespread misinterpretation of dairy’s dietary effects. She noted that cultured and fermented dairy products had very different qualities to regular milk; kefir, for example, is safe for consumers with lactose intolerance because of the sugar is digested by probiotics. She added that dairy products, when fermented and cultured, are anti-inflammatory and help the reduce mucus build-up in the body.
“I would caution people to sort of jump on that bandwagon of the dairy-free movement without really understanding which pieces of dairy they are removing from their diet and why and what the consequences can be if they aren’t supplementing with other areas and other sources of nutrition,” she said.
ON THE SHELF
Regardless of what term individual brands choose to go with, the retail positioning of non-dairy kefirs and kefir alternatives will play a large role in determining how such products are understood and accepted by consumers.
“What’s paramount to the success of offerings like [CocoKefir],” Dave said, “is that they go where they fit, which means they can’t go everywhere.”
The ideal scenario at retail, according to Dave, would be for CocoKefir, which will retail for around $10, to be merchandised next to GT’s Kombucha. He compared its current situation to the early days of making kombucha, in which the brand was stocked with yogurt because of the products’ shared probiotic qualities.
“We kind of got pigeonholed into that and forced into the dairy section, which is not a sexy section,” Dave said. By focusing on premium retailers that “caters to the die-hard consumer,” he said the brand wants to communicate CocoKefir’s artisan quality. “It’s a very different consumer, it’s a very different occasion. With our kefir, we see it very much like kombucha, something you can drink with food or without food, at the beginning or end of day.”
As evidence of the growing demand for non-dairy kefir alternatives, even Lifeway, despite emphasizing the superior efficacy of dairy-based probiotics, is getting involved. Smolyansky said the company is launching a plant-based probiotic beverage, which will contain kefir cultures as well as others, later this year that will “accommodate those consumers who kind of refuse to look at facts and science and data and still want to have a non-dairy version of our kefir drinks.”
“You can only fight the tide for so long before you say ‘OK, we’re going to give them what they want,’ which is this sort of alternative,” she said of the decision, which was made based on a combination of analyzing industry trends and demand from consumers, whom she noted the company heard from “hourly.”
“It’s clear as day that this is what consumers want,” Smolyansky continued “We are there to offer options, we will continue to educate people and let them make their best decisions.”