the KOMBUCHA law (“ Prevent our manufacturers from being unfairly taxed while defending the health law ” HR 2124 / S.892), which would amend the internal revenue code to ensure that kombucha is exempt from excise duties and ” other regulations imposed on alcoholic beverages, has been reintroduced to CongressBy Representative Earl Blumenauer (D-OR-3) and Senator Ron Wyden (D-OR).
GT explained: “I have spoken with legislators and this law has been extremely well received; they understand the logic of updating the law to allow business and a health product to continue to thrive.
“It’s a slow, steady journey, and there’s more than one way to get that through, so you can graft it onto something else or make it independent, but I don’t know at this point we have identified exactly the path of least resistance, so we remain open-minded. “
He added: “This act [which includes a definition of kombucha – see below] will eliminate some of the fear and uncertainty, especially for small kombucha brewers, because when something is not defined in the law, it creates opportunities for the plaintiff’s lawyer to come in and start to sue everyone.
GT’s Classic Kombucha: “ At the moment, a product like Classic can only be distributed by beer distributors ”
GT’s live foodsOffers three ranges of kombucha products:
- GT Synergy Raw Kombucha: less than 0.5% ABV
- GT’s Classic Kombucha: 0.5% + ABV (sold to over 21s)
- GT’s Hard Kombucha: 3% ABV (sold to over 21s)
GT’s Classic Kombucha is the original brew GT started bottling in the 1990s, which, like many traditional kombucha products, bypasses the 0.5% threshold and can contain up to around 1.25%. If the KOMBUCHA law is passed, it will no longer need to be marketed effectively as an alcoholic product and will not be subject to excise duties, he said.
“We would probably re-evaluate the positioning of the brand and the product because it wouldn’t have to have this age restriction. One of the main reasons we want this law passed is that at the moment a product like Classic can only be distributed through beer distributors, which rarely have refrigeration. “
While GT’s classic Kombucha is no longer effectively classified as beer, he said, “this could have a much wider distribution opportunity.”
As the Classic line bypassed the 0.5% threshold, he added: “We had to become a licensed brewer and pay taxes not only to the federal government, but also state taxes. It also means that we can only sell to distributors who are licensed to sell beer and cannot sell across states. “
Preserving the integrity of the kombucha category
however, the biggest problem for GTsPreserves the integrity of the kombucha grade, which he says has been compromised in part by pressure to consistently keep alcohol levels below 0.5% throughout shelf life, prompting companies to deploy a variety of hot pasteurization techniques to remove yeast residues, to micro-filtration to remove yeast and prevent secondary fermentation in the bottle, to spinning cone technology to remove alcohol.
“IF you take away the things that make kombucha special – its rawness, its vinegar flavor, its natural effervescence, its visible strands of culture, the way it’s made with authentic SCOBY kombucha [symbiotic culture of bacteria and yeast] – then we have to ask ourselves, what are you actually doing? ” Added GT, who started his company, now a market leader in a multi-million dollar category, In her mother’s kitchen as a teenager in the 1990s.
He also praised the much anticipated code of practiceFrom the trade association Kombucha Brewers International (KBI), which defines what kombucha isAnd how it’s made, and encourages the use of terminology on packaging that she says provides consumers with more clarity on ingredients or manufacturing processes, such as “addition of probiotics, “ pasteurized ”, filtered sterile‘ [if the filter is less than .45 microns], “ carbonated ” or “ dealcoholized ” (Although this allows for flexibility in the exact wording used).
“The most important thing for me is to present this information to consumers about all the different kombuchas out there and let them decide which version they want,”He said.
What is kombucha and why does it contain alcohol?
To make traditional kombucha, companies typically brew tea, add sugar, and then ferment the mixture with a culture of kombucha or “SCOBY” (a symbiotic culture of bacteria and yeast). Yeast converts some of the sugars into alcohol, most of which is consumed by bacteria and converted into acetic acid (explaining the slightly vinegar taste) and other organic acids.
Keeping the alcohol level below 0.5% throughout shelf life has been a challenge for the industry since its inception, with companies using a variety of techniques such as hot pasteurization; micro-filtration; rotary cone technology to remove alcohol; or other approaches such as changing the shape of fermentation vessels.
However, some purists dispute some of these approaches, claiming that “ genuine ” kombucha is a raw, “ living ” product that should be made in a particular way, prompting a protracted debate about the standards of identity in the category.
The TTB (Office of the Tax and Trade on Alcohol and Tobacco) took a keen interest in the alcohol levels of kombucha in 2010, causing a high-profile take down of the products in Whole Foods. However, since then the push to resolve the alcohol compliance issue has been driven by lawsuits, with several brands in the space being sued by competitors or consumers.
‘Kombucha is not a new age soda’
The overall kombucha category, which has been growing quite rapidly for several years, has matured and started to slow in recent years, with SPINS data for the 52 weeks through April 18, 2021, showing dollar sales of chilled kombucha. and fermented drinks. up + 3.93%, driven by + 7% growth in the conventional channel (MULO) partially offset by a -7% drop in the improved natural channel.
For GTs, 2020 was a “mixed bag, “ sAid GT, who said the long-shelf functional drinks foray into the kombucha category confused consumers and disrupted pricing architectures.
“We want to raise the conversation about what makes kombucha special. This is not a new age soda.
He added: “We continue to be the leader in the kombucha category, and as such we are not immune to some category headwinds, and so we kept growing but it wasn’t as clear. than in recent years.
KBI: “ Summer 2021 is a critical time for the kombucha industry ”
According to KBI President Hannah Crum (who argues that the 0.5% ABV threshold is “not based on any scientific study or process’),raising the threshold to 1.25% would make it much easier to make authentic raw kombucha using traditional methods, with still low alcohol levels and which “do not poison people.
In a recent blog post, the KBI added: “KBI is winning in its efforts to increase the ABV of kombucha and align the IRS code with natural fermentation … Summer 2021 is a critical time for the kombucha industry, as there are framework bills under active discussion that have a strong possibility of accommodating the KOMBUCHA law. This is the number one obstacle that has prevented its crossing in recent years. “
the KOMBUCHA law (“ Preventing our manufacturers from being unfairly taxed while defending the health care law ”) would amend the internal tax code to ensure that kombucha is exempt from excise duties and other regulations imposed on alcoholic beverages.
He defines kombucha as: “(A) fermented only by a symbiotic culture of bacteria and yeasts, (B) does not contain more than 1.25% abv, (C) is sold or offered for sale as kombucha, and (D) is derived from: (i) sugar, malt or malt substitute, tea or coffee, and (ii) not more than 20% other healthy ingredients. “
In a press release, Rep Earl Blumenauer, D-Ore., Note: “Due to the natural fermentation process, the alcohol content [in kombucha] can sometimes increase slightly [taking it over 0.5%], especially during transport or handling by third parties. “
But nobody drinks kombucha “due to its low alcohol content, ” Blumenauer said. “A person would have to consume between five and 10 bottles of kombucha to match the alcohol in a single beer.”
To put this in context, popular light lager beers are typically around 3.2% ABV, while many craft beers can be 5% ABV +. “ Hard ” brands of kombucha such as Flying Embers and JuneShine – which are marketed to adults 21 and older and sold as alcoholic beverages – typically contain between 4-7% abv.