What are NOLO beverages?

In the UK, producers can only label a product as “low alcohol” if it has an ABV below 1.2%. Alcohol-free products must be 0.05% ABV or lower, and anything with an ABV of 0.5% should be called “de-alcoholized.” In the EU, Regulation (EU) 1169/2011 (EU 2011) on the provision of food information to consumers requires that the ‘actual alcoholic strength by volume’ of an alcoholic beverage containing more than 1.2 % by volume of alcohol is given.

The same regulation exempts alcoholic beverages containing more than 1.2 % abv from having a nutrition declaration and a mandatory list of ingredients. In the U.S., numerous regulations dictate the labeling of no and low alcohol beverages including dealcoholized wine and malt beverages. Due to the complexity, it is best to have no and low alcohol labels reviewed by a lawyer who specializes in food and beverage labeling compliance.

The trends behind no and low alcohol

Total alcohol volume in America dropped 0.8% in 2018 after a 0.7% decline in 2016, according to the IWSR U.S. Beverage Alcohol Review. UK alcohol consumption also fell from 3.07 units per day in 2003 to 2.57 units per day in 2018, while the number of people in the UK who do not drink at all rose 35% in 2013. It’s a trend that seems likely to continue as 52% of consumer surveyed in the IWSR’s study reported that they are trying to reduce their alcohol intake.

Underneath these statistics are a few driving forces that are gaining momentum. The rise of the wellness movement means that consumers are increasingly aware of the risks of excessive alcohol consumption and more inclined to avoid or reduce their intake as a result. Global campaigns to encourage moderate alcohol consumption are also influencing consumers’ drinking habits. The idea of intentionally lowering or cutting out alcohol consumption has even been marked by new terminology like “sober curious,” and “mindful drinking.”

While consumers are more health conscious, they are also seeking more exceptional experiences, meaning they will pay more for a quality product that is memorable and increases enjoyment and wellbeing.  In fact, two distilled nonalcoholic products, Seedlip and Ish, sell for $36 and $37 respectively, despite neither product being subjected to standard alcoholic export fees.

A YouGov poll revealed that 7% of respondents have already switched some of their alcohol intake with low or no alcohol substitutes. The survey also revealed that 9% of respondents between the ages of 18 and 24 had already switched to low­- or no­-abv alternatives.

The Future of NOLO

The trends supporting the rise of no and low alcohol beverages tend to point towards success with recipe innovation with a focus on quality, enhanced experience, and distinctive ingredients.

Even with all of the recent entrants, there is plenty of room for growth in the NOLO category. In the UK, low-/no-alcohol brands represent only 1.3% of the country’s total beverage alcohol market. In the US that number is even smaller at 0.5%.

Fitch Solutions projects that global non-alcoholic drink spending will expand by 4.0% year-over-year in 2019, up from 3.9% year-over-year in 2018 and that the category will gain steam over its medium-term forecast to 2023.

As the NOLO space gains more attention and momentum, we are sure to see beverage entrepreneurs rise to the challenge, growing the demand for these products with a steady stream passion and innovation.

Original article was published in Beverage Industry Blog.

The contents and quality of sports and nutritional products are becoming increasingly important for athletes that are subjected to anti-doping tests as well as the general population, including millions of people who are subject to drug testing for employment. Federal regulations (outlined in the U.S. Federal Food, Drug, and Cosmetic Act; the Dietary Supplement Health and Education Act of 1994; and the FDA’s 21 C.F.R. 111 – Good Manufacturing Practices (GMP) for Dietary Supplements) do not require that a supplement is tested for banned substances.

The market is responding with a broader range of third-party certification options designed to confirm independent testing and evaluation of dietary supplements, their ingredients and manufacturing, and storage facilities.

Who Certifies?

Some of the most common third-party certification seals are BSCG Certified Drug Free, Informed-Choice (or Informed-Sport), and NSF Certified for Sport. Certification programs confirm that a product contains the ingredients listed on the label and that they do not contain ingredients banned by the World Anti-Doping Agency (WADA). They do not ensure a product’s effectiveness or safety. The companies vary in terms of how they approach the certification process.

History of Certifying Organizations

The Laboratory of Government Chemists (LGC) was the original substance-testing organization, dating back to 1842. The agency has evolved into the for-profit supplement testing agency Informed-Choice (and its sister agency Informed-Sport), which over the last 16 years has become the world’s largest laboratory testing supplements for contamination by banned substances.

NSF International (formerly the National Sanitation Foundation) began in 1994 as an independent and accredited organization that develops public health standards and certification programs to test and certify products and systems designed to protect the world’s food, water, consumer products, and the environment. In 2006, Red Bull became the first company to be awarded NSF International’s Certified for Sport which was introduced in response to growing concern from amateur and professional athletes about banned substances in sports supplements.

In 2004, Don H. Catlin, M.D., who founded the first anti-doping lab in the United States in 1982, and his son Oliver Catlin, introduced BSCG (Banned Substances Control Group). The BSCG Certified Drug Free® program provides protection against 485 drugs including 274 drugs on the World Anti-Doping Agency (WADA) Prohibited List and an additional 211 illicit, prescription and over-the-counter drugs.

What Certification Signifies

The certification symbols issued by the various organizations mean that the certified products had to go through extensive testing to make sure there isn’t anything in them that would get flagged in a blood test. The World Anti-Doping Agency (WADA) does not certify, approve, endorse, or guarantee any supplement. Some products on the market imply, or state directly, that they are WADA certified or approved, but they are not. Supplement certification and testing services look for everything from certain metals to anabolic steroids and endocrine inhibitors. The manufacturing facility inspections are designed to prevent accidental contamination when the raw materials are produced and when the products are manufactured. Even when a product says, “manufactured or bottled in the USA,” there is a high probability that some materials are coming from other countries with less regulation than the U.S.

With the global sports nutrition market expected to reach USD 81.5 billion by 2023, we’re likely to see even more options and demand for sports supplement certification in the future.

Original article was published in Beverage Industry Blog.

Traditional categories such as coffee and soft drinks are growing steadily with a five to six percent increase in their compound annual growth rate, while new categories such as beauty beverages are predicted to grow at a compound annual growth rate of 10.5 percent.

Another every growing category, protein beverages, is expected to reach a value of $43.4 billion by 2024. Energy drinks alone are expected to grow to $84.8 billion by 2025.

According to the research, all signs point to an international industry full of steady growth in traditional beverages, highlighted by explosive growth and opportunity in the new and emerging categories. It is an exciting time to be a part of an innovative industry primed for prosperity!

Original article was published in Beverage Industry Blog.

What is the Brand Pyramid?

A brand pyramid is a framework that showcases the different layers of thinking and feeling behind your brand. It pulls together the elements that make up your brand essence, or fundamental nature, by organizing what your company wants to be, your company’s core values, who you serve, and how your brand makes customers feel. The idea is that the more customers understand and identify with your brand essence, the more loyal they become to your brand.

How to build your pyramid?

As you move from the bottom to the top of the pyramid, the brand attributes go from concrete to more abstract moving from features, to benefits, to aspirations. Go through each section and write down what you believe to be true about your brand and product.

Test your insights by doing this exercise with your team to see where you agree and where your answers and observations differ. Incorporate the customer data you have to back up your claims and look for gaps in information as opportunities to strengthen your brand.

Features & Attributes: This section lays out the different features and attributes of your beverage. For example, an energy drink’s features and benefits might be thirst quenching, sugar-free, carbonated, vitamin-enhanced, compact packaging, etc.

Functional Benefits: This is where you explore what problem you’re solving for your customer. For an energy drink, this might be energy without sugar, convenience, good flavor, etc. The goal is to select functional benefits that matter most to customers and support a strong position relative to competitors. Ask what your customers expect to gain from your product.

Emotional Benefits: How does your customer feel after using/consuming your product? An emotional benefit is a cognitive statement that customers can make about themselves due to their use of, and attachment to, your brand and its features. For example, “I am a healthy person because I stay hydrated with nutrient-enriched water,” or “I am a successful person because I stay focused throughout the day with a memory-enhancing beverage.”

Brand Personality: The goal of creating a brand personality is to build an identity for your customers to interact with. It’s about turning your company into something that people can relate to. Brand personality is a set of characteristics connected to a company or brand that shape how people feel about and interact with a company. A brand’s personality often mirrors that of the target customer base. Is your brand serious or playful, conventional or adventurous?

Brand Essence/Promise: Your brand essence answers why customers should care about your brand. It combines your brand attributes and benefits into a succinct idea. Your brand essence should be unique, focused, experiential, meaningful, authentic, and sustainable. Focusing on building and delivering on a strong brand promise is the best way to win your space in the hearts and minds of your customers. If you’re looking for an excellent example of a brand promise, check out Coca Cola, whose central promise is “to refresh the world in mind, body, and spirit, and inspire moments of optimism; to create value and make a difference.”

The goal of the brand pyramid exercise isn’t to come up with all the right answers. It’s a tool to explore your assumptions, better define your brand aspirations, and find the gaps between where you are and where you want to be as a brand. Building a strong brand is not simple, and it doesn’t happen overnight. Maintaining conversation around your brand is the best way to ensure that you are growing in a cohesive, intentional, and consistent way. Use tools like the brand pyramid to add clarity and fuel to your branding strategy and ensure that your marketing plans and actions are in alignment with your goals.

Original article was published in Beverage Industry Blog.

The Shroom Boom

There’s no doubt about it—mushrooms are having a moment in the food and beverage industry. From a renewed interest in wild mushroom foraging to grow-your-own mushroom kits featuring “exotic” species like Hen of the Woods and Lion’s Mane mushrooms, you can expect to see mushrooms taking over the health beverage industry as well. Food Navigator found that year-on-year sales of products containing medicinal mushrooms have risen 200-800%, depending on the variety of mushroom.  And for good reason—mushrooms pack a serious punch in the nutrition department.

Whole Foods even named functional mushrooms on its list of top food trends for 2018. For those who don’t enjoy the taste or texture of eating whole mushrooms, mushroom-infused beverages provide a perfect opportunity to capitalize on the benefits of mushrooms without having to eat them at all. The most popular types of mushrooms being used in the health and wellness industry today are adaptogenic mushrooms.

Adaptogens and Their Advantages

“Adaptogen” is probably a word you’ve seen thrown around by nutritionists and health bloggers lately, but what does it really mean? In his book, Healing Mushrooms, Tero Isokauppila (founder of Four Sigmatic, a mushroom beverage company) describes the properties of adaptogens this way:

“To qualify as an adaptogen, a mushroom must help the body in a non-specific way. That last part is important because rather than serving a single, targeted purpose, adaptogenic mushrooms will adapt their healing properties to whatever your body specifically needs at a given time to restore you to peak functionality. Think of adaptogens this way: You know that good friend who comes over to your house to vent after she’s had a bad day, but sees that you’re over the moon about some terrific news and promptly adjusts her demeanor to celebrate your happiness with you? That’s what an adaptogen does in the human body — it senses what the body needs and alters its behavior in whatever way necessary to foster peak health.”

Not all mushrooms have adaptogenic properties. The most widely used species of adaptogenic mushrooms being used currently are Chaga, Shiitake, Himematsutake, Lion’s Mane, Turkey Tail, Cordyceps, and Reishi mushrooms. Some of the most commonly cited benefits of these mushrooms include:

• anti-inflammatory properties
• improved circulation
• high antioxidant content
• improved immune function
• increased cognitive function and focus
• anxiety reduction
• increased energy and endurance

Some small trial studies have even indicated that certain species of adaptogenic mushrooms can kill cancer cells in the body. A study performed by the University of Washington, funded by the National Institutes of Health, found that taking Turkey Tail mushrooms daily improved immune function in women with Stage I to III breast cancer. Reishi mushrooms, on the other hand, have been shown to decrease fat storage and even improve kidney function in individuals with diabetes.

Mushrooms also tend to be low in calories and fat-free, while still containing a wealth of beneficial nutrients like protein, fiber, potassium, calcium, niacin, and selenium.  Thanks to their increasing popularity as a health food, adaptogenic mushrooms can now be consumed in a variety of forms way beyond the whole food. There are dry powders (meant to be added into beverages or food), capsules which are ingested like a vitamin, blended into ready-made tea or instant coffee mixtures, and even extracts that can be consumed in their concentrated state like a tincture or added into a beverage of choice.

Growth and Challenges

Despite rapidly increasing popularity, especially among millennials who are keen to try unique and innovative products, the booming industry of mushroom supplements and beverages isn’t without its challenges. Because many of the scientific studies done on the health benefits of these mushrooms are small studies and the research is relatively new, many of these health claims cannot be listed on the packaging of mushroom products.

This leaves it up to the consumer to seek out information about the health benefits of adaptogenic mushrooms and seek out products with these ingredients on their own.

Additionally, because medicinal mushrooms are a fairly recent trend in the U.S., many nutritionists did not receive much information or training on the subject during their schooling. Another challenge is taste—many varieties of these mushrooms have a distinctive earthy, umami flavor. This lends itself especially well to meat-alternative type products but is less appealing to most when it comes to their beverages.

Many companies using adaptogenic mushrooms are blending them into drinks or powders with strong flavor profiles—like coffee, dark chocolate, or lemon—in order to mask the earthy flavor of the mushroom supplement or powder. However, for many consumers, a slight earthy flavor in their coffee is a small price to pay for all of the supposed health benefits of these mushrooms.

Another potential hurdle is sourcing—many medicinal mushrooms do not contain the same benefits if consumed raw and whole, so processing is necessary. Beyond that, many of these mushrooms are sourced from China, which may pose concerns surrounding pollution and pesticide usage. There are, however, already mushroom beverage companies making a point of sourcing their mushrooms from the U.S. only—it can be done, but it may not always be simple or cost-effective.

Despite potential challenges and their fairly recent explosion into the U.S. health industry, medicinal mushrooms are definitely a growing market with huge room for expansion as further studies are possible and as advancements in the processing and flavoring of these medicinal mushrooms push forward. Mushrooms tap into several popular trends among today’s consumers—functional foods, ancient eating, gut-healthy probiotics, adaptogens, and the incorporation of traditional eastern medicine into western products.

Original article was published in Beverage Industry Blog.

That same year, protein was listed as one of the top five hottest functional foods due to its versatility, benefits to athletic performance, and overall ability to curb appetites and manage weight loss.  While it’s true that protein has been popular in health circles for decades, consumer trends toward healthier alternatives have pushed ingredients like protein into the mainstream — and market trends and consumer products hitting the shelves today have begun to reflect that growth.

Why Protein?

Most people think of bodybuilding and exercise supplements when protein comes to mind.

As an ingredient marketed to the public, protein — particularly whey protein — found a place in the protein marketing boom of the 70s and 80s.  It’s widely accepted that protein provides benefits to muscle repair, recovery, and production, which is why powders and protein shakes are popular today among bodybuilders and members of the athletic community.

However, protein requirements go beyond bodybuilding — and that’s where functional foods come into play.  Whether you’re an athlete or not, your body needs protein to survive.  Proteins are made up of 20 different types of amino acids.  These amino acids string themselves together in different combinations by the hundreds and thousands, creating long chains. The unique composition sequence of these amino acids gives a protein its specific function.

All that to said:  Humans need protein, and we use a lot of it.  Everything from hair, nails, and muscle growth all the way to hormone and blood production all require protein.  But, we have a problem:  The body doesn’t store proteins in reserve.  It uses what it needs and discards the rest, which means that constant consumption is important. The good news: Consuming protein isn’t difficult. It’s in most of the food we consume. But making sure you are eating and drinking in the right type of protein is another story.

Sources of Protein

If you’re new to the protein market, especially as a consumer, it’s easy to think that protein-supplemented products are all created equal.  The body needs protein, of course, but remember those 20 amino acids?  As it turns out, it’s more difficult to acquire some of those amino acids than others, and some products which are high in protein may have negative side effects on the body.

This is where the debate between animal-based and plant-based proteins finds its roots.

Recent science has shown that animal-based protein products, such as whey or casein, offer more complete proteins than plant-based protein products, such as pea, hemp, and rice. Complete proteins contain all nine indispensable amino acids (IAAs) – also known as essential amino acids, whereas incomplete proteins contain some, but not all of the IAAs.

Evaluating Protein

In order to accurately assess and rank the quality of different proteins, a common system is needed. The purpose of the protein digestibility corrected amino acid score (PDCAAS) is to give each protein a quality rating based on the amount of IAAs they contain. Although widely used today to evaluate various proteins, there are many who are critical of PDCAAS as a singular method for sourcing proteins for a particular diet.

Marketing Trends

The idea behind today’s functional foods trend isn’t necessarily to provide a full gamut of proteins in a single supplement.  In fact, many ingredient suppliers specialize in only one or two kinds of plant-based ingredient to manufacture, stabilize, and fortify functional beverages like protein shakes and energy drinks.

Creating a shelf-stable product that looks good and tastes great is a challenge for many beverage brand owners, which is why they often turn to specialized blends of different types of proteins like plant and whey to create their finished product. Pea protein and rice protein are becoming more popular within the nutrition industry as well.

The market may be changing, however, new trends indicate that there may be a push inside the functional foods category to go beyond protein shakes and supplements.  Usually, beverage formulations contain either animal- or plant-based proteins, but not both.  Current trends indicate a push toward blending these proteins together into a complete solution designed to pack more into a serving while keeping an affordable price point. This may be a concern for strict vegetarians and vegans who don’t want animal proteins in their diet, but any kind of public outcry remains to be seen.

There is also a rising focus on branch chain amino acids (BCAAs), a group of essential amino acids that are present in various combinations and at varying levels in each type of protein.

It’s worth noting that, depending on their intended use and how they are marketed, protein beverages may be considered dietary supplements and be subject to different levels of regulation and labeling requirements.  Despite the general acceptance that protein beverages provide benefit, there is no final authority on how these beverages are produced.

At the end of the day, it may not matter.  According to a study by Global Market Insights, protein as an ingredient in the food market is set to surpass USD $29 billion by 2024 with animal-based food protein ingredients surpassing USD $22 billion alone by the same year.  In many ways, this uptick is a direct result of the functional foods boom, which has pushed protein supplements into everything from baby food to weight loss beverages.

As an increased interest in sports and fitness has started to spread across the world, so too has the interest in protein supplements and beverages.  According to Mintel Global New Products Database (GNPD), the number of food and drink products launched in the UK with a high-protein claim rose by 97% between 2014 and 2015 and 498% between 2010 and 2015.

The high level of interest in protein is driving a push towards innovation as beverage creators experiment with new process and formulations that are resulting in everything from protein enriched water and protein tea and coffee, to carbonated protein beverages.

As it stands, the market shows no signs of slowing down.

Original article was published in Beverage Industry Blog.

What’s more: that future may not be far away.  Brain enhancing supplements, called nootropics, are on the rise.  These “smart drugs” are said to improve and increase cognitive functions, enhancing everything from memory to creativity to motivation as well as boost mental aptitude and productivity.  As the health food movement reaches its peak and consumers begin to search for benefits beyond bodily health, nootropic foods, beverages, and supplements may be primed for the spotlight.

If you’ve never heard of nootropics, though, you’re not alone.  Although they’ve been around for decades, nootropics are only now making their way toward broader public awareness.

What are Nootropics?

On the surface, nootropics might look (and sound) like something out of a science fiction novel.  While the desired results aren’t dissimilar, the idea behind nootropics as an enhancement tool is rooted more in the ancient past than the distant future.  Nootropics might be best defined as synthetic or natural compounds designed to improve cognition.

However broad this definition might seem, the term carries with it some guidelines.  For example, caffeine isn’t considered a nootropic because it’s a stimulant.  Though it produces nootropic-like properties, it only does so for a limited time and at the cost of a crash at the end of the cycle.  However, caffeine is often paired with L-theanine, an antioxidant known for its calming properties commonly found in black, green, and white tea leaves.

Caffeine and L-theanine are often combined to create what’s known as a “nootropic stack” — a combination of chemicals which are consumed simultaneously to give a nootropic effect.  In the case of the caffeine / L-theanine stack, the idea is to gain the stimulating effects of the caffeine while using the L-theanine to calm the mind and offset the negative side effects.

The result: a boost in mental performance with no downsides or negative after effects.

Boosting the Beverage Market

The allure of nootropics hasn’t gone unnoticed by entrepreneurs and marketers looking for a new product to rally behind.  Nootropics are often called “smart pills” or “genius drugs,” and there are a host of popular stacks, combinations, and supplements already available on the market.

Even major brands are beginning to take notice.  V8, a popular producer of alternative energy beverages, just launched their V8 +Energy line, which touts a steady stream of energy from a green tea supplement infused into the traditional product.  Other brands, like TruBrain market their drinks and supplements as “brain food” designed by UCLA scientists.  Following the functional foods trend, brands like Drink Neuro have been quick to highlight the stress-relieving properties of their premium neuroDAILY beverage lineup.

And nootropics are trending.  According to BBC Research, the functional beverage market will reach US $105.5 billion by 2021, while a report by Credence Research values nootropics as a US $1.3 billion as of 2015, projected to reach just over US $6 billion by 2024.

The Nootropics Popularity Boom

Nootropics have been around for decades, but they’ve become something of a buzzword on the fringes of the health-aware movement.  Customers who are breaking away from traditional productivity boosters and energy drinks and are instead looking for alternatives to high doses of caffeine and sugar.  Because nootropics can provide similar benefits, they’re likely to appeal to consumers considering them as an alternative health supplement.

It’s not just a shift in consumer consciousness driving the change, however.  Major brands have begun repackaging and shifting decades old nootropic blends to appeal to a different crowd — namely academics and professional overachievers.  Particularly among a growing niche of the consumers obsessed with productivity, from college students to Silicon Valley, the notion of a “brain hack” to boost further output may feel like a necessity in hyper-competitive careers.

As other markets and industries continue to gain popularity and attract worldwide attention, supplements to enhance everything from memory to reaction time may find a place.  One such area ripe for the nootropic market is eSports, where mental acuity is paramount to success.

A Bumpy Road to Profitability

Nootropics as mental enhancers may seem like a shoo-in for explosive growth, but the reality is that profitability and the semblance of a mature market are quite a way down the road.  As of 2018, the effectiveness and authenticity of nootropics are still heavily scrutinized.  Most dedicated nootropic products are available as a dietary supplement, which is a largely unregulated market, requiring no FDA approval.

On top of that, brand representatives of the nootropics market aren’t furthering consumer confidence, as in the case of one million-dollar nootropic startup whose own scientific study revealed that coffee was more effective than its own product.  The stories hardly stop there.  Social media accounts of individuals using prescription drugs in search of nootropic effects have caused the American Medical Association to issue new user guidelines and warnings regarding “smart drugs” and off-label use.

If companies plan to broach this market and legitimize nootropics as anything beyond dietary supplements and clever marketing, they’ll have some work to do in order to prove the lasting value of the products they’re planning to promote.

Even considering most basic nootropic stack — coffee and L-theanine — the EFSA could find no credible evidence when studying L-theanine to suggest that nootropic benefits exist.  This makes determining the validity of nootropics and their benefits a questionable endeavor for even the most well-reputed brand.

Forward to Formulation

What does it take to successfully integrate nootropic ingredients into a beverage formulation? MyDrink Beverages has seen an increase in the desire to incorporate nootropic ingredients into beverages due to their stated benefits. But creating a winning formula that includes nootropics is not an easy task. Matching potency and potability can be particularly tricky.

“There are some specific challenges in working with these types of ingredients, which are often bitter tasting,” says Dani Stanley, Application Scientist at BevSource, MyDrink Beverage’s parent company. “Consumers may be looking for certain usage levels based on their own research. But getting the right amount into a formulation while masking the bitterness takes some experimentation.”

With more obscure ingredients, sourcing issues and cost can come into play as well. Balancing these demands while responding to the fast-changing market preferences is an important focus for beverage entrepreneurs in this space.

The mix of potential advantages and challenges make the world of nootropics an evolving and exciting space for new ideas and beverages to emerge.

Original article was published in Beverage Industry Blog.

Ready-to-Drink Coffee with Alcohol

According to Mintel, 20% of the U.S. coffee market is occupied by ready-to-drink (RTD) segment, which is predicted to grow by 67 % over the next five years. Beverage creators are preparing to capitalize on these trends and growth by creating new coffee options with alcohol.

In 2017, Diageo released Bailey’s RTD iced coffees in the UK. The 200ml cans come in both Latte and Mocha flavors. The company said they are a mix of “Arabica and Robusta iced coffee with real milk, fine spirit and the taste of Baileys Irish Cream.” Bailey’s iced coffee is 4% alcohol by volume (ABV).

FrappaChata is a ready-made cocktail made with premium dark roast coffee that’s blended with RumChata cream liqueur. It is 12.5% ABV and has caffeine levels similar to decaffeinated coffee. Bad Larry’s “blends cold brew with malt for a perfectly sweetened and unforgettably smooth boozy coffee,” according to a news release. The beverage is sold in four-packs of 11.5-ounce cans. It is 6% ABV and contains 180mg of caffeine per can.

Alcohol and Caffeine Regulations

While beverage creators are enjoying experimenting with new ways to combine coffee and alcohol, they must also be aware of the changing regulations surrounding caffeine in alcohol.

In 2010, there was a wide-reaching ban on alcoholic energy drinks across the U.S. The Food & Drug Administration (FDA) issued warning letters to four caffeinated alcoholic beverage companies advising that adding caffeine to malt beverage products was considered an “unsafe food additive.” Food additives are subject to review and approval by the FDA, and although alcoholic beverages usually fall under the Tobacco Tax and Trade Bureau (TTB) in this case, the TTB agreed that shipping and selling beverages that are considered adulterated under the Federal Food, Drug, and Cosmetic Act (FFDCA) are mislabeled under the Federal Alcohol Administration (FAA) act and are not permitted to be shipped or sold.

All of this put into question if caffeine and coffee would be considered a Generally Recognized as Safe (GRAS) additive. To be considered GRAS, there must be evidence that demonstrates the safety of the intended use of the substance. The FDA has stated that alcoholic beverages containing added caffeine may be subject to agency action if the available scientific data and information indicate that the use of synthetic caffeine in those products is not GRAS. A manufacturer is responsible for ensuring that its products, including the ingredients of its products, are safe for their intended use and are otherwise in compliance with the law.

In Canada, the sale of alcoholic caffeinated energy drinks is not authorized, and caffeine cannot be used as ingredients in other alcoholic beverages. According to Global News, Food and Drug Regulations from Health Canada prohibit adding caffeine to alcoholic beverages but allow some alcoholic beverages to have “flavoring ingredients” like guarana and coffee that naturally contain caffeine. It’s permitted to have a pre-mixed beverage, like a canned rum and coke, where the soft drink would have caffeine as a food additive. Currently, Health Canada doesn’t place limits on how much flavoring agent can be added to a drink, including those with natural caffeine.

According to research by the European Center for Monitoring Alcohol Marketing, in Europe, non-member states have more stringent regulations when it comes to alcoholic beverages containing caffeine than do EU member states because of possible conflicts with EU trade agreements. The study also found that in most countries without a ban on energy drinks, more alcoholic energy drinks could be found. However, even in countries with stringent energy drink restrictions on drinks with more than 150mg of caffeine per liter, alcoholic energy drinks containing guarana and ginseng are popping up as a way to get around caffeine regulations.

As more information points to the adverse side effects of combining alcohol and caffeine, beverage producers will need to remain aware of the implications of current and future regulations on how they can produce, market, and sell products.

With the longstanding popularity of both alcohol and coffee, more beverages that contain the two are inevitably on the way. Consumers’ tastes as well as the legal and regulatory environment in which they are introduced will largely influence what those beverages look like.

Original article was published in Beverage Industry Blog.

Though it’s been around for a long time and has been a hearty staple of the alternative-health market, kombucha recently made its way back into the spotlight as a social trendsetter, generating $556 million US in refrigerated beverage sales during 2017.

And the market anticipates a steady upward trajectory in the coming years. The recent launch of a line of kombucha beverages from former rugby union star, Jonny Wilkinson, highlights the growth in acceptance and publicity for the formerly unknown beverage.

The Kombucha Craze

It’s more likely a combination of factors, rather than one source of influence, is responsible for the rise in kombucha’s popularity.  The drink has roots in Chinese culture dating back over 2,000 years and was once considered the “tea of immortality”, according to ancient myth.  However, it’s only recently that the drink has exploded onto the consumer market as the probiotic craze has gone mainstream.

Walking into any local supermarket, you’ll likely see kombucha in every type of bottle and flavor lining the shelves alongside similar probiotic foods and beverages like yogurt and kimchi.  The drink is especially popular among teenagers, college students, and younger adults who tend to favor health-conscious alternatives and lifestyle choices over traditional consumer food products.

In an article discussing food 2018 food trends, Julia Mellentin, Director of New Nutrition Business at Nutraceuticals World, writes:

“The single, most powerful trend in today’s marketplace is consumers’ desire for foods and ingredients that are ‘naturally functional.’ This massive trend underpins the success of almost everything else. It’s the key driver of most innovation in healthier food and beverages, from plant-based foods and beverages to the re-birth of full-fat dairy, the rise of green juices, blueberries, almonds, seaweed snacking and more.”

That’s no surprise.  Functional foods and beverages are seeing massive growth, particularly with millennials.  BevNet reported in 2016 that while carbonated soft drinks are in the middle of a five-year decline, natural and functional beverages should expect to see a 40 percent dollar growth in the industry.

Despite the mystifying uptick in kombucha and its probiotic cousins, the numbers don’t lie.  A 2016 market analysis anticipated 25 percent growth in the kombucha market year over year until 2020 — which might have been a modest estimate, considering that the market grew 41 percent in 2016 and 37.4 percent last year.

EMEA: growing focus on health-oriented foods to boost growth

While awareness around healthier alternatives has grown in the US over the last decade, the European market has long outpaced its western neighbor in organic food sales.  In 2016, Europe was one of the largest markets of kombucha, behind the Americas, with the UK, Germany, and France driving industry growth.

Though trends around probiotic and fermentation foods are coming to a head in Europe, the craze still trails behind the US. Kombucha-oriented brands are sustained by the US West Coast, where the top five cities for 2017 sales were San Diego, Seattle, Portland, San Francisco, and Spokane.

Part of the hesitation in the European market may have to do with European retailers response to new and trending concepts like fermented foods and beverages.  Though fermentation in foods is on the rise globally, Europe has been “slow off the mark,” according to Brian Owens of Rhythm Health, a maker of coconut-based kefir beverages and snacks. Some have speculated that this is due to European manufacturers and retailers being slower to respond to the consumer demand than other markets. This real or perceived sluggishness may have to do with EU probiotic legislation and the history of a difficult regulatory environment for probiotics.

Infrastructure and supply chain issues may also be contributing to slower growth in some parts of Europe. The process for fermenting and manufacturing kombucha is lengthy and intensive, and some suppliers aren’t able or willing to dedicate the required equipment and resources. But the list of producers in the UK and Europe is growing.

LA Brewery, located in the UK, makes and bottles their own kombucha and ships it across the country while London-based Jarr Kombucha has opened Europe’s first kombucha tap room in addition to stocking their product in local markets.  In Russia, where kombucha was considered a staple during World War II long before it caught the eye of the US consumer, kombucha is making a comeback.

An Overblown Health Trend?

Despite its categorization as a health product, questions continue to circulate around kombucha’s health benefits.  Since its debut in ancient China as a miracle elixir, kombucha has been credited with a number of positive side effects,

from carrying antioxidants to reducing heart disease and managing diabetes.

While some of these benefits are undisputed, they may be overblown when put to the test.  One study found that the benefits of kombucha weren’t unique to the fermented tea itself, pointing out that while kombucha does carry some benefits, it’s no different than drinking other teas or eating other fermented foods.  That is to say: the benefits of kombucha could be acquired in other ways if the taste, the price, or the trend doesn’t appeal to the standard consumer.

The lack of detailed clinical studies means that declarations of health benefits on packaging under EU law is limited. This could be another contributing factor to slower adoption rates in European countries.

Wrapping Up

No matter your thoughts about the tea or its related health benefits, it’s clear from the numbers that the kombucha market is growing and hasn’t yet peaked.  While the drink is already popular in Europe, projections indicate that the market may be set to follow US consumer trends around probiotic foods and drinks. According to a 2016 report, the Europe kombucha market was worth $156.26USD and estimated to be growing at a CAGR of 24.5%, to reach USD 467.41 million by 2021.

So grab a glass and pull up a chair.  Kombucha is here to stay.

Original article was published in Beverage Industry Blog.

A commercial formula is the industry term used for a production-ready beverage recipe. Commercializing your beverage recipe provides contract manufacturers with the necessary details required to scale and produce your beverage in a consistent, efficient, and safe manner.

The Formulation Process

Below are the steps commonly followed when working with a beverage developer or formulator to create a commercial formulation:

1. Project Brief Development. It is important for the formulator to understand your beverage concept and the desired taste profile including flavor, smell, appearance, color, and mouthfeel. The more precise and comprehensive your project brief, the closer the resulting test samples will be to your vision. Other characteristics that have formulation implications include:

• Health Benefits & Claims (e.g. energy, weight loss, hydration, etc)
• Certifications (e.g. organic, non-GMO, kosher, gluten-free, etc.)
• Calories
• Flavor/Ingredient Call Outs (e.g. “made with real lemon juice,” “made with agave nectar,” etc.)
• Natural or Artificial Colors
• Allergen Restrictions
• Shelf Life
• Preservation Method

2. Recipe Development. Once your beverage concept is clearly defined and understood, the formulator will begin sourcing raw materials to start developing the first round of prototypes. First-round development can take anywhere between 4-6 weeks. When samples are ready, they will be sent to you for sensory review and feedback. If additional refinements are required, an iterative process begins with a second and third round of prototypes to follow.

3. Final Commercial Formulation. Once all aspects of the beverage meet requirements and your vision, you sign off on final formulation. The commercial formulation and Method of Manufacturer will be sent to you, with details outlining your ingredients and target liquid specification such as pH, Titratable Acidity (TA), Brix, percent Alcohol by Volume (ABV) for alcoholic products, carbonation/nitrogen (if applicable), filling/preservation method, and possible allergens (if applicable).

The formulation for your beverage is the foundation that your brand is built on. Be sure to allow yourself and the formulators enough time for formulation. Getting it right could be the difference between a successful product and failed one.

To get started on your beverage formulation process, contact us today to speak with one of our specialists.

Original article was published in Beverage Industry Blog.