The KBI Verified Seal Program, by Hannah Crum

Hannah gave a presentation on the KBI Verified Seal Program to KKON attendees at the Craft Beverage Expo & Conference | Tasting & Tap Room Expo in Reno. It was listed in the program as:

Bring peace of mind and transparency to the kombucha industry. Remove consumer confusion, the KBI Verification seal communicates to everyone who spies it that the product is authentic kombucha produced in a safe manner in compliance with the Food Modernization & Safety Act and all local, state and federal laws.

The following is a verbatim transcript of her presentation with selected slides.

The KBI verified seal program is a labor of love designed to help kombucha brands differentiate themselves in the marketplace and create trust with consumers, distributors, and retailers so that what is on the label is what is in the bottle.

We know that consumers want transparency. In order to be process agnostic we have to be radically transparent because there really is a kombucha for everyone.

And look, nobody knows better than I do that there are purists out there, so while my kombucha may not be for everyone, we need flavor profiles that will attract the broadest base of consumers into our category.

So why are we here? Consumers are confused. First of all, we probably still only have about 15% household penetration here in the United States. Yet for those of us who live in the industry, it feels like everybody knows about kombucha, but we’re in a bit of a bubble. The awesome thing about that fact is that it means 85% of consumers have yet to even hear about, try, or enjoy our products.

That’s a huge, untapped market with great potential. Here’s what the three seals look like.

Consumers are used to going to the shelf looking for trusted seals, whether that’s a vegan, raw, gluten-free, organic, fair trade, or kosher seal. All these seals quickly communicate to the consumer. They understand what they mean and can trust the product because they align with those values.

It means consumers don’t necessarily have to go online and research to understand. This is going to give the consumer a really quick way to understand that the product they’re consuming has already been vetted by experts so that they know that what they’re getting is what they’re paying for.  Here’s what we’ll cover.

First, why a seal of verification? For the good of ALL kombucha.

What is kombucha? It is delicious, but how else would you describe it to someone who knows nothing about it? What do you say kombucha is? Fermented tea!  But what type of tea? What type of fermentation process? What type of microbes? What type of cultures? There’s a lot of information that people don’t even necessarily know. And even in the industry, part of developing a Code of Practice, which took many years for us to do, was because many people were attacking the “problem” of kombucha, meaning the ethanol production, and applying different types of processes and techniques.

There are many in our industry who have a sort of home-brew purist vision of what kombucha is. And when we try to take a home-brew product and scale it to commercial size, that doesn’t always work, especially if we’re looking for something that’s going to be consistent. And is as labor intensive as, you know, a bazillion five-gallon jars. And so, we need to help educate the public about the benefits of all kombucha because I truly believe that there is a kombucha for everyone. And yes, that means kombucha from concentrate. That means pasteurized kombucha, along with raw unpasteurized kombucha, or kombucha that is not from concentrate.

Take some examples. Coffee. Your grandpa drank Folgers, Sanka, or Nescafe if you’re in Europe. And now look at the wide range of coffees we have. These products do not all cost the same. Their stories are not the same, and yet it is that same coffee bean.  Or chocolate bars that once meant a Hershey bar. Now look at the different varieties.  70% cacao dark chocolate’s that’s marketed as good for you, right?  We moved away from just chocolate as a treat to health benefits.  I pay a lot more money for this fancier bar, and I feel good. I’m treating my body to something that’s not only delicious but also nutritious.

The point of these examples is that humans crave sophistication. We love iterating. We love to take a product and then find all the different ways we can make it nutritious, valuable, different, or unique.

So we need to attract diet soda drinkers, casual drinkers, and people looking for lighter, softer flavors, in addition to folks like myself who are, like, punch me in the mouth with the sourness.

Think about beer. You’ve got IPAs, which some people won’t touch with a 10-foot pole, and then you have light lagers. And so there’s going to be something for everyone.

We want to help consumers understand that kombucha is not a monolithic, singular flavor profile or singular product but, in fact, a diverse range of flavors and styles.

Transparency

Transparency builds trust.  Consumers have been lied to for a really long time, and it’s really unfortunate. There’s so much awareness around how many toxins are in our food supply. I’ve been into food wellness for a long time. Many groups have emerged because our government doesn’t actually do a great job of regulating the 80,000-plus chemicals that are permitted in our food, water, air, etc. We can look to places like Europe, where they’ve had tighter restrictions. Identical food products are being produced for European markets without artificial flavors, artificial colorants, fillers, and cheap ingredients. And yet those same companies have no moral qualms about selling us the junk because they’re allowed to, because it’s cheaper, and because they have a higher profit margin. And this has broken consumers’ trust in the vast majority of products.

And unfortunately, people will state that organic is no better for you than non-organic. And people get confused. They often don’t want to spend the money because everyone’s pinched these days.

They go through the different talking points, not realizing that they’re being sold a bill of goods because buying cheaper products gives you a financial advantage. Transparency builds trust, and it builds trust in our industry, too.

So here are just some stats we pulled together.

When shopping for food, almost 50% of consumers check their labels. Just 10 years ago, if we asked that stat, it would probably have been half that. People just didn’t have the thought process back then. Now, they recognize they need to check labels and make sure they’re not putting something bad in the shopping bag. Think of all the food allergies that have increased over time and why people must now be so conscious.

42% claim they researched a brand before buying. So, consumers care. They want to know. They want to be able to find products that resonate with them, and they’re going to do the legwork to do that. Consumers read product labels, right? They’re looking at the packaging. That’s the most important thing.

It doesn’t look good. Is it sexy in that bottle? Is it sexy in that can? Is there a cool design? Does the name captivate me? Can I see the beautiful resonance of the living kombucha pouring for us from that glass bottle, right? We’ve all been captivated by those beautiful jewel tones as we walk past that case in the grocery store. And then, of course, price.

Everyone’s price sensitive. I bet if we did this today, price would be when we surpassed packaging. So, typical consumers are really concerned about fairly surface things, and they’re less than highly educated consumers. And we’ll see why this is important in a minute.

Pasteurized kombucha. People exclaim: “Oh, my God! You killed it! It’s dead! You can’t drink that. There is no value in that.”

I get it, guys. I’m a home brewer. I’m going to drink raw kombucha. It’s delicious and amazing.  But consumers don’t have that same hardcore thought process about our products that we do. They don’t know. They don’t understand. And we make it hard for them when we engage in all this infighting and complicate the message. The message is that kombucha is good for you. That’s the one message, no matter what form it comes in. Because it’s always going to be better for you than a soda. It’s always going to be better for you than an energy drink or anything with all kinds of synthetic nutrients and chemicals in it, regardless of whether it’s pasteurized or whether it’s from concentrate. And so, it doesn’t matter.

Many consumers say it doesn’t matter if it’s pasteurized. And here’s the thing: Consumers are intelligent. They understand the value proposition. If they’re paying $7 for a raw, fresh squeezed juice, they know they can’t leave it in the fridge for a week because the next day, it’s not even going to have the same flavor profile and freshness. And if they buy that pasteurized orange juice and they stick it in the fridge, they know they’re going to have a little glass every single day, and they’re going to give it to their kids, and it’s not going to have any funky flavors, and it’s a reliable product that they can depend on. It’s something they can put in their car and leave in there, even if it’s hot. It’s not going to explode, get funky, or turn weird.

And so, this is where radical transparency equals process-agnostic.

We need to boost our confidence. When we’re infighting, we look childish. We look like we don’t even understand our own product because we’re so concerned about being negative about other people’s products instead of focusing and highlighting what makes our brand unique, what makes our value proposition the one that they should be putting on their store shelves.

This is why we want to harmonize the kombucha practice globally. Retailers feel more confident when they see an industry that’s united. Look, even Coke and Pepsi come together on the important talking points. Even though they’ve been at each other’s throats for over 100 years, right? And that’s what we can do. We can be a united message with all this variation within it.

The Three Seals

So, as I said, these are the three names of the seals we chose. Who here recognizes the names of these? Where do you normally see “not from concentrate”? What types of products? Juice. And what does that say to the consumer? They know it’s not from concentrate. What are they expecting? Higher nutritional value. It’s not had the water taken out of it and put back in. It’s not a diluted product. It’s something that is going to have a higher value proposition and probably a higher price.

How about “from concentrate”? Didn’t we all have those freezer packs of orange juice and dump it in the pitcher and stir the water in? Oh, look, you’ve got orange juice. Anytime you want, it’s just in the freezer. Right? We know “from concentrate” means that, yes, we’re going to add the water back in, but there’s still value. We’re still drinking the juice. We still find it to be a beneficial part of our lifestyle. It’s contributing vitamin C, giving you these other nutrients that are potentially part of it. And we’re not going to pay the same price for “from concentrate” as  “not from concentrate”.

“From pasteurized” means that it’s been through a processing technique that has killed any potential microbes that could cause damage. And so if you have a pasteurized kombucha, what’s the benefit of that? Acidity? Right. So maybe it’s not as acidic. It’s not going to continue to ferment in the bottle. It’s going to be very stable. The flavor profile is going to be consistent. You can, again, put that product in your hot car and not worry that when you open it, you’re going to suddenly Picasso or Jackson Pollock in yourself and your surroundings.

Integrity of the Seal

And so, these are all beneficial things that consumers easily understand. As with USDA organic, the USDA sets organic standards. They do not do the paperwork and the audits and the this and that. Those are farmed out to the third-party Seal programs, right? And so KBI is like the USDA in this regard. We have set the standards. Yet, we are not going to be the ones who are saying, send me all your confidential information. Send me all of your recipe and supplier details. That will go to a third party because it’s not KBI’s business to do that. We want to hold ourselves to a higher standard.

So that’s how we protect the confidentiality and the integrity of the Seal. So, there’s administration, there’s auditing, and that’s all done with the third-party partner.

As I mentioned, we’ve been working on this for a long time. And if we had put a code of practice or a standard of identity together in 2015: tea, sugar, SCOBY, that’s it. We would have a very narrow definition of what kombucha is. And all of us know, those of us who are brewers and have experimented with it, know that it is now beyond that. It can ferment a wide variety of substrates. It can do all kinds of different things. It can be brewed in many different ways. Some people are pitching the yeast from batch to batch like they do in beer. Some people are purchasing concentrates and diluting them with water and flavors and putting it in a bottle. Maybe they’re not good at making kombucha, but they have a flavor ability and a marketing ability, right? Some are in small vessels. Some are in large vessels. Some are open tanks. Some are closed tanks.

And what’s cool about our industry right now is, first of all, we’re borrowing from all these other industries that have come before us, and we’re starting to develop our own specific tools. And so we’re at a really exciting point in the kombucha industry in terms of where it can go.

But it took a long time. And why we did a code of practice, which we update every single year, is because our knowledge is updated. And so it gets to be a living document that isn’t calcified in one thought process, but rather gets to reflect the developments we see in our industry.

KBI

Who here is familiar with KBI? Alex and I, as said earlier, it was an outgrowth of our mission of changing the world one gut at a time. We had a kombucha crisis in 2010, and Whole Foods didn’t want to be liable for potentially selling alcoholic beverages that weren’t properly labeled. There was no health issue. There wasn’t a concern. Different consumers weren’t complaining. And a large corporation doesn’t want to take on that level of liability.

We formed in 2014 to bring everybody together so we could talk about this. But it created a lot of fear and tension. We’re an organization formed out of crisis to meet the needs of a challenging situation. And this is an organization that, as recently as 2022, we had to go to South Carolina. We got on the phone with them because they wanted to tax all kombucha as beer. In 2022, and you might be thinking, oh, I’m on the West Coast, or I’m on the East Coast, or I’m somewhere else in the world. This doesn’t apply to me. Except if one state makes this type of different decision about our product and other states might look at them, oh, well, over here they did this. Why aren’t we doing that? And now all of a sudden, something that happened in South Carolina is now impacting the entire industry around the country.

And so KBI’s value proposition is, why wait till the next crisis? Support the industry now so that we have your back when this stuff comes up, because you never know when the next fear of kombucha boogeyman is going to raise its head. And at the end of the day, it’s all education.

When we got on the phone, we could clearly explain the code of practice to them. They were like, well, is this enshrined at the FDA? No, because the FDA isn’t taking up the issue of kombucha. And so it’s valuable and valid that KBI exists even just to have that code of practice in place. Here’s the definition of hard kombucha. Here’s the different types of it.  So it’s incredibly valuable that we exist.

And so our mission has always been to protect, promote, and educate. We’ve done protect. We’re doing education. And now we really want to lean into promoting. And I think the Seal is a fantastic platform that we can all get on, get behind, and use to get that messaging out.

So we seek to self-regulate in the absence of other governmental recognition. I have brands from other countries. They go, oh, well, what does the FDA say? Again, the FDA says nothing about kombucha. That’s not how food regulation works in this country. They’re only going to be reactive to a negative situation. And again, because kombucha is incredibly safe, we don’t have those situations occurring. So there’s no reason for the FDA to step in because there’s no need, right? They’re not going to put resources towards something that isn’t an issue. And that’s where KBI stands in that place. And what we see in the absence of regulation is litigation, as all too many larger kombucha brands have run into. As soon as those trial lawyers or those class action lawsuit lawyers see that you have some money, they’re going to figure out a way to get some of that for themselves, valid or not.

So this is the timeline we’ve been on. We’re a little protracted. We haven’t seen any labels yet. But we’re still aspirational. And so here’s how the process works.

You pay a fee. We distribute that fee to the auditor. The auditor that gets in touch with you, and they collect all the necessary paperwork. You go back and forth with them until the paperwork is satisfied. Then they let us know that you’re approved. KBI issues the seal. You pay a licensing fee to KBI, and you’re on your merry way. This is where we see more drinkers coming in. Our sales are going to increase. Shelf space grows. And here’s how it works. I know some of us are thinking, like, really? And who’s going to put a “from concentrate” label on their product? And who’s going to put a “pasteurized” label on their product? Nobody even wants to admit this stuff.

And you’re right. Those are likely not the first adopters of the seal. The likely first adopters of the seal are the “not from concentrate” folks. And then, as those labels start appearing on shelves, as distributors and retailers see, oh, this is the one with the seal, now consumers are saying, where’s the seal on your product? Where’s the seal on your product? This is what is going to create that transparency.

Look, guys, we move at the pace of a nonprofit. We move at the pace of government. And that means it’s very slow. These changes aren’t going to just happen overnight. And they take a small group of dedicated people consistently showing up and chipping away in order to implement these changes.

Marketing

So how are we intending to market this to the industry? We want to work with distributors and retailers. We want to educate them. At shows like this, at Expo West, all the individual brands who are members of the board are already in conversations. You know, the folks who are doing co-packing and private labeling are also talking to their customers and saying, hey, we want to build this into our system.

Think about it like this. If all the grocery store brands have the seal on it, wouldn’t then all the other producers want to get on board and do that? And so this is a really necessary first step is getting those first brands to start carrying the seal. So we’re in a really dynamic and exciting time in order to get that accomplished. But it takes education, right? We all know we don’t hear something once and it’s instantly absorbed. People have to be exposed to a concept many times before they’re ready to adopt it.

You know, we want more information for consumers. Again, COVID kind of threw a monkey wrench into all of our plans. We’ve all been sort of hanging on by our fingernails in order to stay alive. And education for consumers is absolutely the next thing on KBI’s list.

We have an amazing research database. We have lots of information about the benefits of kombucha. And while brands cannot put that information on their labels without getting in trouble for making health claims, a trade association can put research information about the benefits of the product so that anyone can then share that information or point their consumers to it. We become that lighthouse, if you will, that shines out the information about kombucha so that people have a trusted, non-biased, non-brand-based source to understand why this is a product they should be paying $3 or $4 for it, versus $1.50 for Poop Pop. Yes, that’s what I’m calling all these Inulin-infused, cheapo sodas that have no fermentation value proposition. I mean, how much Inulin in a liquid form are you actually supposed to consume? And yet that’s what’s sort of pushing out or edging out some of the kombucha products. And I think, you know, our value proposition is always going to be the better one, and it’s helping consumers understand why that is.

We’ve created holidays. We have World Kombucha Day. We have the Kup Awards. SYMBIOSIS magazine. These are all ways in which we communicate our authority and our legitimacy to consumers, retailers, and distributors.

To find out more and keep current please scan the QR code for updates.

We need to increase our visibility. We need to put more of this information out.Who’s got questions? Let’s just have a conversation.

Q&A

Is this program just for the United States or worldwide?

It is a global program. Now, here’s the thing. How much people pay for certification in Europe is very different than what we pay for organic certification in the U.S. So there is some price sensitivity, and what we’d like to do is a long-term goal of why I think it’s so advantageous. We have Kendra Sepulveda, who’s based in Spain as our current executive director.  She’s the boots on the ground in Europe to try to make these relationships so that we can replicate the auditing process at a price point that’s going to make sense for that specific market. That said, anyone, Japan, anywhere from around the world, as long as the documentation’s in English, they’re going to be able to apply, be audited, and receive the seal, assuming they’re in compliance.

So, you mentioned orange juice, and I guess the average consumer would expect that not from concentrate orange juice is superior, will cost a little more than from concentrate. However, in kombucha world, is that going to hold?

If you have an award-winning kombucha, yeah, you could charge a higher price for that, even if it is made with concentrate. Because clearly, what you’re expressing is, this is still a very quality premium product. That said, the assumption is that if you’re bypassing certain steps of the process, and using a beverage base in order to make your product, that it’s going to have a lower manufacturing cost. And so, the advantage to you is a lower price point. I’m able to sell you this product at a lower price, and if you’re price sensitive, this is still a high quality kombucha that’s won awards, and you can pay less for it because it is a from concentrate product. I think that’s a win-win, right there.

And again, there’s so much fear of how the consumer’s going to perceive it, but that is all coming from, you’re inside the kombucha bubble. But for people outside the bubble, this stuff, they don’t even know or understand, oh, raw, what does this mean? Right? Oh, but you have to boil the tea, are you sure? It’s raw, right? This is why we can’t just have a Seal that says raw kombucha, because when we get into technicalities, they’re going to complain that we have to boil our tea. Therefore, it’s not raw.

What is this program going to cost?

So, this is a great question. It’s tiered based on your output, right? So, just like membership at KBI is tiered based on output. And so, for a producer who’s in Tier One, it’s about $2,000 for the first year, and that’s going to cover the audit as well as the licensing fee for up to five SKUs. Now, our hope is that five SKUs is actually five formulations, because we know sometimes we see different packaging sizes of the exact same product. It all has to do with label review. And if the only thing that’s different is, you know, the ounces and the nutrients, because it’s 10 ounces versus 16 ounces, there’s not a lot to review it, right? The content of the label is what’s important. If you’re not making any significant changes to your label, then perhaps in future years, you’re only paying the licensing fee, which would be a lot less than the cost of the audit. You know, having an organic certification, we just went through it again. It’s intense.

It takes a lot of time, a lot of energy. And if our products are essentially, right, if we’re not changing much in our process, then there shouldn’t be a reason to have to pay for that audit every year, if we can just pay a licensing fee. This is just the first iteration of this program. It is not the final iteration. So, that, we’re going to be able to evolve it as we go on.  

Have any brands started with the Seal program?

Not yet. We have brands who pushed for the Seal program, who said, I’m all in, and now the Seal’s here. And as we know, financial times have changed, and I think people are still evaluating, and other label changes are being made with some brands because of, as I said before, the sort of litigation and the absence of regulation. It takes time to get people to buy into the concept. And so, again, as we have that ambitious timeline, we also know that realistically, it’s probably going to take a little bit longer. And the sooner any brand dives in to start, they’re going to be the first to get to advertise this opportunity.  They’re going to get to let consumers know, they’re going to have a real reason to educate people as to why this is important and why they’re staking this claim. But it just takes one.

Does KBI have plans to fund research that can help support the claims that we have about our products?

And I think, in an ideal world, yes.  We’re still in this post-COVID world where people are just trying to get their footing. Look, we’ve seen a contraction in our kombucha space, and the reason for that is many-layered, right? You’ve probably seen it, too. Restaurants that have been around for decades are shuttering their doors. Businesses that have a long-standing history in their communities are having to transition into something else. We’re in a massive period of transition. And the short answer is, yes, of course, this is on our list of ideal things that we’d like to put money towards.

And, realistically, we’re—like you—in a space where it’s important that we come together and connect so that we can get through these lean times because we know another thing is coming, right? The wave is like this. We’re in a trough, and we’re going to climb out of this because gut health is not going the way. Gut-brain connection is not going the way. And as more people understand the value proposition of what fermentation holds for them, and kombucha, again, not being that endpoint. It’s not drink kombucha and nothing else. It’s kombucha’s is a gateway into understanding how these delicious, not that expensive beverages can give you a ton of benefit.

And it’s hard for some people because they think, you know, we expect things that are good for us aren’t going to taste good, or we have to adjust to them, and we forget that, like, coffee tasted terrible the first time you had it. You had to dump a bunch of cream of sugar in it just to make it taste good. And yet you drink it all the time because of how it makes you feel. And that’s where communicating that benefit and allowing consumers to really feel how kombucha has that impact in their lives, it’s going to take time. The first sip of whiskey or wine or alcohol probably was terrible, too. And people forget that you had to go through that period of adjusting and all of the finer things in life. First of all, they’re all fermented. They all have really complex, unusual flavor profiles. And they all take a little bit of getting used to.  And kombucha is that, too. And so, really, this is like, let’s lay down the need to advocate for some sort of purest definition of kombucha. The code of practice, what it did is it enshrined fermentation. As long as there’s fermentation, and we’ve defined certain microbes, we’ve defined certain substrates, we’ve also defined some of the variations that can exist.

Let’s all get on board with the code of practice and shout it from the hills, and that is going to allow us to have that unified message. But it’s hard because I think people get really embedded to these ideas that, at the end of the day, aren’t actually going to help move our industry.

We have some copies here, so if you want to sign copy, we’ll have those there. And then I’m inviting you all right next door to that booth. There’s this one-on-one meeting section, and we’re going to sit there and talk through some of the issues.

So, if you have pain points, if you have questions, there’s a lot of, there’s not many, and the expertise that is in this room is incredibly deep and intelligent. And so, let’s gather, let’s talk about how we can help support each other so that kombucha continues to be a passion that we can all.

Content courtesy of KBI.