Attorney: 'My client is playing by the rules but he’s not competing in a fair marketplace'

Trader Joe's, Better Booch, The Bu, Rowdy Mermaid sued over sugar and alcohol levels in kombucha

By Elaine Watson

- Last updated on GMT

Trader Joe's, Better Booch, The Bu, Rowdy Mermaid sued over sugar and alcohol levels in kombucha
If manufacturers cannot ensure that the alcohol in their kombuchas remains consistently below 0.5% throughout the shelf life, they should stop falsely advertising them as soft drinks and compete “fairly” by selling them alongside alcoholic brands such as Kombucha Dog, argues a wave of new lawsuits.

The complaints,* filed on April 9 in California by Tortilla Factory (the company behind Kombucha Dog), accuse Trader Joe's, Better Booch, Makana Beverages (The Bu), and Rowdy Mermaid Kombucha  of understating their sugar content and exceeding the 0.5% abv threshold above which beverages are classified as alcoholic by the Alcohol and Tobacco Tax and Trade Bureau and must be taxed and labeled accordingly.  

(Similar cases** brought by Tortilla Factory were filed by the same law firm (LevatoLaw LLP) against Health-Ade Kombucha and Humm Kombucha last December.)

According to the latest wave of lawsuits, third party lab testing using headspace gas chromatography testing combined with mass spectrometry had detected alcohol levels of 1.1-2.2%; 0.6-1.9%; 1.9-2.7%; and 1.00-1.2% in kombuchas sold by Trader Joe’s, The Bu, Better Booch, and Rowdy Mermaid respectively over the past six months.

“Tortilla Factory’s Kombucha Dog is a direct competitor of Trader Joe’s with respect to brewing kombucha for sale in retail and wholesale settings​,” explains the suit vs Trader Joe’s, which alleges breaches of California’s unfair competition and false advertising laws and false advertising under the Lanham Act.

“The parties are vying for the same dollars from the same consumers… except that Tortilla Factory did not seek to sell alcohol to minors.”

The complaints do not specify what testing methods were used to determine sugar levels or detail the alleged disparity between third party test results and the sugar levels stated on pack, but alleges that all the defendants “understate​” their sugar content.

My client is playing by the rules but he’s not competing in a fair marketplace

LevatoLaw attorney Stephen Weisskopf told FoodNavigator-USA that his client, Kombucha Dog founder Michael Faye, just wants a level playing field.

He’s playing by the rules but he’s not competing in a fair marketplace. It’s not just that it’s a lot easier and cheaper to market and distribute a non-alcoholic product, which can sit next to pomegranate juice while my client’s products are in the alcohol section, it’s also a health and safety issue. Pregnant women, recovering alcoholics, and people with certain health conditions and on certain medications need to know they are consuming alcohol.”  

Owing to deceptive labeling practices, he claimed, Kombucha Dog (containing c. 1.4% abv) might appear to “consumers, wholesalers, and retailers as less natural, less healthy, and more sugary”​ than the defendants’ products, putting it at an unfair disadvantage.

Asked why federal regulators (the TTB, FTC) had not stepped in given that this is an ongoing bone of contention in the industry, he said: “That’s a very good question and I wish I knew the answer. There are ways to control alcohol and some manufacturers are doing it, but others are not.

"These companies are blatantly violating the law."

Kombucha Dog
Kombucha Dog: “The traditional recipe for kombucha calls for fermenting one gallon of tea with one cup of sugar. If fermented properly and for long enough, the resulting beverage will contain about 6 grams of sugar per 8 oz of tea (not sweet), and contain about 1.4% abv.”

Better Booch CEO: These allegations are false

Trader Joe’s and Makana Beverages did not respond to our requests for comment, but Better Booch founder and CEO Trey Lockerbie told us that the allegations against his company were “false, and we look forward to clearing these matters up.”

Rowdy Mermaid CEO: We control ethanol throughout the process

Jamba Dunn, CEO, Rowdy Mermaid Kombucha, added: “We don't have any comment because this is quite literally the first we've heard of such a claim.”

But asked what steps the company takes to ensure alcohol levels remain below 0.5% throughout the shelf life, Dunn said: "We control ethanol throughout the process to ensure we are in line with federal FDA and TTB compliance, which requires the product to remain below .5% throughout the entire life of the product.

"We also work with two local laboratories to ensure the security of our tests at a monthly interval, and we work with a national laboratory to provide an additional layer of regulatory assurance. We have a contractual agreement with the manufacturer of our ethanol testing equipment to calibrate and check our equipment against at least one additional testing protocol to map any deviations in the equipment against the multiple layers of testing as the tolerances of variance are extremely narrow. We have been random tested by the FDA as well as by third party auditory agencies."

He added: "As vocal advocates of genetic testing, we are building an in-house genetic bench to better understand the conditions under which bacterial strains mutate their DNA. Earlier this year, we took part in a project to genetically test our product and build a library of genetic snapshots to map transitions in yeast and bacteria and metabolites, as well as their effect on the respiration of mitochondria affecting ethanol production."

Attorney: The industry is going to have to figure this out

Defense attorneys contacted by FoodNavigator-USA in the wake of a series of consumer class action complaints against Health Ade earlier this year said plaintiffs’ attorneys were increasingly eyeing up the kombucha category, given the lack of a clear definition of what kombucha is, a lack of clarity over ‘raw’ claims, concern over sugar and alcohol levels, and confusion over probiotic claims.

Ryan Kaiser, attorney, Amin Talati Upadhye told us: "Due to the nature of kombucha and how it’s made, I don’t see this issue going away until manufacturers begin adopting different methods of production that can better account for alcohol and sugar levels."

William C. Acevedo, partner, Wendel, Rosen, Black & Dean LLP, added: "Legal risk cannot be ignored, but neither can reputational harm, and a potential loss of consumer trust due to less than straightforward dialogue with the consumer cannot be underestimated or disregarded."

What is kombucha?

Kombucha is typically defined as a fermented tea, whereby firms brew tea, add sugar, and then ferment the mixture with a kombucha culture or 'SCOBY' (symbiotic culture of bacteria and yeast), which creates, among other things, carbon dioxide (explaining why kombucha is a bit fizzy), alcohol, acetic acid (explaining the slightly sour, vinegary taste) and other organic acids such as lactic acid, propionic acid, glucuronic acid and gluconic acid.

Individual brands may also add herbs, adaptogens such as reishi and ashwaganda, botanicals, fruit juice concentrates, and other ingredients, before or after the fermentation.

The devil, however, is in the detail, with some companies making a virtue of the fact that their kombucha is 'raw' (a term not clearly defined in law), and others heat pasteurizing their products to create a consistent product with an alcohol level below 0.5% abv and adding in well-characterized strains of probiotics afterwards, for example.

Controlling alcohol levels

Some firms use micro-filtration techniques to filter out some yeast (to stop the product continuing to ferment in the bottle and increasing the alcohol content), while others (Brew Dr Kombucha​​, Aqua ViTea) distill off alcohol after the fermentation without the use of excessive heat.

Some brands such as Suja​​ ​use a low heat, which they claim kills off residual yeast, but does not destroy beneficial bacteria remaining in the brew post fermentation.  

However, killing off yeast - even if bacteria is not impacted - is not ideal, argues Hannah Crum, co-founder at non-profit trade association Kombucha Brewers International (KBI): "The yeast contain nutrition in living form - notably B vitamins, think nutritional yeast - so heat killing off the yeast does impact the nutritional profile of the product."

KBI members are deploying a variety of tactics to control alcohol, says board member Zane Adams (from Buchi Kombucha), although the KBI has been encouraging members of Congress to back a bill (the Kombucha Act​​) that would raise the threshold to 1.25%.

*The cases are: Tortilla Factory, LLC v. Trader Joe's Company et al 2:18-cv-02977; Tortilla Factory, LLC v. Better Booch LLC, 2:18-cv-02980; Tortilla Factory, LLC v. Rowdy Mermaid Kombucha LLC, United Natural Foods Inc, United Natural Foods West Inc, 2:18-cv-02984; and Tortilla Factory, LLC v. Makana Beverages Inc, KeHe Distributors, United Natural Foods Inc, United Natural Foods West Inc, 2:18-cv-02981; filed in the central district of California on April 9, 2018.

**The cases are: Tortilla Factory, LLC v. Humm Kombucha LLC et al 2:17-cv-09092, ​and Tortilla Factory, LLC v Health-Ade  

Tortilla Factory is represented by Stephen D Weisskopf at LevatoLaw LLP

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