Known for its digestive health benefits, kombucha—a fermented beverage—has seen an increase in consumer recognition and popularity in recent years. As demand for the beverage increases, manufacturers may decide to seize the opportunity to take share in its market, but must be aware of the rules regulating kombucha beverages—especially those that may be considered alcoholic.
In certain cases, the manufacturing process of kombucha naturally produces alcohol, and sometimes in amounts high enough to require additional regulation beyond FDA requirements. In such cases, the beverage must also meet the requirements of the Alcohol and Tobacco Trade and Tax Bureau (TTB) for alcoholic beverages in order to remain compliant.
The American Herbal Products Association recently hosted a webinar, “TTB Basics," explaining the basic requirements of TTB for beverages considered alcoholic. To be considered an alcohol beverage, the finished kombucha product must contain 0.5 percent alcohol or more by volume.
According to Arthur Libertucci, senior consultant at the Buckles Group and presenter during the webinar, TTB tests various beverages in the market each year to ensure regulatory and labeling compliance. Recent testing has determined that some kombucha products are not labeled correctly.
Under TTB regulation, if a beverage is considered an alcohol beverage, it must then be classified as a beer, wine or distilled spirit. Kombucha would be classified as “beer" if the predominant fermentable material is sugar. Wine, on the other hand, uses predominantly fruit or fruit just as the fermentable material. To be considered a distilled spirit, the beverage must contain more than 24 percent alcohol, which is highly unlikely in the case of kombucha, Libertucci said.
TTB can advise manufacturers who are unsure of the classification of their product based on the company’s production process and formula. “This is an informal process," Libertucci said. “There is no application process."
TTB will require alcohol beverages to comply with TTB labeling regulations in addition to FDA labeling regulations. And the requirements don’t stop with TTB. Once a beverage becomes an alcohol beverage, it must comply with the Internal Revenue Code, which requires that the “nature of the product" is designated on the label, and with any state regulations in which the products are sold. If kombucha is fermented using malt, which, according to Libetucci is not common, it would also fall under rules of the Federal Alcohol Administration (FAA).
Rightly so, Libertucci called the regulations “a complicated set of regulations," explaining that “each of these codes have different definitions for these types of products." For example, he said that FAA has no definition for beer, whereas the Internal Revenue Code does have a definition for beer.
Obtaining a Permit
Per TTB regulations, manufacturers of alcohol beverages must produce the beverages in a facility that has been approved by the government for alcohol production, meaning a permit or registration is needed. Importantly, a permit is required if the product exceeds 0.5 percent alcohol content at any point during the manufacturing process, even if the finish product contains less than 0.5 percent alcohol content.
According to Will Woodlee, partner, Kleinfeld, Kaplan, and Becker, LLP, and presenter during the webinar, the type of permit required by TTB will depend on how the beverage is classified. Applications to obtain a permit can be submitted online, or can be mailed to TTB.
Manufacturers need to have a permit before they begin producing, and obtaining a permit can be a lengthy process. While the process length varies, the current wait for a brewery permit—which will be the permit needed for most kombucha products—is three to four months. If manufacturers are producing kombucha that is considered an alcohol beverage without a permit, they are out of compliance and need to work with TTB to obtain a permit.
AHPA will be hosting its next webinar, “Alcohol Analysis," on Oct. 14. Visit AHPA’s webpage to register to attend.