Understanding Kombucha Law: Legally Selling Hard Kombucha

Kombucha law can be mystifying—here, we discuss whether a permit may be needed, spot sources of risk, and touch on steps to be compliant.
Kombucha law can be mystifying—here, we discuss whether a permit may be needed, spot sources of risk, and touch on steps to be compliant.

My fascination with kombucha started in the kitchen, as I raised my first SCOBY from a bottle of GT’s. As she grew, so did another fascination with kombucha—the issues involved in kombucha law. Do you need a federal license to produce kombucha? What about a state license? Can you make kombucha at home and then sell it? Or, do you need a commercial premises to make and sell kombucha—must that be your own commercial space, or could you make kombucha at a commercial kitchen and then sell it? I found that the answer, responsive to so many questions in the law, is that it depends.

As a preliminary matter, though, the first thing to consider is what the alcohol content of the kombucha is (or will be). When producing traditional kombucha, the alcohol content often drifts above .5% ABV (that is, one half of one percent). A product that consists of .5% ABV or more is legally considered alcohol, and a permit is required from the federal government. Moreover, a TTB permit is required even if the ultimate final product is less than .5% ABV. For example, if a producer makes anything beyond .5% ABV—even if the producer plans to dilute that later in the final product—a permit is still required. Of course, there’s no “kombucha permit”—at least not yet!—and so the options for alcohol permits are the ones you would expect. The federal government (the Alcohol and Tobacco Tax and Trade Bureau, or the TTB for short) has three kinds of alcohol permits. There is the brewery permit, the winery permit, or the distilled spirits plant permit.

Through vigil efforts, a kombucha producer (side note: I often think of them as a professional “kombuchery,” and I’m seeing others are starting to use the term as well!) may keep the ABV below .5% at all times. If this is the tact the producer is taking, a permit is not required, and sales would not be limited to those of legal drinking age. Nevertheless, because of the steps involved in making kombucha, it is often not a product eligible to be made at home under the cottage food laws in each state. Moreover, keep in mind that if the product drifts above .5% ABV while it is on the retail shelves (perhaps due to unrefrigerated storage and continued fermentation), then the producer is liable for alcohol taxes, and is essentially producing alcohol without proper licensure. Not good. Indeed, this issue spawned a recall of kombucha products five or so years back, and caused a few entrants into the kombucha market to reconsider. More regulation, federal taxes (at the time of writing $7 for every 31 gallons, also known as a barrel, on the first 50,000 bbls), state taxes (depends on the state), a regulated premises, sales to those 21+ only, potential placement in the alcohol aisle of the grocery store (and many natural foods stores lack permits to even sell alcohol), and so on. It’s a lot to deal with and more risk—especially when dealing with unpasteurized kombucha with live cultures, which for many producers and consumers is the very point—there’s far more inherent risk than when selling a pasteurized orange juice.

If you are making traditional kombucha, or want the ability to produce a line of .5% ABV+ kombucha, then the TTB brewery permit is what tends to fit. Without drilling too far into the legal nitty gritty, a TTB-approved brewer is able to produce alcohol through extracting sugars from malted barley, or using any number of approved substitutes . Sugar is one of those substitutes. Moreover, a TTB-approved brewer is able to use various adjuncts in flavoring the final product—and so this is how tea and various herbal seasonings may be introduced into the product. Keep in mind, though, that a beer product—or any food product—may only contain ingredients that FDA deems “Generally Recognized as Safe,” or GRAS.

Key, though, is that if a TTB-approved brewer is making a product that lacks malted barley and hops (which defines beer under the Federal Alcohol Administration Act), then the product is not subject to TTB Certificate of Label Approval requirements. This may seem like a boon, but it’s a bit more complicated than that. Because the product is not TTB “beer,” it may not be subject to COLAs, but it is subject to labeling requirements of the Food and Drug Administration (FDA). Thus, nutrition facts would be necessary. (And, notably, laws prevent producers from dropping in just a tiny bit of  hops and malted barley to get around this requirement.)

Further, depending on the composition of the kombucha, a formula approval may be required. However, if all the ingredients come from the exempted list, then the formula approval may be avoided.

All in all, the legal requirements for making kombucha are nuanced. They also can vary by the state. For someone interested in opening a kombucha brewery, it is well worth learning about the legal requirements involved in producing kombucha—and forming a plan for a compliant launch of your new business endeavor. If you are going the the traditional permitted route, then obtaining federal, state, and local permits may affect your kombucha company start-up timeline, not to mention your start-up costs.

This kicks off a series of posts we’ll be making about kombucha law, including diving into more detail about the above issues we’ve already noted.

 

 

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