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It's actually good, but not because of the sauerkraut (so much). It was probably a vinegar replacement - some thrifty cook was out of vinegar, so she improvised and added the sauerkraut.
(edit) two in the same reply...impressive
This is from NPR:
Popular as an April Fool's Day recipe in the 1960s, Chocolate Sauerkraut Cake actually makes a lot of sense since vinegar was often added to early chocolate cakes to make them moist and tender.
http://www.npr.org/templates/story/story.php?storyId=9049243
"My mother used to make sauerkraut cake for us when we were kids," she says. ".......I didn't realize how strange it was until I took this cake into school one day when I was in sixth grade. Everyone loved it until I said that it had sauerkraut in it. People had thought it was coconut.