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The Business of
Organics |
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As a child, I knew shopping day included a stop at Spitzer’s Meat Market for locally raised beef and a free homemade hotdog to snack on. Then we’d drive to Aki’s for locally grown fruits and vegetables. Karen’s Bakery provided fresh loaves of wheat bread, and the milkman left milk, eggs and butter on the back porch every Saturday. We only went to the supermarket for dried goods and paper products. One-stop shopping was not part of my mother’s vocabulary. But as a young adult pursuing a career, it became part of mine.
I fell into the simplicity of stocking up at one store, until I learned about additives, chemicals, genetic manipulations and conventional farming practices and the impact on our environment and my health. Shopping organically and locally merited my attention. So I frequented farmer’s markets, local butchers and health food stores. Like my mother, I visited the market for dried goods and paper products.
Scooting into Shaw’s one day for a few simple items, an array of egg choices caught my attention. Naturally raised Wild Harvest Omega 3 eggs were stacked beside natural vegetarian-fed Nellies Cage Free Omega 3 eggs. Land O Lakes All-Natural eggs were shelved just below Pete and Gerry’s Organic eggs. I hadn’t anticipated buying eggs at the market but put them in my basket and wandered over to the produce section.
I ended up buying Earthbound Farm mixed organic greens and organic hearts of romaine lettuce along with my organic broccoli. Scanning the aisles, I realized organics were everywhere: tortellini, chocolate, olive oil, canned pumpkin, organic raisins and organic ketchup. Organic microwaveable popcorn debuts soon.
Supermarkets are stocking more organic produce, milk, yogurt, baby food, even meats. Their shelves are lined with food certified under the U.S. Department of Agriculture regulations as organic—produced without synthetic pesticides, petroleum-based fertilizers or sewage sludge; animals must be raised on 100% organic feed without antibiotics, growth hormones or feed made from animal parts. Beyond food, things like organic cotton and organic seeds are now available at conventional markets.
Organics has gone mainstream.
“Half of our conventional items have been replaced with organics because of demand,” says Phil Philbrick, co-owner of Philbrick’s Fresh Market in Portsmouth, NH, which opened two years ago. “We had eight feet of organic when we opened the store; we have three times that now. We’re only limited by what we can get. If we can get it, we’ll sell it.”
Sarah Anderson, produce buyer for Portsmouth Health Food says their “organic meat market tripled in the last four years.” She says she can’t get enough organic sliced meats. There’s a huge demand but not enough supply.
“Scott started off selling organic tomatoes and potatoes 28 years ago,” Anderson says, referring to Portsmouth Health Food storeowner Scott Nelson. “In the mid 90s there was this huge surge, this rise in interest as people realized something weird was going on with their food. People were asking why all these chemicals? What’s the need?”
Consumers created a financial stir. Organics represent about two percent of the total U.S. food market, yet they are the only sector of the industry experiencing sustained growth. According to Juli Brussell, Program Leader, Agricultural Resources for The University of New Hampshire Cooperative Extension, organics have experienced a 25% or greater increase every year while conventional markets flatlined.
“That is a significant increase, and with rise in the organic market comes demand. As the industry looks to supply, big business is stepping in,” Brussell says.
Always on the lookout for profitable possibilities, large conventional food processors plunged into the organic market. Kelloggs now owns Sunrise Organic and Kashi, a supplier of organic whole grain cereals. Kraft owns Back to Nature and Boca Foods. Odwalla’s organic carrot, apple and orange juices come by way of Coca-Cola. General Mills owns Cascadian Farms. Heinz holds a 20% equity share in food distributor Hain, which owns Health Valley, Rice Dream soymilk and Earth’s Best, as well as 15 other brands. And Hunts announced their intention to sell six kinds of canned organic tomatoes. Even the largest organic seed company, Seeds of Change, is controlled by M&M/Mars.
From a consumer standpoint, Brussell says interest is driving the market. People are more concerned with where their food comes from. Demographically, she says, college-level educated women in the 24- to 50-year-old age bracket are fueling the market. According to Philbrick, cancer survivors, women with multiple chemical sensitivities and women with young children are also reexamining the way they fuel their bodies and voting with their food dollars at his cash registers. People are aware of the connection between food and health.
“Studies looked at different responses of children to pesticides in foods, and they found a differential response,” Brussell says. “The EPA lists foods, particularly in produce, that consumers should buy as organics to avoid residue exposure.”
While consumers appreciate the large variety of organic products now available, not all brands are created equal. Some products are 100% organic, which means all ingredients must be organic, while others are only made with some organic ingredients. Product labels reveal a subtle truth: “Organic” really means at least 95 % of the ingredients (by weight, excluding water and salt) are organic. “Made with organic ingredients” means at least 70% of the ingredients must be organic, and products with less than 70% organic ingredients can’t put the word organic on the front but can list organic ingredients individually.
As the organic industry becomes subject to marketing and supply factors of the mass market, consumers are urged to consider the reality of large corporations such as ConAgra—a company more often associated with profiting from agribusiness than funding sustaining practices—embracing the values of organic foods. Can organic farming practices coexist with big business motives? Will organic agriculture increasingly resemble the global industrial agriculture system it was created to combat?
As large corporations consume small organic companies and absorb organic farms, Philbrick says that while “the hope is that they will not dilute the quality, the trickle-down effect is there are more choices, more opportunities for vendors to bring in more products.”
The buyer needs to know and understand where the food is coming from, he says, explaining that people are a little leery about Chilean fruits like peaches, and that Mexico’s standards are not always particularly in line with the United States.
Brussells agrees, saying organic consumers need to be aware of who oversees certification standards in the foreign countries we import from to determine if they are consistent with our own.
“When we make agreements with China and Japan, are we allowed to send in an independent third-party inspector to ensure they are using acceptable practice?” Brussell asks. “High pesticide levels were detected in soybeans from China and Japan. How do we monitor practices internationally? What impact does this have on our economy, and who do we support with our grocery dollars?”
As consumers wonder if organics are still organic, local retailers recommend consumers shop locally. The reality is that when foods are grown on a large scale like organic lettuce from Earth Farms in California, even if they’re using cover cropping, there’s still a demand on natural resources and space. “We see the impact on the scale of production,” Brussell says.
“When consumers are making their food choices, the first criterion should be local, then organic, and then, is it certified or not? Small local farmers who raise organically and sell directly to customers don’t need certification. It’s based on the integrity of the relationship with the customer,” Brussell says. “We need to get back to the more personal relationship where people knew their farmers.
“We need to sell local produce to people who can have relationships with people producing our food, and this isn’t possible if we’re importing food from Peru and China and Mexico,” Brussell continues. “We have the opportunity to support that part of our economy.”