Are You Buying Organic Ingredients?

Consumers are buying into organic foods; are you buying organic ingredients?

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Chipotle Mexican Grill became
the first, and is now the largest,
national restaurant chain to serve
naturally raised (without antibiotics
or hormones) meats in their entrees.




By Kantha Shelke, Ingredients Editor

With the January release of the new Dietary Guidelines for Healthy Americans, consumers are focusing their attention on healthier eating. Despite all the positive things processed foods can do within the guidelines, the very acknowledgment that they are processed makes some foods perceived to be less wholesome, in the minds of some consumers, than raw or fresh foods. Wholesome, organic ingredients are one way for food companies to convince consumers that their processed foods are healthful.

And it’s official! Health-conscious consumers are driving double-digit growth in organic foods. Consumer focus on health and diet drove pushed growth in the food sector – as a whole, an area that otherwise showed very small overall change in the recent years.

According to ACNielsen, of the seven categories that experienced double-digit growth in the past year, six were related to the consumer’s perception of health or diet. Over a longer period of time, between 2000 and 2004, five categories grew based on concerns over health and safety, according to ACNielsen: frozen meats and poultry, bottled water, drinkable yogurts and other dairy-based drinks, fresh ready-to-eat salads and frozen fruit. All experienced double-digit growth.

Going all the way: The ingredient statement on Amy’s Kitchen’s All-American Burger, a soy patty, lists “organic onions, organic mushrooms, organic bulgur wheat”… even organic evaporated cane juice. The box also proclaims “no GMOs.”

Factors driving organic trends

Organic consumers hail from all socioeconomic strata, - dispelling the once- popular myth that organics awere boutique marketing and a consequence of conspicuous consumption.

Qualitative research by The Hartman Group (www.hartman-group.com), Seattle, revealed that that the perceived benefits of organics as part of a more generalized lifestyle were far more influential than disposable income. “Low-income consumers view their organic food purchases as valuable preventative medicine,” according says to Laurie Demerritt, a principal at Hartman. “They assume that high-quality organic foods, free of pesticides, preservatives and other additives, will maintain their health and the health of their family and require lead to fewer visits to a physician.”

The Hartman Group highlighted several social and cultural factors that influencinged consumer behavior and which cut across demographics including media influence:
  • Consumers are increasingly buying organic foods as a response to the growing focus by the media on the benefits of organic foods.

  • Loss of control – with less control over their environment, consumers are turning to self and familial control by conscious choice of what they put in and on their bodieseat and wear.

  • Scientific and technological advances have significantly influenced what consumers know about their foods and how they go about making their selection.

  • Life-transforming experiences and events such as the birth of a child or the illness of kin have significantly motivated consumers to reach for organics.

  • Dissatisfaction with inadequate and ineffective healthcare has promptsed many consumers to proactively manage their health and to reach for organic food as medicine.

  • Recent world events including the war on terrorism have heightened consumers’ interest in food security and motivated many to re-examine their food choices and to support local businesses.
Who is the organic consumer?

The demand for organics tends to be concentrated in urban areas, according to the Hartman Group. Organics are a “lifestyle choice” based on the belief they believed to beare healthier than conventional products and thought to prevent health problems, especially if embraced from childhood. The researchers found almost 75 percent% of Americans are concerned about food safety, and 87% percent of organic purchasers believe organic products to be safer than conventional ones.

Loyal users of natural food and drink products are estimated to total 26 million in the U.S., according to Datamonitor (www.datamonitor.com). Consumers of organics span diverse ethnic groups. There is higher incidence of organic consumption among Asian Americans, African Americans and people of Hispanic descent than among Caucasian populations.

How and why do consumers select organic products over conventional ones? First of all, consumers do tend to trust the major brands. As a result, huge companies including such as Mars, General Mills, Kraft, Nestle and Kellogg have jumped on or bought into the pioneer organic bandwagon. By producing branded organic lines or acquiring independent brands, these food giants are growing and influencing the organic trend.

Families with children are one of the leading markets for organic products. Their consumption of lunchbox and single- serving items has propelled the development of many new products focused on convenience and ease of preparation.

Young consumers (specifically 15- to 24-year-olds) are forecasted to influence the organic industry significantly because of their heightened awareness about food safety, health and environmental concerns. This second largest demographic group (40 million) grew up on supplements and organic foods, and is driving many school foodservice institutions and universities to provide organic options in cafeterias and even in vending machines.

Development & production with organics

Manufacturers often find the production of appealing organic versions of traditional and favorite mainstream processed foods to be rather challenging.

Certain ingredients are prohibited, especially processing aids and incidental additives such as dusting agents, anti-caking agents, and anti-foaming agents. As a result, the finished product often has a shorter shelf-life or reduced functionality and may not very appealing to first-time purchasers.

This line of Domino sugar carries both the USDA and Quality Assurance International organic seals.

Organic co-packers may be difficult to find. Often, food processors have to change their practices to qualify for organic certification.

Certification is done by USDA-accredited inspectors. The inspection involves on-site evaluation of crop standards, livestock standards and handling standards to ensure the basic tenets of the National Organic Program (NOP) of USDA are adhered to throughout the chain of custody. (See sidebar, Defining organics.)

The NOP designation requires that that organic foods incorporate certified organic colors and flavors if commercially available. If they’re not available, then processors may resort to incorporating natural ingredients provide thating they conform to guidelines – specifically that they contain no genetically modified organisms and that they are not produced using any prohibited methods or materials. Solvent extraction is strictly prohibited, which rules out oleoresins and emulsifiers.

However, there is a new category of ingredients called “organic compatible.” These are flavors and extracts that are that are not certified organic but which are permitted ingredients in organic foods.

Flavors and colors labeled as “made with organic ingredients” comprise another category and may be used for foods made with 70-–95% percent organic materials. Still, these and are not allowed in certified organic foods.

New organic offerings available to food processors include flavors, extracts, fruit and vegetable concentrates, caramel colorings, and compounded flavors.

The organic palette

Essential oils are the aromatic components of plants and are either expressed (such as citrus oils) or steam-distilled (such as herb and spice oils). Essential oils are at the very least “organic compatible.”

Extracts contain both volatile and non-volatile taste components of the raw material. Extracts may be derived by the use of solvents, generally petroleum-based, and these are strictly forbidden in organic food production. But extracts also may be derived by the use of highly pressurized, supercritical carbon dioxide solvent or by the use of alcohol and/or water in conjunction with clever use of temperature and pressure combinations for the former, and the use of non-invasive cell rupturing methods such as sonar. These types of extracts are permitted.

Some food processors employ organic emulsifiers to extend the benefits of essential oils and extracts – which are fat-soluble – to and enhance the flavor of water-based foods.

As their very name suggests, concentrates of fruits and vegetables are more potent forms of the color and essence of the starting materials. Widely used to enhance the color and flavor of many foods, including smoothies, yogurts, pastries, and confections, they expand the repertoire of organic versions of conventional fare. Beet concentrate, for example, may be used to redden uncured bacon and bring it closer in appearance to its traditional counterpart.

Caramel colors are derived from sugar and sugar-based compounds and are stabilized by the use of several compounds and preservatives that are forbidden in organic foods. The development of new technologies has reduced the reliance on such compounds and created comparable caramel colors suitable for organic processors. Certified organic caramel colors have significantly enhanced the appearance and stability of organic foods, especially those in transparent packages.

Increasing consumer demand is prompting the exploration of certified organic ingredients such as colors, flavors, and processing aids. “We are seeing more organic raw materials available for the product developer,” says Cynthia Sasaki, director of research and development at Kerry Ingredients (www.kerryingredients.com), Kent, Wash. “These raw materials include spices, flavors and functional ingredients. Vendors, recognizing a growing niche, are willing to invest more in organic certification. More organic farm land is also becoming available to allow for more crop production.”

Large ingredient houses, such as Kerry, National Starch and Cargill, are providing an array of organic ingredients to enhance the capability of organic food manufacturers.

Aside from providing manufacturers with more organic ingredients, these suppliers are also developing “functional organic” ingredients such as prebiotics, probiotics, antioxidants, fiber and resistant starch – all of which are promising elements in the health and well-being environment. Meanwhile, market demand has prompted the development of a strong domestic supply of stabilizers and hydrocolloids, and the increased demand for "clean" labels has brought the pricing of many organics to parity with conventional offerings.

Whole-grain soy flour from Nutriant, as was used in this bread, gives processors the opportunity to make label claims related to both content and health.

Soy ingredients are becoming increasingly familiar to the both the food industry and those in the consumer audience that are interested in organic foods. Soy flours, proteins and fibers should will be among the key ingredients in helping food manufacturers deliver on the healthful outlook for 2005, some capable of adding the bonus of the soy health claim.

Beloit, Wis.-based Nutriant, (a division of Kerry Ingredients, Beloit, Wis., (www.kerryamericas.com) has created certified organic versions of a wide range of naturally processed soy ingredients including one of the very few certified organic soy concentrates and soy isolates available. Whole-grain soy flour from Nutriant affords food manufacturers the opportunity for claims related to both content and health.

Many food processors are handicapped by the lack of certified organic ‘processing aids’ such as stabilizers and emulsifiers. TIC Gums (www.ticgums.com), Belcamp, Md., offers a wide range of 100% percent organic and organic hydrocolloids, individually and in stabilizer blends specially prepared for different food system applications.

Colorado Sweet Gold (www.coloradosweetgold.com), Johnstown, Colo., was the first company in the U.S. to produce organic starch. It now also produces a number variety of other organic ingredients for food processors in the baking industry. The company is certified for the producing organic Bio-Maize fiber, food-grade corn starch, corn germ, glucose and corn gluten meal.

For producers of extruded foods, there is a new certified organic emulsifier called Nu-Rice with complex proteins and unique fats derived from rice bran. Made by St Louis-based Ribus (www.ribus.com), it has the beneficial functional characteristics of emulsifiers derived from high-fat sources, but without the negative effect on bulk density. Nu-Rice is 100% percent natural and non-GMO. It helps for clean up label statements; it may be labeled as “rice extract” when label declaration is required. Snack food manufacturers may use it as a processing aid or as a functional ingredient to add texture and reduce fat.

Organic Prospects

According to Datamonitor, the North American organic market is predicted to continue rapid growth and be worth more than $30 billion by 2007, with a compound annual growth rate of 21% percent between 2002 and 2007. Natural and organic foods and related industries – including supermarkets, restaurants and farming – are poised for a major jump in visibility and popularity in the next decade.

According to Craig “Skip” Julius, executive chef for Nestle’s frozen food division in Solon, Ohio (www.nestle.com), consumers are willing to pay more for organic food; they like to know their chicken is from a cage-free environment and that their mesclun greens came from a named local farm.

Restaurants are catching the wave by proclaiming the heritage of their fare. Some high-end dining establishments, such as Nora and Asia Nora in Washington, are beginning to feature only organic foods. Fast food chains McDonald's and Burger King are already feeling the pressure and are beginning to offer organic items, certified hormone-free, free-range meats and chickens and even some kind of a soy complement.

Chipotle Mexican Grill (www.chipotle.com), Boulder, Colo., named after a smoked jalapeño pepper, promotes what it calls “Food with Integrity.” That mission entails working back along the food chain to discover how foods are produced and how pigs, cows and chickens are raised.

Chipotle became the first, and is now the largest, national restaurant chain to serve naturally raised (without antibiotics or hormones) meats including Niman Ranch pork (Marin County, Calif., www.nimanranch.com), Bell & Evans chicken (www.bellandevans.com) and Meyer Natural Angus Beef (Missoula, Mont., www.meyersnaturalangus.com).

“We have gone from 10% percent to 15% percent organic beans in our offering and expect to have 25% percent organic by the end of this year,” says Chris Arnold, Chipotle’s media relations manager.

These are exciting times for organic. Just as organic food costs consumers more, so will organic ingredients cost food processors more. But with a 21 percent annual growth rate for organic food, a lot of consumers and processors apparently think it’s worth it.

NOTE TO PROCUREMENT

Conventional food manufacturers, accustomed to tapping into an existing supply chain of their commonly used ingredients, find sourcing organic ingredients challenging. Although most conventional ingredients are available with an organic label, suppliers of organic ingredients generally need more time to react.

A majority of the organic ingredient community consists of small to medium-sized entities, and procurement requires a certain amount of coordination. Often, even with available inventory, their supply chains may not be as advanced as large processors from the conventional arena are used to.

For best results:
  • Try to establish a working relationship with a reputable vendor.

  • Seek alternate vendors whenever possible for all and especially for key raw materials.

  • Keep your vendor informed of your business growth, so that the supplier can support you by proactively managing the producers. You will get a lot more by partnering with vendors than by pitting them against each other.

  • Encourage your vendors to provide technical support and base formulas to help your product development group gain a faster ramp to launching a new product. Many organic ingredients are handled by brokers; savvy ones have qualified technical service representatives on call as a resource for product development and reformulation.
Getting organic ingredients in quantity is one of the major hurdles for food processors. “One has to distinguish between ‘limited availability’ and ‘non-existing’ ingredients,” cautions Gary Bartl, principal at Food and Commerce, a specialty ingredient purveyor in Palm Beach, Fla. Climatic conditions limit the availability of some ingredients while seasonality limits others, such as dairy ingredients.

“Some ingredients, such as colors and flavors, are newer to the organic trade and are not as readily available as their conventional counterparts,” he adds. “While the market for organic flavors is growing, and so are its suppliers, one might want to look beyond the geographical borders of the U.S. market and source some of these ingredients overseas. Europe, with an abundance of organic ingredients, has many suppliers that are NOP-certified or diligently working towards it.”



Defining organics

Organic food is food that has been cultivated and processed in a more ecologically sustainable way and does not use synthetic chemical pesticides, genetically engineered seed, and artificial additives.

"Certified" organic implies that the food met the standards for growing and processing organic as established by the U.S. Dept. of Agriculture (USDA), and that third-party inspectors approved the involved farmers and manufacturers in annual on-site inspections.

A food labeled “100 percent organic” implies that 100 percent of the ingredients, additives and processing aids are certified organic. A food labeled “organic” means the food product contains 95-100 percent “certified” organic content.

Only foods with the above qualities can use the USDA Organic seal on the packaging. Foods labeled “made with organic ingredients” contain 70–94 percent organic ingredients and cannot use the USDA Organic seal.

The organic label refers to an agricultural growing method and is not intended to be a health claim. The organic rules of the USDA specifically state that the agency does not address food safety or nutrition. Some researchers have documented health and quality implications: fewer pesticide residues, less groundwater contamination and apparently higher levels of some nutrients.

For consumers, the Organic Foods Protection Act (OFPA) of 1990 meant clear criteria for what was organic, and it specifically ruled out the use of genetically engineered methods, ionizing radiation and sewage sludge fertilizers. The assurance of federal oversight attracted more players from traditional arenas and further propelled organic food products into the mainstream.

The term “organic” is distinct from the term “natural”– often and erroneously used as synonyms. The term “natural” is not federally regulated and has a broader meaning. Natural foods may contain genetically modified organisms and may be cultivated using synthetic pesticides, herbicides or fertilizer. Natural food products may also contain synthetic or artificial ingredients, which are strictly forbidden under the organic label.



ARE ORGANICS HEALTHIER?

A number of consumers think so. A consumer trend that started in Europe and now growing in the U.S., is to want “kitchen cupboard ingredients” on food labels.

Public debate continues regarding the health benefits to be gained from eating organic food. While many studies claim that eating organic means that you are likely to be getting more vitamins and minerals per mouthful, especially vitamin C, magnesium and iron, there are others that have shown no significant nutrient difference between organic and conventionally raised foods.

The most recent is a meta-analysis of 94,000 food samples ranging across 20 different crops. The sample data was supplied by the USDA's Pesticide Data Program and the California Dept. of Pesticide Regulation. The USDA data showed 73 percent of conventionally grown produce had at least one pesticide residue, while only 23 percent of organically grown samples of similar crops contained residues. The California data showed multiple pesticide residues nine times more often in conventionally grown food.

A United Nations Food and Agricultural Organization study concluded, "Organically produced foods have lower levels of pesticide and veterinary drug residues and, in many cases, lower nitrate contents."

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