Organic Food Movement Reaches Critical Mass

Like some counter-culture version of the Manhattan Project, the organic movement progressed for decades pretty much unnoticed.

By John K. Ashby, Contributing Editor

Some in the conventional food industry even laughed at organic. That is, until about 15 years ago when it appeared to explode onto the scene seemingly from nowhere.

The organic industry has gone nuclear, reaching a critical mass that took decades to produce and is now both enjoying, and suffering from, the results of its explosive growth.

According to the Nutrition Business Journal, organic food sales could continue growing by double digits - 14 percent or so, as it has been averaging - leading the industry to sales nearing $25 billion within a few years. Produce and dairy are still the largest segments of the total organics market. But inside this growth rate are the potential stars of the future - bakery, meats and poultry. If organic grains and feed can keep up with the pace, these segments could grow at a rate as high as 40 percent annually for the foreseeable future.

With such gung-ho growth, the (previously) strictly conventional food industry has moved in to play a major role on both the consumer products and food ingredients side. A few examples of big processors taking up the torch of organic include General Mills, Kraft Foods, Dean Foods, Archer Daniels Midland, ConAgra and Kerry Ingredients.


With organic labeling laws still being worked out, not to mention subject to intense controversy, some companies are taking the reins and establishing clear criteria for their products.

General Mills describes organic foods as "food grown by farmers who use farming methods that strive for a balance with nature. Organic farmers focus on soil improvement and rely on biological systems to produce high quality food and reduce environmental impact." Their "organic" food label identifies food grown with practices that:

• DON'T use synthetic pesticides, herbicides and soil fumigants
• DON'T use genetic engineering
• DON'T use sewage sludge as fertilizer

• DO improve the quality and fertility of the soil
• DO protect water quality
• DO reduce soil erosion
• DO rely on natural biological systems for pest and weed control
• DO reduce the impact of agriculture on our environment
• DO produce high quality, great tasting food.

Meanwhile, Whole Foods Markets, the world's largest retailer of natural and organic foods with more than 155 stores, keeps racking up the sales. Suffice it to say the conventional foods industry is not laughing anymore.

Whole Foods Stores is in many ways the most public face of organic and natural foods merchandising. "Whole Foods, Whole People, Whole Planet" is their motto. It resonates with their consumer base, and is actively backed up in ways beyond what's on the shelf.

General Mills made the news last year with their commitment to whole grains in their cereals - a clear response to the health and wellness movement of consumer nutrition. Lesser known, however, is that General Mills is also a major player in the Natural/organic arena with their Small Planet Foods division. Consumers are moving in these directions and General Mills recognizes the market, current size and direction of growth.

The organic argument

By eating organic produce, you limit your exposure to synthetic insecticides, fungicides and herbicides because these chemicals are not applied to organic crops. By eating organic animal products, you limit your intake of growth hormones and antibiotics, because organic meat and dairy farmers are prohibited from using hormones and antibiotics in organic livestock and dairy production. You also limit your intake of genetically modified foods because organic farmers cannot raise genetically modified crops or livestock or use production aids that are genetically modified.

Organic farming helps provide a safer, healthier environment by: 1) not polluting our groundwater, rivers, lakes, and oceans with pesticides and chemical fertilizers; 2) reducing soil erosion; 3) improving soil quality; 4) increasing the diversity of wildlife on and near farms; and 5) providing safer working conditions for farm laborers (no exposure to pesticides)."

Until recently, "organic" was synonymous with "fringe." The idea that multinational, multibillion-dollar food corporations would feel inclined to pursue the higher costs and increased complications of creating organic products was unlikely, to say the least. But it's a different world, a different consumer today, and the big guys are responding to the strong consumer interest in organic.

Take Kraft Foods Inc., Northfield, Ill. The company continues to fulfill an important strategic role - that of remaining strong in its traditional markets within its traditional business model. At the same time, Kraft's natural, vegetarian and organic entries, Back to Nature and Boca Burger, play a key role in its strategy for the future. Those product lines move the company toward what it terms its "new business system" while at the same time addressing the "new consumer behavior."

Boca is Kraft's line of vegetarian meat analogs, which includes a sub-line of organic vegetarian and Vegan offerings. The full line of "made with organic soy" Boca Burgers include the following options: All American Classic Burger, Vegan, Garden Vegetable, Roasted Onion, Roasted Garlic and Cheeseburger.

"The consumer is at the core of all our new product innovations at Kraft," explains Brian Driscoll, Kraft's senior vice president of North American commercial sales. "Our goal is to delight consumers with all of our brands by introducing products that fit their lives today and staying one step ahead of their needs for tomorrow."

From Tang to organic Shells & Cheese Dinner, Kraft is making a concerted effort to be significantly present in every substantial facet of the food industry.

The same goes double for Dean Foods Co., Dallas - literally double with their Silk Soy and Horizon organic milk divisions giving Dean perhaps the biggest single footprint in the natural/organic segment of the store. After Steve Demos (the founder of Silk Soymilk) achieved megalithic success with Silk Soy dairy alternative, Dean picked up the ball and is running with it, filling more and more dairy cases with Silk Soy and its own Horizon organics dairy and dairy alternative products.


Also growing dramatically - in part the result of the organic industry's success - is the concept of related social responsibility.

Dean Foods, for example, rounds out the consumer perception of the company as environmentally responsible in many ways, declaring, "As a leader in sustainable business practices, Dean Foods and its WhiteWave Foods division recognize the importance of supporting research and education efforts aimed at better understanding the benefits of organic foods." The company recently donated $100,000 to the Organic Center for Education and Promotion to further advance these efforts.

Moreover, Horizon organic and Silk purchase wind energy in quantities to account for 100 percent of their energy use. Their goal is to further strengthen these companies commitment to health and wellness for the planet as well as the consumers.

Whole Foods Market is a leader in this "behind the shelves" application of "good for you, good for the earth" philosophy. The company utilizes 20 percent - more than 70,000 megawatt hours - of a variety of renewable energy forms including wind, solar, geothermal, and small-hydro. It's also active in the Animal Compassion Foundation, donates significantly to environmental and local charities and the company's commitment to its team members is evident in having landed on Fortune magazine's Best 100 places to work in America list.

On the role of organics, Dean's mission states: " ‘Good for You, Good for the Earth.' More consumers are taking a closer look at how their food choices impact their overall health and well-being. Horizon organic gives families a choice they can feel good about. By eating organic foods, you're making a delicious and healthful choice for yourself, your family, even your planet."

Con Agra owns LightLife Vegetarian Foods, but their larger Hunt's division has grabbed the organic brass ring with a line of organic tomato products. The company also introduced an organic, trans fat-free version of Orville Redenbacher's organic Microwave Popcorn.

Basic ingredients

Karen Mannheimer, vice president of natural products for Kerry Ingredients Inc.'s Teterboro, N.J.-based Mastertaste Inc. division, explains the company's interest in the organic market. "About four years ago we became interested in organics both from the perspectives of the growing marketplace as well as the stewardship of the environment. The conventional food industry is relatively stagnant while the organic industry is growing. It's the ‘Whole Foods' phenomenon - regular people are shopping at Whole Foods."

Explaining that the Whole Foods customer base is an extremely wide one, not at all like the customer base for a health food store would have been even just five years ago, Mannheimer notes how the market has changed: "Consumers are looking toward organic as the seal of approval that the food doesn't have ingredients in it that are bad for you."

Mastertaste originally became organically certified to sell its organic essential oils from an international organic spice and essential oil trader, Forestrade. These organic ingredients are used in foods, beverages and especially high volume in the aromatherapy/personal care market. The company's other organic product line is "Crystals" - freeze dried fruits and vegetables to provide color, flavor and sweetness to organic products.

Mannheimer sums up, "What we do by selling organic products causes more land to be planted in organic crops hence supporting sustainable farming where fewer chemical pesticides and herbicides are used."


One huge problem for organic foods is genetically modified organisms (GMOs) If grown near or next to organic crops, genetically modified crops can cross-pollinate (to a different extent depending on the crop) with the adjacent organics. The result of this contamination is not only the destruction of organic status for the crop but the seed stock as well. In many areas of the world farmers save the seeds. An undiscovered GMO contamination of a crop and the seeds, followed by subsequent use of these seeds by that farmer, can result in that farmer being threatened with a lawsuit for "misappropriating" the GMO intellectual property.

This is more than just a fringe issue. Genetically modified crops not only invalidate organic crops, but can trigger labeling and or outright rejection in some countries. Anheuser-Busch Inc., one of the largest breweries (and purchasers of grain) in the world, recently announced to the state of Missouri that if the state allowed planting of a strain of rice genetically engineered to contain pharmaceutical ingredients, it would refuse to buy any Missouri rice.

In a very few short years, the organic foods industry has grown into a serious contender for a large segment of the food industry, has laid a path for other natural and socially responsible food production claims and laid the ground work for other industries that use agricultural products to move toward an organic label. It will be a lot of fun to see where this goes next.

-John K. Ashby, general manager - ingredients, for California Natural Products, a manufacturer of rice ingredients. He focuses on the nutritional, nutraceutical, functional and organic segments of the food industry.


In 1985, a group of organic producers and handlers established what would become the Organic Trade Association. Since its inception, the association has been a key player in shaping both the regulatory and market environment for the organic products industry. The Organic Trade Association has long sought national organic standards. Its efforts finally bore fruit in 2001.

On Dec. 21, 2000, the U. S. Department of Agriculture published a final rule to implement national organic standards. The organic rule went into effect April 21, 2001, and was fully implemented on October 21, 2002.

As promised by USDA, the regulations prohibit the use of irradiation, sewage sludge, or genetically modified organisms in organic production; reflect NOSB recommendations concerning items on the national list of allowed synthetic and prohibited natural substances; prohibit antibiotics in organic meat and poultry; and require 100 percent organic feed for organic livestock.

The role of the National Organic Standards Board (NOSB) in this process is to serve as an advisory board to USDA. NOSB recommendations regarding substances that are allowed and prohibited are part of the final rule.

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