Power Lunch: Organic Category Proposes a Check-off Program

A nation-wide check-off program, from farmers to processors, will take the organic market to the next level.

By Nicole Bernard Dawes of Late July Snacks

America’s certified organic stakeholders are now considering the most critical and potentially transformative issue for the organic industry since the discussions more than 20 years ago to develop national guidelines and regulations for the then fledgling sector: whether to adopt a national organic check-off program.

The time is right for a research and promotion check-off program that is designed specifically for the organic sector – farmers, ranchers, distributors, and food makers. The organic industry must act collectively to ensure our future. Together we can accomplish more than we can individually. Organic food companies – and all organic stakeholders – have to act to promote the organic seal over other labels that aren’t supported by the strict standards that the organic seal represents.

The demand for organic is soaring as consumers are making the connection between what they eat and their health. Sales of organic food reached a new high of over $32 billion in 2013. The growth rate of organic food and beverage sales has averaged almost 10 percent every year since 2010, dwarfing the average annual growth of just over 3 percent in total food sales.

Despite the growing appetite for organic, many consumers are confused, and as an industry, we need to do a better job of educating what it means to be organic. One-third of organic consumers are new to the market. These new organic shoppers often are not fully aware of all the benefits and guarantees that the organic seal represents. To add to the confusion, consumers are getting bombarded by unregulated claims on food throughout grocery stores.

There is a disconnect between the demand for organic products and the supply of organic ingredients. Organic food companies like my company, Late July, face shortages of organic ingredients far too often.  Each year there is another organic ingredient that is under-produced and difficult to source.

In order to fix this supply and demand issue, more farmers in America need to go organic. Domestic organic production simply can’t keep up with the robust demand. Our country, the biggest agricultural producer in the world, is having to import organic ingredients to feed America’s hunger for organic food.

Commodity research and promotion check-off programs have been a part of American agriculture for almost 50 years. These programs boost demand for the product they promote and return a good investment to those paying into the check-off.

An organic check-off would be unprecedented, and would be designed to reflect the unique needs of the diverse organic community. An organic check-off would not promote a specific commodity, but instead a specific agricultural production process; it would represent all organic stakeholders.

The check-off assessments would be broad and shallow; all organic certificate holders would pay into the check-off and all of us would benefit. The proposed assessment on the gross revenue (minus the cost of organic goods) would equal one-tenth of one percent annually. For a $1 million gross organic revenue company, for example, the assessment would be a maximum of $1,000.

It’s estimated a check-off could raise up to $40 million a year. Imagine what we could do! This would allow for more money to be spent on promotion, research and consumer education: promoting the benefits of organic to consumers and explaining why organic sometimes costs more and why it is worth more. We'd fund research to find everyday solutions for organic farmers and encourage others to transition to organic practices. An organic check-off program would strengthen the voice of the organic industry and allow us to get our message to the American consumer in a clear, transparent way.

Today’s organic sector was founded by visionaries who believed in a better, more healthy and sustainable way to raise our food and to provide American consumers with the highest quality of food products. I believe in that mission and work everyday to achieve it.

We have an opportunity today to work together to promote the organic brand. For just one-tenth of one percent of our annual revenue, we can take the next step and help advance the organic industry to a new level of prosperity and sustainability. An organic check-off: the best investment we can make.

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