The days of organic foods being associated with a fringe hippie lifestyle and being sold only at natural food stores are over. Today, organic foods are purchased by a diverse group of consumers in both natural food stores and traditional grocery stores across the U.S.
“Organic is morphing - it’s something that isn’t appealing to just a certain demographic anymore,” says Laurie Demeritt, president and chief operating officer of The Hartman Group, a Bellevue, Wash.-based consumer research group that recently completed an organic industry study.
“We found very large numbers of lower income consumers, different ethnic groups and different ages buy organic. So, this idea that there’s this stereotypical organic consumer has really fallen by the wayside,” she says.
Mass appeal
Despite their differences, what all organic consumers desire are “better for you” foods.According to the Nielsen Co.’s report From Obese to Organic - The Next Obsession: Organic, functional and local foods on the rise, “Consumers clearly associate ‘organic’ with personal health and wellness - the most important lifestyle trend of this decade.”
In fact, 57 percent of North Americans and 48 percent of Europeans say the main reason they choose to eat organic foods is because “it’s healthier for me,” the report says.
With increased, widespread acceptance and association with health, demand for organic food products has grown and consumers are looking for new and different varieties.
To meet this growing appetite, food processors are turning to ingredient suppliers for new and improved organic options.
“The increased demand for organic products has driven not only an increased supply [of ingredients] through new sources, but also a greater variety of products, such as flavoring agents or functional ingredients,” says Liz Hertz, marketing director for the Burke Corp., a Nevada, Iowa-based supplier of fully-cooked meat ingredients.
“Whereas previously it was very much a niche market, organic is now prevalent in traditional retail channels as well as specialty shops,” she adds.
Adding value
Organic meat products, frozen fruits and vegetables and frozen prepared foods sales all have increased in recent years - up 29 percent, 27 percent and 25 percent, respectively, from 2005 to 2006, according to the Organic Trade Association’s (OTA) 2007 Manufacturer Survey conducted by Packaged Facts.“Along with the growth in demand has been an increase in availability of raw materials. Five years ago it would have been nearly impossible to source large quantities of [organic] ingredients, whereas now this is a possibility,” says Hertz. “We anticipate seeing more and more convenience organic ingredients for both retail and foodservice applications - fully-cooked meat products, recipe-ready vegetables and ready-to-heat appetizers, soups and entrees.”
Burke’s newest organic product line is called NaturaSelect and includes Italian sausage and seasoned ground beef.
“Consumers are beginning to expect to find any food product that is available in traditional retail and foodservice outlets also available in an organic form,” Hertz says. “One of the most recent developments has been the demand for organic ingredients for prepared meals.”
This translates into demand for refrigerated and frozen convenience meals she adds. But convenience meals require sourcing dozens of organic ingredients - a bigger challenge than sourcing, say, an organic banana.
“For the refrigerated and frozen food areas, trying to get all the ingredients to come together - dairy, pasta, incidentals, meats - can be a challenge,” says Dwight Grenawalt, vice president and general manager of Summit Hill Flavors, Middlesex, N.J.
But ingredient suppliers are scrambling to provide the organic ingredients that processors request. Summit Hill, for one, offers an entire line of organic savory flavors. The newest is a 95 percent organic grill flavor that can be added to meats, soups and sauces, Grenawalt says.
Another new organic product in the works is a reduced sodium ingredient.
“Our clients are looking for value-added products. One of the big things we have seen is crossover into other areas such as low sodium and reduced sodium. Processors need an ingredient that can improve the taste profile and the more simplistic it is - the better,” Grenawalt adds.
Hydroblend Inc., a Nampa, Idaho-based manufacturer of breadings and batters, provides another example with a line of organic certified batters, breadings and other dry-blended items including Japanese-style Nama Panko breadcrumbs.
“I believe that the sector of prepared meals is continually growing in the organic market,” says Sarah Fisher, product development manager for Hydroblend. “We have seen an increase in request for entire systems including batter, predust and breader, for substrates such as seafood, chicken and vegetables.”
Grenawalt also predicts the organic market will only see more demand.
“It’s a continuous area of growth for us. Processors come to us to improve flavor profile or appearance, to add functionality or convenience.
“The industry has really stepped up to the plate,” he adds. “There’s more selection of organic ingredients and we’ve seen a lot of technological improvements.”
Increasing supply
Even though more organic ingredients are available to processors, the value of “organic” is lost if there’s no guarantee that the products are certified by the U.S. Department of Agriculture (USDA). Organic consumers want to know that their food is certified and inspected, says Grenawalt.“The onus is put on the USDA inspectors to make sure that everything is compliant,” he says. “The certifying agencies are doing a good job. The plant auditors and certifiers are becoming more in tune with what they are looking for.”
“The regulations have become more clear and defined in the last five years as more ingredients have become available for use as ‘organic,’” agrees Fisher.
Hertz says, “As with any ingredient, processors are looking for quality products that consistently meet specifications in addition to responsive, reliable service.”
Above all, processors want to ensure that the ingredients they receive are certified organic - even if this means sacrificing in other ways.
“Most processors understand the nature of the organic market and are willing to give longer lead times in order to ensure that access to a consistent quality of raw ingredients,” Hertz says.
Demand continues to outpace supply, says Barbara Haumann, press secretary for the OTA. Fifty-five percent of processors said that the lack of dependable organic ingredient supply restricted their company from generating more sales from organic products, according to an OTA manufacturer survey.
Ensuring that processors (and consumers) have access to reliably organic ingredients is one of the OTA’s main priorities, Haumann says.
On its Web site, the trade group states, “OTA is a leader in advocating and protecting organic standards so that consumers can have confidence in certified organic production.”
Adds Haumann, “A hurdle for getting more organic farmers has been the lack of information available for them on what they need to do to set up a successful organic operation,” she says. In response, the OTA launchedwww.HowtoGoOrganic.comas a resource for processors and farmers.
As demand for organic ingredients continues to increase, resources like these will become increasingly important.
“I think that as the organic market grows, people will continually want more flavors and variety,” says Fisher. “People essentially want to get what they normally buy, but have it made organically. People think ‘healthy’ when they see organic and we [ingredient suppliers] need to be able to back that up by making the products as ‘good for you’ as possible.”
Is organic enough?
U.S. organic sales are growing by approximately 20 to 21 percent a year, says Barbara Haumann, press secretary for the Organic Trade Association (OTA). As more organic food products hit grocery store shelves, food processors are going to have to work harder to make sure their organic products stand out from the crowd, according to Laurie Demeritt, president and chief operating officer of The Hartman Group, a Bellevue, Wash.-based consumer researcher.“Manufacturers can’t just assume that because they have an organic product that that’s going to be enough that they don’t have to do anything else,” she says.
Today, consumers are looking for even more from their organic products.
“Many consumers are starting to think, ‘What’s the next attribute I’ll look for? Is it local? Fresh? Seasonal? Artisanal? Gourmet? What is there on top of organic that makes it more appealing for me?’” she continues.
“What we are trying to uncover is what are those next attributes that are going to be part of what organic means to consumers and therefore things that manufacturers have to think about when they start bringing out new products.”
Of all these organic subcategories, one of the most interesting is local. It doesn’t necessarily mean what you think it means, Demeritt says.
“Local isn’t just about geographically local - it’s about coming from a certain place - even if that product is coming from far away. It’s about coming from a certain community or locale that the consumer can think about or believe there are quality attributions because it’s being grown in a certain place or made in a certain way that can embody that local or community aspect.
“It’s almost this romanticized ideal narrative of how it was produced that they are really interested in. It’s less about safety or science - it’s really about the story.”
