The rise of organics from
a shambolic bunch of well-intentioned amateurs to the hottest tag in the global
food industry has taken not much more than a year. Above all it is the Internet
that has made organics respectable and turned it into a global brand. Web sites
that have spread consumer concerns about food scares, and above all fears about
genetically modified foods, have transformed the image of the organic movement
from Marxist lentilists into a one stop total food brand solution for anyone in
the world who cares. Drew Smith reports.
This month the mighty United
States Department of Agriculture is deliberating again on the definition of
organic produce. Prompted by Europe’s hostile reaction to GM crops and
growth promoters in beef in its home markets and alert to rising consumer concerns
over food scares like BSE and salmonella in Europe, the USDA has blessed the
once cranky movement with official respect. It could hardly ignore the figures.
Go deeper with GlobalData
Latest analysis suggests
the organic US market will be worth US$12bn. Other reports suggest organic products
will snatch 5% of the mainstream markets within five years. Growth in the UK
alone is put at an astonishing 278%, a figure that perhaps might be read with
a little caution in the sense that the starting point was pretty low. Ten years
ago organic produce was not even in the UK supermarket, where this year Tesco,
Iceland, Waitrose and Sainsbury have all used it to flag
up their million pound marketing campaigns.
The
first time USDA attempted to file definitions of organic produce it spread the
definition so wide that it could have included the modern day conundrum of genetically
modified organic foods. This was met with a vociferous outcry from anti GM campaigners
who used the Net to coordinate campaigns and bring down the share prices of
the big agribusiness players – orchestrated by the impassioned Organic Consumers
Association (www.purefood.org).
The GM debate made the organic movement grow up. And passions run deep as ABC
reporter John Stossel found out when his producer was suspended for allowing
him to make dismissive claims about pesticide residues in a news report on organic
food.
Cyberspace now hums to the
sound of the organic debate across the globe. Farmers in New Zealand argue over
the merits of branding their product as New Zealand or organic. Surely everyone
knows, they argue, that New Zealand produce is clean and pure. But after a reluctant
start, milk farmers set up an organic niche to supply spreadable butter. In
recent weeks fears over trade embargoes have lent further fuel to the argument
for a small nation with organic being seen as a means of getting exemption on
potential or perceived export embargoes. And yet the proposition still remains
tiny. NZ figures suggest only 1% of farms to be organic, albeit that its best-known
product the kiwi fruit has always been 100% organic because of the nature of
the plantations.
In
Vietnam reports are now emanating of how a small cooperative at Sat Lat city
that was working to organic principles has outperformed farmers in the rest
of the delta. That commune will soon be linked by the new airport to the international
markets in Singapore. Coffee producers in South America have seen the opportunity
to use an organic message to differentiate between sun and shade crops and a
mechanism to support a return to more traditional methods as pesticide fed plantations
lead to increased poverty and under production. Initially these manifested themselves
in brands like Coffee Direct where proceeds were channelled back to the
community. More recently a Bird Song Coffee label was launched in west
coast US to support plantations where the use of pesticides were controlled
to stop the defoliation of the jungle. This summer the Green Mountain coffee
brand has sought accreditation for its organic plantations. In China farmers
in Shanghai have developed a green brand, in Malaysia they are building an organic
fertilising plant while last month Horizon opened a showpiece 900-acre
organic farm and museum at Annapolis to show people how it is all done.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
With fringe nations on the
edge of the global supply chain waking up to the demand in developed countries,
organic can be said to have come of age. But the inherent danger is also that
the organic community fails to master its own success and retain its own credibility
with consumers in the face of such sudden global acceptance. Definitions will
be key.
Started
in the UK by Lady Eve Balfour 54 years ago and still administered by the organisation
she founded, the Soil Association, accreditation has been lengthy and
bureaucratic and anything but commercial. But where the Soil Association still
holds sway in the UK, other accreditation bodies have sprung up across Europe.
The UK supermarket Sainsbury recently announced it would support an international
standard IFOAM, the International Federation of Organic Agriculture Movement
and will require all its suppliers to subscribe. A list of European definitions
can be found at the new organic B2B site www.tradeorganex.com,
which has nipped into the cyber market with a niche-trading platform for suppliers
to find manufacturers and vice versa while other larger players, have concentrated
on more conventional commodities.
Fergal O’Mullane, a former
organic meat trader and founder of Tradeorganex.com has cannily seen the other
big issue for manufacturers and retailers suddenly faced with this upsurge of
demand: how and where to source? In the UK estimates suggest that 70% of the
produce has to be imported, which in turn has alerted markets as far away as
Malaya and Canada. Even the Canadian Wheat Board, after decades of resistance,
has finally recognised the need for an organic definition.
The biggest sales of organic
produce are still fresh fruit and vegetables. But the trend is steadfastly moving
towards manufactured foods. Heinz Baked Beans can now be bought organically.
So too HP Sauce. Even Jelly Babies (a leading sugar confectionery
brand). And gin.
Purists
previously might have argued that organic produce should stay away from such
blatant commercialism and align itself with that other great twin cause of whole
foods that dominated the sixties. But in the early nineties suddenly the organic
community seemed to take a conscious decision that if a food was stocked on
a supermarket shelf then there should be an organic alternative too. Now nothing
is safe. Every product sector is targeted. Even cotton products have been listed
with plantations growing by ten fold in recent years to create organic products
in an area that has notoriously relied on pesticides.
The organic movement in
the US has arrived almost out of the sun. Spectrum Foods reported last week
an 87% increase in profits on last year mainly thanks to its organic investments.
Here the term has become almost hand in glove with words like health and probably
soon functional. For in the US the concept of health foods has always seemed
to be associated as closely with the chemist style beauty and drug aids as much
as in Europe the term is associated with boxed vegetables schemes and farmers
markets. Whether the world market can sustain both concepts in one breath without
imploding is an open question.
Not everyone is winning.
Organic products may be the hot word of the moment, but as any farmer will tell
you conversion costs are high and yields by no means guaranteed, which is why
they went over to chemicals in the first place. In Britain farmers have been
slow to convert and are finding that their home markets are being taken over
by German produce and even with the inducement of government grants, albeit
small ones, look unlikely to be able to take advantage. For every boom, some
will still go bust.
By Drew Smith
Drew is developing a restaurant and hotel portal eatsleepdrink.net
