PLBuyer: Ingredients for a Debate
By Jill Rivkin
Through a special arrangement, what follows is an excerpt of a current article from Private Label Buyer, presented here for discussion.
Foods that are 95 percent organic can carry the “USDA organic” seal if the remaining five percent of the ingredients cannot be found in organic form and have USDA approval. Until recently, only five ingredients – cornstarch, water-extracted gum, kelp, unbleached lecithin and pectin – were considered acceptable but in early June the agency added 38 more to the national list.
Though the USDA cannot finalize its choices until it considers public comments, most of the ingredients, if not all, are expected to remain on the list. The ingredients, chosen from more than 600 requested by food manufacturers, include 19 food colorings, two starches, casings for sausages, hops, fish oil, chipotle chili pepper, gelatin, celery powder, dill weed oil, frozen lemon grass and a sweetener. The action has stirred up a sizeable debate.
Proponents of the list containing the additional ingredients, including the Organic Trade Association, according to MSNBC.com, say the list may strengthen standards because some organic certifiers allowed companies to use more than the five non-organic ingredients in the past. Supply issues have been linked to this extension of the list as well, given that organic suppliers of ingredients and finished products have been maxed-out recently thanks to the increasing popularity of these products.
“It is very difficult to source enough organic materials to supply the industry,” says Monica Consonery, executive vice president of sales and marketing at Cliffstar Corp. “The two biggest issues [impacting the organic industry] are supply and price.”
Some opponents say the USDA is bending to pressure from major consumer packaged goods companies to make producing organically easier. One item catching a lot of flack is Anheuser-Busch’s Wild Hops, which has organic certification and is coined “the perfect organic experience.” It is produced with 100 percent organic barley but less than 10 percent organic hops. The rest consists of conventionally grown hops produced with pesticides and chemical fertilizers.
“There currently is only a small supply of organically grown hops available for purchase by brewers, and we purchased all we could for brewing these beers,” Doug Muhleman, A-B’s vice president of brewing operations told the Los Angeles Times.
But purists don’t buy the supply argument and want to protect the integrity of the organic industry. According to the LA Times, Ronnie Cummins, executive director of the Organic Consumers Association, said, “This proposal is blatant catering to powerful industry players who want the benefits of labeling their products ‘USDA organic’ without doing the work to source organic materials.”
While this debate rages on, consumers will be left to make their decisions, especially as media coverage continues to expose the details of organic production practices. Some will continue to question the USDA, while others will encourage reform to bolster growth in consumer acceptance, manufacturers’ ability to produce organically and the overall organic industry.
Steve Fay, executive vice president at Berner Foods Inc., said, “I believe the inclusion issue is a balance of ingredients that are known to have demonstrated sterling food safety records over a long period of time. Used as processing aids and ingredients, they will likely improve the quality and safety of the food. It will likely open the gates to expand a healthy food segment.”
Discussion Question: Do you think organic products consumers will be okay knowing that a small percentage of “USDA organic” products contain non-organic ingredients? Do you think adding 38 USDA-approved non-organic ingredients diminishes the credibility of organic products in the marketplace? Do you expect to see a consumer backlash?
The backlash would be severe if it weren’t for some very smooth PR which I have faith is being cooked up right now.
Disclaimer first – I am NOT a consumer of organics. But I AM a purist in that I believe that people who want to purchase organic products should be able to rely on and believe the accreditation. It’s bad/confusing enough that there are so many organic, processed, cpg products that people believe are good for them just because all the fat, sugar, salt etc. in them is organic. Adding in so many non-organic ingredients dilutes the product even further. If people want to buy organic food then they should be able to do so with confidence. I find it very disappointing that the manufacturers and Organic Consumers Association are the ones lobbying for these changes. If the changes go through, then there should be an intermediate label, which I think already exists, to say that the product contains organic ingredients. That would be less misleading, I believe, than to say the product is organic.
All that said, any backlash will depend on whether or not consumers know about the list of 38 permitted non-organic ingredients. It is shocking and infuriating, after all the millions of words and hours many of us put into getting messages across, how little actually registers. As with most information, though, at some point it probably will register and whenever that is, there will be an outcry. Better to be honest up front than to wait until people begin to notice and get upset. If the name is changed, perhaps as I’ve suggested, then people will know what they are buying and will be able to make that informed decision to which we so frequently refer and then, just maybe, everyone will be happy. Why on earth do the manufacturers feel that they must be allowed to call something organic when it patently isn’t? Is it because they are purely interested in the price they can charge rather than purely interested in the quality of the product and the message they are selling to customers?
Wipe those smirks off your faces! And you, in the back row, quit giggling! This is not funny!!
Or maybe it is. Rumor has it that lobbyists representing Chinese manufacturing interests will soon have lead added to the allowable ingredients in “Certified” organic products.
This is such a dumb argument. “Organic” has no meaningful definition whatsoever and probably never will. This is one of those “feeling” issues as opposed to issues that rely on thought. Just another emotion vs. intellect discussion. I recently viewed a television report on organic food products in which the new-age couple interviewed in their upscale kitchen had this to say when confronted with evidence that organic products offered no health or environmental benefits: “Well, we just feel better.”
This is very interesting and is somewhat predictable. The tried and true Organic consumers are experiencing a larger variety of offerings now than ever before. Their experience with the mega natural and organic stores has significantly increased awareness as well as product knowledge. In my opinion, changing the rules now may prove to be devastating to the true organic consumers, however, it may also be a way to expand the health and wellness trade to include semi-organic or nearly organic lines. I feel there would be a place in the category for something like this, provided that the consumers were aware of what it was and the benefits vs. non organic edibles.
I feel that lessening the standards and including non-organic ingredients is the wrong way to go. As word of this spreads it will lower the consumer’s confidence in organic products overall. If people believe that organic products are not truly organic, then why bother?
The USDA’s Agricultural Marketing Services (AMS) published an interim final rule on June 21 which adds 38 non-organic ingredients to the national list of allowed and prohibited substances. This was done to prevent business disruption, following the effective date (June 9) of the National Organic Program regulation.
Disruption was feared because these 38 ingredients, and presumably others, are currently found in products labeled as organic. They got there through a loop hole in USDA regulations, also referred to as “misinterpretation” of those regulations. It seems that non-organic ingredients may have been used when accredited certifying agencies determined that organic alternatives were not available.
A recent survey by Mambo Sprouts Marketing, Collingswood, N.J., tried to evaluate consumer understanding of the USDA organic “grades” (100 percent organic, organic and made with organic), but could only conclude: confusion and distrust abound.
However, two interesting findings came from the online research:
* Over half of the respondents would be more confident if a store’s organic standards were included with the USDA seal.
* Consumers prefer foods that are both local and organic.
Retailers who can help consumers interpret the shifting USDA rules will draw shoppers who bas their purchase decisions on this type of nutritional information.
The USDA is expected to publish the final regulation language now that the a public comment period ended on August 27. This fall shapes up to be an important time for the organic industry.
I disagree: another alternative is for manufacturers to produce purely organic products. One of the issues here is that some of the products under question are used in needlessly complex products in order to satisfy a mis-comprehended set of consumer expectations–for example, some bakery items contain a number of synthetic ingredients and have complex production processes in order to satisfy a “consumer expectation” that the product remain fresh for up to 8 weeks on the shelf. Food manufacturers can take two basic paths: the route of complexity where colorings, modified starches, and precise process timings (for example) are imperative to product success, or the route of simplicity where fewer, simpler, purer, and more common ingredients produce better results. The simplicity path is harder and takes longer to find, which may be why we see many manufacturers not taking it.
To me, this market is screaming for a brand differentiation–“organic” vs. ?? Locally grown? US made? I’d be interested in what the group thinks for names.
There is a core of organic users who are absolute purists about the type of farm, the location of the farm and all the ingredients included. These consumers are well served by many of the products at places like Whole Foods and appear, for the most part, to have the means to pay the market price for getting organic, ethical, socially conscious food.
There is, I believe, another group of people who may not have the same means as the first and who may not care as much about the size of the farm, the range of the animals (I am not being sarcastic here just trying to be descriptive) but who care, or can be informed to care, about having pure ingredients, fewer chemicals and a less global supply chain (read; no random ingredients from China). These consumers will be more price sensitive but still want and desire better food. At the same time they are less likely to be bothered by the addition of fillers and colors and other additional ingredients.
I suggest the organic label should be preserved for the first group and a new label created for the second. I’m surprised more consumers aren’t bothered by the “China ingredients” scare but a few more high profile incidents could change that in the future. If I were a food marketer for a big CPG I’d be working hard to create a standard beneath organic but above mass produced food that speaks to its purity, quality, and safe supply chain. Pricing-wise, it should fall below organic but above mass produced goods and I believe many people will pay for it.
If the USDA organic exception list is kept very small (or eliminated entirely) it will only be a matter of time for the suppliers to catch up. There will be plenty of organic hops if the price goes high enough, although it might take a few years, since agriculture takes time. By widening the USDA organic exception list, the value of the certification will decline, so it won’t be much of a marketing tool. Something similar occurred in kosher certification: the stricter certification organizations’ heschers sell their products to a more discerning audience. Some kosher products now show more than 1 hescher on each label because the original hescher isn’t respected by so many people. Maybe the USDA should have 2 certifications: (1) “Seriously Organic” and (2) “Organic Lite.”
There are 3 different Organic/Natural consumers. First is the purist. They object to any additives and will not purchase. This is less of an issue for supermarkets, as purists do little shopping in these stores. The second buyer is the rational organic consumer. This consumer likes and supports organic products, but only to a reasonable limit. They like the idea but understand there are limits to what is organic. This is like the vegetarian who eats chicken or fish. Last is the target organic consumer. This consumer is only concerned with organic products in select categories. They also do not require the standards of the purist. This last group is the one supporting organic baby food.
Therefore, the answer to the question is–it depends on which consumer type is doing the shopping.
Many consumers that purchase organic foods are probably not aware or perhaps not paying close enough attention, to know that certain percentages of ingredients are, in fact, not organic. Once this topic is more widely publicized, a certain portion of the consumer base will become disappointed and not purchase quite as many organically marketed items. Overall, the true organic consumer will continue to purchase because the only alternative is to grow and produce all of their own foods.
This is a discussion that has gone on for a while that I simply do not understand. If there is a market for “organic,” then the marketplace supply and demand should dictate price; those consumers willing to pay for it will, and those manufacturers willing to invest into developing the resources to fill it will.
But, to change definitions to make everyone feel like there is a way around the issue makes no sense. It’s like finding out that Porsche can not make enough cars based on the workmanship required so 10% of the car will be a Yugo and they still get to call it a Porsche.
If there really is a demand (which I believe there is) and if there is a way to make it profitably (which I guess there is), then let the market dynamics control, not the labeling organizations.
The organic definitions were meant to stand for something. Why change them now and dilute their meaning?