The organic opportunity: a natural choice

It is predicted that the organic food market will grow strongly over the next few years, and in several European countries, products will soon pass beyond the niche stage. But while the market for organics grows, the food safety issues surrounding the sector till need to be resolved.
Elsevier Food International, Vol. 4, Number 4, November 2001
Vincent Hentzepeter

Bio-organic products are increasingly conquering the mainstream market. Retailers worldwide are introducing organic private label ranges, and not without success. Sainsbury's and Tesco in the UK, for instance, and the KF Group in Sweden have reported impressive double digit growth figures for their green products. On the other hand, the major food producers are still biding their time. This is not only because the organic market is still in its infancy but also because multinationals are unfamiliar with the organic production process and are unsure of how to market it. To be on the safe side, the majority of food producers are opting for organic branding, rather than launching organic product lines under their own familiar brand names. This is often a strategic decision, designed to protect the identity and image of brand names and to prevent confusion among consumers.
The H.J. Heinz company is an exception to the rule. The global food producer has incorporated an organic line within its Heinz brand, meaning no costly investments in building a new brand. In fact, Heinz has not undertaken any advertising for this organic' adventure'. At the Natural Products Expo Europe (held last June in Amsterdam) Andrew Sellick, the trade category manager of H.J. Heinz Company Ltd, reported that products such as Heinz organic baked beans and ketchup have profited tremendously from the familiarity of the brand’s name. But how can that be? Doesn't the move into organics in itself imply that conventional Heinz baked beans are less healthy or tasty than the originals? Says Sellick: "Actually n First of all, people want to have a choice -want an organic variety of their favourite foods. Secondly, they want taste and we want the buy more organic products. Thirdly, they w organic produce to be the backdrop as environmental awareness grows."

Quality to the high chair

For German baby food producer HiPP, the decision to go organic was an easy one.

The Heinz example shows that, as well as convention, produce, many consumers also want - or even prefer - organic products. The company ha undoubtedly profited from a rising consumer awareness regarding the perceived health benefits of organic foods. However, this in no way guarantees instant success when it comes to actually launching these foodstuffs. In any case, introducing organic foods - either as  A-brands or as private label - demands careful tapping of niches in the market. For German baby food producer Hipp, the decision to go organic was an easy one. "Statistics indicated that the market was ready to see high quali brought to the high chair," says Dieter Bud manager of sourcing and quality assurance Hipp Gmbh. "Our early decision to produce organic baby food was the right one," he Says, "Figures quoted in Eltern [Parents] magazine show that, in 1989, about 45 per cent of mothers wanted organic baby food. By 1998, this percentage had risen to 97 per cent!" Currently, almost the entire German Hipp baby food range is 100 per cent organic. Throughout the company as a whole, 73 per cent of the raw materials it uses are organic. The thirty per cent difference is related to the conventional baby food brand that the company has introduced on the Eastern European market, where organics are not a popular issue - not yet, anyway. Launching an organic baby food line on the market is quite a challenge for a food producer, says Buchle. Extremely high standards are required when it comes to the quality of the organic ingredients. Besides conforming to the tight food regulations that exist for baby products, an organic producer has to implement even tighter regulations for the ingredients used than a conventional producer would have to do. Consequently, the consumer demands an absolute guarantee that these standards are met via highly controlled contract farming and comprehensive laboratory analysis. "According to German law, the maximum level of pesticides in baby food is ten parts per billion [ppb]," Buchle continues. "To give you an idea of how much this is, one ppb is comparable to one grain of salt in a 50-metre swimming pool. We cannot guarantee that our products contain no contaminant residues at all, but they are very low in ppbs. That's why we've built in 260 controls on end products, including soil and raw material checks, before they enter the market. Only by implementing rigorous procedures can we ensure top quality." It's costly, but worth the trouble, the company reckons: "When you create an organic product you also create added value, and you can charge more for the end product."

No dilution of standards
To the average consumer, organic foods are synonymous with the word 'natural: and this in turn means minimal processing, little or no additives and a non-processed appearance. However, responding to the increasing demand for convenience foods along with the decision by many food producers to introduce mainstream organic brands, makes it increasingly hard to define what is and isn't a natural product. The fact is that processed organic foods are currently the fastest-growing area of the industry. "In the UK, organic meals have come up quickly over the last twelve months," says Helen Taylor, Technical Operations Director of The Soil Association, a body that's responsible for certifying about 70 per cent of all organic food products in the UK. "Two new brands have entered the market: Mars with Seeds of Change and Rank Hovis McDougal with Enjoy Organic. Just like Heinz, they have formed teams in order to establish organic brands."
These teams are set up by the large food companies to keep the organic market clear of impurities, Taylor explains. This is for a good reason: there is no room for dilution of standards - not in the organic market, where consumer trust is essential for further growth and future success. Organic teams work together to ensure the integrity of organic foodstuffs. This procedure prevents the mixing of organic and non-organic disciplines.

The natural contradiction
One of the challenges in the organic market is to meet consumer demand for organic convenience products, while at the same time ensuring that such products have similar properties to their conventional, non-organic counterparts. In other words, no premature decolouring, no water

UK-based Whole Earth Foods Ltd has been producing organic foods since 1967.

shedding or degradation of structure or texture during storage should be permissible. Organic, ready-to-eat foodstuffs -just like their non-organic counterparts - need some kind of additives, such as colourings and emulsifiers, in order to remain shelf stable; but how best to incorporate these without compromising the 'integrity' issue? Food producers are currently exploring the limits of organic food production. "They are operating in a continuum between natural and synthetic," concludes Mary Mulry, president of FoodWise Inc in the US. According to Mulry it is not always possible to avoid the application of synthetic ingredients, simply because there are no organic alternatives on the market. Often, the consumer is not even aware of their inclusion, mainly because labelling is not always needed and is therefore not indicated on the product. Besides, consumers are not familiar with processing technology. Nevertheless, producers are struggling with this issue. They fear that consumers might feel duped when and if they find out what's happening via information mediums such as the Internet. Says Mulry: "Where should the line be drawn? How are additives to be used? Are they available in forms that meet organic standards? Can we use colourings, flavourings, preservatives et cetera? How should you best deal with processing aids, non-organic carriers and solvents such as glycol propylene. How far can we go into the direction of conventional foods without endangering organic status?"
Mulry observes that some organic products are already growing towards becoming conventional foodstuffs. It is a gradual process. Organic cheddar in the US is a good example of this tendency. "Organic cheeses were for some time only available in a non coloured form, now you also see the orange types, as with conventional cheddar." And, with functional foods a booming business, what about adding vitamins to organic foods?
"The addition of vitamins and minerals is sometimes required by law, as in the case of skimmed milk. But what we're now seeing is more and more organic products trying to mimic functional foods."

Dilution of standards?
Horizon foods from the US is an interesting example of a company that's had to modify itself in order to keep pace with other brands. When it introduced an organic juice line, its products contained no added A and 0 vitamins, unlike the conventional brand leader Tropicana. Says Mary Mulry: "Tropicana created functionality awareness in the US, so American consumers want their orange juice fortified. Horizon increased sales enormously after it enriched its organic juices with beta carotene, calcium and vitamin D. The company uses liquid A&D vitamins, which contain small amounts of propylene glycol in order to ensure a good blend. They have to use a synthetic additive, because there is no organic source. The organic ingredient market is still very small." Until now, Horizon's move towards organic fortification has turned out positively. But what if consumers realise that the idea of 100 per cent natural juice is an illusion? Says Mulry: "From a market research standpoint, I would say that, to consumers, a product is either purely natural or it is not. In the long run, yes, consumers might get upset once they find out."