in the Organic Food Sector
By Carol T. Culhane, P.H.Ec. MBA
Fringe to Mainstream
A short ten years ago organic food was unheard of in organizations such as multinational food processors, federal, provincial and state governments and NGO's. Today, in these circles, the sector is the focus of investigation and investment.
All with good reason. Worldwide sector sales are estimated at US$14.8 Billion, and annual growth recently observed and estimated to continue between 20 to 30%. With this volume and rate of activity, trends can be identified and measured.
In January of this year, the discerning and highly-acclaimed scientific journal "Critical Reviews in Food Science and Nutrition" published a study examining the scientific basis for claims made for organic produce such as better nutritional value, sensory characteristics and safety. Inclusion of this subject matter in CRFSN gestures the importance of the findings to a significant number of consumers.
In June of this year, the USDA's NOP (National Organic Program) becomes law, regulating American production and sales of all food labeled in whole or in part as organic. The legislation will protect consumers while providing a level playing field for operators. Some existing operators will leave, unable or unwilling to comply with the regulations. Meanwhile, major food processors in Canada and the USA are planning their entry into the US organic food sector. They are encouraged by the protection and stability afforded by legislative standards; they interpret the advent of the NOP as validation of the importance of one of the world's largest organic food markets; they are attracted to the sector's profitability.
Moreover, an oat product manufacturer in Ireland, McCann's plc, now exports Steel Cut Irish Oats to the USA with labels bearing the oat health claim. While the oats fulfill all product specifications required under the FDA's health claim ruling, picky reaps direct benefits from its competitor's initiative and investment.
Tropicana Pure Premiumģ Calcium & Extra Vitamin C (orange juice) is a functional food designed to deliver a tangible consumer benefit – drinkable calcium for those who do not drink milk. Launched in 1996, the patented innovation starts with a popular familiar beverage and adds a nutrient whose national consumption is below recommended levels. The calcium source – FruitCal™ or calcium citrate malate – has been clinically proven to equal the bioavailability of calcium from milk.
Provincial and state governments provide an impressive range of market support services for organic producers and processors. The Ontario government published Organic Opportunities in the United Kingdom: An entry strategy overview. Agriculture Canada sponsors an organic booth in the annual European-based ANUGA Trade Show. The FAO has urged small countries to diversify into organic, while simultaneously cautioning of the sector's time-consuming processing procedures and regulatory obstacles.
‘Twas a time when organic food was relegated to the distant corners of the produce section, the annex of the trade show or alternative channels such as health food stores. Organic food now occupies prime real estate – prominent facings, sometimes entire aisles, in mainstream grocery stores. Observe this market positioning in practice with the opening of the first Whole Foods store in Canada - in upscale, trendy Yorkville in downtown Toronto on May 1st. In the ‘60's, Yorkville was the mecca of peace-loving hippies and coffee houses and many of those patrons were the early adopters of organic food. Yorkville is now an essential ‘see to be seen' venue of high society, home to world-class haute couture fashion studios and five-star restaurants. As for trends, organic food in Yorkville has gone full circle, yet come back with prestige, premium prices and profit. FF
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