Don't Miss Out

Subscribe to OCA's News & Alerts.

Who is Taking Over Whom in the Organic Industry?

Either way you look at it, there is little question that corporate America is beginning to embrace the organic standards. Most would agree with this statement because it omits the principles and values of organic agriculture. Big business now provides a considerable percentage of the certified organic products now stocked on supermarket—and many natural groceries—shelves.

According to the 2005 Whole Foods Market Organic Trend Tracker, “65% of Americans have tried organic foods and beverages, jumping from just over half (54%) in both 2003 and 2004.” Although my heart will always be with small-scale local production, two-thirds of Americans simply are not exposed to that farming universe. Most of our population is witnessing the organics influx on the shelves of their super-sized supermarkets.

The “more exposure” argument has been the consistent message I have heard from Gary Hirshberg over the years, far before his own company moved under the rubric (but maybe not so much control) of international corporation, Danone. More exposure means more sales means more organic acres. This has been my stance too. And yet, like many others, the atrophy of organic principles under the organic seal continues to be a concern of mine.

The green advocate website Treehugger recently (January 26, 2006) held an instant survey: How do you feel about companies like Kraft and Starbucks getting in on the organic biz? Sixty-two agreed with the statement, “It sucks; just another way to keep small business down.” Eighty-two agreed with “It is okay, you know, a necessary evil. And far ahead of both, at three hundred and seventy: “It is a great way to bring organic products and sustainable living to the broader public.” Interestingly, one of the comments posted by a man named Sid suggests the internal turmoil most of us go through when considering the issue: “I agree with other respondents that this kind of issue is just too hard to boil down to a few pat answers.” I tend to agree.

In the winter of 2002/2003, I spent an extended period of my life on the road with The Eco-Foods Guide: What’s Good for the Earth is Good for You. The motivation behind writing and touring with the book was simple: increase public awareness of the need for a sustainable food system. I now know that my little effort was a blip on the screen compared to what one multi-national corporation can do with one little can of tomatoes labeled with the organic seal.

Since that time, I have redirected my efforts to teaching food marketing and natural products marketing at the university in order to instill the principles while simultaneously providing the tools to launch new sustainable businesses. I also work with small start-ups interested in breaking into the natural and organic industry through my consulting company, Seed to Shelf: Marketing for Sustainability. Recently, however, I was asked to speak at a national conference in San Diego to mainstream food companies transitioning to natural and organic products.

After spending a few days with representatives from these big businesses, I believe there is both good news and not-so-good news about the organic seal being brought into the product mix of conventional brands.

I’m learning that behind many of these corporate America facades are real people--nice people who have a value set not that dissimilar to our own. They are happy, albeit skeptical to be considering the venture into organics, and most seem eager to learn. Some of the big brands that have most recently emerged with an organic version of their traditional product--like ConAgra’s Hunts ketchup or Campbell’s Prego spaghetti sauce--have actually taken quite a leap to source organic ingredients and rearrange or build anew processing facilities to meet the standards. I was impressed with the presentation from Campbell’s Soup’s Steve DeMuri as he detailed the rather arduous venture to bring us Campbell’s organic V8 and Swanson’s broth. “You’ll pay from 15 to 300% more for your ingredients,” he said. “And finding enough supply, such as organic basil, for us, can be quite difficult.” Is that virtuous?

 It does seem that the individuals charged with the task of bringing organics into the company go out on a limb in a very personal way. When you pitch higher management numbers that will cause them to keel over, and can still convince them it is worth it, it does seem rather virtuous. The company may not be considering carrying organic products for altruistic reasons, but the individuals undertaking the task seem dedicated.

These companies did not start with a passion to preserve our soils, hold dear our family farms, entrust our children with a healthy food system instead of burdening them with one in total disrepair. Thus, they often do not get it. The mindset is different. Some of the individuals, as convinced as they seemed, were also perplexed. One couldn’t understand why a strategic alliance with Monsanto might be a negative thing. Another was curious why I thought his wife wanted to “buy this stuff?”

 There was little question that the motivating factor behind the companies’ organic certification considerations was fear of losing a customer base that they either already have or could have down the road. Nonetheless, it was one of the most gratifying moments I’ve known in my work when one very large food manufacturer said clearly, “this is neither a fad nor a trend – this is the way it will be in the future.” This attitude permeated the conference.

 This is good news, in my opinion. It means a pressure on the supply side, certainly. That will be the challenge to our organic growers. But, in its most simple expression, it means more acres on Mother Earth grown using organic practices. Ultimately, it means less toxicity– for our children, for our community.

 And what has happened to the philosophy, the spirit and reverence true organic farmers have brought to their practice? Consumers don’t yet really understand the organic seal, (Natural Marketing Institute) although they recognize it more each year (40% are noticing the logo and labeling, according to the 2005 Whole Trends Tracker.) Will it become what many who started the movement declare: nothing but a bunch of standards with none of the value-set we all once shared?

 My guess is that the seal will be but a beginning for other qualifiers to emerge. An interesting NMI survey result was that in 2005, 48% of the general population sample said they were interested in products grown using “sustainable agriculture.” That these consumers know the term at all was a surprise, since they still struggle with organic. Yet, the terms sustainable and socially responsible have emerged in reference to a variety of non-food activities. This may have helped create the very large awareness of sustainability.

 So, it is quite possible that other words will be necessary to describe a commitment to the original and deeper meaning of organic. It means doing a better job expressing the philosophy. Will another eco-label emerge to trump the federal label? There is more interest these days in whether or not biodynamic and its Demeter certification will take its place. A quick call to Jim Fuller of Demeter-USA last week confirmed that the number of companies looking for certification has grown substantially as have requests for his presence at events to describe biodynamic agriculture.

 Does this mean deep organic growers need to start again, developing standards that include a philosophical component? More seals may be more confusing to consumers. One of the most important elements of marketing I teach my students is the development of a brand personality: defining a shared vision, developing values and missions and communicating those through everything they do. All companies need to express their value set consistently and authentically. Of course, given the Enrons of the world, not every one does.

 Social responsibility and sustainability are moving in, however. An interesting study done by market research firm, Datamonitor, in December 2005, indicates that 86% of European and U.S. consumers agree that they have become more skeptical about corporations in the last five years. Nearly three-quarters considered a “good track record in business ethics” to be influential in (re)gaining consumer trust. This may be an indicator of future media reports and consumer advocacy around corporate responsibility.

For this reason, those with line extensions such as Heinz Organic Ketchup or Gold Medal Organic Flour feel more authentic, even though their identity is not what most would consider “principled.” It does feel more transparent than Muir Glen or Seeds of Change, who are often perceived with a value set which may not be in line with their corporate owners, primarily because most consumers don’t know their new parents.

 Authenticity, transparency, trustworthiness, consistency: these are the attributes consumers will seek. If the organic seal means simply that certain production standards have been met, it may be that companies will need to share their own philosophical component additionally. This happens already. Certainly the perception of Organic Valley is extremely different than that of Horizon although they both bear the organic label on their milk cartons.

 While it may be true that the original principles of organic agriculture may not be lived by the corporations carrying the organic seal, the increased presence of the seal introduces more consumers to organic production standards. As consumers approve the practices and buy more of these products, the number of acres under organic agriculture will increase. Consumers will question conventional and become more aware of a food system in need of recovery. Their demands for authenticity and trustworthiness will increase. A positive feedback loop encouraging a set of principles very similar to the original may just emerge.

 So, the questions remain, but I am a little less quick to judge. A little naive, maybe, but in the end, I wonder whether this corporate America takeover of organics may just be the organic takeover of corporate America. Let’s hope.