HOLIDAY WEEK

David Merrefield

If it weren't already holiday time, we might have to declare it to be so. After all, during this month alone two governmental agencies have made long-overdue decisions about two activities that have the potential to make a significant change in how consumers look at food products.

First, the Food and Drug Administration approved the irradiation of red meat, then, just last week, the U.S. Department of Agriculture proposed a rule that would set nationwide and consistent standards for food products labeled "organic." (For more on this, see Page 1.) It's difficult to fathom which of these actions contains the greatest potential for changing the food industry, but looking at the whole distribution chain -- farm to table -- it's likely that the matter concerning organics is paramount. What is organic product? The USDA's specifications mainly define "organics" in terms of the conditions under which products must be grown. But it's clear the purpose of labeling is to ensure that consumers who seek products that are free of certain chemical fertilizers, additives and the like -- and who are willing to pay a premium to do so -- can be confident the presence of the word "organic" on a label means something, and means the same thing from state to state.

Retailers who do not have anything to do with processing or repackaging activities need not be involved in labeling requirements, although they should be alert to how customers perceive organics. Incidentally, the proposal is silent about the related term "natural" product. The new push toward labeling standardization may presage the dominance of the term "organics" over "natural," in time.

Organic products have moved far from their origin in 1960s hippie mentality and are now knocking on the door of mainstream retailing. Retailers of such products are ringing up sales of $3.5 billion annually. This economic horsepower behind organics, coupled with the upcoming labeling designation, mean that organics are very likely to be led by manufacturers fully into the mainstream. Many large processing companies are interested in organics and aim to incorporate chemical-free techniques as soon as possible. H.J. Heinz Co. has acquired Earth's Best, an organic processor of baby food.

What may happen is that organic products will move from their separate home with vertical retailers such as Whole Foods and Wild Oats, then into separate product sets in conventional supermarkets (as is happening now), then into a situation where organic processes are used to the degree that the distinction is lost altogether.

During the time the migration from specialty to mainstream products is occurring, though, there could be a downside for conventional supermarkets. As the Grocery Manufacturers of America asserted last week, consumers should be told right away that "the nutrition, health and safety of organic foods are the same as traditionally produced products. The term 'organic' does not imply any inherent difference in these critical characteristics. Indeed, some natural-chemical pesticides used by conventional farmers -- sulfur, for example -- are also used by organic farmers."

The GMA's good point is that conventional food products shouldn't be denigrated, or made to seem unsafe or inferior to organic offerings.

In any case, this organic-labeling situation may be pending for quite a while. As is often the instance with governmental proposals, another lengthy period of public comment and evaluation will be required before final regulations will be issued. That will take through the end of next year.