Organic Support

Talks of an organic checkoff are heating up as the industry recognizes an increasing need for research and education.

Research shows that the organic industry generates about $35 billion in sales. It has enjoyed double-digit or nearly double-digit growth annually for the past 10 years or so; and it is estimated that 80% of consumers buy some sort of organic product, industry observers add.

Just think what organic sales could develop into if the industry had a little help. 

Enter an Organic Checkoff Program.

The idea for a checkoff program catering to the organic sector has been bandied about for several years; however, the concept seems to have gained more steam recently.

“It’s a work in progress because it is something that needs to be constructed to meet the needs of the entire industry,” says Laura Batcha, CEO and executive director of the Organic Trade Association. The Washington, D.C.-based organization is responsible for leading the push for the checkoff.

Beyond the expected logistical issues, forming an organic checkoff enlists other challenges. For one, “organics” is not a commodity like beef, pork or milk; it is difficult to create a program able to meet the needs of multiple industries, note observers.

“All the previous Checkoffs have been very specific to a commodity,” says Addie Pobst, organic integrity and logistics lead for Viva Tierra Organics, based in Sedro-Woolley, Wash. “Whether it be beef, milk or mushrooms, those folks have a pretty clear understanding of what binds them together. Whereas if you have somebody offering organic wine, somebody raising organic eggs and somebody growing organic apples they all have something in common—a shared organic marketplace—but the particular need that they each have for research is going to be very different.”

The common bond to build on is the USDA Organic Seal. “It is the concept that the USDA Organic Seal is a common brand that has a need for a 101 education about the certification system, why you can trust it and the production practices,” says Batcha. “If you do that collectively with shared funds, then it allows everyone to build off of that with particular commodity or brand positioning.”

Part of an organic checkoff’s mission would be to help educate consumers. However, there are other ways in which a checkoff would serve its members, most notably with research and communications. These aspects would help retailers as well.

“A consistent supply of organic products would be enhanced by more money going into research on organic production and various organic problems for organic producers and manufacturers,” says Pobst. “That would help retailers by providing them with a more stable supply.”

She says the biggest benefit to retailers would be the education component and the simple fact that more consumers would understand just exactly what organic means—and what it does not mean. Despite the fact that organics have entered the mainstream marketplace, understanding what the term means is still a significant issue.

One of the biggest misconceptions is the distinction between the term “organic” and the use of the word “natural” in marketing products. While organic is a well-defined legally enforceable system of standards, natural does not have an industry definition. The claim means whatever the marketer putting it on a package wants it to mean, organic producers note.

“That is something that is very confusing to consumers,” says Pobst. “With organic there are standards, which we are constantly revisiting. They evolve as we get more information and as more research is done. Natural is like saying something is healthy. It doesn’t mean anything.”

Albert’s Organics’ Simcha Weinstein takes it a step further. “Study after study has shown that consumers see more value in foods that are called natural than those labeled organic. That is a communications failure,” says the director of marketing for the Bridgeport, N.J.-based company.

The ongoing GMO-labeling issue also has the potential to cause confusion as it appears on more state ballots, some demonstrating significant financial support.

“People are very concerned about GMOs in their foods and we are already seeing that people are viewing non-GMO as the Holy Grail of our food supply,” Weinstein says. “That’s very misleading and even dangerous as far as information flow. We need to re-establish that organic foods are far superior to anything that is only verified non-GMO or labeled natural.

“Consumers should look for the organic label. If its organic then it will automatically be GMO-free. We need to do a better job of educating the consumer as to what exactly organic foods are. Too much is assumed and misinformation or lack of understanding abounds,” he adds.

Cost is another concern for some growers, especially as many already fund their own marketing programs. Bruce Turner, national sales representative for Oneonta Starr Ranch Growers, based in Wenatchee, Wash., says some growers may not be keen on the idea of double dipping,

“We know a strong checkoff program can increase consumer awareness and purchasing habits, but the aspect of another hit on the growers’ pocketbook has to be managed very well,” he says. “We have our own marketing programs in place already to support sales of our organic fruit at retail.”

Exacting standards

While appearance may not be a standard that defines what makes something organic, it has become a significant factor in organics’ market acceptance.

“For a long time, mainstream consumers and retailers assumed organic produce were smaller, lower grades, lower color—generally inferior in appearance and shelf life—and to some extent that was true,” says Turner. “But organic farmers have just done an incredible job at figuring out how to improve their quality, selection, etc. Today’s organic offerings can really hold its own on the shelf next to conventional displays, in some cases even looking better.”

Some industry observers say organics have come so far that they are now being questioned when fruit actually looks too good or is too similar to conventional product. “Shoppers don’t believe it is actually organic,” says Suzanne Wolter, director of marketing for Selah, Wash.-based Rainier Fruit Co. “Retailers and consumers have asked growers to find a way to grow organic fruit that is as close to the quality and appearance as that of conventionally grown fruit. The growers have slowly but surely begun to find ways to meet that challenge.”

Wolter attributes this success in quality and appearance to the increased resources available to organic growers assisting them in their endeavors and greater acreage dedicated to organic production.

Expanding shelf space

On the shelf, retailers are also allocating more space to organic—sometimes at the expense of their conventional counterparts. Take the apple category for example. According to Steve Lutz, vice president of marketing for Wenatchee, Wash.-based CMI, consumers are demanding more organic apples and retailers are happy to hand them over.

Not only does this improve organic apples sales, he says, but also other organic segments because retailers are adding incremental organic items. “By expanding their organic assortment, conventional retailers have taught their customers to regularly look for new organic products during their normal shopping trips. This creates many opportunities to switch consumers from conventional to organic,” Lutz adds.

In addition to providing extra space to organics, many conventional retailers have refined their organic selling strategies and have become very good at merchandising and selling organic products, Lutz says.

Many retailers now integrate organic apple into conventional apple display areas rather than in a separate organic area within the produce department. “This helps capture the attention of shoppers who might never peruse the organic section,” says Lutz. “When conventional and organic are side-by-side, it is easy for consumers to compare quality and pricing. Shoppers can then make a quick decision to trade up to organics or stick with conventional. All of these trends have resulted in a hot category.”    

Checkoff chatter

The potential for an organic checkoff has garnered widespread and varied responses from those within the fresh industry. Here is what just a few had to say.

“It is an interesting concept that we are watching carefully. We don’t have a strong opinion yet one way or the other, but if our growers decide they want to support the checkoff, we will definitely participate in the design and rollout.” — Bruce Turner, national sales representative for Oneonta Star Ranch, Wenatchee, Wash.

“There have been  ongoing issues with organic since the beginning of organic with reaching out to consumers, educating consumers, educating legislators, there are a lot of issues that come up and it would sure be nice to have a centralized resource that could possibly put money into working out those problems and finding solutions for them.”

— Addie Pobst, organic integrity and logistics lead for Viva Tierra Organics, Sedro-Woolley, Wash.

“From what I have read, the intent of the program is certainly pure enough. However, the diversity and general size of the organic industry may pose barriers to an equitable and functional infrastructure.”

— Suzanne Wolter, director of marketing for Rainer Fruit Co., Selah, Wash.

“A big concern is that within the promotion, you will not be allowed to defend or promote organic as an environmentally responsible food system that addresses climate change and biodiversity. Basically the checkoff dollars are not to be used to ‘disparage’ other foods, and that’s how promoting organic as healthier and safer would be viewed. So, essentially you cannot even promote its best and strongest attributes.

Also, historically the way Checkoffs have worked is that the farmers pay into a fund that is primarily controlled by large companies. Much of the money goes to the USDA and more and more as large companies dominate—even in the organic industry—there is much skepticism that this program will benefit the growers and food artisans.”

— Simcha Weinstein, director of marketing for Albert’s Organics, Bridgeport, N.J. 

“There is some work to do to convince me that a generic program on behalf of organics is going to be money better spent than can be implemented by the individual growers and shippers through their marketing agencies.

“It is a question of how the funds are going to be spent. Who do they target—the retailer or the consumer? If they target the consumer, what is the message? How does that specifically come back to growers who are paying the bills?” 

— Steve Lutz, vice president of marketing for CMI, Wenatchee, Wash.