PANEL: ORGANIC FOOD IS READY FOR A MAJOR UPSWING

WILLIAM SMYTH

NEW YORK -- The best period of growth is yet to come for the organics industry, according to a panel of experts brought together by the Private Label Manufacturers Association.

The 10-person panel's findings, which are preserved through the report "Organics: Growing From the Margins to the Mainstream," conclude that more sophisticated marketing of the products, the publication of long-awaited USDA standards for organic certification, and expanded private-label organic offerings could boost organic sales to all-time highs.

According to Dane Twining, director of public relations and project coordinator for the PLMA, the report, based on a round table held last fall, was only recently released because the PLMA wanted to update the information the report contained.

Also in the report are 17 highlights and suggestions on the state of organics, ranging from guidelines and regulations to private label and the future of organic food. According to the PLMA, sales exceeded $4.2 billion for 1998, with much of the sales originating from traditional outlets and being buoyed by the increasing visibility of organic sections in supermarkets.

While produce accounts for about one fourth of total organic sales, center store products, including grocery items, frozen food, soy foods, herbs and bulk, are expanding. "Organics are a personal option now; to foster even faster growth, marketers need to get them to become a public health and environmental option as well," concurred the panel.

The PLMA also made some bold predictions concerning guidelines and regulations, pointing out that a set of federal standards will eventually become available. New rules will provide a blueprint for the industry and also send a message to consumers about the authenticity of the products' production and contents.

"The advent of federal standards will represent a good starting point for retailers to deploy private-label organics and enable them to make their mark in organics," the PLMA predicted. "There are voids in the market where private-label manufacturers can find a niche opportunity. Processed foods may be a good place to start."

The panel explained that private label can jump directly into the middle of the organic market by taking ownership.

"Retailers who want to private label organic products should make the commitment on a contractual basis with organic farmers who will incur costs that have to be passed on," the panel said, pointing out that this is a necessary pre-arrangement and a commitment to go mainstream with organics in store brands by the retailer.