Cracking Down on Fraud: USDA Organic Enforcement Rules Take Full Effect in March 2024
This article first appeared in Presence Marketing’s September 2023 newsletter.
By Steven Hoffman
Organic food is big business in the U.S. – sales of organic products topped $61 billion in 2022 – and the certified organic label fetches a premium price for producers. So much so that fraud from both domestic and imported sources had become a major concern among organic industry business owners, investors and advocates.
That’s why such leading organizations as the Organic Trade Association (OTA) and others applauded the U.S. Department of Agriculture (USDA) when, earlier this year, the agency announced the Strengthening Organic Enforcement (SOE) final rule, which is set to be fully implemented and enforced in March 2024.
Representing the biggest change to organic regulations since the passage of the Organic Food Production Act in 1990, the SOE Rule was created to crack down on organic fraud. The new rule provides “a significant increase in oversight and enforcement authority to reinforce the trust of consumers, farmers, and those transitioning to organic production. This success is another demonstration that USDA fully stands behind the organic brand,” Jenny Lester Moffitt, USDA Under Secretary for Marketing and Regulatory Programs, said in a statement.
“The rule closes gaps in current organic regulations and builds consistent certification practices to prevent fraud and improve the transparency and traceability of organic products. Fraud in the organic system – wherever it occurs – harms the entire organic sector and shakes the trust of consumers in organic. This regulation will have significant and far-reaching impacts on the organic sector and will do much to deter and detect organic fraud and protect organic integrity throughout the supply chain,” OTA said in support of the new rule.
Liz Figueredo, quality and regulatory director at organic certifier Quality Assurance International (QAI), based in San Diego, California, told Nutritional Outlook in July 2023 that the new SOE Rule closes supply chain loopholes that existed in previous regulations. The new rule requires organic certification for all parts of the supply chain, including handlers and suppliers who were previously exempt, she said.
“This means that certifiers can no longer depend on documentation from uncertified handlers, which was often lacking, to verify the organic status of products. The rule also includes fraud-reduction techniques, such as requiring an Import Certificate for any organic ingredients or products imported into the U.S., which provides the total volume or weight of the imported products,” Figueredo said.
Who Is Affected by the New SOE Rule?
According to USDA, the SOE Rule may affect USDA-accredited certifying agencies; organic inspectors; certified organic operations; handlers of organic products; operations considering organic certification; businesses that import or trade organic products; retailers that sell organic products; and organic supply chain participants who are not currently certified organic.
Exemptions are limited to a few low-risk activities such as very small operations; certain retail establishments that do not process; storage and warehouse facilities that only handle products in sealed, tamper-proof containers or packages; distributors that only handle final retail-packaged products; and customs and logistics brokers that do not take ownership or physical possession of organic products.
However, exempt operations must still follow all other applicable portions of organic regulations, including co-mingling and contamination prevention, labeling requirements and record keeping. Transporters that only move organic products between certified operations, or transload between modes of transportation, do not need to be individually certified, but are the responsibility of the certified operation that loads or receives the product.
To see if your business is affected and for more information, visit the full text of USDA’s SOE Rule in the Federal Register. OTA, too, has a resource page with extensive information regarding preparing for full compliance with the SOE Rule, along with exclusive training materials for association members. OTA also offers a questionnaire for businesses that may not be sure if they need certification.
What Does the SOE Rule Do?
According to USDA, “SOE protects organic integrity and bolsters farmer and consumer confidence in the USDA organic seal by supporting strong organic control systems, improving farm to market traceability, increasing import oversight authority, and providing robust enforcement of the organic regulations.”
Key updates include:
Requiring certification of more of the businesses, like brokers and traders, at critical links in organic supply chains.
Requiring NOP Import Certificates for all organic imports.
Requiring organic identification on non-retail containers.
Increasing authority for more rigorous on-site inspections of certified operations.
Requiring uniform qualification and training standards for organic inspectors and certifying agent personnel.
Requires standardized certificates of organic operation.
Requires additional and more frequent reporting of data on certified operations.
Creates authority for more robust recordkeeping, traceability practices, and fraud prevention procedures.
Specify certification requirements for producer groups.
“SOE complements and supports the many actions that USDA takes to protect the organic label, including the registration of the USDA organic seal trademark with the USPTO. The registered trademark provides authority to deter uncertified entities from falsely using the seal, which together with this new rule provides additional layers of protection to the USDA organic seal,” USDA said.
For producers wanting to learn more about navigating and adhering to these new requirements, the Western Growers Association in partnership with the Organic Produce Network will host a session at its upcoming Organic Grower Summit, Nov. 29-30, 2023, in Monterey, California, entitled “The SOE Deadline Looms–Are You Ready?” The seminar is designed to help growers better understand the upcoming rule changes, which will affect producers, distributors, handlers and importers.
In addition, organic industry and policy veterans Gwendolyn Wyard and Kim Dietz recently founded Strengthening Organic Systems, an advisory firm focused on helping businesses with organic fraud prevention, supply chain investigations and compliance with USDA’s organic anti-fraud regulations.
Read More
How Will USDA’s Organic Regulation Changes Affect the Food and Nutraceutical Industries? – Nutritional Outlook
USDA Launches Organic Integrity Database Module – Organic Insider
Tighter Rules Now in Effect for USDA Organic Seal of Approval – Cosmetics and Toiletries News
Strengthening Organic Enforcement USDA Rule – California Certified Organic Farmers
USDA Bolsters Consumer Confidence in Certified Organic Products with New Enforcement Rule – New Hope Network
Steven Hoffman is Managing Director of Compass Natural, providing public relations, brand marketing, social media, and strategic business development services to natural, organic, sustainable and hemp/CBD products businesses. Compass Natural serves in PR and programming for NoCo Hemp Expo and Southern Hemp Expo, and Hoffman serves as Editor of the weekly Let’s Talk Hemp Newsletter, published by We are for Better Alternatives. Contact steve@compassnaturalmarketing.com.
Organic Products Growth Outpaces Overall Conventional Food Market; Hits 5 Percent Market Share
Source: Wikimedia Commons
Market Research
Author- Steven Hoffman
Published In- June 2017 Presence Marketing / Dynamic Presence Newsletter
The news is just in from the Organic Trade Association (OTA) and it’s very good. Sales of organic products in the U.S. reached a record $47 billion in 2016, up from sales of $43.3 billion in 2015, reflecting overall growth of more than 8 percent. Compare that to a lackluster growth rate of less than 1 percent for the overall food industry, says OTA. Another significant first for the organic industry, reports OTA in its May 2017 Organic Industry Survey, is that organic food now accounts for more than 5 percent – 5.3 percent to be exact – of total U.S. food sales.
The organic industry is creating jobs, too, according to the OTA report. More than 60 percent of all organic businesses with more than five employees reported an increase of full-time employment in 2016, and said they planned to continue adding to their full-time work staff in 2017.
Source: Organic Trade Association, May 24, 2017
“Organic farmers are not just staying in business, they’re often expanding. Organic handling, manufacturing and processing facilities are being opened, enlarged and retooled. Organic farms, suppliers and handlers are creating jobs across the country, and the organic sector is growing and creating the kinds of healthy, environmentally friendly products that consumers are increasingly demanding,” said Laura Batcha, CEO and Executive Director of OTA. Produce – organic fruits and vegetables – accounted for nearly 40 percent of overall organic food sales. Growing at 8.4 percent in 2016 – almost three times the 3.3 percent growth rate of total fruit and vegetable sales – organic fruits and vegetables now account for nearly 15 percent of the produce Americans eat, says OTA. Organic meat and poultry products, too, marked record growth of more than 17 percent in 2016 to $991 million. The category is expected to top $1 billion in sales in 2017 as consumers demand transparency and awareness continues to grow about the benefits of organic over conventionally produced meat, poultry and dairy products.
Other organic food categories showing explosive growth included organic dips, growing 41 percent to $57 million, and organic spices, posting a 35 percent increase to $193 million. Of the overall $47 billion in sales of organic products, non-food organic items claimed nearly $4 billion of that total. Organic fiber, supplements and personal care products accounted for the majority of those sales, reporting nearly 9 percent growth in 2016.“Increasing consumer awareness that what we put on our body is as important as what we put in our body is driving the growth in organic fiber sales, while a growing desire for transparency, clean ingredients and plant-based products is spurring sales of organic supplements and personal care products,” OTA noted. “Organic products of all sorts are now found in the majority of kitchens and households across our country,” said Batcha. “But the organic sector is facing challenges to continue its growth. We need more organic farmers in this country to meet our growing organic demand, and the organic sector needs to have the necessary tools to grow and compete on a level playing field. That means federal, state and local programs that help support organic research, and provide the organic farmer with a fully equipped tool kit to be successful.”
Appetite for Organic Tops $35 Billion
The organic products industry grew to be a $35-billion business in 2013, reported the Organic Trade Association (OTA) in May 2014.
The organic products industry grew to be a $35-billion business in 2013, reported the Organic Trade Association (OTA) in May 2014. The reported 11.5% increase from 2012 is the fastest growth rate in the last five years. The OTA expects this growth will continue over the next two years. “Consumers are making the correlation between what we eat and our health, and that knowledge is spurring heightened consumer interest in organic products,” said Laura Batcha, executive director and CEO of OTA.
Organic products are comprised of foods, flowers, fiber, household products and pet food. Organic food sales, which accounts for about 92% of total organic sales, were $32.3 billion in 2013. Organic food sales broke the $30 billion mark in 2012 and, according to the OTA, now accounts for more than 4% of the $760 billion in annual food sales in the United States. While total foods sales have averaged an annual average growth of 3%, the growth rate of organic food sales has grown an average of 10% every year since 2010.
Although continued growth is expected in the sale of organic products, there is still confusion among consumers about what organic means. The message of organic can be lost next to the presence of “natural” products and the long debate around GMOs, cautioned the OTA.
“The entire organic industry needs to rally around helping consumers better understand and appreciate all the values that certified organic brings to the table,” said Batcha. “Consumer education is critical to grow the organic industry,” she added.
Major Food Brands Dump the Junk
Over a dozen major food brands and restaurant chains have announced they are removing ingredients deemed unhealthful by an increasingly discerning public.
Talk about a domino effect. One after another, from Pepsi to Panera, over a dozen major food brands and restaurant chains this past year have announced they are removing artificial colors, flavorings and preservatives, GMOs, antibiotics, and other ingredients deemed unhealthful by an increasingly discerning public from their products.
Driven by increased demand from Millennials for cleaner, healthier products, along with growing sales of natural and organic products across a broad spectrum of the US population – not to mention constant pressure by consumer advocacy groups and high-profile food activists – iconic food brands are dumping the junk and striving for a more health-oriented image.
One sign: people just aren’t drinking soda and eating junk food burgers as much as they used to. With fizzy soda sales on a long-term decline and 63% of Americans telling a Gallup survey last year that they are actively avoiding traditional soda drinks, “we’re operating in a very challenging environment,” Coca-Cola CEO Muhtar Kent told analysts in a conference call in late April, reported the Washington Times.
For the quarter ending April 3, 2015, Coca-Cola reported a profit of $1.56 billion, or 35 cents a share, down 3.8% from the previous year. Global sales increased a modest 1%, the first growth in quarterly revenue in more than two years, reported the Washington Times.
After emerging rival Chipotle Mexican Grill – which announced recently that its menu is now non-GMO – reported that comparable-store sales were up 10.4% during the first quarter of 2015, McDonald's reported a 2.6% decline in same-store sales in the company's 14,000 U.S. locations during the quarter. Additionally revenue for McDonald’s for the quarter dropped 12% from $6.7 billion the previous year to just under $6 billion.
So, with mounting pressure from social media, consumer organizations, online petitions, and high-profile activists including GMO Inside, Vani Hari of Food Babe, Robyn O’Brien of Allergy Kids and others, combined with declining sales and profits for traditional junk foods, longstanding brands are retooling their recipes. Whether of their own volition, as in the case of Chipotle, or under pressure, recent examples of companies getting on board the clean label bandwagon include the following.
Chipotle says Adios to GMOs Making good on a two-year promise, Chipotle Mexican Grill announced in late April 2015 that it had removed all ingredients made with genetically modified organisms from its menu. The company's corn and flour tortillas were among the hardest items to change, but now they’re non-GMO, thanks to Chipotle's collaboration with suppliers to plant non-GMO corn varieties, reported NPR. GMO soybean oil in the chips and taco shells was replaced with non-GMO sunflower oil. However, Chipotle still uses meat from animals that may be fed on GMO corn or soybeans, admits CEO Steve Ells, though the company wants to change that, but it may take several years, he said.
Panera Drops Long List of Artificial Ingredients Artificial sweeteners, preservatives, flavor enhancers, and 150 other artificial ingredients are being nixed from Panera’s menu by the end of 2016, the restaurant chain announced in May 2015. Panera uses more than 450 ingredients to prepare its food in nearly 1,900 locations across the US. In a move to protect its sales and remove one-third of its ingredients, the company created a "No No List" based on research and standards developed by Johns Hopkins, the Environmental Working Group, the Natural Resources Defense Council and various European governments, reported the New York Times. Panera said it worked with both its suppliers and their suppliers, who themselves were not always certain whether their products contained the ingredients on Panera’s list.
Kraft Mac & Cheese Goes Au Natural Moms across the country breathed a collective sigh of relief when Kraft Foods, after an onslaught by bloggers and food activists, announced in April 2015 that it would remove artificial colors and preservatives in the U.S. version of its iconic Macaroni & Cheese by January 2016. Kraft says it will replace synthetic colors — including Yellow 5 and Yellow 6 — with naturally derived colors such as paprika, annatto and turmeric – the way it's been formulated in Europe for years.
PepsiCo Removes Aspartame from Diet Pepsi; Adds Sucralose Instead PepsiCo announced it is removing aspartame, first sold under the brand name NutraSweet, from Diet Pepsi by August 2015 in response to customer feedback, and replacing it with sucralose, another artificial sweetener known as Splenda. Aspartame is "literally the number-one complaint we've heard from diet-cola consumers as to why they're drinking less and less diet cola, " Seth Kaufman, SVP for PepsiCo, told NPR.
Coca-Cola: No More Fire Retardant in Soda Coca-Cola and PepsiCo both announced in May 2014 they would remove brominated vegetable oil (BVO) from all of their beverages. BVO was first patented as a flame retardant, but has also been added to many American sodas for decades, reported health expert Dr. Mercola. “Regardless of what the official statements say, the companies made this move due to consumer outrage started with an online petition…from a college student that gained over 200,000 signatures,” reported the Motley Fool.
Hershey’s Kisses Goodbye to GMO The Hershey Co. announced in February 2015 it intends to remove genetically modified ingredients from Hershey’s Milk Chocolate and its iconic Kisses – first introduced in 1907 – by the end of 2015. The company will replace sugar derived from GMO sugar beets with cane sugar, and will switch to a non-GMO soy lecithin as it pledged to focus on "simple ingredients." It will also remove the emulsifier polyglycerol polyricinoleate (PGPR) and artificial vanillin in its products. Hershey in December 2014 said it would work to replace high-fructose corn syrup in sweets including York Peppermint Patties and Almond Joy candy bars. "We are specifically looking to formulate new products and transition existing products to deliver on no artificial flavors, no synthetic colors, no high fructose corn syrup and to be gluten free," Hershey said in a statement.
Nestle Makes Over Butterfinger, Baby Ruth Not to be outdone by the Hershey Co., Nestlé USA also announced in February 2015 it would remove artificial flavors and synthetic colors, including Red 40 and Yellow 5, from all of its chocolate candy products. By the end of 2015, more than 250 products and 10 brands, including Butterfinger, Crunch, and Baby Ruth candy and Nesquik powdered drink mixes, will be free of artificial flavors and certified colors, said the company. Products will begin appearing on store shelves by mid-2015, and will be identified by a “No Artificial Flavors or Colors” claim featured on-pack.
McDonalds: No Human Antibiotics in Chicken McDonald's will stop selling chicken treated with antibiotics that are also used in human medicine, the company announced in March 2105. The phase-out will occur over the next two years, as the world's largest restaurant chain works with its suppliers, which include poultry giant Tyson Foods (see below). Chickens used by McDonald's will still be treated with antibiotics that aren't used in human medicine, reported Time Magazine. The announcement came three days after McDonald's new CEO Steve Easterbrook took over leadership of the company, when he pledged to reform McDonald's into a "modern, progressive burger company."
Tyson Removes Human Antibiotics in Poultry Operations Tyson Foods announced in April 2015 that it is striving to eliminate the use of human antibiotics from its U.S. broiler chicken flocks by September 2017. The country’s largest producer of poultry will report annually on its progress, beginning with its fiscal 2015 Sustainability Report. In October 2014, Tyson said it no longer uses antibiotics in its 35 chicken hatcheries. The company still uses antibiotics in chicken feed “when prescribed by a veterinarian to treat or prevent disease” and said the “vast majority of the antibiotics” it uses aren’t used in humans. The company said it is researching “alternative treatments and protocols that will eventually eliminate the application of any antibiotics used in human medicine from poultry feed,” Food Safety News reported. Tyson offers a completely antibiotic-free chicken under its NatureRaised Farms brand.
Subway Bows to Food Babe Over Additive After food blogger Vani Hari, also known as Food Babe, launched an online petition in early 2014 to convince Subway to remove a controversial food additive, the sandwich giant announced plans to phase it out of its fresh-baked breads, reported NPR in February 2014. The additive, azodicarbonamide, is often used by the commercial baking industry to bleach flour and condition dough. However, as the petition points out, the compound has been phased out in many other countries, and the World Health Organization has linked it to asthma in people. A spokesperson for Subway told NPR, "We are already in the process of removing azodicarbonamide as part of our bread improvement efforts, despite the fact that it is a USDA and FDA approved ingredient."
Dunkin’ Donuts Ditches Nanoparticles Responding to concerns that a whitening agent, titanium dioxide, is a nanoparticle that may be unsafe for human consumption, Dunkin' Donuts announced in March 2015 that it will no longer use the ingredient – also used in sunscreen and paints – in its donuts. The decision came after an environmental advocacy organization said it found titanium dioxide nanoparticles in the white powdered sugar used in Dunkin' Donuts products, based on independent laboratory tests in 2013. As You Sow, an Oakland-based group, said the small size of nanomaterials might make them more likely to enter cells, tissues and organs and cause damage. The FDA does not have a broad stance on products containing nanomaterials, saying it would make safety judgments on an individual basis, reported the Los Angeles Times. Dunkin’ Donuts said the titanium dioxide used in its products "does not meet the definition of 'nanomaterial' as outlined under FDA guidance," nonetheless it is making the change to remove the chemical from its donuts.
Yoplait Reduces Sugar Content by 25% Following Yoplait's removal of high fructose corn syrup and its discontinued used of dairy with rBGH/rBST growth hormone in 2009, the leading yogurt brand announced in May 2015 that it is reducing the sugar content in its single serve yogurt cups by 25%. The move is the latest in brand owner General Mills' efforts to provide consumers with more healthful, category-leading products, reported Food Ingredients First. In order to reduce the sugar, Yoplait included additional milk and changed the natural flavorings, the company said, adding that Yoplait contains no artificial sweeteners or flavors.
Target Repositions Food Business Toward Healthier Options Target in April 2015 named Anne Dament the company's top executive to lead the repositioning of its food business. Dament brings nearly 20 years of grocery and consumer packaged goods experience to the role, including as a buyer at Supervalu and Safeway, said Target in an April 2015 press release. Target’s food reinvention, expected to take place over the next 18 months, will emphasize six key categories that resonate most with its customers: better-for-you snacks, coffee and tea, premium sauces and oils, specialty candy, wine and craft beer, and yogurt and granola. It will also expand the availability of natural, organic, locally grown and gluten-free choices to fit customers' wellness-focused lifestyles, the company said. Work on the reinvention is underway, with the most significant changes slated to arrive in stores in 2016.
Wendy's Goes Veggie Columbus, OH, is the test market for a new black bean veggie burger at Wendy’s, the nation’s third largest burger chain, reported the Columbus Dispatch on May 18, 2015. While petitioners at Change.org had been asking the company, founded by Dave Thomas in Columbus in 1969, for a veggie burger option, Wendy’s had been testing its black bean burger at two locations in Columbus. White Castle, another Columbus-based burger chain, tested a veggie burger last year, purchasing its patties from a New Jersey company, Dr. Praeger’s Sensible Foods, which also makes a line of frozen veggie-burger products. White Castle made the veggie burger a permanent menu item in March 2015. Additionally, in late April 2015, Wendy’s announced that it added an organic tea – Honest Tea’s Tropical Green Tea – to its permanent menu. The product began rolling out nationally in May. “While the move may seem insignificant, it’s huge for the organic food movement – taking organic beyond the world of specialty and natural foods restaurants and into the absolute mainstream of fast-food America,” said USA Today.
Editor's Note: This blog was originally published on the website/blog of our friends and colleagues at Agrisystems International: http://agrisysintl.com/major-food-brands-dump-the-junk/.
Steven Hoffman is Managing Director of Compass Natural Marketing, providing brand marketing, PR, social media, and strategic business development services to natural, organic and sustainable products businesses. He is the former Editorial Director of Natural Foods Merchandiser Magazine and co-founder of the LOHAS Journal.
The Heroes: Companies Supporting GMO Labeling
In Colorado, while multi-billion-dollar, multinational corporate opponents have pumped nearly $17 million into the state to try to defeat Prop. 105.
Source: Pexels
In Colorado, while multi-billion-dollar, multinational corporate opponents have pumped nearly $17 million into the state to try to defeat Prop. 105, the 2014 ballot initiative to label GMO foods, the grassroots Yes on 105 side has raised just under $1 million in campaign funding. The Yes on 105 campaign is using these funds - contributed by hundreds of Colorado residents, and a small group of leading natural and organic products companies and consumer advocacy groups - tohelp educate voters and get out the yes vote via newspaper and digital advertising, an extensive volunteer network, phone banking, and social media - and to endure a withering onslaught of negative, deceptive television advertising and direct mail from the No on 105 side.
Put these brands contributing to consumer transparency and truth in labeling on your shopping list. Support the brands that have stepped up to contribute to Colorado's grassroots Prop. 105 Ballot Initiative to Label GMO Foods against a $17 million onslaught by Monsanto, Pepsi, Coke, Kraft, Dow, Dupont, Hershey, J.M. Smucker, Mead Johnson, Abbot Nutrition, Conagra and others.
Compass Natural Marketing and its principal Steven Hoffman have served as the lead fundraiser and industry communications specialists on behalf of Yes on 105, Right to Know Colorado - GMO. For more information, visit www.righttoknowcolorado.org.
The Heroes: Support these Companies that Contributed to Yes on 105 to Label GMO Foods in Colorado*
More than $200,000 Food Democracy Now! Presence Marketing/Dynamic Presence
$50,000 - $100,000 Annie's Inc. Organic Consumers Fund
$10,000 - $50,000 Boulder Brands Lundberg Family Farms Dr. Bronner's Applegate Farms Clif Bar Nature's Path UNFI Hain Celestial Group Alliance for Sustainable Colorado
$5,000 - $10,000 Amy's Kichen Frontier Natural Products Co-op KeHE Distributors Nutiva Stonyfield Farm
$500 - $5,000 Daiya Foods Food & Water Watch Justin's .Organic Lucky's Market Door to Door Organics Suja Food Babe Living Maxwell New Belgium Brewery Snack Out Loud Red Idea Group Front & Center Marketing Vital Farms Good Earth Natural Grocery Lucky's Market
Special Thanks Natural Grocers by Vitamin Cottage Whole Foods Market Chipotle Mexican Grill
Acknowledgments Alex and Ana Bogusky Steve and Grace Hughes Organic & Non-GMO Report The Crunchy Grocer Alfalfa's Market Compass Natural Marketing Journeys for Conscious Living Durango Natural Foods Co-op Jared Polis John Foraker Joshua Kunau and Jeremy Siefert, GMO OMG Robyn O'Brien Quinn Popcorn Silver Hills Bakery The Organic Dish Meetings and Events Sandy Gooch and Harry Lederman
Visit our Donors Here: http://www.righttoknowcolorado.org/donors Visit our Endorsers Here: http://www.righttoknowcolorado.org/endorsements
Join a growing number of supporters of GMO labeling. To contribute to Right to Know Colorado to Label GMOs, visit www.righttoknowcolorado.org to make an online donation. For corporate or individual contributions, contact Steven Hoffman at steve (at) compassnatural.com.
Please help us win in Colorado, for all Americans.
* Sources: Right to Know Colorado, www.righttoknowcolorado.org Colorado Secretary of State Elections Division, reporting as of Oct. 27, 2014, http://tracer.sos.colorado.gov/PublicSite/SearchPages/CommitteeDetail.aspx?OrgID=25377
GreenMoney Journal: GMOs in Our Food: Do We Have a Right to Know?
Test your knowledge on GMOs in food! Compass Natural's Steve Hoffman and Nikki McCord of McCord Consulting co-authored an article in the Fall 2013 edition of GreenMoney Journal: "If you’re anything like us, you’re probably enjoying a snack while checking your email and catching up on your blogs. If you’re eating a conventionally produced snack – that is, one that is not Certified Organic or Non-GMO Verified – chances are it could be full of GMOs. Check your packaging. Did you see the label informing you of this fact? Most likely you didn’t because companies are not required to tell you whether or not GMOs are in your foods. And yet, GMOs are in about 80% of commonly processed foods. So what are GMOs and what is their impact on human and animal health and the environment? . . ."
Open Source Branding and the Consumer Values Evolution
At the Epicenter” Green Entrepreneurship Speaker Series Will Feature Brendan Synnott, Co-founder of Bear Naked Granola and EVOL Foods.
Photo: Compass Natural
“At the Epicenter” Green Entrepreneurship Speaker Series Will Feature Brendan Synnott, Co-founder of Bear Naked Granola and EVOL Foods, and Founder of Healthy Lifestyles Investment Group Revelry Brands, on Dec. 5, 2012, Boulder, CO.
After building a $65 million brand, Bear Naked, in just five years in his mid twenties, entrepreneur Brendan Synnott took time off after selling the company in late 2007 to travel and participate as a contestant on television’s pioneering reality show Survivor, and to think about what was next. At the time, Bear Naked held the number one spot in market share in the granola category in more than 10,000 retail stores nationwide.
Now based in Boulder, Synnott is applying the expertise and insights garnered as the former CEO of Bear Naked, plus the strength, stamina and determination demonstrated in Survivor to invest in and partner with innovative natural, organic and sustainable businesses. Synnott’s group Revelry Brands, established in 2009, has invested in such successful emerging brands as EVOL Foods, Siggi’s Yogurt, Only Natural Pet Store, Data Garden and PACT Organic Apparel, where the company’s slogan is “Change starts with your underwear.” Synnott serves as Chairman of Pact, and he stays actively involved in guiding Revelry’s portfolio of companies.
Brendan will share his concept of “open source branding,” or how companies can benefit from building transparency and dialogue with a rapidly evolving, values-based, healthy lifestyles consumer “At the Epicenter” on Wednesday, December 5, 2012, 5:30 – 7:30 pm, at the offices of the Sterling Rice Group in downtown Boulder. A welcoming reception will precede the CEO armchair-style interview and interactive discussion. For information and to register, visit http://brendansynnottattheepicenter.eventbrite.com. For press passes or more information, please contact Shoshana Romer, shoshana@compassnaturalmarketing.com.
At the Epicenter, now in its third year, is an educational series for entrepreneurs in the rapidly growing market for natural, organic and sustainable products in the Boulder/Denver region. The series is produced by Best Organics Inc. and Compass Natural LLC, and hosted by the Sterling Rice Group and the University of Colorado Deming Center for Entrepreneurship, and has featured speakers including Bill McKibben, founder of 350.org; John Elstrott, Chair of Whole Foods Market; Horst Rechelbacher, founder of Aveda and Intelligent Nutrients; Sandy Gooch, founder of Mrs. Gooch’s Natural Foods Markets; and Arran and Ratana Stephens, founders of Nature’s Path Foods.
Secrets of Open Source Branding Revealed “Open source branding is where the relationship between a consumer and a producer unites around transparency and dialogue,” says Synnott, a graduate in economics from Vanderbilt University and a former staffer in the talent department at Saturday Night Live.
“Today’s consumers want to eat food they can learn about, talk about, and understand; they want to drive cars that communicate their care about the environment; they want to eat at restaurants that show they understand the importance of local and sustainable practices. It just so happens that this shift in a consumer’s emotional connection with brands is also going to help save our planet. We continue to believe that investing in forward-thinking consumer brands is a way to improve the negative impact humans have on the environment while helping us to benefit economically from this wave of change,” he says.
“We are excited to add such an accomplished and idea-filled young entrepreneur and investor to our roster of distinguished alumni of the At the Epicenter series,” says Seleyn DeYarus, CEO of Best Organics, a leading organic gift and brand promotions company based in Boulder and co-producer and host of An Evening at the Epicenter. “Brendan’s presentation will inspire young entrepreneurs as well as seasoned business leaders to see possibilities for business to have a positive impact beyond the bottom line.”
At the Epicenter Sponsors Sponsors include the following leaders in natural, organic and sustainable business. Gold Sponsors:Whole Foods Market, Sterling Rice Group, and University of Colorado Deming Center for Entrepreneurship; Silver Sponsors:New Hope Natural Media, Mychelle Dermaceuticals, Earth Balance, Glutino Foods, Udi’s Gluten Free, and Transition Colorado; Bronze Sponsors:Pax World Investments, Bay State Milling, St. Claire's Organics, and EKS&H; Supporting Sponsors:Bonterra Organic Vineyards, Eco-Products Inc., Chinook Book, Care2, Boulder Valley Media Alliance, Shine Restaurant, and Boulder Ice Cream.
About At the Epicenter At the Epicenter is an ongoing series of interactive talks for entrepreneurs and business and community leaders in the $300-billion market for natural, organic, sustainable and socially responsible products and services. At the Epicenter is produced by Best Organics Inc., a leading organic gift basket and brand promotions company based in Boulder, CO; and Compass Natural LLC, a leader in LOHAS communications, public relations, strategic marketing and business development. For information, visit www.americasbestorganics.com, gifts@bestorganics.com, tel 303.499.ORGANIC (6742). For information about Compass Natural Marketing, visit www.compassnatural.com, info@compassnatural.com, tel 303.807.1042.
Natural, Organic Foods Tracking 10% Growth
We are pleased that Compass Natural Marketing was included as a source in New Hope 360's 2012 annual Market Overview of the natural and organic products industry.
Source: Wikimedia Commons
We are pleased that Compass Natural Marketing was included as a source in New Hope 360's 2012 annual Market Overview of the natural and organic products industry. Here's an excerpt, below. For the full story, click here.When it comes to natural products hotbeds, Louisville, Ky., doesn’t make the top 10—or maybe even the top 40. But last year, the five Rainbow Blossom Natural Food Markets in the Louisville area posted 9 percent sales growth. Even more impressively, the stores—which range from 3,500 to 7,500 square feet—did this while competing with a Whole Foods Market, a new Trader Joe’s and a Vitamin Shoppe for the city’s natural products audience.
The fact that eight naturals stores—soon to be joined by two more: Earth Fare and another Vitamin Shoppe—could thrive in an area that Rainbow Blossom Chief Operating Officer Summer Auerbach diplomatically calls “not the most progressive” illustrates the post-recession strength of the natural and organic industry. Indeed, Natural Foods Merchandiser’s 2012 Market Overview Natural Retailers Survey shows that nationwide, sales of all natural and organic products (including dietary supplements) within all channels jumped 10 percent to nearly $91 billion last year.
The natural channel (which includes independent and chain natural products retailers) continued to generate the lion’s share of sales in 2011, growing 9 percent to $37 billion. Although growth in the natural channel was better last year than in 2010 (when sales expanded just 7 percent), mass market retailers—particularly club stores—remain hot on the heels of the naturals stores and, in fact, grew their sales of natural and organic products by 11.2 percent, to $36 billion, in 2011, according to NFM’s Market Overview survey.
Conducted in collaboration with Nutrition Business Journal, a sister publication, NFM’s research shows that growth of natural and organic products sales in all channels is being fueled by a variety of factors: consumers who are becoming more educated about health and environmental issues; foods that taste as good or better than their conventional counterparts; consistent, favorable media attention about the merits of natural and organic products; the growing foodie and farm-to-table movements; and even the rising popularity of yoga.
“The number of natural products shoppers has increased so much that stores like Whole Foods are now opening in secondary markets like Basalt, Colo. [located near Aspen],” says Steven Hoffman, managing partner of Boulder, Colo.-based consulting firm Compass Naturals. Hungry and well capitalized for expansion, Whole Foods is on track to open between 24 and 27 new stores during its fiscal year 2012 and another 28 to 32 in fiscal year 2013, the company’s co-CEO Walter Robb told analysts in February. (Read more...)
Source: Natural Foods Merchandiser, June 2012, published by New Hope Natural Media.
Baker's Dozen: Top 13 Trends in Sustainable Food and Agriculture
We at Compass Natural wanted to highlight some of the trends we see on the horizon in sustainable food and agriculture as 2010 comes to a close.
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Boulder, CO (December 13, 2010) - Joining other prognosticators, we at Compass Natural wanted to highlight some of the trends we see on the horizon in sustainable food and agriculture as 2010 comes to a close. You may have a trend or observation you wish to share – please do. Contact me at steve@compassnatural.com or tel 303.807.1042. Happy Holidays and all the best for a healthful and prosperous new year. Steven Hoffman, Compass Natural
1. The Economy
Wall Street may be recording record profits, but the job market is lagging. As such, hard-pressed consumers will continue to look for value. Core healthy lifestyles shoppers will be more discerning in their budgets for organic, and low-income families are particularly strained in finding healthful food alternatives. With people looking to save money, coupon redemption is up 25% this past year, and coupon use in the natural sector reflects a similar growth trend. Also, redemption rates for Internet coupons, while still small, account for the fastest growing segment in the business. Private label product sales also increased from 15 percent of total food sales before the recession to 18% this past year, according to research firm Booz & Company, which also reports that the new frugality may be here to stay, as consumers continue to feel they are on shaky ground. The natural and organic companies that can communicate value as well as benefits will continue to grow in a tough market.
2. Social Networking
Word of mouth travels fast in the social network, good or bad. Take an active role in making it good. Stay engaged on Facebook and Twitter and build your brand among friends and followers. Sustainable consumers tend to be early adopters on the web and build strong online communities. “Friend” and “follow” other like-minded Facebookers and Twitterers – they’ll help you spread the word – and stay connected professionally on networks such as Linked In. See what other companies are doing on their Facebook pages. Learn WordPress, a relatively easy, open source blog publishing program, or get someone on your team who knows how, and contribute regularly to your blog. Tie it all in with your website and traditional public relations and marketing campaigns. All these efforts can go far in getting your brand to show up higher in the Google searches. Try to keep up!
3. Chemicals in the Environment
The cumulative effects of chemicals in our environment, food and packaging are impacting our public health. The average school age child is walking around with an estimated 10-13 pesticide residues in their bodies every day. However, when they switch to an all-organic diet, the residues literally disappear from their bodies, according to studies by Emory University and Harvard School of Public Health. Additionally, the President’s Cancer Panel in 2010 reported on “pre-polluted babies” born with as many as 300 man-made chemicals in their umbilical cords. Families are reacting: 41 % of parents report they are buying more organic foods today than a year ago, up significantly from 31% reporting organic purchases in 2009, according to a joint survey released this month by the Organic Trade Association and Kiwi Magazine. A growing body of research also points to links between pesticides and alarming rises in the rates of childhood autism, ADHD, diabetes and obesity. Additionally, synthetic nitrogen fertilizer runoff is primarily responsible for the Dead Zone in the Gulf of Mexico and elsewhere. GMO contamination threatens native plant species and promotes the emergence of superweeds. As a result, demand for sustainable food production that protects health and the environment will continue to grow, and consumers are willing to pay a premium for organic products, but only up to a point (see #1).
4. Sustainable Packaging
Did you hear the latest research about fast food and deli paper wrap and microwave popcorn bags that leach cancer-causing chemicals into our food? These stories will continue to emerge, and packaging is facing challenges on two fronts: reducing package waste in landfills; and keeping chemicals from leaching into food. Many natural and organic products companies are leading the way toward more sustainable packaging, including BPA-free cans, and also innovating on reduced package content and recyclable and compostable packaging alternatives. Concerned over squeeze pack packaging, Justin’s Nut Butter, a small Boulder-based business, recently convened a sustainable squeeze pack summit, bringing competitors, industry leaders and packaging specialists together to explore ways to develop more sustainable packaging in consumer products. This is a great opportunity for the industry to work together and serve as a pacesetter for the food and consumer products industry at large.
5. Organic Gardening and Urban Agriculture
As Michelle Obama leads the way with the White House organic garden, Victory Gardens are back, except they’re organic. And it’s helping people get in touch with their food, as well as giving them access to fresh, local produce. The organic sector of the lawn and garden (L&G) market has experienced significant growth over the last few years, and major garden centers are expanding the shelf for natural and organic L&G products. Market research firm Packaged Facts in January 2009 estimated that the organic L&G sector reached $460 million in retail sales in 2008, a gain of 12% over 2007. Farmers Markets and CSAs (Community Supported Agriculture) are growing fast, and small-scale urban farms are also on the rise, thanks to the efforts of organizations like Growing Power, linking inner city teens and communities with working urban food gardens utilizing vacant city lots. Many natural and organic products companies are already helping support similar causes.
6. Organic and Climate Change
The global food system is estimated to account for one-third of the world’s total greenhouse gas emissions, says Anna Lappe, author of Diet for a Hot Planet. Yet, organic farming has the potential to help reduce agriculture’s impact on global warming. According to Dr. David Pimentel, author of Food, Energy and Society, organic agriculture has been shown to reduce energy inputs by 30%. Organic farming also conserves more water in the soil and reduces erosion. Healthy organic soils tie up more carbon in the soil, helping to reduce CO2 levels in the atmosphere. An October 2010 study in California’s Central Valley concluded that organic farming significantly reduced GHGs, while conventional agriculture increased GHGs in the atmosphere. Additionally, the National Sustainable Agriculture Coalition reported, “Sustainable and organic agricultural systems offer the most resilience for agricultural production in the face of the extreme precipitation, prolonged droughts and increasingly uncertain regional climate regimes expected with rapid global warming.”
7. Slow Money
According to Woody Tasch, founder of Slow Money, a nonprofit formed to catalyze the flow of investment capital to small sustainable food companies and agriculture, the innate value of investing in sustainable food comes not only in the form of monetary return, but also in benefits to individuals and communities—“more organic farms, more organic food available locally, and a more robust local economy,” he writes in the Winter 2010 GreenMoneyJournal. In the fast-pitch world of Buy Low and Sell High, Slow Money is developing vehicles that enable small investors to invest in local sustainable food businesses. In two years, Slow Money has grown to 1,200 members and six regional chapters, and has facilitated the investment of more than $3 million into a number of local sustainable food businesses. In 2010, Slow Money established the Soil Trust to pool small donations into a philanthropic investment fund dedicated to small food companies and soil fertility, and is working with socially responsible investing companies to further open the playing field for everyday citizens who want to make sustainable food investments. See www.slowmoney.org.
8. Animal Rights
The beauty without cruelty movement has been around for a while, helping to usher in a generation of body care products that have not been tested on animals. Now, we enter a new era of animal rights and consumer advocacy that is critical of the inhumane, intensive confinement conditions in which most animals bred for food find themselves. However, beginning on January 1, Whole Foods Market will require that all meat sold to it will be rated under new animal welfare standards. The world’s largest retailer of natural and organic products created Global Animal Partnership as a nonprofit third party certifier to establish ratings, conduct inspections and administer the standards. Kudos to Whole Foods: This is a huge step in increasing consumer awareness of animal rights, and also in presenting more humane options to the public.
9. GMO Debate
This is an issue that isn’t going away. In fact, I would venture that the organic industry is pretty much at war with the biotech and pesticide companies that seek to dominate the market with GMO agriculture, the genetic drift from which is a threat to organic seed stock and organic crops. While proponents insist that GMOs are the only way to feed the world, opponents claim that GMO farming has passed the point of diminishing returns. While pesticide use was reduced in the first three years after GMO crops were introduced in the mid ‘90s, herbicide use has actually increased over the past 13 years by nearly 400 million pounds as a result of GMO agriculture, according to The Organic Center. GMO yields are not matching what was promised, and superweeds are emerging due to the overuse of glyphosate, the herbicide mainly used in GMO agriculture, hence the need for more herbicide. With numerous food allergy and health concerns also emerging, many manufacturers are turning to the Non-GMO Project to verify that their products are GMO free. Consumers are highly confused over this issue, due to the rhetoric from biotech companies that have co-opted the term “sustainability.” And the onslaught continues: the FDA currently is evaluating genetically engineered salmon—the first potential GMO animal for commercial consumption—and also a GMO apple that doesn’t turn brown when cut open. If you are not choosing organic or if it doesn’t say non-GMO on the label, chances are your food contains GMOs, as it is estimated that 80% of conventional grocery products now contain GMO ingredients.
10. Sustainability
“Sustainability is not an exact science, but it is a strategic decision,” says Jeanne von Zastrow, senior director of industry relations and sustainability at the Food Marketing Institute (FMI). And it’s more than how the food was grown; it’s also about a company’s energy and water use, transportation, equipment, supply chain management, packaging and waste – garnering efficiencies in these areas and elsewhere promotes sustainability and cuts costs. Many natural and organic products companies are leading the way but could do more, and FMI also is developing sustainability resources for the food industry. While what consumers say and do regarding sustainability may be a dichotomy, health conscious and environmentally aware consumers will continue to develop brand loyalty by identifying with your green efforts.
11. Organic Acreage Grows
Compared to overall acreage dedicated to conventional agriculture production, the amount of land under organic production is still very small. But it is growing. In the first wide-scale survey of organic farming, published this past year, USDA counted 14,540 U.S. farms and ranches that were under organic production, comprising 4.8 million acres of land in 2008. Certified U.S. organic cropland acreage between 2002 and 2008 averaged 15% annual growth. Globally, organic acreage grew by 9% in 2008, with more than 35 million hectares in organic production. The highest increases came in Latin America and Europe, according to the Research Institute of Organic Agriculture (FiBL) in Switzerland.
12. Local and Fair Trade
As my friend and colleague Joel Dee likes to say, “We are all local.” At Edward & Sons, Joel and his team work with small-scale organic producers all over the world. One example is the organic hearts of palm project in Peru’s Amazon basin. Working with local and indigenous people, Edward & Sons helped create a sustainable harvesting and processing program in Iquitos, a small city 125 miles from the source of the Amazon, helping to protect the rainforest and bring sustainable jobs to an impoverished region. This type of partnership supports local economies and environments around the world. As consumers respond to the ‘local” trend, they are understanding that local means not only supporting farmers and producers in their own area, but also choosing organic and fair trade products that support lo cal economies all over the world. This is a story the sustainable food industry was born to tell, so if you are going to import organic products from China or elsewhere, make sure you’ve got a sustainable, fair trade and maybe even a cultural story behind it and not just because it’s cheaper (see #2).
13. The Real Cost of Cheap Food
One of the best articles I’ve read on this subject was the cover story of Time’s Aug. 31, 2009, edition, appropriately entitled The Real Cost of Cheap Food. In it, author Bryan Walsh reports: “The U.S. agricultural industry can now produce unlimited quantities of meat and grains at remarkably cheap prices. But it does so at a high cost to the environment, animals and humans. Those hidden prices are the creeping erosion of our fertile farmland, cages for egg-laying chickens so packed that the birds can't even raise their wings and the scary rise of antibiotic-resistant bacteria among farm animals. Add to the price tag the acceleration of global warming — our energy-intensive food system uses 19% of U.S. fossil fuels, more than any other sector of the economy. And perhaps worst of all, our food is increasingly bad for us, even dangerous,” says Walsh, referring to rising obesity rates and food safety issues in America. Plus, if you haven’t seen it, check out the 5-minute video of Birke Baehr’s talk, What’s Wrong With Our Food System, at the TEDx Next Generation conference in Asheville, NC. This 11-year-old young man, who wants to be an organic farmer, speaks clearly about what is wrong with conventional agriculture, factory farming and the industrialized food system, and what people can do to change it. “Some people say organic or local food is more expensive, but is it really? With all these things I’ve been learning about the food system, it seems to me that we can either pay the farmer, or we can pay the hospital,” says an astute Birke.
Bonus Trend: Young Organic Farmers
For years, young people have been leaving the farm. Today, the USDA estimates the average age of the American farmer is 57, with more than 25% over age 65. However, while the trend is too new to quantify, USA Today reports that there is an emerging movement in which young people, “most of whom come from cities and suburbs,” are taking up organic farming on small-acre farms throughout the country as an “honorable, important career choice.” Three factors have made these small organic farms possible: a rising consumer demand for organic and local produce, a huge increase in farmers markets nationwide, and the growing popularity of community-supported agriculture (CSA) programs, says USA Today. The National Young Farmers' Coalition is a new organization created by and for young and beginning farmers in the United States, and a soon to be released documentary, The Greenhorns, explores the lives of America’s young sustainable farming community. Also, an international volunteer organization, Worldwide Opportunities on Organic Farms, since 1971 has been connecting young workers with organic farms all over the world, where they gain hands on experience in sustainable farming. The invested energy of youth is a promising bonus trend indeed for the future of sustainable food.
About Compass Natural - Your Guide to the Natural, Organic & LOHAS Market
Compass Natural LLC, established in 2002 and based in Boulder, CO, brings 30 years’ experience in natural and organic products sales, marketing, public relations, communications, research, event planning, and strategic industry guidance to businesses with interests in the $290 billion market for natural, organic, sustainable, and socially responsible products and services. Visit www.compassnatural.com or call 303.807.1042.
© 2010 Compass Natural LLC.
Article also appears in:
http://www.rodale.com/organic-trends
http://www.organicconsumers.org/articles/article_22193.cfm
http://www.sustainablefoodnews.com/story.php?news_id=11241
http://blog.slowmoneyalliance.org/?p=524
http://www.perfumerflavorist.com/flavor/trends/111810244.html
http://www.goodfoodworld.com/2010/12/top-organic-food-and-farming-trends-in-2011/
http://www.naturalhomemagazine.com/blogs/blog.aspx?blogid=78&tag=2011%20trends