April 1, 2005
Organics pervade the dairy aisle.
by Pamela Accetta Smith
The organic segment of the food industry continues to expand, and dairy is no exception. Sales of organic-food products in the United States grew 17 percent to $12.7 billion in 2003. In fact, organic products account for 2.3 percent of total U.S. food sales.
And processors are making the most of a growing demand for foodstuffs that are at least perceived as being a cut above the rest in quality and nutritional benefit.
Indeed, price keeps many consumers from purchasing organic foods, but people are proving more willing to pay extra if they have confidence in the integrity of organic standards. That said, to be concerned about health has become a trend that many consumers consider a creditable investment. In response to consumers’ desire to lead a healthier lifestyle, many dairy processors have entered the organic market, formulating a variety of better-for-you products. Organic cheeses can even be linked to this niche, in that such products are often touted as being as healthful for the body as they are for the land. To that end, larger brands like Horizon Organic and smaller organic cheesemakers continue to try to expand distribution of organic cheeses into mainstream supermarkets.
It’s true official standards have been set for some time now and organic products continue to generate more and more consumer dollars, but being organic isn’t so simple. In order to sell products labeled as organic in the United States, food manufacturers must adhere to a strict set of regulations. Before the implementation of the new standards, which went into effect in October 2002, many organic products were certified by agencies that could use their own standards in determining whether a product was organic. Now, organic processors must be certified by an agency that has been accredited by the U.S. Department of Agriculture.
Before products can be labeled organic, a USDA agent fully inspects farm and factory to make sure all the rules necessary to meet USDA organic standards are followed. Companies that handle or process organic food must be certified as well. The name and address of the government-approved certifier must also appear on all packaged products that use organic ingredients.
But what does it really mean to be organic?
For one, organic food is grown without relying on synthetic chemical pesticides. Organic farming is supposed to help protect our air, soil, water and food supply from potentially toxic chemicals and other pollutants. Organic farming also conserves natural resources by recycling natural materials and encourages an abundance of species living in balanced, harmonious ecosystems. Organic farmers are required by the National Organic Standards to minimize soil erosion, implement crop rotations and prevent contamination of crops, soil or water by plant and animal nutrients, pathogenic organisms, heavy metals or residues of prohibited substances.
Since the recombinant bovine growth hormone (rBGH) was introduced, a limited percentage of the U.S. milk supply has come from cows injected with this artificial hormone to stimulate increased milk production. Because milk from many different cows is routinely co-mingled in bulk tanks at most of the nation’s dairies, even some non-organic dairy products probably contain at least trace levels of rBGH.
In response to rBGH’s introduction into the milk business, many processors that wish to avoid artificial hormones require written affidavits from their milk suppliers that no rBGH was injected into the cows, and label the milk as rBGH-free. About 10 percent of fluid milk sold in the United States is labeled as being free of artificial hormones, but must include a disclaimer that the FDA has found no difference in milk from cows treated or not treated with rBGH. In fact, the Hudson Institute’s Center for Global Food Issues has launched the “Milk is Milk” campaign to stress this point, arguing that some processors are improperly trumpeting a perceived superiority of milk from rGBH-free cows.
Meanwhile, other processors have capitalized on the growing market of organic milk, which is guaranteed to be rBGH-free because organic certification prohibits the use of artificial hormones. Since the introduction of rBGH, sales of organic milk have skyrocketed.
Processors on Board
It goes without saying that Londonderry, N.H.-based Stonyfield Farm has been at the helm of the organic movement for years. One of the largest U.S. yogurt manufacturers, the company takes credit for creating such famed products as YoBaby, Planet Protectors, YoSqueeze, YoSelf, O’Soy and Drinkables. The company has built a national reputation for its leadership in organics, natural nutrition and corporate environmental responsibility, and is one of the most visible brands in the natural products segment.
Stonyfield Farm’s recently introduced Light Yogurt Smoothie is fat-free and naturally sweetened with less sugar and calories than traditional smoothies. Using the all-natural sweetener erythritol, found in grapes and melons, the healthful beverage is the first light yogurt product to achieve reduced sugar and calories without the use of aspartame or sucralose. It’s available in strawberry, wild berry and peach flavors.
La Farge, Wis.-based Organic Valley Family of Farms began in 1988 with just seven farmers who shared a love of the land and a belief that a new, sustainable approach to agriculture was needed for family farms and rural communities to survive. With more and more family farms threatened with extinction, these farmers set out to create a solution. That solution has grown into America’s largest independent cooperative of organic farms and one of the largest organic brands on the market.
Determined to stay independent and true to its founding mission, Organic Valley announced its best-ever year in January with $208 million in sales and a growing total of 689 organic farmers in 20 states. “Organic Valley’s cooperative approach to organic agriculture guarantees our nation’s struggling family farmers a lifeline for survival and sustained growth in an era when consolidation is consuming all sectors of our economy, especially agriculture,” says George Siemon, chief executive officer and one of the 17-year old cooperative’s founding farmers.
Defying the trend, Organic Valley farmers were paid in excess of 25 percent more than their conventional counterparts in 2004, the co-op reports, receiving a premium of $4.16 per hundredweight. Sales for the cooperative were the highest in its history, jumping 33 percent over the previous year ($208 million in 2004 and $156 million in 2003).
This rate of growth surpassed that of the food industry (2 percent) and the organic industry (20 percent), the co-op reports. In 2005, Organic Valley expects to continue this course with projected sales of $259 million.
The age range of Organic Valley’s farmers — 21 to 78 — also offers hope for the future, coop leaders say. At a time when the average age of an American farmer is about 55 (according to the 2002 Farm Census), Organic Valley is increasing its numbers of young farmers. More than 49 percent of cooperative members are now 45 or younger. “Organic Valley is committed to building a new generation of farming leadership,” says Travis Forgues, 31, an Organic Valley dairy farmer who milks 80 cows on more than 160 acres in Alburg, Vt. “It is the new generation of young people getting into organic farming today who will have to fight to protect the purity of the organic mission and the health of our environment in the years to come. The future of food is in our hands.”
Longmont, Colo.-based Horizon Organic, a division of Dallas-based Dean Foods Co., boasts a full line of certified organic milk and other dairy, egg and juice products. The company says it strongly believes in the importance of organic agriculture, not only to provide the best-tasting, highest-quality dairy and juice products, but also to encourage a safe future for the planet.
One of its top priorities, the company says, is the humane treatment of animals. Cows that supply Horizon Organic with milk are not treated with antibiotics or growth hormones and are fed only 100 percent certified organic cottonseed, hay and grain. The cows also have access to clean water, fresh air, pasture and exercise.
The company owns and operates a 3,885-acre organic farm in Idaho (recently the target of a complaint by the Cornucopia Group, a family-farm advocacy group, as reported in Dairy Field last month) and a 465-acre dairy farm in Maryland.
Horizon Organic also purchases about two-thirds of its organic milk from family and independent certified-organic dairy farmers across the country. Through the company’s feed and milk supply purchases, it reports helping to support more than 200,000 acres of organic farmland.
Horizon Organic launched a line of kid-friendly smoothies in August 2004, made with organic nonfat organic yogurt and organic fruit juices. The beverages are available in four flavors — Wild Berry Blast, Strawberry Banana Splash and Tropical Fruit Punch — and deliver calcium and 100 percent of the recommended daily intake of vitamin C per serving.
“Consumers are taking a closer look at how their food choices impact their overall health and well-being,” Doug Radi, the company’s smoothie brand manager, recently told Beverage Industry magazine. “If it tastes good, kids will eat it. [But] tasting good and being good for you are not mutually exclusive. Choosing organic food is a great way to reduce exposure to added chemicals because organic food is produced without the use of antibiotics, added growth hormones and dangerous pesticides.”
A key point of difference in the Horizon Organic smoothies, the company says, is that they are enriched with NutraFlora, a natural fiber that enhances calcium absorption. And as a prebiotic, NutraFlora also helps increase the level of good bacteria in the digestive system and promotes overall digestive health.
To keep the organic message alive, Horizon Organic is launching a national education initiative dubbed the “Year of Organic Good Beginnings.” The campaign aims to promote “the positive role that organic food plays in the overall health and well-being of consumers.”
The program includes a grant to a nonprofit group — the National Healthy Mothers, Healthy Babies Coalition — to develop and distribute a brochure on organic foods and nutrition. Horizon Organic will also work with the Organic Trade Association’s “Go Organic for Earth Day” campaign to provide educational information to teachers and retailers. In a back-to-school campaign this fall, the company will focus on promoting organic foods in children’s lunch boxes.
Petaluma, Calif.-based Clover Stornetta Farms’ organic milk facilities are certified by QCS (Quality Certification Services), a USDA-accredited certifier. Under the procedures of certification, each step of processing and handling is evaluated for compliance with the highest organic standards. From the pooling of milk from organic farms, through pasteurization, storage, packaging and delivery; to organic milk retailers and food-service outlets, organic methods are documented.
This popular regional dairy recently introduced organic chocolate milk quarts to its line of dairy products. Cocoa used in the drink is organic natural and organic dutched (alkalized to enhance flavor and color). The product is sweetened with organic crystallized cane sugar and contains no unnatural stabilizers or preservatives.
In 2003, sales of organic juices failed to live up to expectations primarily because, market research suggests, consumers already felt good about drinking juice in the first place and didn’t feel it was necessary to delve into organic products. Organic Valley seemed to edge past this slump. After a bit of a rocky start, the company’s juice sales continue to grow and it remains committed to the organic juice category.
Responding to consumer demand for ways to increase calcium in the diet, Clermont, Fla.-based Uncle Matt’s Organic Inc. has introduced a 100 percent pure Florida organic orange juice with 30 percent of the recommended daily value of calcium and 25 percent RDV of vitamin D. The company, which purports to have the first such nationally branded product on the market, says one serving of this juice provides as much of these nutrients as a glass of milk.
“It’s good timing because vitamin D is getting great publicity about its added health benefits, in particular helping to fight some forms of cancer. This is the juice that’s good for the entire family, from growing kids to mom on the go and even grandmothers,” says Matt McLean, chief executive officer. “The vitamin D helps with the absorption of calcium, making our juice a better choice than many ordinary calcium-added OJs.” m
The industry gets on board with the non-dairy craze.
While much of the dairy industry considers soy to be a four-letter word, many processors are getting behind the non-dairy ingredient with product formulations that stay on point with the ever-growing, functional-food trend.
An example of this latest proclivity, is the rising popularity of soymilk. For example, supermarket and mass merchandise sales of Boulder Colo.-based White Wave’s Silk Soymilk, which accounts for more than 70 percent of the refrigerated soymilk category, grew almost 20 percent in 2003.
According to industry reports, soy beverages are one of the fastest-growing segments in the functional beverages industry. In 2003, sales of soy beverages reached $622 million and are expected to rise to $1.78 billion by 2010.
Soymilk, once a product only found in natural and health food stores, is now a staple in the fluid dairy aisle. Of course, there is much debate in the dairy industry about whether a soy product should be called “milk.”
White Wave, a division of Dallas-based dairy giant Dean Foods Co., is also appealing to the younger set with its Silk Soymilk products. The company’s soy beverage is now available in shelf-stable 6.5-ounce cartons. Silk Kids packs are available in vanilla, chocolate and strawberry flavors. Featuring a variety of playful animals, the soymilk packs are great for school lunches or as an on-the-go snack.
White Wave also offers Silk Light, a lighter version of its original soy beverage. The company says it does not use soybeans produced with the use of biotechnology and receives statements from all suppliers to guarantee no such ingredients are used.
In March, Naperville, Ill.-based Quality Chekd Dairies entered the functional beverage category with the launch of its first-ever soymilk product. Quality Chekd Organic Soymilk is available in half-gallon cartons in original and vanilla flavors.
“Quality Chekd is constantly looking for ways to satisfy customer demands for healthy, good-tasting products,” says Molly Murphy, marketing and sales director for Quality Chekd. “Our new organic soymilk is an excellent beverage choice for consumers looking to increase their consumption of healthy foods or for people with diet restrictions or lactose intolerance. Soymilk provides a healthy dose of protein as well as 30 percent of the recommended daily value of calcium.”
Organic Valley Family of Farms, La Farge, Wis., also has a soymilk line. Certified organic, it’s available in original, vanilla and strawberry flavors.
Experts agree that soy is being used more regularly because of its increasing reputation as an ingredient with innate health benefits.
According to Stagnito’s New Product Magazine, soy protein’s heart-health benefits have won widespread recognition since the Food and Drug Administration (FDA) approved a health claim in 1999. The health claim states that 25 grams of soy per day may help reduce risk of heat disease. New research offers important information that the oil produced from soybeans may likewise play an important role in heart health.
Versatility is also one of the reasons soy is on the rise in many new healthier products. Manufacturers are manipulating it in a variety of ways, which makes it an ingredient that can be used across categories.
Last year, for example, White Wave introduced Silk Live! — a live cultured, fruit-flavored smoothie. With six active probiotic cultures and 19 vitamins and minerals, Silk Live promotes digestive health and helps boost the immune system. The flavorful drink is made with natural, organic soy. Available in raspberry, mango, strawberry and peach flavors, the beverage contains 35 percent of the recommended daily value of calcium and is 100 percent dairy and lactose free.
Certified Organic Standards
After 10 years of research and public comment, the National Organic Standards Board (NOSB), under the auspices of the U.S. Department of Agriculture, released the final draft of federal guidelines for Organic production in October 2002. Now, all agricultural products labeled organic must be in compliance. The law sets strict regulations for organic farms, livestock operations as well as handling and processing operations.
Prior to these rules, there were more than 40 private organizations and some states the provided certification. These certifying agents can continue certification of organic products sold in the United States as long as they are accredited by the USDA.
When a grower or processor is certified organic, they must meet or exceed all regulations including but not limited to the following:
mOrganic farms must use organic or untreated seeds and apply no prohibited materials for three years prior to certification; implement organic plans with proactive soil building, conservation, nutrient management, pest management and crop rotation systems; and keep and maintain written organic plans detailing their management practices.
mOrganic livestock operations must implement sound management to promote animal health and well being; provide outdoor access for all animals and access to pasture for ruminants; use 100 percent organic feed; and not use antibiotics, growth hormones or GMOs.
mOrganic processing operations must implement proactive sanitation and facility pest management practices; and not use ingredients that are genetically engineered, grown with the use of sewage sludge, GMOs, irradiated or produced with volatile synthetic solvents.
mProducts cannot be labeled organic that have not actually been certified. All authorized organic products will carry the USDA seal. The seal assures the product was created without toxic and persistent chemicals, in accordance with strict organic standards.
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