SPECIAL REPORT: Certifying The Highs and Lows of Organic Product Development

11 Jul 2016 --- The global organic food and drink market is reportedly worth US$64 billion, growing at an average rate of about 12.8% each year. However, as NutritionInsight discovers, developing organic products is more successful in some countries than in others. Organic producers employ a wide range of methods in order to develop their products. These depend on location, agriculture, financial strength of local players, as well as resident infrastructure. 

However, regulations must always be adhered to:

Regulation & standards
For most nations, it is unacceptable to use the term "organic" on a product if it does not meet the standards set in the law and regulations. However, as organic food production is a self-regulated industry, there can be oversight in some countries.

The bench mark for organic food policy and certification of organic food is said to come from Denmark. The European Organic food policy is based on the 1987 Danish Model, when the first Danish Action Plan was implemented to support and stimulate farmers to switch from conventional food production systems to organic ones. 

In the UK, the Soil Association is the leading organic certifier. Angus Oliphant, founder of Miniscoff children’s organic food range — which is Soil Association Organic certified — explained to NutritionInsight: “The certification process is well supported, and since we are exclusively organic, relatively straightforward.”

“Being certified organic not only ensures we know where our ingredients come from, but that they are grown and produced as naturally as possible and to the highest standards of welfare and sustainability. No other certification provides anywhere near the same transparency — and therefore trust.”

Growing organic
Organic agriculture and production is developing rapidly around the world. However, the number of producers may be higher than records suggest as some countries (especially in Africa) report only the numbers of companies, projects, or grower groups, and not the number of individual producers.

Australia has the biggest area of land for growing organic products, followed by Argentina and the US.

Although the US has 2.2 million hectares of organic land, demand for organic is outstripping production in the country. Therefore, organic organizations and market actors are calling for more farmers to convert to organic. Of course, this also opens up opportunities for overseas businesses to export organic produce there.

Latin America has more than 50% of the world’s organic coffee area, and many countries remain important exporters. Manufacture has more than quadrupled since 2004, as coffee is grown more extensively in organic agriculture, and often in association with other crops. Although, few countries invest in innovation, research, and development, findings from a 20-year Mexican study revealed in November 2015 could be a major contribution for the organic coffee sector of the future.

Asia has 3.7 million hectares of land for growing organic products, or about 10% of the total production area worldwide. China has the majority; since the 1990s, their organic agriculture has expanded rapidly due to the growing demand of international trade and production in organic foods. 

India has the most people growing organic products (650,000 according to FiBL, the Research Institute of Organic Agriculture), and official figures state that the country produced approximately 1.35 million tons of certified organic products in 2015-6, including sugarcane, oil seeds, cereals & millets, pulses, medicinal plants, tea, fruits, spices, dry fruits, vegetables and coffee. 

Organic production accounts for 2.4% of European farmland and 5.7% of farmland within the EU. The Ambition Bio 2017 action plan aims to double the proportion of land farmed organically in France by the end of 2017, as well as promoting consumption of organic products — even though the input of organic products in the catering sector has been increasing for years.

Denmark, which has the highest organic market share worldwide, has constantly worked on further developing the organic market by promoting organic food, as well as keeping prices low in comparison to conventional food products by offering farmers subsidies and extra support if they choose to produce organic food. Germany’s continuously high organic market is driven less by supermarkets, and more by the independent retail sector, meaning organic products are more accessible and available.

According to the Soil Association 2016 Organic Report, the UK organic market has continued to grow steadily this year at 4.9%. This compares to a -1% fall in sales in the non-organic food and drink market. As organic product innovation is thriving, many new products are coming into the market.

Product development
In 2015, more than 200 new processors became Soil Association Certification licensees. British company Delightful Organic Ltd, based in Stockport, north west England, produces Soil Association certified organic relishes, marinades and chutneys. “The whole problem with food these days is the amount of additives put into them,” Company Director Gavin Erlam told NutritionInsight. “Our development Chef has drawn on his experience from working in Michelin starred restaurants to create an exciting innovative Organic Vegan range, containing no artificial colorings, flavorings or preservatives. All ingredients are sourced from accredited organic suppliers.” Their new hand-made range of sauces, relishes and pestos is planned to be launched in September 2016.

North London-based vegetarian company Mr. Organic is launching 22 Italian tomato-based and chocolate organic food items this year via a number of distributors. Jenna Greenwood told NutritionInsight: “We harvest all of our tomatoes in Italy, so we work very closely with the local farmers out there.” High financial support for organic producers has played an important role in the rapid production development in Italy. But it is not always easy for organic producers:

Challenges ahead
Oliphant explains: “In the beginning (2013) it was incredibly difficult to find a comprehensive list of potential suppliers. The Soil Association cold only offer us a blanket list of organic licensees from a small holding right up to the biggest wholesalers. But we learnt a lot by going the long way round.”

“Our biggest challenge has been countering the persistent negative perception a) of frozen food, b) of children's food products and c) of ready meals. Triple whammy! None of these are bad ideas on their own of course, just represented by generally very poor products.” 

“Most of our potential customers believe convenience is ALWAYS at the expense of quality and health — therefore they don't believe that options to suit their standards exist for children and home cooking is the only way. We are proof they do — we just need to show enough people and prove it.”

There are also challenges for growers. In the UK, farmers receive the lowest levels of government support in Europe, which leaves them at a competitive disadvantage to other organic producers in the EU. However, diverse weather conditions on farm production can also have a positive impact: this year, plenty of sunshine in the Scottish borders and north east England led to the highest organic cereal yields on record.

Some countries have to depend on importing organic products. In 2014, organic food was just 0.4% of the total food market in Japan, whereas the global average was around 2%. So why was their organic production rate so low? Duco Delgorge, Founder and President of MIE Project Co Ltd, who believes in the benefits of organic food for health and the environment — as well as for business has a theory: ”Most farmers get their finance, materials, pesticides and fertilizers through Japan Agriculture (JA) and it seems to be difficult for farmers to leave JA and go organic. Also, it is cumbersome and costly for farmers to get organic JAS certification, so some do not bother.” However, the Tokyo Olympics in 2020 may herald a brighter future, as organic marketing organizations have started a plan to continue to promote organic products at every Olympic-related event up to 2020.

Organic support
So what else can be done to help organic producers? Every year the international organic industry meets in Nuremberg, Germany at BIOFACH, the World’s Leading Trade Fair for Organic Food, to improve development cooperation and discuss just that. 

Thanks to schemes such as the new Common Agricultural Policy (CAP), from 2015 all EU Member States must use 30% of direct payments to finance farmers for sustainable agricultural practices (‘greening’). There is also help for researchers, advisors, businesses, and NGOs from rural areas to work together on innovative projects. Funding is provided through EAFRD, the European Agricultural Fund for Rural Development and Horizon 2020, the biggest ever EU Research Innovation program.

Participatory Guarantee Systems (PGS) are also gaining more recognition internationally. It is estimated that 123 PGS initiatives are now established on all continents, and another 110 are currently under development. These locally focused quality assurance systems certify producers based on active participation of stakeholders, and are built on a foundation of trust, social networks, and knowledge exchange.

Although several countries are becoming major consumers of organic food and drink, developers are advised to test the market before deciding on developing new organic products instead of their regular product lines. With support, the growing area for organic crops can also be expanded to help increase supply, and serve rising demand for innovative organic products in the world market. Promotion and trade between countries will become smoother with proper standards and policies in place — meaning more organic products for more consumers.

by Kerina Tull