Natural Products Insider

MAR-APR 2018

INSIDER is the leading information source for marketers, manufacturers and formulators of dietary supplements, healthy foods and cosmeceuticals. Since 1997, INSIDER has been serving the needs of the global nutrition industry.

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44 INSIDER March/April 2018 value for that consumer group," she noted. "We do receive a wide range of requests to develop organic products such as CSDs [carbonated soft drinks], cocktail mixers, coffee beverages, teas, juices and fl avored sparkling waters, so organic is certainly spreading to other beverage categories as well." Dembitzer said her company has received more requests for non-dairy, plant-derived organic proteins—the supply of which doesn't always meet demand. Organic botanical extracts can also be challenging to source, and an ingredient such as organic vanilla extract can be cost-prohibitive due to vanilla supply shortages and the resulting surge in prices. Organic Challenges Companies looking to offer organic products may face unusual challenges, particularly if a formulation requires an ingredient that doesn't have an organic alternative. "A fi nished product must contain at least 95 percent organic-certifi ed ingredients by weight in order to obtain the USDA organic seal," explained Guy Affolaby, Imbibe's manager of regulatory affairs. "The remaining 5 percent of the ingredients have to be organic-compliant or fall within the allowable synthetic ingredients listed by the National Organic Program (NOP). There are several guidelines an ingredient must align with to be considered organic-compliant. Common ingredients like citric acid, vitamins, minerals, juice concentrates, purees and botanical extracts are technically allowed to be part of the 5 percent non-organic portion, but their usage level affects the organic calculations." Additionally, Affolaby cautioned products making a 100 percent organic claim must not only contain ingredients certifi ed 100 percent organic, but also be processed with equipment that meets the organic requirements. Carolina Innovative Food Ingredients (CIFI) encountered the latter challenge fi rsthand. In mid-2016, the company received NOP certifi cation for its organic range of sweet potato ingredients. According to Paul Verderber, vice president of sales, two of the biggest adjustments his team faced were "the amount of upfront planning required and the need for more segregation within our processing facility." He elaborated, "If the processing facility also produces conventional ingredients, there need to be measures in place to ensure that none of the conventional product intermingles with the organic product." Organic integrity can be a point of contention, particularly when it comes to foreign suppliers. Patrick Hart, specialty grain merchant, Ardent Mills, pointed out, "As demand for organic products outpaces supply, the difference is often supplemented by foreign imports, which can increase the chance of fraud in making organic claims." However, Saumil Maheshvari, business development manager, Orgenetics Inc., noted not all American brand holders can keep things close to home. "I understand and empathize with the local farming/ sourcing movement, but some crops that are common in the markets can only be grown organically and effi ciently in certain climates of the world." Affolaby concurred, offering advice for imports. "You might be able to fi nd the organic ingredient you're looking for from non-domestic sources, but some countries have a different standard for what constitutes organic. Therefore, non- domestic ingredients need to be fully vetted with proper documentation to ensure that they are organic-compliant in the United States," he said. Supply & Demand Currently, no challenge is greater to organic than ensuring adequate supply. "There is general agreement that we need more organic farmers to meet growing organic demand," Batcha surmised. "The market continues to experience double- digit growth, and has for most of the past two decades. We are currently at 5.3 percent of U.S. food sales, yet less than 1 percent of farmland. Major retailers continue to expand their organic offerings to meet increasing consumer demand. This dynamic creates opportunity for U.S. farmers to take on more organic production." If only it were that easy. "It takes three years to get new farmland USDA Organic Certifi ed," Maheshvari advised. "It is a time- and capital-intensive process. A farm that is undergoing organic certifi cation cannot sell plants as organic, even if they are adhering to the NOP rules and regulations during that time frame. This creates a challenge for farmers and suppliers, as they must deal with organic farming costs, but conventional/non- organic selling price points. One of the results of this squeeze is going to manifest with higher ingredient pricing." Maheshvari maintained many people understand "the general differences between synthetic ingredients vs. organic ingredients," and that "USDA Organic supply chains are monitored, audited and regulated more tightly than their synthetic counterparts," suggesting this contributes to general consumer acceptance of premium price points for certifi ed organic products. Where the disconnect comes in, he stated, is in educating people about supply chain issues, particularly those faced by farmers. "Consumers would better be able to justify spending at premium price points once they understand these challenges," he noted. Transitional Assistance An education gap also exists regarding certifi ed transitional organic crops. According to Mark Stavro, senior director of marketing, Bunge North America, "Farmers transitioning their land from conventional to organic now have the opportunity to sell their produce as Certifi ed Transitional through the Certifi ed Transitional program." He said Bunge Food & Beverage: Organic Supply Chain Organic and Sustainable Sourcing 2018 When it comes to sustainability and transparency, there's a big difference between tossing around buzzwords and truly incorporating these tenets into business practices. And as shoppers grow evermore discerning about the products they purchase, only those brands that really walk their sustainability and transparency talk will earn consumer trust. Learn more about organic and sustainable sourcing in the Organic and Sustainable Sourcing 2018 mini guide from New Hope Network. Scan Here

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