December 1, 2004
Ingredient suppliers prepare to meet increasing demand for organics
By JOANNA COSGROVE
Health food stores used to be the destination of choice for customers desiring organic beverages. But over the past five years, the desire for organic beverages has grown so strong they’ve gone mainstream, outgrowing the shelves and cold cases in the health food stores where they originated. From juices and concentrates to sweeteners, beverage ingredient suppliers are working to build and broaden their organic product offerings.
“The whole organic beverage category shows double-digit projections,” comments Otis Curtis, director of marketing at Chr. Hansen in Mahwah, N.J. “It’s my understanding that the entire organic beverage category is worth in the neighborhood of nearly $2 billion dollars. Organic soymilk alone is valued at about a billion dollars and is expected to hit $2 billion by 2010. Organic juice drinks and bottled juices follow behind soy, pulling down about 20 percent of the billion-dollar figure and they are expected to almost triple by 2010.”
“Considerable work is being done to increase the scope of ingredients available for use in organic products,” says Jonathan P. Martin, organic business development manager at Wild Flavors Inc., Erlanger, Ky. “The increased interest in organic products is a relatively recent market phenomenon, and it has taken some time for ingredient manufacturers to develop and commercialize quality organic ingredients.”
Martin attributes organic growth to retail category managers’ desire to increase the selection of organic beverages on store shelves. “The growth in the organic market as a whole has been quite substantial in recent years, and beverages seem to be the logical progression in this area,” he says. “If there is a hindrance to this category’s growth, it would be the immature/ underdeveloped supply chain for organic goods and raw materials.”
While organic soy beverages are the top dollar earners in the category, organic juices are by and large the most accessible organic beverage medium. Martin says his company is being inundated with requests for reasonably priced organic fruit concentrates and quality organic-compliant fruit flavors. “The appeal of these beverages would be to have quality organic juice-based beverages at a more competitive price,” he says. “The healthy, good-for-you image of organic is still fighting the premium that must be paid for those products. The manufacturer that is able to create a cost-effective organic beverage without sacrificing quality will be the clear winner of this category.”
To that end, Wild Flavors recently launched more than 100 high-quality, competitively priced, organic-compliant fruit flavors for beverages.
Purac America Inc., a mineral supplier based in Lincolnshire Ill., has also experienced an upswing in organic ingredient requests, according to Ellis Hogetoorn, the company’s senior market development specialist. “Not all the ingredients that beverage manufacturers would like to use are currently available as certified organic,” she says. “Hence, they might have to resort to using some organic ingredients and labeling their end-product as ‘made with organic ingredients’ as opposed to the product being [wholly] organic.”
Hogetoorn adds that organic juices are beginning to take a cue from mainstream juices with regard to calcium fortification, inquiring about how they can add calcium and retain the juice’s organic qualifications. “Consumers who buy organic foods don’t necessarily obtain sufficient amounts of calcium, so there is a market for calcium-fortified organic juices as well,” she says. “The Code of Federal Regulations lists non-agricultural (non-organic) substances allowed as ingredients in processed products labeled as ‘organic’ or ‘made with organic.’ This list includes lactic acid. The USDA has stated that sodium and potassium lactate are also allowed. GDL (D-gluconic acid delta-lactone) is also on this list with the following provision: production by oxidation of D-glucose with bromine water is prohibited.”
Hogetoorn says that Purac’s domestic and European products aren't currently certified organic, but they are on the National Organic Program’s (NOP) list of ingredients that could be used in products “made with” organic ingredients.
Organic Sweeteners & Soy
For a finished product to be labeled organic, it must be 95 percent organic in composition. Sweeteners are an often-overlooked component. “Sweeteners are a macro ingredient,” says Chr. Hansen’s Curtis. “There’s a demand for certified sweeteners — if they weren’t certified, use levels could exceed 5 percent, possibly voiding the organic status.”
All of Chr. Hansen’s sweetener products — pure cane Homemaid Molasses, Blackstrap TCT Molasses, Maltoline ER Malt Extract, SPD Honey, Brown Rice Syrup and Oat Extract — are classified as “all natural” ingredients and can be labeled as “all natural” on ingredient declarations. Maltoline Malt and Brown Rice Syrup are also available in organic forms.
Curtis says the biggest opportunities for organic sweeteners are in premium beverages and soy-type beverages. “The industry is still in its infancy, with respect to the utilization of soy,” he says. “I don’t think the industry has fully embraced the opportunities in terms of flavors creativity and variety for what we traditionally think of as a natural organic soy beverage the way it has in the juice and carbonated categories.”
Soy-based beverages have always seemed to have a loyal niche following. But in recent years, soy beverages have gotten a boost from lactose-intolerant consumers and other consumers — typically females aged 23 to 45 — who simply want to experience the nutritional benefits associated with soy consumption. “Health is the leading factor [in soy’s popularity]. The consumer is looking for soy due to the health messages around soy, but organic is also important because it is a ‘seal of purity,’” says Phil Fass, global business manager, dairy and beverage markets at Archer Daniels Midland Co. (ADM), Decatur, Ill. “This consumer wants to have products she can be sure do not contain pesticides, growth hormones [or] chemicals. The consumer also relates taste to an organic product — they believe that organic products deliver a more natural or ‘real’ flavor. There is also the belief that organic products are ‘healthier’ than processed foods, [making organic] a truly holistic choice.”
To meet the need for organic soy beverages, ADM offers NutriSoy Organic Whole Soybean Powder that is suitable for use in soymilk, soy beverages and drinkable yogurt. Produced in a dedicated processing facility, the powder is created by spray-drying whole soybeans, giving it a composition very similar to the natural whole soybean. NutriSoy is characterized by a pleasant taste, without the typical “beany” taste associated with soy products. Its self-stabilizing, microfine particle size disperses easily, delivering a smooth mouthfeel with no gritty texture. It also contains nutritionally significant properties such as protein isoflavones, phytosterols and prebiotic sugars. BI
Organic Production and Handling Standards
The National Organic Program (NOP) is a marketing program housed within the USDA Agricultural Marketing Service. The NOP developed national organic standards and established an organic certification program to ensure organically labeled products meet consistent national standards.
In short, the standards impact all aspects of production, including agricultural operations, handling and production processes, and strictly prohibit the use of genetic engineering, ionizing radiation, and sewage sludge in organic production and handling. As a general rule, all-natural (non-synthetic) substances are allowed in organic production and synthetic substances are prohibited. The National List of Allowed Synthetic and Prohibited Non-Synthetic Substances, a section in the regulations, contains specific exceptions to the rule.
Although the NOP regulations are a good starting point, there are some gray areas that are still being clarified. “It takes a little bit of knowledge that can be given to you by your individual certifying agencies, but you like to feel that that the legislation is clear enough, and I’m sure over time it will get clearer,” comments Otis Curtis, director of marketing at Chr. Hansen. “The certifying agencies are swamped because there’s been such a flurry of activity. One of the challenges to someone new to this market is finding the certifying agency that can support the development questions they might have.”
For more in-depth information about the National Organic Program’s regulations, log onto the NOP’s Web Site ams.usda.gov/nop. A secondary resource for organic rules, regulations and support associations is the Organic Trade Association (OTA). The OTA’s Web site is ota.com/links/resources.html.