Beverage Industry

Meeting Demand for Organics

October 1, 2005

Meeting Demand for Organics
By RENEE PAS
Supply and development issues top the list of concerns for organic ingredients
Organic products are gaining acceptance in the marketplace and ingredient companies are taking notice. Datamonitor expects the organic market to continue to grow roughly 20 percent annually, compared with the rest of the food industry’s growth, which is estimated around 3 percent.
Although the organic product base is much smaller, some ingredient companies are very optimistic about organics and are aligning their ingredient portfolios to match the anticipated increases.
Kenneth A. Gawley, director of marketing for Milwaukee-based Chr. Hansen, attributes a key portion of organic growth to a greater desire among consumers to manage their health while still maintaining the convenience of regular shopping routines.
“The average consumer doesn’t necessarily want to have to go to a specialty health food store to get good-for-you, natural or organic-type products if they don’t have to,” he says. As a result, he says beverage companies are among those aggressively allocating resources to get organic products on the shelves of the major grocery chain stores. Chr. Hansen started marketing a line of organic ingredients, which includes organic colors and sweeteners, this summer.
Bruce Kirk, president of ingredient company Corgins, Laconia, N.H., also notes a greater prevalence of organic products in grocery stores. “The crossover has already started,” he says.
Of course, organic products mean organic ingredients and with that comes a number of issues.
Supply, development issues
One key issue to be aware of with organic ingredients is guaranteeing consistent supply. “Availability is the tough one,” says Kirk. “Since formulating organic versions is expensive, the last thing you want to hear is ‘We’re out.’”
Corgins’ product line includes organic sugar and organic cocoa and cocoa products. Kirk says securing a consistent supply of high-quality, food-grade ingredients is becoming increasingly difficult as demand for organic ingredients continues. That could, in turn, cause variations in taste for the final product.
The use of organic ingredients can “significantly impact the product development process, as well as the finished product and shelf life,” adds Chr. Hansen’s Gawley.” Two examples he points to are colors and flavors. National Organic Program (NOP)-compliant ingredient standards limit colorants to non-synthetic sources only — in effect, natural colors. Likewise, flavors must be derrived from non-synthetic sources, meaning made without synthetic solvents and carriers or artificial preservatives.
“A product developer needs to be aware that they can only be considering products for their formulations that meet these criteria, and therefore will need to allow for any effects on quality or shelf life from using such ingredients,” Gawley says.
But organic does not necessarily mean shorter shelf life for beverages, Gawley points out. He says he is asked that question a lot and attributes it to a preconceived notion about the whole organic segment as being less stable than conventional products.
Certification assistance
While some ingredient companies have gone the route of organic certification for ingredients, others are finding ways to assist their clients with gaining organic certification for products rather than certifying specific ingredients.
DSM Nutritional Products, Parsipanny, N.J., does not certify any of its ingredients as organic. Leonard Johnson, director of food technical services, says organic is “a very different kind of beast.” He says his company has not undertaken organic certification for its ingredients because the large number of ingredients in its portfolio would make the task daunting.
Johnson does report seeing an increase in customer requests around organics. “It seems to be quite a growing area, and while it may still be a small part of the food industry, it seems to be growing quite rapidly.”
The company does assist customers in gaining organic certification for beverages. Johnson says DSM works with customers seeking organic status by providing them the information they need to go to state agencies and submit products as organic. One of the more common questions he gets is about GMO (genetically modified organism) status, since an item usually won’t gain organic approval if a GMO-ingredient is used. Other recurring questions that arise around the organic issue are whether ionizing radiation has been used and whether sewage sluge is used in crops. Johnson doubts organic status would be approved if either is involved in the ingredient supply.
Archer Daniels Midland Co. (ADM), an agricultural processor with headquarters in Decatur, Ill., offers an organic version of NutriSoy, a whole soybean powder that can be used to create soymilks and other soy beverages. It is a micro-milled powder that is billed as being versatile and bland-flavored, in addition to being organic and non-GMO.
Philip Fass, ADM global business manager for dairy and beverage, describes NutriSoy as a low-flavor profile in a healthy soy product. “It delivers holistic attributes of soy without the soybean flavor,” he says.
Soy beverages are certainly one of the more common beverage product categories for organics, although there are more organic beverages surfacing in other segments. Ingredient companies report interest from beverage companies making smoothie-type drinks, chilled juices and juice drinks. There is also speculation that organics will start to show up in the near future in horchatta-type drinks, coffee and chocolate-based beverages.
“We have only scratched the surface,” Gawley says. BI
Natural vs. organic
A primary difference between natural and organic products is the degree of regulation to which they are subjected. Declaring a product organic requires a paper trail that can be clearly followed, while the guidelines for natural ingredients and beverages not nearly as defined.
The organic industry is regulated by the National Organic Program under the United States Department of Agriculture. Products marketed as organic must meet one of the following NOP standardized labeling criteria (percentage based on weight of organic ingredients): “100 percent organic;” “organic,” which means it contains 95 percent organically produced ingredients; or “made with organic ingredients,” which means it must have at least 70 percent organically produced ingredients. Any product with less than 70 percent organic ingredients can identify the organic ingredients in the ingredient statement and information panel.
There is no formal agreed-upon definition of “natural” ingredients, although Bruce Kirk, president of ingredient company Corgins, based in Laconia, N.H., believes the consensus on natural is that the product has nothing artificial in it. He adds that because of the stringent process required to label a product organic, consumer confidence with organics is very high. “It is light years ahead of where natural is.”