Supply And Demand

April 1, 2006
/ Print / Reprints /
/ Text Size+

Supply And Demand
Sarah Theodore
The Natural Products Expo, held last month in Anaheim, Calif., has become one of the best places to see where product trends are heading. Not only are the exhibitors at the show a particularly creative bunch, but as the natural and organic market continues to grow, the products on display are becoming more relevant to the mainstream. In fact, much of the talk at this year’s show revolved around just how mainstream organics have become and what it means to the industry.
Top of mind was the announcement that Wal-Mart intends to double the number of organic products it carries. Safeway, too, has gotten into organics in a big way with its new “Lifestyle” concept, and natural foods retailer Whole Foods says it believes it can open 25 to 30 more stores a year into 2010. On the surface, this seems to be exactly what the industry has been shooting for. More organic products mean more organic farms, which suits environmental goals, and it offers a much bigger opportunity to sell products.
But it also raises a number of questions about “authentic” vs. “fabricated” organic, whether companies that previously shunned the Big Business way of life could stomach working with giant retailers, and even whether organic supply can meet the demand these retailers could create.
Proponents say a retailer like Wal-Mart could have the same effect on organics that the company has had in other areas — forcing down prices to make products more accessible, and inciting more companies to adopt environmentally sustainable practices. Critics fear such retailers would use organics only as a marketing ploy, and their lobbying muscle might be used to create weaker organic standards.
Even before Wal-Mart’s announcement, the question of supply had become an issue for some segments. Unlike producers that can start up quickly to meet demand, it takes several years of organic practice for a dairy or farm to gain certification. The supply of organic milk, for example, is especially tight these days, with newspaper reports of consumers in some markets calling ahead to see if organic milk is in stock and reserving it for pick-up.
In addition, many of the most dedicated organic companies have fundamental disagreements over issues such as worker compensation and what they believe to be fair prices for products. Some of these companies go to great lengths to showcase their Fair Trade participation, through which they pledge to pay fair wages and prices for products from other countries, and they are wary of making exceptions in their own country
Of course, nothing says these companies must do business with Wal-Mart or any other mainstream retailer. But it is interesting to note how quickly the issues around organics have moved beyond simply trying to gain acceptance and visibility. Just as the image of organic has gone from hippie to mainstream, so too have the issues these companies must grapple with if they hope to have a sustainable business. BI
Sneak Peek
Special packaging issue
Category focus — Wine & spirits
Beverage R&D — Energy ingredients
Packaging — Package design
Distribution — Driver meetings
The Top 100 Beverage Companies
Category Focus — Sports drinks
Packaging — Secondary Packaging
Distribution — Avoiding road hazards
Logistics — Routing hardware and software

 Did you enjoy this article? Click here to subscribe to Beverage Industry.  

You must login or register in order to post a comment.



Image Galleries

Dinner with Tequila Don Julio

Diageo is taking its Tequila Don Julio brand on the road this summer with a rolling Airstream Speakeasy mobile craft cocktail bar. The team stopped in Chicago on July 29 to share some specialty tequila cocktails paired with food from Chicago restaurants Honey Butter Fried Chicken and The Radler as well as dessert venues Black Dog Gelato and Baker Miller. (Photos by Jennifer Haderspeck)

9/17/14 2:00 pm EDT

The Path to New Product Success: Navigating the latest trends for new beverage development

By attending this webinar, you will learn about the top trends and how they fit into the CPG market, which channels are influencing new products and technology, how Packaging fits into your product development, and ways you can use innovation to increase sales.


Maintaining beverage dispensing equipment

Iuliana Nita, Saint-Gobain Performance Plastics global marketing manager of food and beverage, offers her insights about ensuring sanitary performance of beverage dispensing equipment in foodservice applications. She also will offer some tips about choosing the right kind of tubing to handle acidic beverages.

Beverage Industry Magazine

BI September 2014 cover

2014 September

The September 2014 Beverage Industry includes a cover story on our Wholesaler of the Year, The Odom Corp., as well as articles about single-cup and iced coffees, cconvenience store growth, vegetable flavors, and more. Check it out today!

Table Of Contents Subscribe

Beverage Insider eNewsletter

Are you an Insider? Subscribe to Beverage Industry’s weekly e-newsletter to receive news headlines, new product information and magazine highlights.   

Coffee Segments

Which coffee segment will be impacted the most by coffee bean increases?
View Results Poll Archive


Cleaning-in-Place: Dairy, Food and Beverage Operations, 3rd Edition

This book addresses the principles of cleaning operations, water supply issues and the science of detergents and disinfectants.

More Products


Beverage Industry Webinars are an easy, effective and convenient way to get educated and informed on the latest industry trends and topics. All Webinars are FREE unless indicated. For more information, check out our Events page!


facebook40 twitter    youtubelinkedgoogle+ icon 40px