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![]() New Product Opportunities Identified for Organic Foodsat the Winter Fancy Food Show, San Francisco, 2003Prepared by: On October 21, 2002 the United States Department of Agriculture (USDA) implemented a new standardized National Organic Program (NOP). All products whether produced in the U.S. or exported to the U.S. must meet the same USDA standards. These standards define the labeling requirements for all Organic and/or Made with Organic food products. The USDA organic label categories are:
These standards were implemented in an attempt to standardize a hodgepodge of regulations and increase consumer's confidence in the product quality. However, in February, a bill was passed which will allow livestock producers to certify and label their meat organic even if it has been partly or entirely conventional grain. This contradicts the organic philosophy and may confuse the consumer rather ran increasing consumer confidence. Throughout the 1990s the organic foods industry grew annually by more than 20%. In 2001, the organic industry had $7.1 billion in sales in the U.S., approximately $650 (CDN) million in Canada. Tree of Life, the leading distributor of organic, specialty and ethnic foods, predicts that organic market will continue to increase rapidly. In fact, the Nutrition Business Journal forecasts organic food sales to be $14 billion in 2005. As seen in the chart below, fruits and vegetables accounts for 42% of the 2001 organic food sales in the U.S.. The market make-up is similar in Canada. Canadian Natural and Organic Retail Markets written by Rosalie Cunningham provides an in-depth analysis of the Canadian organic market. http://www.agric.gov.ab.ca/food/organic/organic.html) Prior to the trade show, I participated in a San Francisco gourmet store tour. In this tour it was noted that the stores do not feature an organic section but rather have incorporated the food products into the shelves with the remaining products. There was no significant price difference between the organic and non-organic products. Some highlights of the tour are:
At the trade show the organic food market was probably the most prominent food group. Even the cover of the trade show's directory featured organics. There where numerous organic sauces, salad dressing, oils, snack foods, and preserves. One trend I observed was that often manufactures new products lines were an organic extension of their existing line. This was seen in the salsas, tortilla chips, preserves oils and snack foods such as potato chips. There were two exhibitors with organic meat. Organic Valley Family Farms, a Cooperative that sales fresh milk, cheese and organic turkey, chicken and beef products. Green Circle serves both the restaurant and retail market. They have a complete line of portion cut and case ready beef. At the show, Green Circle was featuring three ready to eat products: pot roast, meatloaf and meatballs. Maple Grove Farms of Vermont own the brand Up Country Naturals of Vermont, which has both organic and natural products. This was the only exhibitor I seen with organic baking mixes (yellow cake, devil's food, corn muffin, fudge brownie), pancake mixes and oatmeal cereals. Organic coffee, chocolate and vanilla was also exhibited. The multinational corporation, Quaker Oat has introduced a Mother's 100% natural product line. Other major food corporations that are entering the organic food industry are:
As more multinational corporations enter the organic industry, it will be more difficult for Alberta/Canadian processors to enter and be competitive in the market. Niche marketing and product differentiation will be critical.
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