World Grain - June 2009 - 38

FE
EATU
URE: ORGANIC INDUSTRY SHOWS GROWTH

cause that means more of a market for
organic farmers."
Consolidation and new entrants are
more or less normal phenomena in
any emerging industry, and a growing
number of companies manufacturing
organic food products will encourage the expansion of cultivation on
organic lands. Also, companies of all

sizes have to nevertheless meet organic
standards, even if they have divisions
that produce conventional feedstuffs,
though industry insiders have said that
the entrance of the megacorps who can
pay more for ingredients have driven
up prices.
Also, companies have found that using the "organic" brand is a powerful

PACKAGING MACHINES

......... it's in the BAG

marketing tool. Half of organic producers display the "USDA Organic" seal on
their products, a proportion that rises to
83% for companies with organic sales
of $5 million or more.
"Among companies that don't currently display the seal, 20 percent have
decided to do so in the next three years,"
the OTA states in its executive summary
of a 2008 market survey. "The relatively
large firms (organic sales over $5 million) are more likely than smaller firms
to say that use of the USDA seal on labels
has helped them generate sales of organic
products. However, only about half of the
larger firms are of this opinion."
The growth of the organic food industry has been relatively solid, but the real
gains in 2008 were made in the other
sectors of textiles, personal care, pet
food and flowers.
"The non-food organic business is
growing fastest because the food sector
is more mature, "Haumann said. "The
biggest growth was in organic supplements and clothing." Organics represented 3.9% of all bread and grain sales
in 2008, the OTA reports. Organics reported $22.929 billion in food sales for
2008 and $1.648 billion in non-food
revenue.
OTA's survey indicated that lack of a
dependable supply of organic materials
continues to be an important issue for the
industry, with 41% of producers saying
that undependable supplies of organic
raw materials limit their ability to generate sales. This is an issue for both large
and small producers. Though no single
raw material dominates complaints about
supplies, undependable stocks of organic
grains are mentioned most often. "One
of the reasons for this is that the fastest
growing sector of the organic business
was in bread and grains," Haumann told
World Grain.
Nicholas Zeman is a correspondent for
Sosland Publishing. Reach him at
nicholas.zeman@und.edu.

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World Grain - June 2009

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