Natural Foods Merchandiser

Consolidation Raises Questions As It Brings Benefits

It's Organic Harvest Month! And at first glance, I'd say we are sowing an abundant crop this year. Our trade organization (Organic Trade Association) is stronger and more active than ever. Organic foods are everywhere these days, from Edmond, Okla., to Nashville, Tenn., and hundreds of other places that just a few years ago were considered impossible-to-penetrate markets. Chain stores across the country are enlarging organic produce sections and recognizing the organic consumer as an important part of their financial future.

As with any harvest, it's time not only to enjoy the bounty but also to reflect on the season and prepare the seeds for the future.

The other evening, I had dinner with a produce distributor and several farmers. As we talked and ate, our conversation included topics from the new organic regulations to educating consumers. When we settled into dessert, the subject of corporate consolidation and its effects on the world was brought up—not just on media, petrochemical or conventional grocery companies, but fresh organic produce as well. After we each offered our perspective, we found we ended up with more questions than we started with, and some interesting food for thought.

Benefits of growth and consolidation in the world of organics might potentially include better quality standards, more efficient national distribution, and even better selection and variety. As I've worked with produce departments across the country, I've seen the evidence. Consistency, quality and selection of organic produce have gotten much better. Customers can find Earthbound salads, Cal Organic russets, Bunny Luv carrots and Pure Pacific green onions just about anywhere they shop.

But what else might happen when large commercial produce operations buy small organic farms? Does the larger distribution network mean more chlorine must be used in postharvest handling of salad mix, peeled carrots, etc., to keep bacteria levels in check? Does fruit have to be picked greener for it to hold up in shipping? What does that do to the flavor of the product? Does it allow us to stand behind one of our top 10 reasons to buy organic—that the foods taste better?

What about the nutrition profile of the produce? While I applaud any effort to keep pesticides off the land and out of our children's bodies, not much produce grows in Montana during the winter. So after all of the effort nationwide to build soil and grow without synthetic chemicals in order to have nutritious fruits and vegetables, how much of the nutrient content is lost in the back of a cooler truck while the product moves across country?

Another question to ask is what happens to the marketplace when the world's largest organic carrot growers buys the second-largest organic carrot grower? Will it affect the price of the commodity to your customers when the field of competition shrinks? Does price go down with this scale of efficiency, or up with the lack of competition? Do you have a choice in the matter when the dollar you pay for either brand goes to the same pocket? What about brand loyalty? I know of many produce managers who swear their customers know and prefer one brand over another. In many cases, these mergers will keep the same brands for a time, but what about after a few years? There are still plenty of produce managers who buy for their departments according to where products are grown during certain times of the season. Will they lose that knowledge?

As with every growing industry, it's important to ask about the cost versus the gain of growth. Are we going to become the industry we envisioned—or what we have been trying to change? Change may be one of life's only certainties, death and taxes notwithstanding. If this is true, then during this process we must keep one eye on the future and one on the past. We all know the unfortunate changes that have occurred over the years in how the conventional industry manipulates its food production and farming systems—giving us, for example, rock-hard tomatoes with no flavor. I hope that in our quest to provide the best quality organic foods to as many people as possible, we keep a firm grasp on the ideals and integrity that got us here.

Or will we all-too-soon have to decentralize, scale down, localize and diversify our own former industry?

Mark Mulcahy runs an organic education and produce consulting firm. He can be reached at 707.939.8355, or by e-mail at [email protected]

Natural Foods Merchandiser volume XXII/number 9/p. 26

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