The full implications for retail operations of the National Organic Program have stirred debate among industry leaders. When the initiating law was written, logistical challenges led legislators to exempt most aspects of the retail business from certification. But most observers agree that won't last, because the ultimate goal of the NOP is to guarantee organic integrity from farm to table, not just from farm to retail stock room.
"The USDA, in the preamble of the rule," said Richard Mathews, program director for the NOP, "has reserved the right to require retail certification in the future."
The issue is dividing industry experts, some of whom have long declared retailer certification a necessity to uphold integrity of the supply chain. "To ensure organic integrity and provide consumers quality assurance, certification becomes necessary when the potential for contamination exists," said Cissy Bowman, an organic farmer and consultant based in Indianapolis.
But others argue that certification is too costly and point out that the vast majority of organic products sold at retail are prepackaged in impermeable containers and present little, if any risk, of contamination. They believe certification of the large and still growing natural foods retail sector presents too great a challenge, especially without national consensus. And many suggest that retailers don't need certification to uphold organic integrity.
"Give retailers the tools and they will comply," said Margaret Wittenberg, vice president of governmental and public affairs for Austin, Texas-based Whole Foods Market. "Retailers are already required to adhere to organic-labeling provisions, to prevent contact of organic foods with prohibited substances and to maintain records that prove that ingredients identified as organic are organically produced and handled."
Supporters of certification cite the strong commitment made by other segments of the organic industry and see retailers as a potential break in the chain. "Organic certification requires an annual on-site inspection confirming the validity of organic products [and processes]," said Phil LaRocca, chairman of the board, California Certified Organic Farmers.
A few states, such as California, Maryland and Texas, already have mandatory retail certification programs.
But regardless of the ultimate overall certification requirements for retail partners in the organic industry, the NOP will definitely include certain retailers. Stores that process on-site or those that mishandle or mislabel bulk items and produce could be liable under the current program, and fines might be levied for noncompliance.
"Retailers who process individual products within an individual store [such as deli or bakery] are excluded from certification under the NOP," Mathews said. "But retailers who process raw and ready-to-eat foods on the premises that they label 'organic' or 'made with organic' are required to prevent organic product contact with prohibited substances and must abide by certain labeling provisions in the rule."
If a retail operation fraudulently sells or labels a product as organic, they may face civil penalties of up to $10,000 per violation. But many believe the true cost of noncompliance is the potential loss of customer support. "The monetary cost of noncompliance, while potentially significant, is minimal when compared to the cost of losing your customers' confidence," said Mark Mulcahy, president of Organic Options.
With an eye on the opportunity, many retailers are looking beyond the NOP requirements to the potential market benefits provided by certification, for example the opportunity to sell their own organic deli or take-out dishes.
"The choice to become certified is dependent on a retailer's dedication to organic food," said Barth Anderson of The Wedge in Minneapolis. "We see a huge demand for our organic deli dishes." Anderson believes certification efforts ongoing at The Wedge will strengthen its position as a leading retail source for the common consumer question, "How do I know it's organic?"
Resources are available to assist retailers seeking to better understand the NOP. Good Organic Retailing Practices, a training session sponsored by the Organic Trade Association, assists store employees with standards compliance and certification strategies. Retailers interested in attending a GORP training session can find additional information at www.ota.com.
"Attending a GORP training session is a practical approach to understanding your operations needs concerning organic regulation and certification," Wittenberg said. Others have chosen to hire a consultant familiar with organic standards or to embark upon voluntary certification to confirm compliance with the NOP.
Retailers in the natural foods industry have a history of providing consumers with natural and organic alternatives. The national standard ensures for consumers in North America ongoing organic product choices and consistency. Retailers who educate their employees and customers about the NOP are part of the process, and they may be building a foundation for their future success.
Mark King currently serves as the retail representative on the National Organic Standards Board and is a consultant in the natural foods industry. He can be reached at [email protected] or 317.253.5502.
Series Part 2: Fine Line Between Certification And Responsibility For Organic Retailers
Series Part 3: NOP Just For Food Products
Series Part 4: Certified Organic Delis Offer Opportunities And Challenges
Series Part 5: Farmers Ready To Face Production, Financial Challenges
Series Part 6: Federal Program Little Help For Foreign Trade
Series Part 7: National Program a Culture Shock for Certifiers
Series Part 8: Distributors Score High Marks for Organic Commitment
Series Part 9: California Retailer Turns a New Leaf on Organic Retailing
Series Part 10: Consumers Know Not What They Eat
Natural Foods Merchandiser volume XXIII/number 1/p. 1, 5