From The January/February 2003 Issue of Natural Grocery Buyer

Organic, Unwrapped

Retailers react to new USDA organic standards by introducing new barriers—to commerce

Elaine Lipson

For more than a decade, organic growers, manufacturers and retailers focused on building and instituting national standards with integrity, reflecting good organic principles and practices. When those standards were fully implemented on Oct. 21, many organic advocates expressed relief, optimism and a general feeling of success.

At the same time, there was, and still is, some watch-and-wait sentiment about aspects of the organic rule. For example, many growers, as well as consumers, are concerned about the ability of small producers to thrive under U.S. Department of Agriculture governance. As a result, we may see lobbying for adjustments to the National Organic Program that better support small farmers. Meanwhile, alternative eco-labels are sprouting that emphasize local, regional or small-scale production, and both retailers and consumers will have to learn to evaluate and compare these labels.

Another unforeseen consequence might be called "resistant retailers." Retailers selling foods labeled organic are not required to be third-party certified, as growers and manufacturers are, but must still meet the terms of the national law and may be subject to fines if they fail to do so.

For fresh foods, such as produce, bulk foods, and meat, these re- quirements center around protecting the integrity of the organic product from contamination, whether from conventional foods, pest-control chemicals used in the store, or improper storage and handling. This requires forethought, planning and staff education—and some retailers are just digging in their heels and saying it's not worth the trouble to sell anything but packaged organic products.

Babies and Bathwater
"We're getting a lot of phone calls from retailers who are very confused about what they can and can't do," says Katherine DiMatteo, executive director of the Organic Trade Association based in Greenfield, Mass. "Many who have called have thrown up their hands and said, 'It's too complicated; I'm afraid I might get fined, so I'll either change what I'm doing or not carry organic at all.'"

An organic importer/exporter and distributor who's been successfully selling organic produce to mainstream markets for many years (who asked to remain anonymous for this column) is experiencing the trend firsthand. "Some retailers say they're not going to carry anything not in a bag," he says. "They want shrink-wrapped broccoli. It's not the buyers—they're frustrated too—-it's the legal teams [deciding this]."

This distributor says he would have to build wrapping facilities and raise prices to supply the same customers he's been satisfying for years.

Resources Full text of the rule governing organic products and a list of accredited certifiers under the USDA National Organic Program: www.ams.usda.gov/nop Organic Trade Association: www.ota.com Organic Farming Research Foundation: www.ofrf.org

Some of the problem is misinformation, according to my sources, and some of it is just confusion, fear and trepidation about an industry that, though its principles aren't difficult to grasp, has presented its share of challenges to conventional food manufacturers and retailers. Though organic has graduated from "health food" niche to meaningful segment for many mainstream shoppers, organic is still David to conventional foods' Goliath. So why should conventional foods retailers invest in the education, systems planning and foresight required to properly and legally sell fresh organic produce (and/or organic meats, poultry, bulk grains, cereals, nuts, etc.) without additional packaging?

1. Shoppers care about first-rate produce departments. In surveys, customers regularly rate good, fresh produce as a priority when they're choosing supermarkets. Good selection, display and merchandising are key. Creating a real fresh-market feel with fruits and vegetables gives your store a soul, and organic choices add to that. But having everything pre-weighed and wrapped in plastic limits the sensual pleasure of your produce market and diminishes appeal for shoppers hungry for color, freshness, fragrance and flavor.

2. Organic shoppers are turned off by excess packaging. Many organic shoppers are motivated by environmental concerns about potential damaging effects of chemicals to our soil, air and water as well as to human health. These shoppers are willing to pay a premium for organic choices that don't add to the planet's toxic burden. That's going to make them sensitive to what they perceive as unnecessary packaging that's part of the same problem, especially plastic and styrofoam. Think carefully about the message your store sends as a conscientious resource user.

3. Organic offerings give you a competitive advantage—but you have to give a little to get the benefits. By now, it should be clear that organic shoppers are often crossover shoppers. They're not fringe health nuts who would never shop at your store anyway. Do you really want to forego the opportunity to sell a great selection of organic foods—and send these shoppers down the street to the competitor making the effort to sell organic foods and maintain organic integrity in the supply chain?

4. You can do it. The USDA clearly sets retailer responsibilities, but the intent of the national organic standard is to facilitate organic commerce, not smother it. If you understand the reasoning behind the responsibilities, it's all a bit more straightforward. "In terms of preventing commingling of organic and nonorganic foods, it's because you want to ensure that the customer is buying the product they want to buy," DiMatteo says. "If the bin or sign is marked organic, the product must indeed be organic. In terms of preventing contamination, these issues are more concerned with cleaning or pest controls in your store, or drip from a conventional product onto an organic product, which would introduce a prohibited substance.

"The first thing is to see this as another part of the quality-control systems that retailers already have in place in their stores, in terms of product sales and meeting consumer expectations. Understand commingling as making sure organic products are identified as such, and not easily confused by customers or mislabeled by employees," DiMatteo says. "Contamination prevention is a check in your system of storage, handling and display, [ensuring] that prohibited substances are not in contact with organic product."

Our longtime organic distributor, for one, is both sympathetic to retailers trying to sort through conflicting information and avoid penalties, and is optimistic about a situation he's hoping will improve for suppliers and consumers alike.

He wants retailers to be responsible, he says, but in the long run, he wants more land farmed without chemicals and more security for longtime organic farmers. For that, he says, the USDA must be clear about rules and enforcement, retailers must be open to alternatives, and most important, organic farmers must be able to continue to thrive under these regulations.