Natural Foods Merchandiser

Distributors Score High Marks for Organic Commitment

For operations within a supply step or two of where organic food is grown—farmers, certifiers and manufacturers—Oct. 21, 2002, is the deadline for having documented government verification regarding the organic integrity of their systems and operations. But distributors and retailers have it a bit easier. Although the date marks the beginning of the NOP, it does not represent a deadline for certifying their operations.

Organic foods distributors and retailers face similar rules and restrictions regarding certification. Unless they process or repackage organic products, they're not required to have the federal government or one of its agents verify that a product's organic integrity has not been compromised. And like retailers, regardless of the scope of a distributor's business, they have responsibilities concerning the handling and labeling of organic products in their control.

Distributors who choose not to be certified must maintain the integrity of the organic products they sell, said Phil Margolis, president of Neshaminy Valley Natural Foods Distributor in Ivyland, Pa. Distributors must keep records, track farm lots, and separate and handle product properly.

However, most distributors have taken a different tack on this choice than retailers, many of whom are choosing not to seek certification. Despite the record-keeping burdens and lotting system headaches, a majority of distribution operations will be certified organic handlers by the time NOP is enforced. "The big difference is that the bulk of the distributors in the organic marketplace are going to wind up being certified," Margolis said.

Veritable Vegetable Inc., an organic produce distributor in San Francisco, was certified before it needed to be—from 1997 to 2001—and it will be certified again by fall. "We did it to support the system and to show leadership around certification," said Bu Nygrens, purchasing manager at Veritable.

"There's nothing about our operation that requires us to get certified," said Susan Futrell, director of marketing for Blooming Prairie Cooperative Warehouse, based in Iowa City, Iowa. But they are working with San Diego-based Quality Assurance International and expect to be certified by sometime this fall. Blooming Prairie has handled organic product for almost three decades, and in that time created systems for tracking and providing the necessary audit trail to be certified organic.

Lotting systems that track where, when and by whom each organic ingredient or fresh product was grown present the biggest paperwork challenge. Distributors will have to coordinate with their suppliers, shippers and growers to keep the audit trail sufficiently intact for the new regulations. Those records must be retained for five years.

"The thing about being a distributor instead of a manufacturer is that as a manufacturer you have a set amount of people that you deal with to make your product," said Lori Zuidema, general manager of Roots and Fruits Cooperative Produce, based in Minneapolis. "But as a distributor, we're constantly getting new products in, produce changes seasonally, and so we're always looking for and getting new suppliers."

But few distributors are intimidated by the record-keeping burden. Although it will increase their costs and squeeze margins, most view it as a business requirement for working in the organic marketplace, Margolis said.

"It's certainly a large expense for us," Zuidema said, "but it's something we've been planning for at least five years."

Series Part 1: Retailers Ready For The National Organic Program
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 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 8/p. 7

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