Although the health and environmental benefits of organic products abound, the hard reality is that they’re more expensive, more time consuming and all-around more difficult to create than non-organic alternatives.
And so in today’s strapped economy, when dollars are tight and competition is fierce, organic food and supplement manufacturers must make difficult business decisions to ensure future success, let alone to stay afloat. For many, this has meant cutting corners, such as switching to cheaper, nonorganic ingredients in order to boost profit margins.
But a few standout companies have taken the opposite approach, not only sticking to their organic ideals but trumpeting them, in turn spreading the organic message to a wider audience and buttressing consumer trust and brand loyalty.
Late July Commits to the Seal
In deciding whether to be or not to be organic, Late July Organic Snacks founder Nicole Dawes has never wavered: “We launched with the U.S. Department of Agriculture (USDA) organic seal, and we’ll never create a product without it,” she says.
Dawes’ fervent commitment to using only organic ingredients in Late July crackers, cookies and chips is rooted in her belief that eating certifi ed-organic food is the only way to ensure wholesome, safe, non-genetically modified nutrition—and it shouldn’t be difficult to attain. “I never want to see the day when we can’t find food without GMOs or artificial colors, which is why I’ve put all my eggs in one basket,” she says.
Dawes knows that creating 100% organic food comes at a cost—to the tune of 15 margin points per product, she estimates— but she feels it’s worth it. Even when faced with mounting economic pressures the past few years, rather than move away from organic ingredients à la other natural brands such as Snikiddy and Silk, Dawes held tightly to her commitment and marketed her mission. The result was a staggering 65% sales increase in 2011.
She’s also hell-bent on educating consumers to clear up widespread confusion surrounding the terms ‘organic’ and ‘natural’. “The organic food industry has done a bad job of educating people about what organic really means,” she says. “Once people are educated, they usually buy organic, so companies need to re-stake their claim and explain why it’s so important.”
Dawes learned the importance of organic and healthy food, along with how to run a successful business, at a young age. Her mother, Lynn Bernard, ran a health food store in the 1970s, while her father, Steve Bernard, founded Cape Cod Potato Chips upon a simple recipe of kettle-cooked potatoes, salt and non-hydrogenated oil. But even before Dawes began peddling organic snacks, she caught her parents’ entrepreneurial spirit, starting her first company—a cookie business—at age 12. “My father taught me how to calculate my margins correctly so I wouldn’t lose money,” she says.
As an adult, Dawes worked alongside her dad at Cape Cod, gleaning business acumen and fomenting her ideals, knowing she’d someday start another company of her own. And even though she hadn’t yet hatched the plan for Late July, “I knew that whatever I would do was going to be completely organic,” she says.
The idea to make crackers struck Dawes as she grocery shopped while pregnant with her first child in 2001. “I found that organic crackers simply did not exist,” she says. “I felt this was a huge, gaping hole in the market.” So Dawes recruited her father, who’d since sold Cape Cod, and together they launched Late July with three organic cracker varieties.
Dawes and her dad continued to work closely together, growing distribution and adding sandwich crackers and cookies to their offerings, until pancreatic cancer took Bernard’s life in March 2009. A devastated but determined Dawes soldiered on. The loss of her father, along with a tough economic climate and widespread peanut-products recall, made 2009 a trying year both emotionally and financially, yet she and her company emerged still on their feet—and poised to grow. As that 65% sales increase indicates, Late July brought that growth potential to dramatic fruition.
According to Bob Burke, founder of Natural Products Consulting, organic food has a bright future, despite consumers’ tightened pocketbooks and fickle food-trend following. “All of the reasons why organic has grown so fast— concern for what’s in the food supply and how that affects health, the fact that it’s good for the planet and fresher and tastier than non-organic—are valid, long-term trends,” he says. “These factors are strong underpinnings for why organic will continue to grow and gain acceptance.”
Still, Burke points out that when consumers do forgo some organic products in order to save cash, they’re more apt to skip packaged foods than commodities such as milk and eggs—which makes Late July’s sales surge, and that of the entire organic cookies and crackers categories, all the more impressive. NBJ estimates that organic cookie sales reached $200 million on 3.4% growth in 2010, while organic crackers swelled 4.5% to $90 million. “If we can be successful in the snack aisles with a completely organic brand, we’re making a huge statement for organic,” says Dawes.
Even as organic moves further into the mainstream, prosperity won’t likely come easy for small operations like Late July, especially with large conventional companies with ample capital launching their own organic offerings. But Burke says success certainly can be achieved with innovative products and strategic branding. By producing nutritious, delicious snack foods and committing wholeheartedly—and openly—to organic, Late July clearly hits both notes right in stride.
Down on the Standard Process Farm
More consumers are waking up to the fact that an organic lifestyle means more than eating organic whole foods—it also involves choosing finished products, such as supplements, made from organic ingredients. As proof, NBJ estimates that U.S. consumer sales of organic supplements hit $540 million in 2010, up 7% from 2009. This compares to a more tepid 4% growth for supplements overall.
Standard Process, an 82-year-old wholefood supplements manufacturer based in Palmyra, Wisconsin, ensures that its products are as pure as possible. The company owns every part of its manufacturing process, right down to organic seed sourcing, planting and growing, which takes place at the 420-acre Standard Process Farm.
“At Standard Process, we really believe quality of food affects quality of life, and every ingredient affects the final product,” says Christine Mason, Standard Process’s farm manager. “And so for us, quality control doesn’t start in the factory— it starts with the soil.”
Although Standard Process is not the only company to use organic ingredients for plant-based supplements, it’s one of just a few to maintain an organic farm, says Michael McGuffin, president of the American Herbal Products Association. “The company’s vertically integrated operation allows it to maintain quality control from seed to shelf,” he says.
Mason and her team of nine year-round staffers rotate 21 different crops, including alfalfa, beets, sweet peas and kale to produce 6.5 million pounds of vegetables to date for use in Standard Process supplements. The company adheres to strict USDA National Organic Program regulations such as using zero synthetic herbicides, fungicides and insecticides, and maintaining diligent records of every seed and soil test. The Midwest Organic Services Association inspects the farm annually and has awarded it organic certification each year for more than a decade.
Mason got her start in conventional farming 24 years ago, but 2012 will mark her 12th season as an organic farmer for Standard Process. “Organic farming takes a bit more ingenuity to come up with the same yields, but I’ve found it to be extremely rewarding,” she says. “It’s definitely more expensive and labor intensive, and slightly riskier since we can’t use fungicides or insecticides. But the risks haven’t exceeded the benefits. We’ve met our yield goals every year.”
Actually, Mason is being modest. “We’ve grown production by 1,640% in my 11 seasons—that’s double-digit growth each year,” she says. But Standard Process’s organic stewardship extends far beyond growing quality whole foods to produce quality wholefood supplements. “The company’s organic investment is not limited to its own economic interest, or even to the direct benefit of its supplements consumers,” McGuffin says. “Rather, Standard Process is willing to share with others the extensive knowledge of organic farming practices that it has gained since its inception.”
Indeed, Standard Process gave more than 75 farm tours last year to Girl Scout troops, Future Farmers of America high school clubs, college students and even its own non-farm employees and their families. “It’s been wonderful to show so many people that organic farming is not only possible but thriving,” Mason says. Mason also takes her extensive knowledge off the farm, keeping active in the Wisconsin Organic Advisory Council, speaking to students at Oregon State University and other colleges, and participating in organic farming conferences and webinars. Standard Process also sponsors the Madison Children’s Museum’s Seedling Sprouter program, which teaches kids about organic farming and organically grows plants year-round for use throughout the museum.
“This NBJ recognition would be well deserved if it were only to acknowledge Standard Process’s meaningful commitment to invest in organic farming,” McGuffin says. “But the company’s generosity and broader vision for promoting organics are equally worthy of praise.”