Natural Foods Merchandiser

Drought, Demand Hinders Organic Sourcing

Drought coupled with a big rise in demand has makers of organic products scrambling to source some key items—among them organic yeast, freeze-dried fruit, soybeans and flaxseed.

Manufacturers credit the U.S. Department of Agriculture's National Organic Program for educating the public and increasing awareness of organics. But in some cases, that interest has pushed demand beyond supply.

Spectrum Organic Products Inc. President Neil Blomquist said Mother Nature has complicated his sourcing problems. Drought in the dryland-farming region—the northern Rockies and Great Plains—has cut deeply into organic flaxseed, sunflower, safflower and canola crop yields. "This year we're taking anything we can get," he said.

Demand for organic flaxseed products rose 60 percent last year, but production is down—30 percent to 60 percent of normal, he said. Spectrum has had to cut off some oil sales to industrial customers, accept shipments of raw seed instead of oil, and absorb much of the associated cost increases.

Blomquist said the shortages are forcing Spectrum to take a more strategic approach to its supply chain. "We're becoming more vertically integrated, making direct contracts with growers instead of working with seed brokers."

Some overseas growers have taken advantage of the shortages to jack up prices, but other seed-growing regions, such as Australia, also have been mired in drought.

Sometimes the sourcing process reaps unexpected benefits. Rudi's Organic Bakery switched from mineral oil to non-GMO sunflower oil to lubricate its bread divider and oil its baking pans. While the sunflower oil is more expensive, its higher viscosity means Rudi's uses much less of it, spokeswoman Amy Barr said.

Rudi's has found a source for certified organic yeast, but it's prohibitively expensive. And the bakery has located certified organic Kalamata olives in California for its Mediterranean Olive bread—but they're not kosher, so the search continues.

Consumers have been motivated to try and buy organic, and have found they like what they're eating and want more, said Mike Scheu, Odwalla Inc.'s brand manager.

This spring, Odwalla will add multiserve SKUs to its line of super-premium organic juices, including a 1.5-liter orange juice. Odwalla rolled out 100 percent organic apple, orange and carrot juices in July 2002, but the company has used organic produce in its juices for more than 20 years.

President Shawn Sugarman has said he'd love to make every Odwalla product organic, but the breadth of its line presents a challenge: more than two dozen juices, blends, shakes and smoothies, using scarce ingredients such as acerola cherries. "On the supply side, the organic industry is very fragmented right now," Scheu said.

Such products—lower on the ingredient panel but key to nutrition and flavor—have been giving organic manufacturers particular fits.

Ojai Organics Int'l. sold out its initial run of organic lecithin even before it produced a drop of the emulsifier used in food, cosmetics and other products. It took two years from the time the product was announced to certify a processing plant in Iowa and to contract for enough soybeans to handle the first year's production.

"One gallon of lecithin is all we capture from 10 loads of soybeans," said Ojai founder George Kalogridis.

And where, for example, might you find organic schizandra berry?

"Those really small ingredients make the difference in flavor," said Numi Tea's co-founder Ahmed Rahim, who will introduce an Orange Spice tea that combines Chinese white tea and organic orange with just enough schizandra to add zing.

Rahim turned to a global network of suppliers that he cultivated as a teahouse owner in Prague. These suppliers are key to Numi's transition to a fully organic product line, he said. At Natural Products Expo West, Numi will introduce six new flavors and roll out certified organic versions of its 13 other teas and "teasans" (herbal blends).

Because Rahim refuses to use oils, flavorings or sweeteners, the fruit taste in Numi's new Berry Black tea had to come from real freeze-dried fruit. "They're incredibly expensive, but the quality is far superior. As we grow, then the quantities can grow with us," he said.

Lisa Everitt is a freelance writer in Arvada, Colo.

Natural Foods Merchandiser volume XXIV/number 3/p. 11

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