The Niche Is Back

July 1, 2007
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The Niche Is Back

Dan Malovany, editor
dmalovany@stagnito.com

When it comes to organic, snacks are where it’s at, especially tortilla chips. As for organic baked goods, well, I don’t know what to believe.
Organic food sales are more than $14 billion annually, and they’re expected to grow at a double-digit clip. By 2010, they will top $25 billion. It’s definitely the next hot thing.
Ugh. I’ve been reading this hype for more than a decade, and I’m still waiting for it to really take off. Organic vegetables, yes. Fruit, yes. Milk, yes. Bread and rolls? I’m still not convinced that they’re ready for the big leagues, despite the dozens of varieties of certified organic baked goods on display at the International Dairy-Deli-Bakery Association show last month.
There, companies such as Ralcorp Frozen Bakery Products, Inc., for instance, displayed everything from organic Monterrey sourdough baguettes to chocolate or onion dill boules. “Organic foods are now a mainstream and a rapidly growing profit opportunity,” the Minneapolis-based company declared.
That’s overstating it. Some retailers are definitely interested in organics. Maybe that’s what’s fueling interest. But are consumers really buying into it? Well, it’s certainly not on-trend like whole grains.
Talk to folks in the industry, and they’re all over the place on this topic.
“Organic is really about safety from a consumer perspective,” says Tim Zimmer, vice president of marketing for Sara Lee Brands, Sara Lee Food & Beverage. As a result, he believes organic is not appropriate for the Sara Lee brand.
Jennifer Hartley, director of bread innovation at George Weston Bakeries, adds that you have to be careful about what category you’re in when considering organic alternatives.
“There really aren’t any bread products that have gained significant volume under an organic banner,” she says.
When developing the Arnold Natural line that hit the shelves this spring, Weston’s consumer research showed that natural had better taste attributes than organic products.
“In our minds, there hasn’t been enough indication that bread is a key category for organic,” Hartley notes. “People view whole grains and the ingredients in bread as very healthy. If we can leverage that and bring in natural benefits, it seems to be to be a win without having to go into organic.”
Flowers Foods has struck a happy medium with the “made with organic flour” varieties sold under its Nature’s Own All Natural premium bread products.
“Is it going to take over the bread business?” asks George Deese, Flowers’ chairman, CEO and president. “No, but it is a nice niche, as long as we have a product that tastes good at a price that is attractive enough so consumers will pay for it. It may help overall margins in the baking industry.”
Organic baked goods, he adds, are a logical progression as consumers seek out premium products.
“For people who are into organics, all natural will not satisfy their needs,” Deese says. “But for those who are eating standard products, all natural is a step up. People who are already into all-natural products are likely to step up into organics.”
Larry Marcucci, president of Alpha Baking, agrees. Alpha plans to drive its newly acquired Natural Ovens brand into the organic arena, which Marcucci believes is the perfect location for the well-regarded line and its loyal consumer base.
“If we’re already there with natural products, how much harder is it to bring some organic products along the way?” he asks.
The soon-to-be launched products will be 100% organic, not just made with organic flour.
“Not only are they going to be organic, but they will have Omega-3 and other healthy ingredients in them that will be a bit more of an enhancement on organic offerings out there,” Marcucci says.
Certainly, organic products are gaining strength with retailers such as Whole Foods. And organic might become more prevalent in baked goods, as it is in the snack aisle. Right now, however, it’s just a son of a niche.

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