December 1, 2007
By Molly V. Strzelecki
You don’t have to be a talk show host to realize that organic snacks and baked goods have become some of our favorite things.
Every season, talk show host Oprah Winfrey does an episode with the theme “Oprah’s Favorite Things.” Fans clamor to get tickets for this particular taping of the Chicago-based TV program because not only do they get to see one of America’s most powerful women in action, but they also go home with oodles and oodles of free goodies — from robes to electronics to foodstuffs and more — worth thousands of dollars. Ms. O and her gift-giving ways are a force to be reckoned with, for sure.
No disrespect to Ms. Winfrey, but there’s another star — a quickly rising one, at that — in the snack and bakery arena that begins with the letter “O” that can’t be discounted as a viable contender in a popularity contest, were it to go up against Oprah.
Who is this superstar of the grocery store shelf fame? Organics, of course.
Chicago-based research firm Mintel recently reported that organic food sales have grown 132% since 2002, and more than half of Americans have purchased organic foods in the last year.
Additionally, Barbara Haumann, spokesperson for the Organic Trade Association (OTA) in Greenfield, Mass., says that overall sales of organic products are growing about 20-21% annually. The OTA recently released their findings on organic sales for 2006, noting that sales of organic salty snacks hit $504 million, cookies reached $171 million, and in-store bakeries sold $106 million in organic products, all in 2006.
“For 2005, U.S. retail sales of organic snacks totaled $667 million,” Haumann notes, “but in 2006, it was up to $807 million.” Sounds like America might have a new favorite thing of its own.
Not Just For Hippies Anymore
So what happened to cause such a spike in sales over the last few years? Did Oprah Winfrey and her long-reaching influence have something to do with it? Maybe, but it more likely had a lot more to do with the expansion and the education of consumers.
“Today, there is no demographic profile because the organic consumer covers all walks,” Haumann says, adding that income, gender and geographic location doesn’t play into the consumer profile, due to the now mass-availability of organic products.
“What there is, oftentimes, is more of a viewpoint on life. Organic consumers are generally quite educated,” she adds. “They may not have a college degree, but they have a big worldview, awareness, curiosity and concern about where food comes from, and they desire a connectedness to where that food comes from.”
Michael Girkout, president of Alvarado Street Bakery, Petaluma, Calif., agrees that there’s no stereotypical consumer for organic snacks and baked goods.
“As organic becomes more widely available,” he says, “the folks who are buying it really run the gamut from young college students all the way up to senior citizens and people who have health issues.”
Everybody from Oprah to your Aunt Opal is buying organic these days and for a variety of reasons. To be honest, organic chips, rolls and cakes may not be any healthier than those that aren’t organic, but consumers can at least be rest-assured that all those goodies are neither overprocessed nor made without artificial ingredients and preservatives. For many consumers, a driving reason for the purchase and consumption of organic products has been egged on by recent food safety scares.
“It’s more of an issue of knowing that the food you are consuming is healthier from a preservative, natural and environmental standpoint,” says Rich Labriola, CEO of Labriola Baking Co., Alsip, Ill.
Haumann points out that the organic industry doesn’t make health claims or say its products are safer.
“We can’t claim that, but consumers have tended to seek out organic products produced without the use of genetic engineering, without sewage sludge, without irradiation,” she says. “There are stories in the news that make consumers start thinking ‘for my personal health, for my family’s health, I do not want these products; therefore I will choose organic, because organic inherently doesn’t use those practices, and it’s verifiable.’”
According to Girkhout, “the concern about what is in food and how it has been manufactured and handled prior to being served has never been higher than it is now.
“Organic has always been perceived as better by the consumer because it was disassociated with chemicals like fertilizers and pesticides and herbicides and fungicides and all those other ‘cides,” he says. “From a food safety standpoint, there is a lot to be said for the oversight in the organic industry, with third-party certifiers. It’s not just the government giving its stamp of approval, it’s also self-policed.”
Although organic bread still is a niche, especially when compared to the consumption of conventional bread, a growing number of Americans are checking it out. For many consumers, pricepoint is an issue. It’s not unusual for organic bread to sell anywhere from 75 cents to $1 more than similar varieties of standard loaves. Then again, with the price of flour skyrocketing over the last year, bakers are charging more for all types of bread, minimizing the sticker shock that some consumers had over organic baked goods.
“About 28% of Americans have tried organic bread products,” says Doug Radi, vice president of marketing for Boulder, Colo.-based Charter Baking, which houses such brands as Rudy’s Organic, Vermont Bread Company, Matthew’s All-Natural, The Baker and its newest roll-out, The Baker Organic. “And about 20% of them have used them in the last three months, so there is frequency of purchase there, according to a 2006 Hartmann organic study. It really just proves that consumers have a strong interest in healthier bread options and nutrition. Certified-organic breads made without artificial preservatives and ingredients and pesticides really help pay that off for them.”
Not all organic baked goods are made with 100% organic ingredients. Some companies like Flowers Foods, Thomasville, Ga., tip-toe in the market by offering loaves of its all-natural breads “made with organic flour” under its Nature’s Own brand.
At the other end of the spectrum, Natural Ovens Bakery of Manitowoc, Wis., recently went headfirst and introduced varieties of bread that are certified organic by the U.S. Department of Agriculture. Larry Marcucci, president of Chicago-based Alpha Baking, which bought Natural Ovens earlier this year, reports that sales of its new organic line of breads are “going pretty darn well.”
Like players in any emerging product segment, producers of organic products — particularly those in the snack and bakery categories — still have something to learn. In the meantime, they’re doing pretty well for themselves. On the whole, those in the snack and bakery industries agree that organic is not a fad, but is solidly here to stay.
“Organic is the future, and that’s why all of those giant mega-companies are getting into organic,” Girkout explains. “It’s not to capitalize on a passing fad, but to see what the trend is and to follow that trend.”
Cynthia Harriman, director of food and nutrition strategies for Oldways and the Whole Grain Council, Boston, Mass., organics are a strong alternative in the snack and bakery aisles.
“It’s giving people a choice so that they can tell us where the future is going,” she says. “Organic is not going to go away.”
Based on trends, Radi doesn’t see this segment of industry slowing down a whole lot.
“Particularly for our brands,” he says, “we see a huge opportunity to offer a healthier option for consumers.”
More organic foods, especially in the bakery category, soon will be available, Girkout notes.
“You saw the same thing with trans fats,” he says. “Once it became clear that consumers did not want trans fats in their food, every bakery in the country made immediate steps to find alternatives to take trans fats out of those foods. And the same thing is happening with organics.”
So it’s possible that, given time, organic snacks and baked goods might start appearing on Oprah Winfrey’s “Favorite Things” list. However, only Oprah can give consumers these items for free. SF&WB
Face Off: Organic vs. All-Natural
Organic snacks and baked goods continue to thrive in the shopping carts and mouths of consumers, but one thing continues to snag the wheels every once in awhile: How do products claiming to be all-natural fit into the grand scheme of things?
While consumers may smile and nod at both organic and all-natural, they’re not created equal. Some products may have an all-natural shout-out that grabs consumers, but ultimately, all-natural can’t back it up like organic does.
“The words ‘all-natural’ have been so abused and so misused over the decades that it doesn’t mean much to anybody anymore,” explains Michael Girkout, president of Petaluma, Calif.-based Alvarado Street Bakery. “’All-natural’ sounds good, but there’s no meat there. There’s no substance, there’s no certification process [as in organic], there’s no oversight [as in organic]. You’re just making a claim that a product is all-natural. Well, sugar is natural, and so is salt, and so is lard. There are lots of things that you can call natural but wouldn’t really qualify as healthy.”
Additionally, claiming that a product is all-natural can leave some consumers confused.
“Research we’ve done here shows that there is a bit of consumer confusion as to what ‘all-natural’ means,” says Doug Radi, vice president of marketing for Charter Baking, Boulder, Colo. “Fortunately for the organic industry and organic brands like Rudy’s Organic, there is a defined standard with the [U.S. Department of Agriculture’s] national organic program. So products that claim to be either certified organic or made with organic ingredients need to go through a pretty rigorous certification program.”
The all-natural claim, Radi notes, doesn’t have a certification program to back it up.
That’s not to say that all-natural is all bad. It does, in fact, have its place in the healthy eating cycle. It all depends on the audience.
“Natural is a better fit [for some products] where organic ingredients are not readily available or are too cost prohibitive to use,” says Rich Labriola, CEO of Alsip, Ill.-based Labriola Baking Co. “In the wholesale restaurant market, organic just does not present a great value for the restaurant operator.”
Organic and all-natural snack and bakery items might seem like they share the spotlight, but in reality, organic products are the only ones who can back up their claim in writing.