Overview of Organic

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• Overview of Organic
• Presented by
• Katherine DiMatteo, Executive Director
• Organic Trade Association
• www.ota.com
• to
• Food Service Educators Network

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Review of Industry Growth and Trends

• Consumer Trends and Opinions

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• Organic Sales
• 2001, 9.7 billion, including Canada
• Organic Monitor
• 2001, 9.5 billion
• 2005, 20 billion estimated
• Research and Markets
• Sales to continue close to double-digit growth
  for next few years, but will slow somewhat after
  2004 as the market begins to stabilize. Overall
  sales growth projected to reach 18.6 billion by
  2007 represents a compound annual growth rate of
  9.
• Packaged Facts 2003
• Source -The U.S. Market for Organic Foods and
  Beverages, 2003
• Slide courtesy of Marr-Barr Communications

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Future Growth by Category2000 - 2005
Source OTA Manufacturer Market Survey 2001
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Organic and Natural Product Category Adoption
Path

• Third area of adoption
• Frozen foods
• Breads (Artisan primarily)
• Pasta sauces, canned tomatoes, salsa
• Fourth area of adoption
• Canned goods
• Bulk goods

• First area of adoption
• Produce (92 use)
• Dairy
• Non-dairy beverage (soy)
• Baby food
• Second area of adoption
• Juice
• Single serve beverage
• Meat/Poultry
• Cold cereal
• Snacks (chips, pretzels)

Source The Hartman Group Slide courtesy of
Marr-Barr Communications
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Organic Fiber Sales

• Total Growth 22 1996-2000
• Projected Growth 44 2000-2005
• Clothing 11 1996-2000
• Clothing 39 2000-2005
• Other Products 39 1996-2000
• Other Products 67 2000-2005
• Source OTA Manufacturer Market Survey 2001

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Organic Fiber ProductsConsumers are Interested In

• Bedding
• Towels
• Shower Curtains
• Comfortable Underwear
• Diapers, Baby Clothes
• T-shirts and other comfortable clothes
• Sleepwear
• Hats, gloves and scarves
• Source OTAs Organic Fiber Shopper Study,
  Hartman Group, 2000

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Top Food Trends

• Comfort Food 74
• Health Food 61
• Organic Food 59
• Ages 18-34
• Fast Food Out 79
• Health Food In 71
• Organic Food In 68
• Source Bon Appetit Magazine 6th Annual How
  America Eats Survey

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Organic is an Overlap of Foodie/Gourmet and
Health/Natural Food
gourmet focus
organics
health focus
Source The Hartman Group Slide courtesy of
Marr-Barr Communications
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Organic Consumer Segments

• Consumption of organic or natural foods and
  beverages
• Importance of organic vs. non-organic when
  shopping for produce
• Knowledge and concern about how food affects
  health and the environment

Source The Hartman Group Slide courtesy of
Marr-Barr Communications
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Who Buys Organic?

• 44.9 of US adult population purchased organic
• 22.5 are exclusive natural buyers
• 27.5 purchase an organic item 2 or times per
  year
• Organic food buyers extremely loyal to category
  and intend to keep buying
• While non-buyers have virtually no interest in
  organic products.
• Source ACNielsen Consumer PreView 2002
  ACNielsen/SPINS 2002

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Who is the Organic Shopper?
Several studies show the typical purchaser of
organic products

• 70 are female
• 37 have children under 18 living in the
  household
• 33 of occasional organic buyers are between
  40-59
• There is both a high proportion of frequent
  organic buyers under 30 and over 60
• 31 of frequent buyers make under 15,000 a year
• The mean income for frequent organic buyers is
  43,280, while the mean income for occasional
  buyers is 50,240.

• Source The Organic Consumer Profile
  The Hartman Group 2000

Slide courtesy Organic Trade Association
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• Consumer Opinion
• Consumers generally are buying organic foods for
  whats NOT in them and tend to perceive them as
  better for you.
• 61 of consumers polled dont want milk, eggs,
  poultry or meat to be labeled organic if they
  were from animals fed antibiotics, hormones,
  pesticides.
• Source OTA/RoperASW March 2003
• 69 of those polled in March 2003 said that
  personal health and wellness is more important
  than it used to be, up from 60 percent in
  October, 2002
• Percent of population that agree
  completely/somewhat that organic foods and
  beverages are
• Safer for the environment 52.2 NCS and 47.8 GP
• Safer to eat than non-organic 49.0 NCS and
  31.5
• Do not contain genetically modified ingredients
  52.2 NCS and 39.8 GP
• Are worth paying an extra 20 for 32.7 NCS and
  17.3 GP
• Source Natural Marketing Institute

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• Very Low Brand Recognition
• Of organic food purchasers, over 60 (mostly
  periphery and mid-level) cannot think of a
  specific organic brand name unaided
• Many of the brands they name now are not organic
• Right now, organic is the brand
• Huge opportunity for a true organic lifestyle
  brand to rapidly dominate the market
• Source The Hartman Group

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History of Organic Agriculture and the USDA
National Organic Program
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• The word organic stands for a commitment to
  agricultural practices that strive for a balance
  with nature, using methods and materials which
  are of low impact to the environment.

Diversely planted farm.
Slide courtesy Organic Trade Association
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Organic Principles

• Improve Soil Fertility
• Work with Nature
• Reduce Agricultural Pollution
• Recycle within System
• Maintain Genetic Diversity

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History
1900-1970 Pioneer Era - Rudolph Steiner, Sir
Albert Howard, Lady Eve Balfour, Paul Keene, J.I.
Rodale, Rachel Carson 1970s First Organic
Certifications 1980s 1st State Laws
(38 states regulate organic in 00) 1985
Industry Organic Guidelines (OTA) 1990 CA
Organic Foods Production Act US
1990 Farm Bill (OFPA)
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Why a National Organic Program?

• Organic Community Identified
• No requirement for certification
• No uniformity among organic standards
• No assurance of organic integrity
• Confusion in the marketplace

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USDA National Organic Program
1992 to date - NOSB Meetings Dec. 1997 -
First Proposed Rule March 2000 - Second
Proposed Rule Dec. 21, 2000 - Final Rule Apr.
21, 2002 - 1st Accredited Certifier List Oct.
21, 2002 - Full Enforcement All food product
labeled organic in the U.S. must be
certified by USDA accredited Certifiers and
comply with 7 CFR 205.
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USDAs Role

• Accredit Certifying Agents
• Recognize Foreign Accreditations
• Approve State Organic Programs
• Promulgate New and Amended Regulations
• Enforce the Standards

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Impact of Full Implementation

• Certifying Agents Must Be Accredited
• Producers and Handlers Must be Certified
• State Programs Must be Approved by the USDA
• All Must Comply With the National Organic
  Standards
• USDA Seal Available for Use

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Key Regulations

• No GMOS, Sewage Sludge, Irradiation
• 3 Year Conversion
• Routine Testing
• Natural Materials and Inputs Allowed
• Public Review of Synthetics per Criteria
• NOSB advises USDA
• No Antibiotics or Growth Hormones
• 100 Organic Feed for Animals
• Access to Outdoors
• Humane Living Conditions

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Key Regulations

• Must prevent commingling of organic with
  non-organic products
• Protect organic products from contact with
  prohibited substances
• Facilities pest management plan
• Must not use packaging materials, storage
  containers or bins containing synthetic
  fungicides, preservatives or fumigants
• All non-agricultural ingredients whether
  synthetic or non-synthetic must be included on
  the National List

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NOP Implementation

• Stream of Commerce
• Appeals and Enforcement
• Peer Review Panel
• Program Manual
• OCC Standards Consensus Project
• Scope Document
• Fiber, Personal Care, Pet Food, and more
• Requirements for Retailers

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Awareness of USDA Organic Labels

• 51 of U.S.women have seen the USDA organic seal
  on products found at locations where consumers do
  most of their food shopping.
• Women, younger baby boomers have highest
  awareness of organic products 53 of consumers
  aged 35-49 report they have seen they seal where
  they shop.
• Source OTA/RoperASW, March 2002
• 45 are aware of the new organic labels
• 55 said there is a difference between USDA and
  Made with organic labels.
• 56 indicated that certified organic labels
  were very or somewhat important to them.
• Source FMI Trends 2003 Report
• 32.3 of general population stated that the USDA
  organic seal would increase their product
  purchases
• 84 of organic food/beverage users stated that
  the USDA organic seal would increase their
  product purchases.
• Source Natural Marketing Institute, 2003

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The Organic Center for Education and Promotion
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Mission
The Organic Center for Education and Promotion
generates credible, peer-reviewed information and
communicates the verifiable benefits of organic
farming and products to society at large,
resulting in greater awareness and demand for
organic products, the conversion of agriculture
to organic methods and improved health for the
earth and its inhabitants.
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Major Goals

• 1. Build a credible, science-based set of
  own-able benefits and points of difference for
  organic agriculture and organic products.
• 2. Effectively communicate organic benefits to
  the public to create a significant increase in
  demand for organic products.
• 3. Contribute, via the activities of The Center,
  to a significant increase in organic production,
  consumption and sales in several identifiable and
  measurable parameters.
• 4. Accomplish all of the above while balancing
  the needs of participants and stakeholders who
  represent different industry sectors, sizes,
  opinions, etc.

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Critical Success Factors

• 1. The features and benefits of organic must be
  defensible, clear and compelling.
• 2. Sources of information that support these
  benefits must be reliable, credible, and broadly
  respected.
• 3.Research must be grounded in serving the
  public interest.
• 4. Communications activities must be integrated
  with the interests and concerns of a broad
  spectrum of participants in the organic movement.
• 5. Funding must be forthcoming from grants,
  programs, individuals and the industry.

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Organic Foods and Children's Health Excerpts from
the Scientific Record
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Why are children at higher risk?

• Infants and children consume more food per kg of
  bodyweight than adults 2
• Infants and children eat a less varied diet than
  adults 2
• During fetal development and the first years of
  life, infants are much less able to detoxify most
  pesticides and are uniquely vulnerable to
  developmental toxins, especially neurotoxins,
  given that the brain and nervous system continue
  developing through about age 12 2,3
• More frequent the exposures and the earlier in
  life, the greater the increase in risk 6

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How do Conventional and Organic Foods Compare?

• Nearly ¾ of fresh fruits and vegetables consumed
  by children in the US contain residues.1
• Almost ½ of fresh fruits and vegetables consumed
  by children in the US contained multiple residues
  1
• Conventional fruits are 3.6 times more likely to
  contain residues that organic fruit 1
• Conventional vegetables are 6.8 times more likely
  to contain residues that organic vegetables 1
• 1 in 2 conventional samples contained multiple
  residues -only 1 in 14 organic samples contained
  multiple residues 1

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What Harm is Caused by Pesticide Exposure During
Pregnancy?

• Exposures to pesticides during pregnancy
  significantly heightened risk of children
  developing leukemia 6
• Exposure to pesticides in the home during fetal
  development increased the risk of Non-Hodgkins
  lymphoma, with odds ratios as high as 9.6 for
  Burkitt lymphoma 7
• Exposures to pesticides three months prior to
  conception and during pregnancy increased the
  risk of spontaneous abortions 8
• Prenatal exposures to organophosphates appear to
  disrupt the architectural organization of
  specific regions in the brain and the development
  of the fetal liver.10

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What Harm is Caused by Pesticide Exposure for
Young Children?

• Pesticides can disrupt childhood development as a
  result of even very low exposures. 4,5
• Exposures to some pesticides during infancy, even
  at very low levels, can disrupt hormone driven
  development processes, and lead to serious
  life-long consequences 2
• Children exposed to pesticides had lessened
  stamina and attention spans, impaired memory and
  hand-eye coordination, and greater difficulty
  making simple line drawings compared to control
  group in low pesticide area 9
• Exposure to chlorpyrifos, an organophosphate,
  impairs neural cell replication and
  differentiation, as well as the functioning of
  glial cells during the first few years of life 10
• Two to five year olds consuming mostly organic
  foods had, on average 8.5 times lower levels of
  organophosphate (OP) insecticide metabolites in
  their urine 11

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Conclusion
Organic diets can reduce childrens exposure
levels from above to below EPAs chronic
reference doses, thereby shifting exposures from
a range of uncertain risk to a range of
negligible risk. Consumption of organic produce
represents a relatively simple means for parents
to reduce their childrens exposure to
pesticides. 11
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Studies Cited

1. Baker, B., C.M. Benbrook, E. Groth, and K.L.
   Benbrook. 2002. Pesticide residues in
   conventional,integrated pest management
   (IPM)-grown and organic foods insights from
   three US data sets. Food Additives and
   Contaminants Vol. 19, No. 5, pp. 427-446.
2. National Research Council. 1993. Pesticides in
   the Diets of Infants and Children. National
   Academy Press, Washington, D.C.
3. Eskenazi, B., A. Bradman, and R. Castorina. 1999.
   Exposures of children to organophosphate
   pesticides and their potential adverse health
   effects. Environmental Health Perspectives Vol.
   109, Supplement 3, pp. 409-419.
4. Cooper, R.L., J.M. Goodman, and T.E. Stoker.
   1999. Neuroendocrine and reproductive effects of
   contemporary-use pesticides. Toxicology and
   Industrial Health. Vol. 15, No. 1-2, pp. 26-36.
5. Gray, L.G., J. Ostby, E. Monosson, and W.R.
   Kelce. 1999. Environmental antiandrogens low
   doses of the fungicide vinclozolin alter sexual
   differentiation of the male rat.. Toxicology and
   Industrial Health. Vol. 15, No. 1-2, pp. 48-65.
6. Ma, X., P.A. Buffler, R.B. Gunier, G. Dahl, M.T.
   Smith, K. Reinier, and P. Reynolds. 2002.
   Critical Windows of Exposure to Household
   Pesticides and Risk of Childhood Leukemia.
   Environmental Health Perspectives. Vol. 110, No.
   9, pp.955-960.
7. Buckley, J.D., A.T. Meadows, M.E. Kadin, M.M. Le
   Beau, S. Siegel, and L.L. Robinson. 2000.
   Pesticide Exposures in children with non-Hodgkin
   lymphoma. Cancer. Vol. 89, No. 11, pp. 2315-2321.
8. Arbuckle, T.E., Z. Lin, and L.S. Mery. 2001. An
   Exploratory Analysis of the Effect of Pesticide
   Exposure on the Risk of Spontaneous Abortion in
   an Ontario Farm Population. Environmental Health
   Perspectives. Vol. 109, No. 8, pp. 851-858.

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Studies Cited (continued)

1. Guillette, E.A., M.M. Meza, M.G. Aquilar, A.D.
   Sotto, and I.E. Garcia. 1998. An anthropological
   approach to the evaluation of preschool children
   exposed to pesticides in Mexico. Environmental
   Health Perspectives. Vol. 106, No. 6, pp.
   347-353.
2. Qiao, D., F.J. Seidler, S. Padilla, and T.A.
   Slotkin. 2002. Developmental Neurotoxicity of
   Chlorpyrifos What is the Vulnerable Period?
   Environmental Health Perspectives. Vol. 110, No.
   11, pp. 1097-1103.
3. Curl, C., Fenske, R., and K. Elgethun. 2002.
   Organophosphorous pesticide exposure of urban and
   suburban pre-school children with organic and
   conventional diets. Environmental Health
   perspectives. Published online

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For more information, contact OTA at (413)
774-7511, or visit OTAs web site at www.ota.com
Attend All Things Organic OTAs Conference and
Trade Show, May 1-4, 2004 McCormick Place,
Chicago, IL