"Organic" Mischief

Certified Organic

When is organic food not organic? When it’s labeled “organic.” The Sunday NY Times (7/8/12) ran a long article about the creeping takeover of the organic food producers and processors by Big Food.

The fact is, organic food has become a wildly lucrative business for Big Food and a premium-price-means-premium-profit section of the grocery store. The industry’s image — contented cows grazing on the green hills of family-owned farms — is mostly pure fantasy. Or rather, pure marketing. Big Food, it turns out, has spawned what might be called Big Organic.

Bear Naked, Wholesome & Hearty, Kashi: all three and more actually belong to the cereals giant Kellogg. Naked Juice? That would be PepsiCo, of Pepsi and Fritos fame. And behind the pastoral-sounding Walnut Acres, Healthy Valley and Spectrum Organics is none other than Hain Celestial, once affiliated with Heinz, the grand old name in ketchup.

Is this simply conventional capitalism at work? Yes and no. The inevitable ingestion of small businesses by bigger ones as a new business arena becomes established is par for the course. There are costs involved that offset any efficiency the larger firms could, in theory, provide.

“In some ways, organic is a victim of its own success,” says Philip H. Howard, an assistant professor at Michigan State University, who has documented the remarkable consolidation of the organic industry. Organic food accounts for just 4 percent of all foods sold, but the industry is growing fast. “Big corporations see the trends and the opportunity to make money and profit,” he says.

So much for the small farmer or small businessperson as the building blocks of the economy. Small businesses that are smart or lucky enough can make the American Dream come to real life as their enterprises get snapped up by the rapacity of the giants who see new opportunities for growth. These entrepreneurs get to join the 1% or maybe only the 2-3%, but they quickly move out of the economy creating business. There’s nothing wrong with this, but the consequences do pose a series of problems for the rest of us.

First is the obvious. As these businesses are bought and merged into their new parents, they will morph from enterprises driven by the visions of their founders to ordinary divisions of big, aggressive companies who are experts at efficiency. The special care that made these companies successful in the first place gets lost quickly as larger markets replace the niches that were willing to buy “pure’ organic products. Some employees are likely to lose jobs as the efficiencies kick in. Organic food is more expensive, inherently, because the processes used to bring it to the market are more expensive. The priority given to quality as the expense of quantity is going to slip at some time; it is inevitable. And this brings me to the second big problem, what happens to the quality and nature of the products. What is “organic” all about?

The Times story is threaded through with reference to Michael Potter, founder of Eden Foods, one of the last large size independent organic food suppliers. Potter is an outspoken opponent of the actions of the federal board that certifies what organic means, by actions to allow non-natural additives.

Mr. Potter of Eden Foods was initially supportive of the government’s efforts to certify organic products. But he quickly became disenchanted. He has never sought a board appointment, for himself or anyone at Eden. “I bought into the swaddling clothes wrapped around it,” he said. “I had high hopes the law and the board would be good things because we needed standards.”

By 1996, he realized that the National Organic Program was heading in a direction he did not like. He said as much at a National Organic Standards Board meeting in Indianapolis that year, earning the permanent opprobrium of the broader organic industry. “They think I’m liberal, immature, a radical,” Mr. Potter says. “But I’m not the one debating whether organics should use genetically modified additives or nanotechnology, which is what I’d call radical.” be used.

What Potter was railing against was the growing list of additives that could be used without causing the loss of the “Certified Organic” label. He and others argue that those who buy organic products simply because they are “natural,” meaning no synthetic materials and even no additives at all, are being bamboozled. The label would seem to me to indicate that there should be no need to “read the label” to tell if something was indeed “organic.” I use the quotes here because after reading this article I cannot come to a definition that would seem to reflect the common usage of organic. The next few quotes should signal the reasons I am confused and concerned.

Ms. Fulwider surprised many observers at a board meeting in May by voting in favor of keeping carrageenan on the organic list. Before that meeting, Organic Valley was saying that it planned to find an alternative to the additive, and there is a long and active list of consumer complaints on its Web site about the cooperative’s use of it in things like heavy cream and chocolate milk.

Ms. Fuldwider (sic) has also voted to let organic egg producers give their chickens just two square feet of living space, when Cropp [a cooperative of farmers who do not accept the standards of the National Organic Standards Board] requires its own farmers to provide five.

Most controversially, she voted to add DHA and ARA to the list for use in baby formulas. Milk fortified with DHA commands premium prices, and Mr. Siemon said Organic Valley had to have a version of its milk with the additive “because that’s what the consumer wants.”

DHA and ARA are derivatives of natural products, but are not present in the milk used for baby formulas. “After DHA got onto the list, we decided to go back and look at all of the ingredients on the list,” Mr. Kastel says. “The average consumer has no idea that all these additives are going into the organic products they’re buying.” Organic foods are about 4% of the total food market, already about $30 billion annually. I don’t know how many customers that is equivalent to, but it’s a lot. They deserve to get what they think they are buying. If the companies advertised such products as green (they probably do in some cases), they would be guilty of greenwashing. The labeling as “Certified Organic” let’s them get away with this pernicious practice. All for profit. How many generations of Homo sapiens survived only on real organic foods simply because that was all there was? Denaturing foodstuffs because they are “better” is nothing but a modernist excuse for making money. For shame!

There’s a striking irony at work here besides the whole irony of what’s organic. These large companies are most likely big donors to the Republican Party, thanks to the Citizens United decision, looking to “limit” the size and scope of Government. But at the same time they are heavily engaged in regulatory capture, as the Times article describes. Maybe that’s part of the reason the 1% get there; they have it both ways. Avoid paying taxes at all costs, but capture whatever public programs can lead to higher profits. All in the name of free markets and raw capitalism. The “rest of us” have to be content with playing by their rules.

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1 Comments

Antony Upward said:

John,

In Canada we have a food system change NGO which is focusing on Local Sustainable food - both increasing supply and generating matching demand.

Local Food Plus has been operating for almost 10 years - and has some solid results - with over 100,000 people eating some local sustainable food everyday nationally. See http://www.localfoodplus.ca/. I can provide more info if you like.

Their approach includes
- A certification standard for farmers, producers, and processors - which enables you the LFP mark on your products
- A certification standard which includes organic, but adds elements for local and sustainable - which most "big organic" can't meet in most cases

Its a fantastic experiment at large scale food systems change.

Clearly a (very) long way to go... but at least its starting...

Cheers
Antony