Inside Organic Ingredients

By Douglas J. Peckenpaugh 
Managing Editor

Over the last 25 years or so, organic products have experienced tremendous growth and diversification. Organic whole foods like apples and berriesoften straining at the boundaries of acceptable quality gradually improved and evolved into niche, minimally processed products like granolas and juices. The range of organic crops expanded as momentum mounted. Eventually, USDA legitimized organics by establishing regulations, first via the Organic Foods Processing Act of 1990, and then with 2002s National Organic Program (NOP).

Over the last 10 years, sales of organic products have increased at least 20% every year, according to the Organic Farming Research Foundation, Santa Cruz, CA. This makes organics the fastest-growing sector of agriculture.

Organic product parameters 

Any manufacturer working in organics must familiarize itself with the USDA NOP Standards (see www.ams.usda.gov/nop). USDA lays out all parameters for designing products labeled 100% organic and organic, as well as products labeled made with organic (specified ingredient or food group), such as made with organic corn or made with organic grains. USDA also publishes the National List of Allowed and Prohibited Substances, which outlines the pieces designers have to puzzle together organic products.

Products labeled as 100% organic must contain all organic ingredients. On the next tier, organic products must include 95% organic ingredients; the remaining 5% must come from the National List. Likewise, a product made with organic (specified ingredient or food group) must contain 70% organic ingredients, with the remaining 30% from the National List. Products with less than 70% organic ingredients have fewer restrictions, including no need to follow the National List for nonorganic ingredients, but subsequently cannot use the term organic on the label, except in the ingredient statement. Such products also cannot display any USDA or organic- certification seals on the label. All percentages are calculated by weight or fluid volume, excluding water and salt.

Todays organically regulated world requires that product designers use an organic ingredient if it exists. When an organic alternative dictated by a products formula doesnt exist, the designer then turns to the National List. At times, that document still proves limiting. However, manufacturers can petition USDA to add ingredients to the National List.

Practical applications 

Often, an organic manufacturer will opt for the organic 95% level because 100% proves limiting. Most of the 95% organic products are driven out of necessity, says Greg Andon, national sales manager, TIC Gums, Belcamp, MD. He notes that functional limitations arise due to a lack of available ingredients. You can make 100% organic yogurt, he notes, but you will have a better texture with 95%. He cites the need for pectin and agar, which are not permitted in 100% organic products, in order to achieve the target mouthfeel.

Another challenging limitation of organics is the prohibition of preservatives with the exception of natural types like citric acid. But organic designers can take some steps to help extend shelf life. As you cannot use preservatives in organics, we rely on tight quality standards and pay close attention to things like water activity and Brix levels to ensure quality, says Prescott H. Bergh, sales and marketing, Ciranda Inc., Hudson, WI.

While the National List petitioning process has proven challenging for some manufacturers, the range of certified-organic ingredients continues to grow. This makes previously impossible organic products a new reality. For example, in late 2005, the North American food industry saw its first certified-organic caramel colors. The sucrose-based caramel color performs and functions exactly like other Class 1 caramels, says Owen Parker, vice president, research and development, D.D. Williamson, Louisville, KY. The colorant is designed for use in organic products, and manufacturers can label it as organic caramel color. He notes that the ingredient is finding its way into organic baked goods, flavor essences and distillates, and beverages, where it remains stable to pH 3.

Doubling up 

Remember that consumer perception reigns supreme. The lurking, undefined fear of pesticides, methylmercury, GMOs, PCBs, percolate and any number of other environmental bogeys has driven more consumers over to the natural and organic sideat least with a portion of their food dollars.

But before we had 100% organic we had 100% juice and other all-encompassing designations that have a wholesome perception. When combined with organic ingredients but not necessarily in a 100% organic productmanufacturers have the ability to play into two marketing arenas.

An organic caramelized rice syrup in a 100% rice formula labeled as organic, as Parker points out, makes for a label-friendly combination. The same methodology holds true for D.D. Williamsons forthcoming organic caramelized-apple ingredient, which he notes could appear as caramelized apple juice concentrate or caramelized apple on ingredient statements for 100% apple products also labeled as organic.

Another combination that plays into a crosshatch of marketing synergies is organic whole grains. When USDA released the 2005 Dietary Guidelines for Americans, it added considerable momentum to whole grainsnot unlike the energy that stemmed from the establishment of organic legislation. Mike Orlando, chairman and CEO, Sunnyland Mills, Fresno, CA, notes that he has seen a tremendous increase in demand for organic bulgur wheat products because they are both whole grain and organic. He notes that his customers are using organic bulgur wheat in a variety of bread mixes, pilaf mixes, snacks and crackers.

Like organics, sales of wholegrain products are up dramatically across the board. As more organic whole-grain ingredients are available to product designers, the potential for this category will likewise increase. As is typically the case with all organic ingredients versus their conventional counterparts, Orlando notes that his companys organic grains do not differ in flavor, functionality or usefulness in formulations. They perform the same as our conventional products.

The Whole-Wild picture 

Organics have grown concurrently with national natural-foods retailers. Natural-foods retailers like Whole Foods and Wild Oats, as well as expanded natural-foods sections in traditional retailers, are sprouting up around the country, says Karen Manheimer, vice president, natural products division, Mastertaste, Teterboro, NJ. This is helping to expand the entire category of organic processed foods, thus driving demand for organic flavor ingredients. She notes that her companys organic flavor ingredients, which perform identically to their nonorganic counterparts, appear in pasta sauce, salsa, chai beverages, teas, juices, cereal bars and hot dogs. Our organic essential oils are virtually identical in intensity, use, etc. as our conventional oils.

If designing organic products for this sector, manufacturers must sometimes follow chain-specific formulation criteria, which often limit use of certain ingredients and processing methodsthink minimally processedin addition to the established NOP rules (although a fair amount of crossover exists). Sonja Tuitele, director of corporate communications, Wild Oats Markets, Inc., Boulder, CO, notes that any 100% organic product is eligible for retailing at the chains stores. We also have several products that are made with organic ingredients, she says. We strive to support as many organic products as possible, regardless of the classification, but do require USDA-accredited certification to sell these products.

Identity preservation 

Ingredient suppliers who work with organics need to take steps to preserve the organic identity of the products they source and/or manufacture. This partially involves maintaining a thorough paper trail.

At the farm level, identity-preservation testing must prove that GMOs and/or pesticides have not contaminated organic crops via drift, cross-contamination, etc. Even a minute trace of GM material in a harvest can revoke its organic pedigree.

Every ingredient needs handling and identity-preservation documentation tracing each step after leaving the farm. At every stop along the way, a manufacturer must be able to determine that no cross-contamination with conventional materials has occurred.

Hidden sources of contamination can also exist. For example, citric acid, a common preservative in organic foods, is sometimes derived from Aspergillus niger fungus combined with a corn substrate. Manufacturers need to ensure that neither the fungus nor the corn substrate has GM roots. Whether or not the selected certification body digs that deep is another matter, but agents from Organic Materials Review Institute, Eugene, OR, and Oregon Tilth, Salem, OR, have recently raised this issue, along with other hidden GM concerns related to enzymes, vitamins, flavors, grains and other ingredients on the National List. Through careful inspection of documentation and identity-preservation testing, manufacturers can usually eliminate any GMO risks. Its always advised that manufacturers work closely with their ingredient suppliers when sourcing organic ingredients.

Continued growth 

Organics have grown at a moderate rate when compared to passing fads like low-carb. This solidifies organics logical place in the industry and permits a healthy environment for continued growth.

The demand is steadily increasing, says Andon, but not skyrocketing. He views that as beneficial. His company has seen demand for both 100% organic and organic products, most notably for applications like ice cream, yogurt, nutrition bars, soups and sauces. 

One aspect of NOP that Andon would like to see addressed is a clearer definition of why any given ingredient is granted organic status. Some ingredients have natural and organic clout but fall outside the realm of organic certification due to their origin. Carrageenan, derived from wild-harvested red seaweed, is permitted in organic and made with organic (specified ingredient or food group). However, wild-harvested gum arabic can gain certified-organic papers.

Manufacturers often cite the increased cost of organic ingredients as a barrier. Although costs have leveled somewhat over time, organic ingredients, as Parker notes, can still cost up to three times as much as conventional. Theres a lot more work underneath the surface with organic ingredients, he says.

Organic manufacturers can often recoup those added costs by charging more for an organic product. And as manufacturers complete initial R&D surrounding new organic lines, supply-chain costs typically adjust accordingly. There will be continuing pressure from manufacturers and retailers to drive price points closer to conventional ingredients, says Bergh.

Increased organic agriculture and the establishment of a long-term organic processing industry have yielded increased supplies of certified- organic ingredients. However, designers still need to ensure availability before planning a new organic product or line. The main caveat in using organic is that users must do a feasibility study, as volumes may be limited and availability restricted to crop times, says Manheimer.

We must come to terms with the fact that we largely depend on the environment for our agricultural commodities. Availability of organic products is reliant on the raw product availability, says Orlando. For example, in some years, droughts will affect the organic wheat market and make it difficult to find high-quality organic wheat to process into our premium bulgur products. We are now sourcing from three different regions to eliminate problems with supply. What users should know is that there are longer lead times with organic ingredients due to intermittent runs of organic product versus conventional product. Taking these lead times into consideration is important as the products ramp up from tabletop to full production.

Organics have come a long way over the last couple of decades. Positive, reasonable levels of growth have yielded an increasing supply of certified-organic ingredients and subsequent products.

However, we still have much ground to cover regarding the practical application of the NOP standards and ongoing amendments to the National List. A common goal of preserving the integrity of organic products should remain at the forefront of this continuing debate, as long as its tempered with scientific and practical realities of organic farming and ingredient processing.