supermarket
Analysis
Going Organic - STEP ONE - Making the Decision
12/19/2007
Now that we've seen how certain companies have snuck their way into the organic market, in this issue we'll look at the process of organic certification the fair way. We'll start by profiling a company that has applied and what obstacles may stand in their way.
Obviously, seeking certification requires a certification agency. These work geographically. There are something just shy of a hundred certifying agencies to choose from. And they are not all built the same.
Island Way Sorbet is based in Port Elizabeth, South Africa. Their product, at face value, would seem perfect as a candidate for organic certification. Sorbet is served in a hand-carved natural shell. The organic "look" would seem to go hand-in-hand with an official designation. And the company has been willing to make changes as necessary to obtain it. The result of certification in a green age is increased product value and acceptance into the emerging green market, not to mention intrinsic values such as the kind of corporate pride that comes from "doing the right thing."
Island Way already has certain certifications. All of their products are already Halall certified, useful for capturing Islamic markets, for instance. Most sorbets are also certified as kosher products. And they have ISO and HCCAP accreditations too, international food safety standards which are prerequisite for all markets.
The reward is apparent, but the costs might not be. Island Way is strategically located next to many farms, both conventional and organic. To get a certified organic label, they not only have to tend to their own processing practices, but pay premium rates for select fruit from certified organic farms. Most organic farmers justify their labor-intense practices with higher price expectations. It works for the supplier, but not the processor.
Costs must be checked against standards and requirements. For a company based outside the USA, we would turn to the International Federation of Organic Agriculture Movements (IFOAM). IFOAM has developed the Organic Guarantee System (OGS), which checks the IBS, the IFOAM Basic Standards for organic production and processing, as well as the certification and accreditation practices of the accrediting agencies themselves.
IFOAM standards are uniform compared to US certifications so certification is actually tougher for companies like Island Way.
Making the road even tougher, demand for organic is increasing, driving prices higher. According to the Organic Consumers Association, in 2005, demand for organic dairy products outgrew supplies. The same scenario is likely for fruit. As a result, there is a tendency for processing companies to purchase conventional farms and convert them to organic in whole or part, increasing supply and, by the way, shifting organics away from small farms in the process.
The cost of fruit from Port Elizabeth dropped 17% overnight when the African Growth and Opportunity Act (AGOA) was passed in 2003, eliminating tarrifs. Dynamic Commodities LLC introduced Island Way sorbet to Florida and Wisconsin in the same year. The act provided much needed jobs and opportunity to more than 200 workers in the years that followed. And the broadening of their international reach, especially in the US, will likely reverse longstanding injustices in a historically troubled area by empowering workers with gainful employment under fair labor practices.
Island Way secured a major contract with 7-Eleven in 2003 with technical and marketing assistance from the USAID-funded South Africa International Business Linkages (SAIBL) program. Since that time the tasty sorbet has also landed on the shelves of Walmart and Cosco and is currently seeking distribution through Publix and others.
Will it be profitable to "go organic?" Matt Russell, an exclusive Island Way Sorbet distributor for South Florida says "we are in the process."
Matt first found out about Island Way as the CEO of C.A.R.E Christian Television Network - a home shopping network that donates a portion of all proceeds to missionary work. Island Way has taken a hybrid approach to marketing, using direct sales while acquiring an increasing presence in retail chains at the same time.
The cost for Island Way will depend much on the cost of fruit in South Africa, a pulse that Dynamic Commodities no doubt takes very carefully, hence the name. But processors also must undergo scrutiny, not just purchasing agents who consider either the products of producers or their businesses.
Next step for Dynamic Commodities LLC was to select a certifying agency. The Rodale Institute provides a certification agency look up on their website, The New Farm. All you have to do is type in your location. The site lists five agencies that would cover South Africa for Island Way. One, The American Food Safety Institute, is marked off as suspended. Fees are mostly set by the acre and paid by the farmer, rather than processor.
There is nothing inherently "unnatural" about the processes used in the production of Island Way sorbet. Preservatives are a necessary ingredient, especially for apple, but since they are frozen, little is needed. What little is used is locust bean and guar gum, along with mono and dyglicerides - natural fruit fats. A web look up shows that if you inhale pure locust bean gum you'll probably get sick. But that's a problem only the factory workers need concern themselves with.
Overall, the Island Way sorbets score well for health - there are fewer than 60 calories per serving, amazing for an ice cream treat, less than a gram of fat and hardly any cholesterol, sodium or carbohydrates. Knowing the product qualifies and having measured the costs, Island Way is moving forward with the certification process.
In part three of this series we will examine the relative costs of organic versus conventional food supply in a variety of markets.
(to be continued)
Jeff Overbeck , Freelance Reporter