Organic market opportunities in the US

Organic market opportunities in the US

17-18 October 2019 Mandalay Bay, Las Vegas, USA

Learn more about Fi North America:

www.figlobal.com/northamerica

Organic market opportunities in the US Organically sourced ingredients are increasingly in demand from consumers seeking products they perceive to be natural, ethical and sustainable. Unsurprising then that the number of new organic product launches has increased 147% since 2010, according to Mintel’s Global New Products Database (GNPD).

This growing market for certified organic ingredients is almost entirely concentrated in North America and Europe, which together account for 90% of organic retail sales value, according to the Research Institute of Organic Agriculture (FiBL)1.

Global organic product launches 30.000 25.000 20.000 15.000 10.000 5.000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018

Date Published

Source: Mintel GNPD

Baptiste Demur, Global Category Manager – Dry F&V Taste Specialties at Naturex, says:

“Organic appears to be the go-to solution for many … it takes a lot of efforts to secure sustainable supply of organic materials, but the size of the prize is definitely worth it. The shift has begun, consumers are not going back and the industry has to embrace this change.”

Identifying opportunities In the US, interest in organics has evolved beyond basic foods like fruits, vegetables, meat, dairy and grains. Processed food and drink manufacturers have shown growing interest in the organic commodity ingredients that make up the bulk of their products, but suppliers have seen rising demand for organic speciality ingredients as well. Demand for 100% organic products has spurred many speciality ingredient suppliers to increase their organic offering in the past few years, and several companies have introduced ranges of speciality ingredients like certified organic yeast, vinegars, dough strengtheners, extended shelf life systems, sweeteners and colours.

Organic market opportunities in the US | 2

The trend has also led to rapid growth in the global botanicals market; botanicals are already used in products for their purported health benefits, and there is considerable overlap between consumers looking for healthy ingredients and consumers looking for organic products. Many new brands are entering the market with organic product lines that require oils. According to Mintel’s GNPD, nearly 8,000 new products containing organic oils were launched worldwide in 2018, about 280% higher than in 2010.

Products with organic oils 9.000 8.000 7.000 6.000 5.000 4.000 3.000 2.000 1.000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018

Date Published

Source: Mintel GNPD

Achieving certification In the US, the term ‘organic’ refers to food or agricultural products that have been produced according to USDA organic regulations. Certification is required to confirm that manufacturers or suppliers including those outside the US, are in compliance. Operations seeking certification must submit an application for organic certification to a USDA-accredited agent.

The USDA’s Environmental Quality Incentives Program (EQIP) offers first-time organic farmers technical assistance as well as a one-off payment that varies by region2. Manufacturers themselves are increasingly offering incentives for farmers to gain organic certification, thereby ensuring supply of a certified organic ingredient. Companies including Stonyfield Farms, Organic Valley, Whole Foods and Nature’s Path Foods are among those that have offered grants and technical assistance to US farmers.

Organic market opportunities in the US | 3

Organic labelling Manufacturers have a range of options when it comes to making organic claims on the US market, including ‘100% organic’; ‘organic’, for which 95% of the ingredients must be organic certified and the remainder must not be commercially available as organic; and ‘made with organic ______’, which can only be used if at least 70% of the ingredients are organic3. For products with less than 70% organic ingredients, brands can also choose to list individual organic ingredients within the ingredient list.

The United States also has a National List of permitted non-organic ingredients for use in organic products, which includes many of the same additives permitted in the EU, and also a broad range of naturally derived flavours and colours4.

Ingredients suppliers and manufacturers should also be aware of the FDA Food Safety Modernization Act (FSMA), which has toughened up rules designed to prevent food safety problems from occurring.

The law gives the FDA important new tools to hold imported foods to the same standards as domestic foods. All food recall-related information is published in a standardised way, and a recalled product’s photo, batch number and distribution are usually publicly communicated.

GMO regulations In the US, GMOs are defined as organisms obtained through genetic modification by recombinant DNA techniques. There are no federal laws specific to GMOs, only a coordinated framework between three agencies: the Environmental Projection Agency (EPA); the Food and Drug Administration (FDA); and the US Department of Agriculture (USDA). In 1997, the FDA established a voluntary consultation process with GM crop developers to review the determination of “substantial equivalence” before the crop is marketed, such as assessing the toxicity and allergenicity of the gene product and the plant itself.

If you are interested in finding out more about organic ingredient opportunities in the US, the Food ingredients North America event can provide unique insights and networking possibilities. The event will provide buyers and sellers of ingredients with practical, objective formulation advice, regulatory challenges, consumer trend data and new ingredient technologies from a global perspective, as well as the opportunity to do business in the US.

The information provided here was compiled with due care and up to date to the best of our knowledge on publication.

Organic market opportunities in the US | 4

Sources http://organic-market.info/news-in-brief-and-reports-article/global-organic-data-show-resilient-growth. html 2 https://www.nrcs.usda.gov/wps/portal/nrcs/main/national/programs/financial/eqip/ 3 https://www.ams.usda.gov/grades-standards/organic-labeling-standards 4 https://www.ams.usda.gov/rules-regulations/national-list-allowed-and-prohibited-substances 1

Fi North America is co-located with:

Organic market opportunities in the US | 5