By Steffen Weck

Once a niche market that few manufacturers troubled with, the organics segment currently is enjoying double-digit growth, something you’ve probably noticed. More and more food manufacturers have taken the plunge into organics or are considering doing so.

The logistics involved in getting a piece of the organic pie can be daunting, however. Meeting regulatory requirements as well as consumer demands, watching out that you don’t comingle organic and non-organic product, even sourcing organic ingredients to begin with takes more time and attention than many bargain for. For some, producing an organic product may not even be in their best interests. But for those who feel a foray into the organics segment is a smart move for even a portion of their product, it can be done, potentially with great success.

One thing’s for sure from my perspective: Organic isn’t going away any time soon.

To Be or Not To Be?

For some companies, it may make sense to develop some kind of all-natural product, but it really boils down to the consumer’s image of the company and/or brand. If the company produces deep-fried frozen appetizers, it’s going to be difficult to convince the consumer that there’s a “commitment” to the idea of organic. It doesn’t mean it’s not worth a try, but think hard as to whether or not jumping on the organics bandwagon is the right move. It’s not a requirement, after all.

To help make the decision, a consulting firm that specializes in fair trade, organic and local sectors of the market can help. These firms can determine market opportunities, assist in the development of products and product ranges, and provide guidance on processing techniques. Consultants like these also can assist in obtaining organic and fair-trade certifications, something that will be necessary to move forward in the process.

Issues, Solutions

Availability is by far the biggest issue when working with organic ingredients. A company with limited distribution can usually find the quantity of material to support its annual volume, but brands with national distribution may find it difficult to secure enough supply to support system-wide distribution. This is where the added work comes in: The bigger the company, the more purveyors needed to meet government regulations for organically labeled products. Food production is already highly regulated, but when “organic” is added to the mix, be ready for much tighter rules and a lot less time to play with.

Organic food growers are rapidly gaining market share and power, partly because there just aren’t that many of them right now. Because of this, sourcing adequate ingredients can be challenging. It might take some re-assessing and re-structuring of the product to make organic happen. However, some have the budget for this, and some don’t.

Another possible cost is that of inventory management and segregation, along with thorough and ongoing employee education. In working with organic and non-organic apples, for example, additional warehousing space may be needed, and this is a cost that must be justified by sales volume and/or product margin.

Thankfully, technology exists today to help out with all of this. A highly functional ERP (Enterprise Resource Planning) system will help smaller producers (as well as larger ones) forecast and plan for a limited incoming supply due to seasonality or inconsistent suppliers. Systems that have been specifically developed for food manufacturers dealing with organics — of which there are more all the time — can alleviate many a producer headache by calculating what is needed and when. These systems not only track everything that’s going on, they streamline the whole process and keep it organized, notifying the user when there’s a threat of comingling organic and non-organic ingredients and recording individual lot properties.

The Nature of the Beast

Organic products are largely free from chemicals and additives, which makes them potentially better for you and the environment. Of course, without using the chemicals that have been developed over time to keep food fresher longer, products become much more perishable, much quicker. That’s fine when product is going from farmer’s truck to dinner table in a few hours, but today’s food manufacturers are shooting for a longer shelf life than that, of course.

Some producers may need to implement new or altered operational processes in order to win at the mass distribution of organic goods game. It can seem like a bit of a paradox — using highly perishable ingredients for mass distribution — but innovative companies are finding solutions every day and reaping the rewards.

Employing a sophisticated ERP system will help create and maintain a product that can proudly proclaim its organic or all-natural qualities.

Thinking outside the box about the kind of product your company offers and re-examining market goals may be helpful, too. Knowing the regulations, making sure you are in compliance, and keeping close records of sources, production, and operations are all necessary steps in the quest for organic-product utopia.

Steffen Weck is a senior managing consultant with Food Business Consulting, a full-service, concept-through-commercialization resource based in Kansas City. He can be reached at weck@FoodBusinessResource.com