Craving organic: Overcoming high costs and challenges, regulatory hurdles and naturalness trends

31 May 2021 --- Organic remains a key positioning on the market for natural ingredients. Among recent developments within the space, suppliers are observing a trend toward ready-to-use compounds for instant organic powders. In Europe, activists are pushing back at a new proposal to “weaken rules” on genetic engineering. 

Speaking to FoodIngredientsFirst, key suppliers weigh in on the existing challenges involved in organic cultivation while offering recommendations on how to stimulate growth for a sector that is generally challenged by high costs and supply inconsistencies.

“A major driver of organic is consumers’ desire for a greater degree of transparency into what goes in,” says Carsten Granso, business unit head of Sternchemie, a German supplier for organic lecithin and MCT oil.

“More accurately, it is about knowing what doesn’t go into the cultivation, harvesting and processing of organic ingredients and products, and having a full record of the chain of custody.”

What’s trending in organic products?
Granso has observed a trend toward ready-to-use compounds for “instantization” of organic powders. These include milk powders, protein powders, non-dairy powders and meal replacers.

“In particular, companies in the US and Europe show deep interest to replace conventional raw material with organic,” he remarks. “We see sports and medical nutrition products, chocolate and bakery products exhibit highest demands for organic lecithin and MCT products.”

Cost still remains the single greatest impediment to scale organic produce.Tapping into these demands, Sternchemie has launched a sprayable lecithin compound, SternInstant Organic, for the dairy and cocoa industry. The company has also recently unveiled its BergaBest MCT Oil 60/40, which is purely based on coconut origin.

“While the plantation and sourcing of raw materials [for BergaBest] is 100 percent organic certified, the characteristics of the MCT-Oil remains unchanged,” Granso notes.

“We have observed increased interest in MCT for organic sports and special nutrition products, while at the same time there is an increased focus on potential contaminants such as 3-MCPD and glyceryl-esters. This requires careful control of production processes and selection of suppliers.”

The lack of harmonized guidelines entails a significant amount of uncertainty and conflict potential, notes Granso.

“Mainly in the EU, there are country-specific and stricter standards and/or guideline values in addition to EU organic and the associated regulation – for example the orientation value for pesticides from BNN (Bundesverband Naturkost Naturwaren),” he says.

Red flag on deregulating new genomic tech
In Europe, the organic food and farming movement is criticizing the European Commission’s (EC) plan to set up a new legal framework for crops derived from “New Genomic Techniques.”

In a report, the EC revealed it is “ready to explore options” for a new legal framework if Member States give the green light. Jan Plagge, president of the International Federation of Organic Agriculture Movements (IFOAM) Organics Europe, has spoken out against the proposed policy.

“A weakening of the rules on the use of genetic engineering in agriculture and food is worrying news and could leave organic food systems unprotected – including their ability to trace genetically modified organisms [GMO] throughout the food chain to avoid contaminations that lead to economic losses and to live up to organic quality standards and consumer expectations,” he remarks.

“Organic producers urge the EC and [EU] Member States to maintain the existing regulatory framework and seriously consider the impact of the proposed regulatory scenario on organic food & farming, consumer choice and access to agrobiodiversity.”

IFOAM Organics Europe asserts that weakening the regulation of these GMO technologies would actually contradict the objectives of the EU Green Deal and the Farm to Fork and Biodiversity strategies.

The organic food and farming movement is criticizing the European Commission-led plan to establish a new legal framework for crops derived from new genomic techniques.The organization further maintains that transparency on the use of genetic modification should continue to be applied throughout the food production chain.

“It is baffling that the Commission envisages to jeopardize the development of existing agronomic solutions put forward in its own Farm to Fork strategy to make room in agriculture and food production for genetic modification technologies with a track record of unfulfilled promises,” says Eric Gall, policy manager at IFOAM Organics Europe.

Rather than “depending on and hoping for silver bullet solutions” such as GM crops, IFOAM Organics Europe stresses that the EC’s focus should be on upscaling concrete and well-defined agroecological practices with proven benefits for biodiversity and soil quality.

The organization maintains: “Organic farming is already implementing a wide range of practices to make our food and farming systems more resilient to pests and diverse environmental conditions, as well as extreme weather events linked to climate change while reducing the dependency on synthetic pesticides.

Achieving scale to offset challenges to organic
Continuous sourcing and gaining quality management approval for all organic ingredients are key benchmarks for producers in this space. These objectives ramp up costs significantly, which still remains the greatest impediment to scale organic produce. 

“Many families, despite wanting the benefits that organic provides, simply cannot pay the premium that organic represents,” says Martin Williams, president and chief innovation officer at Above Food, a Canadian supplier of plant-based ingredients.

“For unit economics to come down closer to parity with conventional, we need scaled agriculture and scaled production. However, for farmers to convert conventional to organic is a long, and arduous process, which represents significant risk for farming operations big and small,” he notes.

Difficulty from achieving scale is what drives many of the issues facing single-origin organic production.

Difficulty from achieving scale is what drives many of the issues facing single-origin organic production.

“When one can achieve scale, they can weather supply inconsistencies, bring down unit economics to expand accessibility, and gain broader market recognition or deploy capital to educate consumers on the value of single-origin organic,” stresses Williams.

“Yet, achieving scale on your own is incredibly difficult. We favor a co-operative model where several producers with shared ideals, production techniques, and geography come together to create scale.”

Above Foods recently expanded its organic offerings with the acquisition of Farmer Direct Organic Foods, which “pioneered and perfected” this model over the past ten years. The company sells Regenerative Organic Certified whole grains and is able to offer seed-to-fork traceability for all its products.

Organic flavoring solutions
The upward trend in ethical food sourcing has prompted Diana Food to launch a range of Organic and Animal Welfare Poultry solutions, comprising broths, meat powder and chicken fat. The range offers performance benefits in terms of solubility, turbidity and mouthfeel. 

The new offerings convey a wide sensory pallet for manufacturers to fine-tune their own taste signature. They can add a boiled or rotisserie note; a fatty, juicy meat note; or an umami note to their creations. 

“The main challenge of organic chicken farming versus conventional farming is to ensure the farm competitiveness taking into consideration a number of additional constraints,” says Annaig Thomas, EMEA regulatory affairs manager of meat and seafood at Diana Food.

“Many organic chicken farms are lower density and cannot be compensated by farm extension because organic farms are smaller, in most cases. There is a need for adapted infrastructures allowing natural light, wooded courses, food and outdoor access and organic feeding.”

The upward trend in ethical food sourcing has prompted Diana Food to launch a range of Organic and Animal Welfare Poultry solutions.The organic solutions within the new range include organic hen broth and hen bone broth, both in liquid and dehydrated forms; organic hen meat powder and organic hen fat.

In the “Animal Welfare” offer, products include liquid and dehydrated free-range chicken extracts; free-range hen meat powder and free-range chicken fat.

Diana Food sources its fresh chicken materials close to its factory and raised by farmers in an ethical environment. The process valorizes every part of the chicken to minimize waste across the value chain.

The production of this range makes use of “kitchen-like” processing techniques, resulting in non-allergenic, clean label products that are free from monosodium glutamate (MSG), yeast extracts, colors and added hormones.

In a video interview, FoodIngredientsFirst recently caught up with Julie Le Guyader, Diana Food’s global product manager, to speak in detail about the new range.

By Benjamin Ferrer