Special Report on Packaging
Posted - October 4, 2009
In search of the most sustainable packaging
By Angela West
The growth in popularity of organic foods and natural products has resulted in a considerable level of new product development over a short period of time. As noticed during industry trade shows, the manner in which organic, nutritious and fair trade goods are packaged and presented to a growing consumer market demanding them, is frequently overlooked. Nutrition, environmental concerns, marketability and logistics are all factors that directly influence the choice of packaging substrate and design. Which are the most unique, convenient, eco-friendly and safe packaging solutions? Which are the best materials? Could it be PET or bio-plastics? Or is it glass or metal?
This is the second of a series (started with the O.W.N. Summer 2009 digital edition available at www.organicwellnessnews.com) on packaging alternatives that fit the values of the green movement. We asked industry players about their choices. Here are some of their replies.
In Canada Harmony Organic opts for traditional glass shaped bottle
Harmony Organic Dairy Products Inc. is a medium sized organic certified enterprise owned and operated in Ontario since 2001 by organic dairy farmers Lawrence Andres and Ross Wilhelm. Although market demand has forced the dairy to also offer its milk and cream products in recyclable cartons and 4 liter bags, the most discerning consumers still prefer to buy their milk in reusable attractive old fashioned shaped glass bottles. The reason? Taste!, says marketing director Robert Kuenzlen. “Anyone who has tasted milk from a glass bottle can attest, milk packaged in plastics and cartons doesn’t compare on taste at all.”
Harmony Dairy wanted the old school milk bottle with the square neck that older folks remember being delivered to their doorstep every day. Produced by packaging giant, Stanpac, the same bottle is also being used by other non-organic dairies in North America. Their goal was not to design a special bottle for the company, but to use what was already available as both a cost saver and out of consideration for the environment.
Harmony retailers charge a high (one to two dollar) deposit for the glass bottle, with a 60% to 70% return rate. One of the challenges to their rate of return is that consumers keep the bottles as keepsakes or for other uses. Harmony Dairy uses hydrogen peroxide rather than chlorine to clean and sanitize their bottles when they get them back. The lids used are No.5 plastic which can be recycled, and they are bi-phenol-A (BPA) free.
Sales of the glass-packaged milk grew last year by almost 30%, a direct response to the increased consumer call for glass. Despite the success of the program, initial implementation and reverse logistics were the biggest challenges for Harmony Dairy. It required a commitment from their vendors to donate space to the program for sometimes dirty or unwashed bottles. Another big challenge was the weight; shipping costs increased dramatically, with new charges for returned bottles and increased charges for the initial shipment.
But once all of the logistics were in place, the operation ran smoothly, according to Kuenzlen. Based on the results, Harmony Dairy gives its glass packaging program a big thumbs up, and will keep it up in the years to come.
In Brazil Canaspirit goes eco-friendly beyond the ingredients
Formerly Cachaca Canaa, this artesanal producer of cachaca, one of Brazil’s best-loved alcoholic drinks, believes in the process of thinking about the environment in every facet of the product life cycle. Cachaca is an alcoholic beverage made from fermented sugar cane juice. Canaspirit started producing premium organic certified cachaca in late 2007 and produces around 50,000 litres in a year, so they do end up using a fair number of glass bottles.
The packaging as well as its content was an important part of Canaspirit’s environmental philosophy, according to marketing director Isabel Calil. “We were concerned not only about making a nice and good looking bottle that people would like and keep in their bars, but also the way this bottle would be produced”, she says.
Canaspirit produces its own bottles with several more eco-friendly methods than you would find at a conventional glass production facility in Brazil. One of these is in the way that it handles sandblasting, the process by which the glass is made translucent. The abrasive material used in this process is aluminum oxide which is not harmful to the environment. The equipment is automated with filters and an internal vacuum does not allow dust to get into the air during the sandblasting process. The aluminum oxide, which is already an existing mineral in the soil, is returned to the environment as soil fertilizer once the process is complete.
Canaspirit was careful to avoid any chemical processes for the etching of the bottles as they didn’t want to soak them in harmful chemicals such as sulfuric acid, fluoride or chloride , which is the common practice. Some of these processes have been banned around the world for being highly harmful to the environment and the health of the operators who run the equipment.”We want our product to be appreciated for the care that has been taken in its production from the soil to the end product”, says Calil.
In the United States Steaz offers glass bottles and metal cans
Steaz, a division of The Healthy Beverage Company, was launched in 2003 by entrepreneurs Eric Schnell and Steven Kessler in Newton PA. They were a small two-man shop with one purpose in mind: take the evil out of the soft drink business. Schnell told O.W.N. that “plastic was not even considered to be an option”, when they started their business. They use glass for their organic soft drink and sparkling tea products not only because it is recyclable, but also because carbonation in plastic can have adverse effects on the quality of the drink. Plastic also means a shorter shelf life for the drinks than glass. The bottles are decorated with high gloss, wet strength conventional paper labels, while the cartons and all marketing material are printed with soy-based inks. By the end of this fiscal year, Steaz will have sold 200,000 cases of their glass-packaged products, with 24 bottles to a case, removing almost five million bottles from the plastic waste stream.
All Steaz beverages are certified organic and Fair Trade Certified. In the United States Steaz is sold at retail outlets such as Whole Foods Market, Publix, Wegmans, Safewayand Shaw’s supermarkets. Steaz is also distributed in Canada and Mexico, the Netherlands, Australia, India, Singapore South Africa and the Middle East.
Steaz offers its organic fair trade iced tea and energy drinks in 16 ounce recyclable BPA-free aluminum cans. The cans were specially designed to handle their formula, co-founder Schnell told O.W.N. The can manufacturer worked with their ingredients and the inside of the can holds up with a non-toxic, organic lining. The process produces a harder can which is able to stand up to heat. The can goes through a tunnel where it is baked for 15 minutes to harden it. Acid levels will not erode the can itself due to the protective lining in place.
Bisphenol A (BPA) is a common component of food containers and baby bottles. It has been suspected of being hazardous to humans since the 1930s, but only in the past couple of years have governments started to question its safety. Studies suggest BPA is an endocrine disruptor able to mimic the body’s key steroid hormone estradiol. BPA has been linked to several health disorders from diabetes Type 2 and obesity, to breast and prostate cancer and negative effects on the development of the brain, behavior, and prostate gland in healthy fetuses.
US organic pioneer Eden Foods ahead of the pack
In spite of the concerns about BPA based on studies conducted over the past fifty years and the media awareness of the last two years, finding a can company able to offer a BPA-free lining was not an easy task for Michael Potter, president of Eden Foods, who went out over ten years ago in search of the can company that would offer his products a safer alternative to BPA. Only one supplier at the time, Ball, could fulfill his request offering a lining based on a vegetable resin. It meant a higher production cost, since they were made just to meet Eden Foods requirements, but the effort was worth it. Ball is still a can manufacturer that offers a safe BPA-free process, and Potter suggests that any company looking to duplicate their efforts contact Ball to get started. “The process is 14% more expensive than producing a conventional can, but we wouldn’t have considered any other option,” says Potter.
Eden Foods, the largest privately owned organic pioneer in the United States has been using BPA-free for a decade, except in the cans for tomato products, where there is no approved alternative yet. Now that consumers are more aware of the safety concerns, Eden Foods are among the first food companies to label its canned products “BPA-free.” Eden Foods was recently selected the No. 1 food company in the world and No.3 best company overall by The Better World Shopping Guide. Michael Potter and his team have proven that if there is the will to become more sustainable, there is always a way.
Vendor solutions
The following programs are managed by vendors and dealers of products rather than the manufacturers themselves.
PatchBerry Farms and Pine Hedge Yogurt shows a 97% return rate
Canadian PatchBerry Farms has been selling Pine Hedge Yogurt and Harmony Organics milk at an organic farmers market stall in Ottawa and through home delivery PatchBerry has a return rate on its bottles of 97% on the milk from Harmony and credits the success of the program mostly to the deposit. PatchBerry has a 2.00 deposit on its milk bottles and a 1.00 deposit on its yogurt bottles. This financial incentive is enough to guarantee that almost every customer returns their bottles; that and the fact that PatchBerry collects them through its home delivery service can’t hurt either. People are only bringing back the bottles when they are buying their products through the organic farmers market. Pine Hedge Yogurt, who sells through other vendors in addition to PatchBerry, has a 75 to 80% return rate on its yogurt jars. They reuse all of the jars that they get back. The owner, Josef Heinzle, estimates that they cannot reuse only 1% of the jars.
PatchBerry Farms also adds that if consumers are to purchase glass, they should rinse out the bottles prior to return in order to assist the logistics in running a bit more smoothly. This would hold especially true for a store; if a bottle return facility is something that could be cited by a health inspector, the practice won’t last long.
The Holdouts
Most health-conscious shoppers prefer glass for food packaging, a recent survey conducted for the Glass Packaging Institute revealed. Consumers believe glass keeps the true flavor and taste (79.8%) and purity (77.3%) of a food product. Still, Stonyfield Yogurt decided to not go with glass for the reasons that they state on their website:
“Glass, which is widely recycled and made from recycled material, was rejected (as a form of packaging) as the environmental costs of transporting the heavy material outweigh the benefits. The energy (fossil fuels) used over the entire life of the glass package for its manufacture and transport exceeds the energy that goes into the manufacturing and transporting of a plastic container.”
For this large firm, this was a valid decision as they are transporting yogurt, an item traditionally served in small containers, across North America. A smaller-scale dairy, such as Harmony Organics (mentioned above) that is able to recover all of their bottles for reuse may have a different economic view.
When asked why he thought more organic companies were not using glass, Joe Cattaneo, president of The Glass Packaging Institute (GPI) indicated that one of the overriding barriers is the perception that glass is expensive. This is largely a misconception, particularly with heavier products such as liquids. Glass costs no more to ship than plastics with products that are already heavy to start with, and the only concern most suppliers should have is fragility.
A local producer of glass means a reduced, rather than a heightened, carbon footprint, according to Cattaneo. To take this a step further, there are research and development efforts underway by GPI member companies to develop glass that is a thinner wall size with the same strength, thus reducing the shipping weight and limiting material costs.
Bag It Back Program at LCBO and Beer Store
Sales of alcoholic beverages in Canada is done under the individual authority of the ten provinces and three territories. In Ontario sales are done through the governmental agency called the Liquor Control Board of Ontario. The LCBO is the largest single buyer of alcoholic products in the world and has used its position to implement a highly successful reuse and recycling program of its products. Headquartered in Toronto, sales in fiscal 2008-09 were $4.27 billion and the LCBO delivered a $1.40 billion dividend to the Ontario government due to its status as a governmental agency. The dividend helps pay for health care, education, social programs, infrastructure and other important government services.
The Ontario Deposit Return Program (ODRP) or the Bag it Back Program as it is also known, was implemented in 2007 to get back high quality glass containers for reuse in high-value products such as fiberglass. The program charges a ten cent deposit on glass bottles under 630ml and a twenty cent deposit on containers over 630ml. Consumers can return their bottles to any LCBO store, which are present in even the smallest towns of Ontario.
As of July 2009, over a half billion containers (glass bottles, cans and other) had been diverted from landfills as a direct result of the program. 90 percent of the returned glass containers are recycled into higher value products such as new bottles, fiberglass insulation and glazes for ceramic tiles.
The goals of the ODRP when it was introduced were to:
• Allow municipalities to add other materials to their waste diversion programs
• Divert an additional 25,000 to 30,000 tonnes of glass annually from landfills
• Help create new markets for recycled goods
• Strengthen the culture of recycling in Ontario
Since the introduction of the ODRP in February 2007 more than 220,000 tonnes of glass alcohol containers have been diverted from the Blue Box (recycling) program and landfills. The program achieved an overall return rate of 71 per cent at the end of its second year in February 2009 and is continuing to climb. The ORDP is already well on its way to achieving the goal of 85 per cent of program containers sold in Ontario being returned for a refund of deposit.
Summary
Glass packaging and recycling programs run most smoothly with vendor participation. While it is almost a given that sales will increase with glass packaging, it is not certain how a recycling program will play out at the vendor level. Those looking at embarking on such a program would best look to Harmony Dairy for an example, and to get vendor buy-in before implementation to avoid a logistics nightmare. Vendor managed programs, such as the Bag it Back Program at the LCBO, seem to have the highest rate of success, being managed entirely at the vendor level. Across all levels, it would seem that a high deposit guarantees a higher return rate, a lesson any company would do well to implement. These deposit costs could also cover the cost difference of manufacturing a glass package over a plastic package, something manufacturers need to figure in to their bottom-line equation.
For companies in the USA, the Glass Packaging Institute (gpi.org) can help you find incentives for using glass packaging in your State and the European Container Glass Federation (feve.org) in Europe can do the same. Even in the absence of such incentives, the question is worth revisiting at least once a year by your accounting department - how much money can you save by using glass packaging, and how many new sales do you project with glass packaging?
Send Angela West awest@organicwellnessnews.com your sustainable packaging story and we may also feature you in the upcoming editions of Organic & Wellness News and in the O.W.N. e-newsletter!
France’s Humble Boom
Posted - July 23, 2009
France’s Humble Boom
By John Coghlan
The next time you nestle into your chair at a Paris bistro and order a wine from Provence, you may be ordering organic. France’s organic market may be small, but, recession aside, growing fast. Sales of organic food jumped 25% last year and more than 60% in the past three years to reach 2.6 billion Euros. Agence Bio, France’s organic association said that sales would probably continue to grow as the public wanted to avoid pesticides in food and genetically modified foods.
Today, organic products in France are offered in all distribution and consumption channels. Already 36% of cafeterias offer at least one organic serving on their menu. In total food sales, organics still have a humble market, jumping from 1.1% of market share in 2007 to 1.7% in 2008. But the organic sector is still growing. Since 1999 organic farmers have almost tripled area allotted to growing organic produce to 580,000 hectares. And market share will continue to grow: 74% of those who had bought organic food said that they would maintain or increase their purchases over the next six months. In a recession, growing markets are something to watch. Agence Bio’s head, Elizabeth Mercier stated that organic products so far appeared resistant to the recession with sales continuing to increase.
One lesson for organic producers and retailers: keep prices modest. In a recent survey, 57% of French polled said that they compare organic and non-organic prices. Only 47% said so in 2006. As well, growth rates are down in all major organic food markets, such as the United States and Germany. The same is proving true for France.
To further build the organic sector, Agence Bio ,in cooperation with other organizations, launched in 2008 a two year national consumer communication campaign. Events that highlight the benefits of organic farming have been scheduled at major stores and fairs. And to increase organic production another initiative is courting grain farmers. Leading organics are the fruit and vegetable, wine and livestock sectors. In the south, Languedoc Rousillon’s organic vineyard area is increasing 36% a year, followed by Provence-Alpes-Côtes-d’Azure, with a 26% yearly growth in organic vineyard area. Last year, 5.6% of France`s fruit cultivation had become organic. Of note too, farmers are planting aromatic organic crops for the perfume industry – above all, lavender, and medicinal herbs for sales in health products. And despite humble cultivated area, in the past year, these crops registered a 25% increase. But the greatest jump in organic production has been the 40% increase in organic olive production. So at the Paris Bistro, even the olive in your Martini may soon be organic.
Africa at BioFach 2009
Posted - January 18, 2009
Africa Pavilion Going Strong for BioFach 2009
Africa will again makes its presence known at BioFach. After great success with its first Africa Pavilion at the 2008 edition of the Nuremberg, Germany, fair, 2009 fair visitors will again enjoy African designs, colours, sounds and flavours.
Last year, the Africa Pavilion gathered 73 exporters exhibiting from 13 African countries, generating favourable coverage and sales. This year over 100 exporters, export promotion agencies and non-governmental organizations will showcase specialities from Sub-Saharan African countries, connecting buyers and suppliers. According to organizers Grolink and Agroeco, this year, around 35 stands with 120 exhibitors from 14 African countries will be exhibiting a full range of organic certified products.
Products to be displayed include cashew nuts, cereals, cocoa, coconut oil, coffee, cotton, dairy, dried fruit, essential oils, fertilizers (organic, of course), flowers, fruits, spices, nuts, herbs, hibiscus, honey, wax, macadamia, natural products, oilseed, processed food, pulses, rice, sesame, shea butter, spices, tea and vegetables.
Countries represented are: Burkina Faso, Ethiopia, Kenya, Madagascar, Namibia, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, Tanzania, Uganda, Zambia and Zimbabwe. The 2009 Africa Pavilion will occupy 500 square metres of space; Uganda alone will occupy 90 square meters.
Products to be displayed include cashew nuts, cereals, cocoa, coconut oil, coffee, cotton, dairy, dried fruit, essential oils, fertilizers (organic, of course), flowers, fruits, spices, nuts, herbs, hibiscus, honey, wax, macadamia, natural products, oilseed, processed food, pulses, rice, sesame, shea butter, spices, tea and vegetables.
Organizations cooperating with Grolink and Agroeco in the development of the project include IFOAM, ITC, Organic Exchange, Rwanda Ministry of Agriculture and Animal Resources, NOGAMU (a Ugandan agricultural movement), TOPAZ, Hivos and the Triodos Foundation.
If the Africa Pavilions at Biofach 2009 and 2010 show results similar to those in 2008, organizers will consider to celebrate Africa as Continent of the Year in BioFach 2011.
Visit http://www.organicafrica2009.com and send any requests to africa2009@grolink.se.
La Vita Launches New Cookies
Posted - December 18, 2008
Crunchy, Healthy Cookies Deliver Old-Fashioned Good Taste: La Vita Introduces Eight New Prebiotic Cookie Varieties
La Vita Health Foods has introduced a line of cookies with a low glycemic index that are also prebiotic, vegan and Kosher, and cholesterol, wheat, dairy and lactose-free. These La Vita All Natural Crunchy Cookies contain no high fructose corn syrup, maltitol, artificial sweeteners, or preservatives and still have a year-long shelf life.
“When family and friends visit this year, hosts can offer adults and children alike La Vita Crunchy Cookies,” said Zina Minz, founder of La Vita Health Foods. “They’re suitable for guests with special dietary needs, or just watching what they eat. As a family-run business, those values are so important to us at La Vita and are always at the forefront of our minds.”
Industry-savvy attendees at the 54th Fancy Food Show in New York City recently proclaimed the cookies the best-tasting sugar free and gluten free cookie they had tried.
“Until now, most healthy, high-fiber cookies simply have not been very enjoyable to eat,” Minz said. “We developed La Vita All Natural Crunchy Cookies to have a delicious homemade taste and fresh-baked texture that melts in your mouth.”
After two decades of research and testing in Israel and Europe, La Vita’s unique soy-flour recipes and baking processes now allow the firm to offer its nutritious alternative to “traditional” grocery-store baked goods, which usually contain artificial preservatives, colors and flavors.
La Vita Crunchy Cookies are available in eight varieties, based on classic recipes updated with a modern twist to appeal to today’s health-conscious eaters. These include Poppy Seed, delightfully matched with a whisper of light lemony goodness, Peanut Butter, for that rich, satisfying wholesomeness, and Cajun, which features cayenne, red peppers and chicory and is subtly sweet with a pleasant saltiness.
Try some out at your next party or as a gift. For once, you can be sure no one will miss the “junk” food!
About La Vita Health Foods, Inc.
Based in Monsey, New York, La Vita Health Foods is dedicated to providing consumers and retailers with the very best “Gluten-Free and Sugar-Free Foods for a Healthy Future.” Its Crunchy Cookies are available in Almond, Chocolate Chip, Chocolate, Strawberry, Poppy Seed, Raspberry Lemon, Cajun, and Peanut Butter. For more information, call (845)368-1073 or visit www.LaVitaHealthFoods.com.
Danish Lead 2009
Posted - November 1, 2008
Denmark Country of the Year at BioFach 2009
By Adriana Michael - as printed in O.W.N. Fall 2008
Next year in February, Biofach, the most international and influential fair for organic trade celebrates its 20th anniversary. Denmark has been selected “Country of the Year” to greet and share its amazing success story in the organic sector with over 46,000 visitors and around 2,900 exhibitors.
This is no surprise for those in the know. Denmark has a strong history of environmentalism. The country is a pioneer and trailblazer in wind power.
Today Danes spend an average of 80 Euros a year per person on organic food, making this small country of over 5 million people, the leader in the European Union (EU). Sales of Danish organic products grew by 33% in 2007. A 6.5% of all food sold in the country comes from organic sources. The capital city of Copenhagen enjoys a 12%, while the Danish government scores even higher than the citizens, with 45% of food requirements in schools, hospitals and other official areas coming from organic production.
“We have chosen Denmark because it has one of the world’s leading organic markets,” said in a release Udo Funke, managing director of BioFach in Nuernberg. Biofach management is convinced Denmark will continue to play an important role on the organic market in the future. “Denmark is a strong export-partner with internationally recognised organic products.”
How did Danemark reach this benchmark?
Denmark was the first country in the world to introduce a state-controlled organic certification, represented by a red Ø-mark, says Paul Holmbeck, managing director of Organic Denmark, a national umbrella organization that coordinates all private and public efforts for the proper development of the organic sector in the country. “Our national organic mark is trusted by Danish consumers and enjoys a 94% recognition rate”, says Holmbeck. “People in Denmark believe in our government institutions”. If someone tries to break the rules, the process goes very public and this openeness creates consumer trust.
Holmbeck also believes that the merging of all consumer, farmer and trade organic associations in 2002 under the umbrella – Organic Danemark – was a real turning point in the country’s organic movement.
The merger of eight main different organic associations was a process that started back in 1998, when the first step was to move offices of all entities to the same building. Holmbeck has been involved with the organization since the beginning and has seen first hand the process of internal restructuring and organization that has made Organic Danemark the powerhouse it is today.
“We had the same objectives and worked on the procedures to make sure all needs of all entities were addressed and covered,” says Holmbeck. Having one voice, one umbrella has empowered the movement and its members even further. “Communication with government officials and the media and reaching end consumers has been much effective”, adds Nanna Hyldegaard Hansen, public relations manager for Organic Danemark.
One of the main accomplishments of the Danish organic sector i since its pioneering years has been the cooperation of farmers and processors with the major supermarket chains, a task that Organic Danemark has developed even further.
“We created a tailor-made marketing strategy with each chain,” says Holmbeck. “They are competitors and know we work with all of them, but we make sure to offer each chain added value for our relationship with them.”
Another contributing aspect to the strong development of the organic sector has been the product differentiation, thanks to strong cooperation between organic producers, research institutions and Universities and the amazing support received from the government. “Danemark enjoys an environment that rewards innovation and a commitment to product development and to find more sustainable ways to obtain consumer goods”, says Holmbeck.
Given Denmark’s high levels of organic food consumption, it’s a sure bet that their strategy has paid off. Holmbeck also says that Organic Danemark is using the same approach to increase export activity with supermarket chains outside the country. During Biofach 2009 in Germany, visitors and exhibitors will enjoy a series of seminars and presentations to showcase Danemark’s success story and the different aspects of the programs currently in place , besides the release of results from research showing more evidence of the strong relationship between health issues and organic farming.
Germany Leads the Way
Posted - May 12, 2008
Organic Supermarkets and Discounters Remain as Driving Forces in Germany
Introduction by Kai Kreuzer, BIO-Marktinfo
When Rudolf Steiner “invented” organic agriculture in the 1920s, he couldn’t have perceived what significance it would have in Germany some 80 years later. Today, Germany is the biggest European organic market, with a share of around 30% of all organic sales in the continent. Three percent of total food consumption is organic. Last year 16,800 farmers worked on 812,000 hectares of organic farmland. That’s almost 5% of the total agricultural surface. Germany recorded 4 billion Euro in organic sales in 2007, 15% more than the year before.
Based on its evolution, the German market can be divided into three categories: the pioneers, the small specialized shops and the conventional market. The first phase refers to the early 1920s, when concern for the side effects of industrialized farming was already evident. Farmers noticed the steady decline in their crops; some decided to follow the principles of Rudolf Steiner. Demeter and Reformhaus were among the first names to appear. During World War II, development came to a halt.
The first simple direct-marketing systems sprung up in the mid 1950s, when farmers began to sell their produce at shops and farmers’ markets. In the 1960s, there was moderate growth in organic farms belonging to the biodynamic Demeter association and the Bioland group, founded in 1971.
In the second phase, beginning in the early 1970s, specialized organic shops emerged. One of the first was the Erdgarten in Munich and Rapunzel in Augsburg, predecessor of today’s big importer and trader. Most organic wholesalers were founded during this period, due to demand from shops for regular suppliers. Shop owners drove to farms for wheat, potatoes, vegetables and fruit. Some drove to Italy in lorries to import wine and oranges! A structure of about 18 wholesalers was born which continue to do business today, largely delivering on a regional basis. Dennree, the only national distributor and now the biggest wholesaler with a yearly turnover of 230 million Euro, started in 1974.
After 25 years, about 2,500 specialized shops had been founded and the percentage of organic product lines continues to increase. The average retail space grew from about 25 m2 to 100 m2. These shops were still tiny compared to the supermarkets and shopping centers that had been developing at the same time.
The third phase began in 1998, with the foundation of the organic supermarket Basic in Munich, center of Germany’s organic lifestyle. Although Basic was not the first organic supermarket in Germany - about a half dozen others preceded it - none has enjoyed such enormous success. In the last 8 years, small retail chains have developed. In 2005, 60 organic supermarkets opened with a retail space between 200 and 1,000 m2. Altogether, there are now more than 300 such stores, with 50 to 60 new ones cropping up per year.
Meanwhile, consumer awareness of organics grew thanks to the “conventional” mistakes of non-organic producers. Organic options moved into mainstream consciousness through food scandals, including hormones in calf meat. Soon organics were no longer considered fringe products for odd customers who wore eco-clothing, but instead developed an image as a choice for modern, sustainability- and future-oriented customers.
Seeing opportunity, big business entered the picture. In 2003, the discount-retail company Plus (2,750 shops) rolled out a modest range of organic products (30 lines) under their own label BioBio. Branchenprimus Aldi Süd (together with Aldi Nord and its 3,700 shops) are now the biggest sellers of organic potatoes. In May 2006, discounter Lidl (2,700 shops) began to offer organics, with a range of 50 products. Last year, discounters added organic bananas with good results.
Quantities sold in the specialized markets have stayed about the same, but bulk sales are made by discounters and conventional supermarkets. Total sales of organic bananas in Germany tripled from 2004 to 2006, from 8,000 tons to 21,700 tons. Standard organic items such as milk, yoghurt, bread, cheese, mueslis, potatoes and some fresh fruit and vegetables are widely available. Broad ranges (of 2,000 organic items or more) are carried by specialized shops, organic supermarkets and a smattering of conventional shops.
The next years will bring a moderate growth of organic food lines in the conventional trade and more competition for the specialized trade, as the old standbys try to to defend their loyal market share. The winner, in any case, will be the consumer, who enjoys ever more choices.
Please read on to Part 2, main text of the article.
Germany Leads the Way - Part 2
Posted - May 12, 2008
Organic Supermarkets and Discounters Remain as Driving Forces in Germany
By Martin Grass
Learning about the people behind the brands we see at the fairs and shops is important to maintain the transparency of the organic sector. Keeping track “from field to fork” is the prevalent slogan.
Here we present some of the best players of the organic scene in Germany. They are producers and processors. Most of them started a retail shop back in the 1970s . The retailers play an important role, especially organic supermarkets and natural health stores such as the Reformhaus chain, the oldest health conscious retail chain, dating back from the 19th century. Today, Reformhaus operates mainly in Germany, Austria and Switzerland, with products under its own Neuform brand and the brands of other suppliers.
Although not all products are organic, the trend is to increase the number of organic certified products. Reformhaus is a strong reference in the German market for reliable advice, quality products, variety and convenience. On the other hand, organic supermarkets have been emerging with a strong image of a trendy yet quality-oriented sector, where LOHAS consumers gather for a cappuccino while their bread is being baked.
The association of organic supermarkets includes ten companies, among them Alnatura, Basic, BioCompany, Ebl-Naturkost, eo (for Eat Organic), Füllhorn, Grüner Markt, Naturata, SuperBioMarkt and Vollcorner BioMarkt.
Please meet some German entrepreneurs, pioneers and newcomers below!
Managing Director Joseph Wilhelm
Line of products: Muesli, dried fruits, oils, sauces, grains, chocolate
In 1974, pioneers Joseph Wilhelm, Jennifer Vermeulen and Peter Erlinger opened an organic natural food store. Three decades later, the company has become one of Europe’s largest importers and distributors of organic dried foods and has operations in Spain, France, Italy, Turkey and the United States. Annual turnover reached Euro 76 million in 2005. The firm delivers more than 400 products directly to natural food stores and organic supermarkets in Germany. Exports, 34% of the firm’s business, go to 31 countries. Imports come via long-term projects and partners around the world. The firm developed the fair trade seal “Hand in Hand”.
Andechser Molkerei Scheitz GmbH
Managing Director Barbara Scheitz
Line of products: Dairy, yogurt and cheese specialist
Bavarian organic pioneer, the 5th most sold organic brand in Germany. Mrs. Scheitz is the 2nd generation running this successful Euro 75 million business with 170 employees and 420 farmers from the producers’ associations Bioland and Demeter. Andechser introduced functional and reusable glass containers to the sector. The firm boasts annual processing of 64 million kg of cows’ milk and 5 million kg of goats’ milk. Exports go to France, Greece and Holland. Constant innovation and product diversification is Andechser’s recipe for success.
Managing Director Volkmar Spielberger
Line of products: Cereals, oils, dried fruits, chocolate, nuts, tomato-based sauces, salt and spices
Mr. Spielberger is the 3rd generation in this dynamic business, established in 1930, operator of the first and only organic mill in Germany. Involved in production under Demeter quality since the mid 1960s, the firm now has 100 employees and an annual turnover of around Euro 20 million. Naturata imports ingredients through long-term cooperations and partnerships in over 30 countries. These include olives from Greece and Tunisia, dried fruit from Turkey, chocolate from the the Dominican Republic and sesame seeds from Uganda.
Ulrich Walter GmbH
Managing Director Ulrich Walter
Line of products: Organic coffee, tea, herbs and spices
In 1979, Ulrich Walter and his wife Angela started a 30 m2 natural food store. Today, their firm is one of the main players in Germany’s organic scene, with 6 divisions for a total area of 5,500 m2. Annual turnover was Euro 17.5 Million in 2005. The company’s own brands are Lebensbaum, Bioveda, Donum Naturae and, under license, Janosch and Kosmos Krauterhexe. These brands are present in a range of 300 products distributed at the national level. Exports go to the EU, Japan and Taiwan; imports come from 30 countries, mostly European nations.
La Selva Toskana Feinkost-Vertriebs-GmbH
Managing Director Karl Egger
Line of products: Tomato purees and sauces, soups, wine, pesto
In 1980, Karl Egger, co-founder of the organic producers association Naturland, made his dream come true: An organic enterprise in Italy to produce quality food in a sustainable way. With an annual turnover of some Euro 10 million, La Selva is among the best known brands in the specialty food segment and has a range of 140 products. Exports account 50% to Germany and the rest to other countries. At first people thought he was crazy, but today his project has become a model to inspire others. The firm also offers a bed and breakfast facility suiting up to 30 guests.
Managing Director Peter Kowalsky
Line of products: Innovative soft drink
Bionade is one of the current success stories of the organic sector in Germany. Established in 1995 by Dieter Leipold, the firm developed a unique soft drink produced with organic ingredients following revised beer-brewing principles. It was not easy to launch the product properly, but perseverance, unique advertising and a close relationship with the press finally paid off. In the last 2 years, the company has grown 300%, with 60 million bottles sold. The drink is distributed to organic stores and to conventional supermarkets and other points of sale, including a distributing relationship with the Coca-Cola Company.
Managing Director Siegfried Schedel
Line of products: Baked goods
Established in 1996 as an innovative enterprise from the Bioland association, Siegfried deals in direct milling and production of frozen baked goods distributed throughout Germany. Exports are sold to 17 European countries. The group’s annual turnover was Euro 5 million in 2005. Mr. Schedel was not satisfied with the development of the conventional baking industry and searched for alternatives in the organic sector, with support from Demeter and Bioland. The firm carries 14 patents and a range of 75 products in a mill developed with eco-friendly standards.
Managing Director Veronika Ramsauer
Line of products: Hemp-based natural cosmetics, energy bars, teas and oils
One of the youngest companies on the German organics scene, Natur-Oase was established in 2004 as part of Hanfwelt Riegler-Nurscher Österreich, with annual growth of 30%. Mrs. Ramsauer comes from the health sector. Fascinated with the beneficial properties of hemp that have been long neglected by modern industry, she decided to bring this natural product back to the consumer. Paying close attention to the market, Natur-Oase has developed a unique range of hemp foods and cosmetics. Exports go to France and Switzerland, with plans for an expanded distribution network.
Continued from Part 1, introduction.
Yacon
Posted - May 1, 2008
Yacon: Natural Sugar Control
By Adriana Michael - as printed in O.W.N. Summer 2008
A South American tuber grown in the Andes could offer valuable sugar control and immune system bonuses to the human body. The yacon, called an apple or pear of the earth for its sweet, crispy taste when washed and eaten fresh, grows between 1,500 and 2,500 metres above sea level. The Andean peoples have long used the root to ease health problems like liver ailments, says Dr. Cass Ingram, a natural health expert who has written a dozen books touching on functional foods such as yacon.
“South American traditional medicines have never been written about in common books. There’s been a lack of quality articles describing their ethnic use and the medicinal properties,” says Ingram, explaining yacon’s low profile. “No one has published about what the properties are.”
Yacon contains a high percentage of inulin, a fructo-oligo-saccharide or FOS. The body does not convert this class of sweet-tasting chemicals into energy, and so they rank a zero on the glycemic index scale. “This is the perfect functional food for resting the pancreas,” says Ingram.
Inulin mimicks better-known insulin, Ingram says, producing all kinds of health benefits. “Insulin has everything to do with how we digest our sugars and starches,” he says.
Good bacteria in the gut feed off the inulin, Ingram says. Yacon functions both as sugar control and as pro-biotic, thus boosting the immune system.
Caution is required to ensure a marketable product retains the benefits of the pure root. “We knew if we could keep it unprocessed, then it would be medicinal,” Ingram says of his early work with yacon.
Organic products derived from yacon are gradually becoming available in North America. Careful methods are required to ensure desirable inulin is obtained while unwanted fructose sugar, which occurs only in the root’s fibrous parts, is not. “If you don’t treat the product properly, what’s going to happen is that you will obtain only fructose sugar, which is not good,” says Jorge Urena, president and CEO of Uhtco Corporation. Uhtco is a well known supplier of organic yacon products, and the main importer to Canada.
Ingram worked with Urena and Uhtco’s partners in Peru to get organic yacon in its highest potency. “We asked him to make extracts that were unprocessed. No alcohol. No heat,” Ingram says. Working with small farmers in Peru and having built a Peruvian processing facility to house the required machines, Uhtco’s processing plant introduced yacon syrups and the line is expanding.
Yacon has a citrus, light caramel flavour, Ingram says. Urena prefers to use the syrups as a sweetener, while Ingram pours his over yogurt or other dairy products. “It’s more interesting for its aroma,” Ingram says, and its health properties.Whatever the impetus, many people today have far too much sugar in their diet and could certainly benefit from the natural, healthy powers of this exotic and not widely known “apple of the earth”.
BioFach Globally
Posted - May 1, 2008
Focus on BioFach Globally 2008:
Where the Organic People Meet
By O.W.N. News Network - as printed in O.W.N. Summer 2008
The BioFach fairs, starting with Nuremberg and now with four international offshoots, are a worldwide success. They connect the global organic market by building a business network able to address diverse market conditions in individual countries and regions.
The main German fair and its subsidiaries attract about 3,700 exhibitors and 100,000 trade visitors each year. February 21-28 this year saw a rousing celebration at the main BioFach fair in Nuremberg, the world’s leading organic exhibition. Held alongside Vivaness, the fair for natural personal care and wellness, the two events attracted 46,484 visitors from 124 countries. The entire international industry gathered to learn about and enjoy the products of 2,764 exhibitors.
BioFach China – Organic Products in the “Middle Kingdom”
Following the glittering BioFach China premiere in 2007, more than 50 Chinese companies exhibited at BioFach Nuremberg this year. Seminars at the BioFach Congress presented in-depth information on the possibilities China offers. Most of that country’s organics are now for export, making BioFach China an ideal event for international buyers. Demand for high-quality imports is also growing. Shanghai is a boomtown, with the strongest purchasing power and international connections in China. Axel Bartkus, Managing Director of NürnbergMesse China and Jane Jiang, Exhibition Director of BioFach China, expect a successful event May 29-31, 2008.
Growing Export Market in Brazil
If you want to learn about sustainability and the richness of Brazil and Latin America, mark your calendar for October 23-25, 2008. International trade visitors will find an amazing assortment of products at BioFach América Latina and ExpoSustentat in Sao Paulo. Show organizers Nürnberg Global Fairs, Planeta Organico and Organic Services foresee a sixth edition full of examples of sustainability.
The huge appetite for organic products in the US and Western European markets is having a positive impact on producing countries, with Brazil a main beneficiary. Research firm Organic Monitor predicted a 30% increase in Brazil’s share of international organics by the end of 2008.
US Still the World’s Largest Organic Market with Sales of $20 Billion
The Organic Trade Association estimated US organic sales at $20 billion dollars, a growth of over 20%. Demand for organics is especially high in the Northeast and West Coast regions. BioFach America, celebrated simultaneously with Natural Products Expo East, invites exhibitors and visitors to its event in Boston, October 16-18, 2008. Over 65% of the exhibition space was booked by October 2007, despite the move from Baltimore to Boston that created more exhibition space.
Japan is Third Largest Organic Consumer Market
Japan’s largest financial newspaper estimated the overall value of the Japanese organic market at EUR 1.9 billion last Fall, marking the third largest market after the US and Germany. Japanese customers traditionally place a high premium on nature and quality. The growing trend toward sustainable, healthy lifestyles combined with changing Japanese demographics creates rising demand for outstanding products.
As with the entire Asian market, natural beauty products were extremely popular at BioFach Japan 2007. The industry’s next gathering will be in Tokyo, September 24-26, 2008. BioFach Japan, like its sister BioFach fairs, offers exhibitors and visitors a reliable and exciting platform to initiate business relationships with the organic industry’s global players.
TerraCycle
Posted - May 1, 2008
From Worms to Wealth
By Adrian Larose - as printed in O.W.N. Summer 2008
Making money from millions of empty juice pouches and drained-out pop bottles might sound like a difficult prospect, but that’s what TerraCycle is doing. TerraCycle works with mainstream companies like Wal-Mart, Home Depot and Kraft Foods. Working with these companies, says CEO and co-founder Tom Skazy, is exactly what is needed to move consumers towards environmentally-friendly products.
Skazy insists that discovering new ways to work with the mainstream in an eco-capitalist fashion is the only sustainable approach. Starting during Skazy’s university studies with an organic worm-poop compost product, his firm TerraCycle has grown from US $70,000 turnover in 2004 to $3.5 million in 2006, with $7 million likely in 2008.
Hungarian-born but raised in Canada, Skazy discovered that worm poop is a very effective fertilizer. He also realized that the main ingredient, garbage, is readily available - it’s “simply a commodity that people are willing to pay to get rid of,” he says. “Waste doesn’t exist in nature,” he adds: it’s a human-made problem.
With this ready supply of ingredients, Skazy obtained funding through business plan contests. Selling a product made from waste was not enough for the firm, though: soon, it also began to package its product in containers usually seen as waste.
“Since we make a product from garbage, why don’t we package it in garbage?” Skazy says of the group’s thinking. Visiting area recycling centers, TerraCycle learned that plastic pop bottles are standardized enough to be cheap, practical non-food packaging. The “world’s first and still only products made and packaged entirely out of garbage” were born, Skazy says. Remove the old labels from the bottles, wash them out and re-fill: you’re ready to roll. (TerraCycle is not packaging food, which would have different requirements.)
The company is built on three brand criteria for all products, such as the cleaners it now also makes. First, TerraCycle’s product must work better than the typical one it replaces. Second, the product must be made with the greenest ingredients - often items previously viewed as waste. Third, the product must cost less or not much more than typical offerings.
“It’s the price that’s the big issue,” Skazy says of environmentally-friendly goods. “Usually, eco-friendly products are more expensive and they don’t work as well. That’s what people think.” The solution: find ways to work within the system that let your firm save money while it helps the environment, so you can provide the consumer an affordable product. Working from waste is one option.
To get enough empty pop bottles for its fertilizer, TerraCycle began paying collection locations - schools and churches, for instance. These locations send in empties under a program called the “bottle brigade” that now has about 4,000 participating US locations. By returning empties, the groups earn money for charitable causes and save TerraCycle laborious collection work.
TerraCycle has partnered with firms like Clif Bar, Stonyfield Farm and Honest Tea to collect their empty, non-recyclable packages, and has a US $1 million deal to collect Capri Sun juice pouches for Kraft. As of writing, the firm was in the final planning stages of a $1 million deal with Oreo.
The basic business model for such deals sees the sponsor company cover all costs to get empty packages to TerraCycle’s factory, Skazy says, such as collection and publicity costs. Locations that offer to collect empty packages receive two to six cents a package towards a charitable cause. Meanwhile, TerraCycle receives free raw ingredients - the empty packaging. It can then manufacture pencil cases, bags and other goods out of the waste, selling the end products for as little as $2 retail for pencil cases. Each year, the brigade programs collects millions of Capri Sun juice pouches from 850 schools.
Good media coverage, and lots of it, is the main benefit for the sponsor, Skazy says. More and more firms are likely to sign up for such programs. “All these big companies are looking to embrace this right now, so we’re in a very fortunate position,” he says.
“Really where it has to happen is Wal-Mart,” he says of the shift towards environmental products. “I’m not an environmentalist. I think I’m very much the average person. I don’t drive a hybrid car. I don’t go out of my way to eat organic food,” Skazy adds. To get such people to choose environmentally-friendly products, those products must be better in every way than others.
The most important ingredient for environmentally-friendly products to succeed, what Skazy calls “the holy grail” , is not to try and make the customer care about your product’s values, but “to make them choose your product without having to care.” Choosing sustainable options must not feel like a sacrifice, but simply be the obvious, best, ordinary choice. Terracycle products have succeeded here.
Even many of the green-oriented people attending the Green Jobs Conference held in Pittsburgh, Pennsylvania this March admitted to Skazy that they sometimes choose price over environment. During his speech at the conference, Skazy asked audience members whether they bought organic bananas at the current premium cost, and only one third of the supposedly forward-thinking audience members raised their hands.
But if the price of organic vs conventional bananas was similar? Who would buy organic then? Everyone raised their hands.
