Demand for organic food is on the rise. In the US alone in 2017, the market was valued at $45.20billion. By 2025, it is forecast to be worth $70.4billion. This upsurge is fuelled by many aspects, including the trend towards plant-based diets and healthier living. It is also indicative of another trend: that consumers are willing to pay more to know precisely where their veggies come from.
Yet this market is also a challenging one. It is rooted in absolute integrity and strict regulation. So how can vegetable producers adapt their operations to take advantage of opportunities in the organic sector?
Organic means full traceability, food safety and brand trust
There is a critical aspect that sets the organic food market apart from others and it is this: buying organic is about more than buying food.
Buying and eating organic has become a form of social activism linked with clean living, a transparent supply chain and sustainable food production. The simple truth is that in order to buy food that we trust to be toxin-free and ecologically sound, we are happy to pay more.
Consumers are increasingly aware of chemical and pesticide use in the food industry and the chronic illnesses to which they have been linked. As organic crops are certified free from dangerous chemicals, consumers trust them to be safe for their families to eat.
Organic brands, however, understand that their certification carries even more weight with their customers – and they are seeking new ways of proving their sustainability credentials.
Laura Batcha, CEO, Organic Trade Association in Washington, said: ‘In 2018, there was a notable shift in the mindset of those working in organic toward collaboration and activism to move the needle on the role organic can play in sustainability and tackling environmental initiatives.’
Consumer who buy organic, therefore, expect their brands to demonstrate the highest ethical standards. The official Organic Certified seal is everything here and it rests on brands to ensure they meet the necessary criteria to earn that seal. That responsibility gets passed to each supplier up and down the supply chain.
Accountability along the organic food supply chain
Building trust with highly discerning consumers means organic brands must be able to demonstrate precisely where their ingredients come from and how they are processed. It stands to reason then, that they will seek out suppliers who can demonstrate the same.
In a 2017 Supply Chain Dive article, Michael Castagnetto, VP of Global Sourcing at Robinson Fresh, commented: “We have had to build organic expertise within our business for all verticals.”
Organic farmers must adhere to strict regulations regarding pesticides and it can take up to three years to convert land. In the US, there are also strict regulations regarding transportation, storage and any process from farm to consumer.
When ‘eating organic’ was something that only interested a niche market, it was only small, independent operations that stood to gain. That has now changed. The market for organic has steadily grown from basic fresh fruit and vegetables to tinned legumes, ready meals, dairy alternatives, even pizza. It has now crossed into other specific diet regimes such as vegan or gluten-free, with new products that carry the organic seal popping up in supermarkets every day.
Organic brands, therefore, are looking to acquire new ingredients for their products every day. Yet their Organic Seal requires that records, labelling and all management of data regarding ingredients be kept in very specific formats.
As US Representative for Main, Chellie Pingree, said in a statement: “Integrity is the cornerstone of the organic label.” This means that transparency along the length of the supply chain is a fundamental imperative. It is also one that is easy to achieve with the right technology in place.
Digital data and IoT technology essential for organic food producers
Digitalization of the supply chain is already happening. Any large vegetable production company will no doubt have at least some of the ideal technology and data gathering elements in place. The next step is understanding where the gaps lie and selecting the best fit data sharing technology to ensure end-to-end transparency, accountability and traceability.
Digital transformation is now an essential part of any business model. The use of data and IoT technology is the only effective way of guaranteeing supply chain transparency. It is a fact that businesses slow to adopt digitalization will be left behind as consumer demand for organic food continues to rise.
Provenance is not something that can be disguised. Indeed, there is already technology available directly to the consumer that places traceability of products into the palm of their hand. Ethical shopping apps are on the up. The App store is filling up with downloadable software that scans barcodes and uses technology such as blockchain, to offer the shopper the most ethical brand choices based on farming techniques, processing and packaging.
Get ready to grow your share of organic: 3 steps towards operational transparency
Optimizing your business operations for organic-certified transparency requires preparation. Here are some key considerations to get you started:
- Check your capacity and understand where your bottlenecks lie
It’s easy to overspend on technology before you need it. Understand the areas you need to prioritize for improvement and your optimum investment levels in terms of your capacity. This will help you make the best decisions for your business.
- Replace manual processes wherever possible
It is a simple fact that machines are better inspectors than humans. If you are looking at entering the organic market, you must make sure you have the technology to sort weeds more effectively, for example, as pesticides are not used. Serious competitors in this space only use automated inspection processes
- Choose technology that is easy to use
Make sure any new technology you invest in is easy to use and you can pick it up and run with it immediately. Long-term promises of great results soon turn to expensive frustrations if technology proves too complex for practical use.