As more brands launch organic products and label fatigue sets in, how do companies retain consumer trust?
Executives from companies that tout organic brands in their portfolio said they are still navigating how to grow in a way that preserves the integrity of the organic label and their company's reputation, but are working to achieve it by carefully switching to organic farms, not expanding too fast and communicating their goals to consumers.
"Growing is something that we want to do, but for us doing it with integrity means doing it in a way that meets the market," Melissa Hughes, chief mission officer and general counsel at Organic Valley, said.
Hughes was one of several executives who talked about scaling up while finding ways to maintain trust with shoppers on a panel at the Organic Trade Association conference on Wednesday.
But it can be difficult as the organic sector continues to grow. Earlier this week, OTA released its latest Organic Industry Survey, which found sales of organic food in the U.S. last year reached a record $47.9 billion — 5.9% higher than 2017. Although that's slower than the 6.4% growth rate for 2017, organic food sales outpaced the overall food market's growth rate for 2018. As the organic growth rate slows, companies are looking for ways to stand out in the bigger market.
Growing organically with integrity
Carla Vernon, president of the natural and organic unit at General Mills, said the company's practices were conventional on a mass scale before organic brands — like Cascadian Farms and Annie's — joined its portfolio. She said the company is still in a "learning and listening mode" when it comes to organic, but there is a lot of room to grow.
"We're newer than some of these companies at being organic and we haven't even begun to see the scale that we believe a larger manufacturer can help support and drive," she said at the panel.
She said General Mills is growing this sector and deepening its principle by developing pledges like its new promise to advance 1 million acres of land to use regenerative agricultural practices by 2030. It is also working with partners, like advisers and suppliers, that keep them honest.
"Growing is something that we want to do, but for us doing it with integrity means doing it in a way that meets the market so that we stay in the right supply and demand."
Chief mission officer and general counsel, Organic Valley
But for companies who aren't a part of Big Food, steady growth has relied on consistency and careful practices. President and CEO of Cal-Organic/Grimmway Farms Jeff Huckaby said his company got into organics 25 years ago. He has learned maintaining integrity on the farm means taking time and money to make sure it's done right.
"We learned the benefits of organics from a growing standpoint, and we realized if we did it correctly and didn't cut corners, that we would cut back on a lot of the chemical use in conventional fertilizers, and actually out-yield our conventional farm with organic products," he said.
The rise of the plant-based beverage sector is presenting a difficult time for dairy. But Hughes, of Organic Valley, said organic dairy accounts for only about 7% of all dairy consumption, so there is room to grow. For the co-op to remain true to its principles, she said Organic Valley needs to expand in a way that its existing 2,000 farmers can still thrive before adding new ones.
Conveying purpose to consumers
In a more crowded food space, labels have overwhelmed consumers in recent years. Companies have been navigating how to get shoppers to trust the organic seal more than other labels.
Hughes said it is hard to get consumers to connect with all the ways that organic is more beneficial to farmers and soil, but food companies need to do better.
"We need to be going to the consumers and having them tell us why organic is so important to them, and then meeting them where they are and helping them understand how its important for their families and why they want to put it on their tables," Hughes said. "We are Organic Valley, it is in our name, and now we have to convince them this is why you have to pull our product off the shelf. It's beyond organic in that there is an emotional connection we need to make with the consumers through quality and taste."
From a farmer's perspective, Huckaby said conventional acreage has been shrinking across the country and brands can stand out by keeping the organic standards as high as possible without taking shortcuts. Cal-Organic has focused on communicating the importance of soil health of its organic products to retailers, but not as much to consumers.
"We are a farming company first and foremost and believe it or not, as big as we are, last year was the first time that we ever had a marketing campaign," he said.
General Mills has been experimenting with new ways to convey its commitment to organic and sustainable practices to consumers. Earlier this year, the company launched cereal made from Kernza, a perennial wheatgrass said to be more beneficial to the environment than annually planted wheat. The cereal company is working to scale the product — but it hasn't worked out as planned.
"We think it can help in regenerative practices," Vernon said. "Unfortunately, when we tried to do our first version we had 95% crop failure, so we had to launch it as limited special edition."
When it comes to communicating new projects and organic goals with consumers, Vernon said General Mills reaches out on a personal level.
"I love the phrase that says we are really borrowing this plant from our children's future. So that is how we are trying to connect with consumers with this messaging," she said.
Pushing the movement forward
The organic movement was founded on challenging the current system, Hughes said, so everyone on the value chain should be pushing each other to do more.
One issue the category has grappled with is cost. Hughes said the elephant in the room the movement has not dealt with is that the U.S. has the cheapest food system in the world, and organic is more expensive.
"We have to figure out how do we shift the conversation so that our world is willing to spend more on food than they're spending on drugs or on health care — because they are doing preventative work, eating well and living longer, and being healthier because they have healthier food and not cheap food," she said. "We all know that organic costs more. ...We have to figure out how to fix that."
The movement also could focus more on the big picture. A recent online survey found that organic certification may not be a top concern for consumers as interest grows in supporting companies with similar social, political and environmental values.
People feel like many of the large institutions they have trusted, like Big Food, have disappointed them, Vernon said. But a lot has changed, she said, and more food companies are listening to consumers.
"We want some of the growth against the principles that consumers want. They want transparent leaders, they want transparent businesses, they want businesses that have measurable, beneficial outcomes," Vernon said. "So we have to play by those rules that consumers are expecting."