Green Light for Organics Part III

The Price and Profit Factors: Status Matters

Even with a lack of real evidence of its superiority, people do pay more for organic produce, mainly because they believe it to be healthier as well as tastier than its counterpart. Depending on various factors, the prices can be on par with conventional produce and go up to 30% higher.

Because of the regulation/certification, lower production volumes and the fact that fewer organic products are mass produced, the price of organic can be higher. But the increase in demand recently for these products has caused greater production, thus driving down the price. Retailer Shaskin says that organic strawberries, for example go for almost the same price as the conventional ones, and that even though some organics will stay higher, many types of organic products will go down in price in the future.

Ontario-based organic wine producer Martin Malivoire believes the prices will even out and conventional food producers will find their market to be less profitable as the costs for pesticides and other conventional growth methods go up. "It will become a healthier world out of necessity because we won't be able to expend the energy and organic foods will actually be the cheaper choice," he said.

Malivoire's critically acclaimed wines are seeing an increase in sales in Ontario so his company is expanding production as well as distribution to Quebec and Alberta, among other new markets. He feels that the labeling claims no small part in his success. Though his grapes were always organic, he got the official accreditation in 2004 as he saw it made a difference to his consumers. And now he sees that his products are believed to be of higher quality for that reason.

Though he has been advised to raise prices due to his organic status he chooses not to at this point. “I think the impact is those that are not organic are going to have to reduce their prices in order to compete with us," Malivoire says.

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Green Light for Organics Part II

Questionable Standards Until Now for Canada

Despite that proper accreditation for organic products has existed in Europe and the U.S. for several years; until recently Canadian organic products could receive such a title even based on the manufacturer using organic hand soap. There has only been voluntary certification here until June 30 of this year; when the labeling standards for Canadian organic products became enforceable by law.

According to Michael Saumur of the Canada Organic Office at the Canadian Food Inspection Agency, those companies claiming to be organic on their labels that don't act on a warning to comply with the laws are subject to their products being removed from stores or face prosecution. These laws include a requirement for a product to contain at least 70% organic ingredients to be called “organic”. There will also be a specific logo for products that are over 95% organic. Those products that are between 70% and 95% organic can state their percentage on the packaging.

Though the laws may be inconvenient to implement at first, Denise Shaskin of Planet Organic Market believes they will ultimately benefit the organic industry. Now the competition in the industry can be more fair too, and the new certification is recognized by the U.S., eliminating the need for separate certification in order to export goods. According to a study in the Canada Gazette, the new certification standards could have a net benefit of $752 million for the economy.

In Shaskin's experience, people's main reason to shop for organic goods is due to an illness in their family. So since they often scrutinize the contents of a product for health concerns, she believes the certification standards will boost many consumers' confidence in the contents of the packages they buy.

Shaskin, recognizing the increasing demand for organic products in the marketplace, entered this market in 1993 and started the Planet Organic chain in 2001. She claims that annual sales jumped to $113 million last year from only $2 million for her retail chain that operates throughout Canada now and intends to expand further into Ontario and Alberta.

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Green Light for Organics Part I

Topping the Pizza

Matthew Von Teichman's wife was expecting, and in a move to introduce a more healthy lifestyle she decided to buy an organic pizza for their supper. They were both largely unimpressed. But this spurred Mr. Teichman, the experienced entrepreneur, onto a new venture to offer people a good range of more than palatable organic food products. Life Choices Natural Foods, which now has expanded across Canada and the U.S., was born.

Now sporting nine product lines that are certified organic, featuring breaded chicken, mac and cheese and the newest one, multigrain perogies; their first product offer was indeed pizza.

Von Teichman notes the organic industry's explosive sales growth rate of 20% recently, compared to that of most non-organic products that only goes up by 1 or 2% per year. This can be attributed to consumers' greater awareness of health-related issues as well as improved access to research on organic science via the internet. Von Teichman sees the interest as being due to people's demand for nutritious foods and their demanding to avoid dangerous substances like chemical residues. The main selling points of organic products, including food, health-care products and vitamins are that they are generally not genetically modified and they don't contain antibiotics, herbicides, hormones, insecticides or pesticides.

Is Organic Truly Better?

Apparently, there is no definitive proof of organic food being more nutritious or healthier than its non-organic counterpart. According to Professor Rena Mendelson of Ryerson University who is also chair of the Canadian Council on Food and Nutrition, a variety of farming conditions makes it difficult to pinpoint the nutritional levels or their sources. But she feels that there is a difference in terms of the impact each type of food has on the environment. A reduction in pesticides would make all farming more organic and put those foods ahead of nonorganic produce in that regard.


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