Organic Ingredients – What’s Next?

Simon Wright
The Organic Consultancy

This article originally appeared in the July/August 2002 edition of International Food Ingredients.


The market for organic food and drink continues to develop, with processed multi-ingredient products becoming an increasingly important part of the category. What are the implications for organic ingredient suppliers? Simon Wright of The Organic Consultancy has talked to Rasanco and Tradin about the challenges they face as specialist organic ingredient suppliers.

The Organic Market

Last year’s Datamonitor report Next Generation Organics 2001 made some controversial points about the continued growth of the international market for organic food and drink.

The key points of the report are

  • UK and German consumers will be the big organic spenders in 2005 (see Table 1)
  • Consumer concerns over food safety and personal well-being are driving the organic market but may not sustain growth
  • Organic food’s niche positioning may be eroded as new food safety measures enter the food chain
  • Consumer priority is health and food safety, not organic food production per se

Datamonitor suggest that manufacturers and suppliers capitalise on the organic market through taking on board six action points:

  1. The future is not 100% organic but more organic as organic values make their way into the standard supply-chain
  2. Do not overextend yourself in organics – pure organics will only be successful in certain clearly defined areas
  3. Know thy organic consumer – the key to success is ensuring levels of concern are sufficient to justify premium prices
  4. Most consumers are not ready for full-scale conversion – organic remains a niche market with certain products wearing the badge better than others
  5. Premium marketing and prime shelf-space is a must for success – if consumers are to pay premium prices the product must reflect this
  6. Beware of the dangers inherent in the organic ghetto strategy – retailers segregating organic products from non-organic will do little to encourage new consumers to experiment and try organic alternatives

Table 1 Organic Market Values (US$m) 1995-2005 Actual and Estimated*

			1995	1996	1997	1998	1999	2000	2005*

France			611	673	703	815	936	985	1720

Germany			1529	1798	1790	2088	2313	2461	5406

Netherlands		282	279	282	329	344	355	470

Sweden			76	96	99	99	111	117	180

UK			228	310	419	544	669	769	4135

US			2826	3565	4450	5401	6463	7760	18000

Case Study One: Rasanc

Rasanc is a dedicated organic ingredients supplier to UK Food & Drink manufacturers. The services offered include managing availability, checking full traceability and assuring quality of raw materials “from field to finished food”. The Rasanc product portfolio spans a wide range of organic ingredients, giving food and drink manufacturers a one-stop shop approach to the sourcing of their organic ingredients. All organic ingredients are covered by Soil Assocation Organic Certification. The product range is particularly suitable for Bakery, Snack, Preserve, Condiments, Confectionery, Drinks, Desserts & Sauces.

Managing Director of Rasanco Russell Smart has good news on pricing. “In general we have seen a 30% decrease in organic ingredient prices over the last three years. This has been not only due to the increased availability but also as a result of considerably reduced shipping costs that are achieved as volumes increase.” Availability is more problematic. “There can be occasions when the market for an organic ingredient becomes completely short to the extent that nothing is available. Seldom does this occur in the conventional market, but it does occur more often in the organic market where there simply is no availability due to a crop failure. organic vanilla this year is a case in point, and white pepper was three years ago. There is some concern that an extreme shortage of sunflower seed this year will result in an empty market at the end of 2002 before the new crop is available.”

The costs to manufacturers of an organic ingredient becoming unavailable are considerable. A good example here is organic agave syrup. Agave syrup is extracted from the Mexican agave cactus. The agave cactus is also used to produce tequila, and the rapid international growth in sales of tequila has resulted in the cactus farmers selling their cactuses to the tequila industry rather than to the organic agave syrup producers. As a result the supply of organic agave syrup was unexpectedly terminated earlier this year. Russell has been working with his clients to find an alternative. “The problems in the supply of agave has led to a number of companies looking for high fructose syrups. They have turned to corn syrups, de-Ionised apple or grape Juice that can give the same sorts of properties to drinks.” This has created a lot of work for NPD teams across Europe and additional costs in redesigning product packaging to reflect the new ingredient declarations.

Conversely another concern is over-supply. “The problem with the market is that if a new origin for a product suddenly comes on stream then an oversupply situation can occur. This has happenedin the wild berry markets where huge forest areas have been given ‘Wild Organic’ status. This gives virtually unlimited supplies of organic ingredients from these areas and can create a market where the organic product is only slightly more expensive than conventional. This has also happened with maple syrup. Although an expensive product in itself, organic maple syrup tapped from maple forests is often only 5% more expensive than conventional.”

Last year saw organic grain fraud reported in France and Germany and Russell is concerned that the current EU organic regulations do not require all links in the supply chain to be registered. “On large shipments, the potential to make a large amount of money from a fraudulent declaration of conventional Ingredients as organic is very real. We feel that each shipment of each organic commodity should be registered with the local certifying body and that it should have its own accompanying original certificate.”


The Estate Office
Sutton Scotney
SO21 3JW

Tel 00 44 1962 761935
Fax 00 44 1962 761860


Case Study Two: Tradin

Tradin NV are the largest supplier of organic ingredients in the world. Like Rasanco, Tradin pride themselves in the wide range of organic commodities they can supply, sourcing from their own subsidiary companies in China, Brazil and Serbia and selling through their offices in The Netherlands, Germany, France, the UK , Austria and the USA. The range includes grains, cereals, flours, starches, beans, nuts, seeds, dried fruit, pulses, cocoa products, sugar, sweeteners, oilseeds, oils, bakery fats, tomato products, frozen fruit, frozen vegetables, fruit concentrates and purees plus animal feeds and oil cakes. All these organic ingredients come with full organic certification. A strong selling point is that Tradin has its own Quality Department and complies with ISO-9002, using GMP Plus and HACCP procedures throughout.

Wouter Floot, Business Manager for Oils and Fats, has been responsible for developing an innovative project around organic soya oil that has had a slow start because of misplaced concerns by consumers. “We started producing organic soya oil in Bolivia two years ago, mainly because we saw a huge potential for organic soya meal as organic animal feed, and in order to get organic soya meal you have to press out the organic soya oil. Today we import organic soya meal from Bolivia, Brazil, Paraguay and now also from our newest (and largest) factory in China.”

“There is a big shortage on supply of organic sunflower seeds for oil crushing as a result of this years bad crops and export restrictions in the main producing counties of origin. Therefore prices of organic sunflower oil are very high at the moment. We consider soya oil to be a very good alternative as it is in abundant supply, it is stable and it has a good nutritional profile. It is also very competitively priced – currently organic soya oil is the least expensive organic vegetable oil.”

The main problem we have, especially in the health food sector, is the negative image of soya oil. People associate soya oil to GM issues. This is of course nonsense, because organic legislation requires us to ensure 100% traceability of the oil to ensure the absence of any GM material. In most countries where we grow our organic soya the local government is very much opposed to introduction of GM-crops in their counties, and they do everything they can to keep GM soya out of the supply chain. Our soya oil is produced in brand new dedicated organic factories, without any chemical extraction.”.

“We are confident that in the long run organic soya oil will be a big success. The latest approach we have received is from non-organic baby food manufacturers. Despite paying a significant premium for Identity Preserved soya oil they are finding it very difficult to avoid pesticide residuesso the answer is to go organic!”

Tradin Organic Agriculture BV

Latexweg 12
1047 BJ Amsterdam
The Netherlands

Tel 00 31 20 407 4499
Fax 00 31 20 497 2100

HI – Specialising in Organics !

Tradin will be exhibiting in The Organic Pavilion at this year’s Healthy Ingredients Europe exhibition in Paris from September 17-19. The Organic Pavilion brings together the key players in the organic ingredient supply industry, resulting in a cohesive and dedicated show-within-a-show, an essential destination for anyone with an interest in this rapidly developing market.

The Organic Pavilion is supported by an Organic Seminar seminar on the afternoon of September 18. Expert speakers from France, Germany, the UK and Finland will address the key technical, marketing and legislative issues currently facing organic manufacturers and ingredient suppliers.

For more information on The Organic Pavilion or to book your place at The Organic Seminar please contact Marisol van der Kuyp at, tel +31 346 559460.

Simon Wright – Profile

Simon Wright is founder of The Organic Consultancy ( For the last six years The Organic Consultancy has specialised in the development of organic food and drink, working with companies throughout Europe and in the USA. Clients range from small manufacturers of natural foods through to one of the UK’s largest multiple retailers.

Simon is editor of The Handbook of Organic Food Processing and Production and helps to organise the trade events Food Ingredients Europe and Health Ingredients Europe. He is a Board Member of UKROFS (The United Kingdom Register of Organic Food Standards). Simon is a Council Member of the Soil Association – the largest organic certification body in the UK – and Deputy Chair of the Soil Association Processors Liaison Group.

Simon began his career in organic food in 1986 when he joined Whole Earth Foods as Development Manager. During his nine years with Whole Earth Simon helped to create and launch the Green & Black’s Organic Chocolate brand. Prior to this Simon worked in R & D for the Leatherhead Food RA, Glace Bolaget AB, Nestle and United Biscuits. He has a degree in Food Science & Nutrition and is a member of the Institute of Food Science and Technology and of the Guild of Food Writers.

Simon Wright
The Organic Consultancy
The Old Bakery
8A Replingham Road
London SW18 5LS, UK

Tel +44 20 8870 5383
Fax +44 20 8870 8140