Much has changed in the US organic food and beverage sector since the US Department of Agriculture National Organic Program (NOP) was established in 2000. And 2024 will bring more changes, everything from stricter regulations to a growing demand for imports.

To ensure organic remains a reliable certification for shoppers, NOP issued its Strengthening Organic Enforcement (SOE) rule that went into effect on March 20, 2023. Operations and certifiers must fully comply with the rule by March 19, 2024.

The SOE closes loopholes that had enabled ingredients that do not meet NOP standards to enter the organic supply chain, leading to fraud. Key updates include requiring certification of more of the businesses at critical links in organic supply chains.

Previously, only operations involved in producing, processing, packaging and labeling organic products required certification. The SOE requires buyers, sellers, brokers and traders to be certified.

“The USDA estimated 4,000 to 5,000 companies would need new certification,” said Nate Ensrud, vice president – US technical services, certification and food safety solutions, FoodChain ID, Fairfield, Iowa. “Many organizations think they are exempt when they are not. It’s the middle layer of the supply chain that is of primary concern.

“Over the last three months, the net change in USDA NOP certified organic operations in the US was essentially zero. A non-compliant company not only affects its own business but others in the organic supply chain. Based on the USDA NOP data, I believe non-compliance is going to happen and be disruptive.”

Another potential disruption is with imports. The situation will look far different than the backlog of cargo ships at ports that occurred during the pandemic. Non-compliant imports will be returned to their country of origin or have to be sold as conventional product, suggesting there’s a chance organic supply will not meet organic demand.

That’s because the SOE requires organic certificates for all organic imports, along with recordkeeping and traceability through the Organic Integrity Database. With many of the most-sought organic ingredients being imports, this has been a tedious task, but the industry believes the result will be worth it.

“The goal is to protect organic integrity and bolster consumer confidence in the USDA organic seal,” said Jennifer Tucker, deputy administrator for USDA NOP.

Maintaining the integrity of the program, in turn, should fuel continued growth of organic foods and beverages, a sector that peaked at $61.7 billion in sales in the US in 2022, according to the Organic Trade Association, Washington. Inflation raised costs across the entire food supply chain and boosted prices in the grocery aisles; thus, similar to overall food and beverage sales, the value of organic sales grew even as the growth in the volume of sales for some categories slipped.

“Organic has proven it can withstand short-term economic storms,” said Tom Chapman, chief executive officer of the OTA. “Despite the fluctuation of any given moment, Americans are still investing in their personal health, and, with increasing interest, in the environment, organic is the answer.

“Organic is at that right intersection of environmental and personal health. Organic brings together the interest in human health and a healthy environment, and that offers organic a positive pathway forward and will help organic businesses withstand challenges in the future.”

The most sought organic ingredients

Inflation has forced many organic shoppers to be selective. Conventional bananas and oranges, for example, with their protective skins, may be deemed acceptable by the organic shopper on a budget, but fresh berries and tomatoes, not so much.

Meanwhile, certain ingredients are sought by organic shoppers because their sourcing resonates with the shopper’s personal values. One is cocoa and the chocolate made from it.

That’s because the conventional cocoa industry has a dark side, which includes environmental impacts of how it is grown, harvested and processed, along with the use of child labor and the low wages paid to workers. Consumers perceive organic chocolate to be natural, healthier and better quality than non-organic chocolate, according to research from Cargill, Minneapolis, and is fueling growth of organic chocolate.

The global organic cocoa market was valued at $8.3 billion in 2022 and is projected to grow at a compound annual growth rate of 3.3% to reach a value of $11.5 billion by 2032, according to Future Market Insights, Valley Cottage, NY. While it is growing, the market for organic cocoa is only about 0.5% of global cocoa production.

“Consumers have learned about these issues and are now seeking products that align with their values,” said Aaron Iverson, national sales manager, Global Organics, Cambridge, Mass. “They understand that organic cocoa is grown in a more sustainable way without the use of synthetic additives. This resonates with health-conscious consumers.”

Research from Barry Callebaut, Zurich, shows consumers are becoming more environmentally conscious and looking for chocolate produced in a way that is perceived as sustainable and ethical. Almost 7 out of 10 consumers prefer chocolate brands and products that enable them to do good for people and the planet, according to Barry Callebaut. Organic certification supports such efforts.

“Organic” means the chocolate was produced using only organic methods and contains a minimum of 95% organic ingredients. For some marketers and consumers that’s enough. Others want more.

Agostoni, a chocolate brand from Icam SpA, Italy, produces 100% organic chocolate made with all organic-certified ingredients, which include the cocoa liquor, cane sugar, cocoa butter, vanilla extract and soy lecithin. Icam controls the entire production chain, from the plantation to the finished product. The traceable powders, chips, chunks and other formats are produced following an ethical and sustainable approach.

Dr. Bronner’s, Vista, Calif., now offers regenerative organic certified salted dark chocolate. The confection is made with a blend of regenerative organic certified ingredients, including cocoa from Ghana and Ivory Coast, cocoa butter from Congo, bourbon vanilla from Madagascar and coconut sugar from Indonesia.

Organic plant-based proteins are another growing category, said Iverson. And all plant-based proteins are available with organic certification.

“The future of plant based is with clean and simple ingredients,” Iverson said. “Organic certification gets you there.”

Iverson added, “And everything coconut is booming, the milk, the cream, the sugar, the nectar, even the aminos. Coconut aminos are similar to soy sauce, with an umami, savory profile, with a hint of sweetness but no coconut flavor.”

Coconut aminos are derived from the fermented sap of a coconut palm tree and sea salt. They may directly replace soy sauce in a formulation and the organic-certified labeling offers a better-for-you proposition.

Organic sugars such as coconut sugar also are popular. In the better-for-you consumer’s mind, organic sugars provide permission to consume at a time when some view sugar negatively.

Approximately three out of four consumers try to limit or avoid sugars to improve their diet in general, according to the 2023 Food and Health Survey from International Food Information Council, Washington. Still, sugar remains the preferred sweetener choice over low- and no-calorie sweeteners. Enter organic.

Organic cane sugar, the most common, comes in forms such as brown, confectioners, turbinado and white. Brazil-based Natíve, one of the largest global producers of organic cane sugar, is adding value to its product portfolio with a new regenerative organic certified cane sugar.

The certification was made possible because of the company’s Green Cane Project. It focuses on soil health and biodiversity and integrates sustainability at all levels of the operation, according to the company. Green cane harvesting is accomplished by using mechanical harvesters to separate the sugar cane leaves and tops from the sugar-bearing stalk. The process replaces the destructive practice of burning sugar cane fields.

While organic cane sugar is trending in new product development, it’s organic coconut sugar that is garnering the attention of food formulators. It is a natural sugar made from coconut palm sap, which is the sugary circulating fluid of the coconut plant. It is not palm sugar, which is similar but made from a different type of palm tree.

Coconut sugar is made through a two-step process that is simple and appeals to the better-for-you consumer. A cut is made on the flower of the coconut palm. The liquid sap is then collected into containers and heated until most of the water has evaporated. The end product is brown and resembles granulated raw cane sugar.

Coconut sugar’s claim to fame is that it retains some of the minerals and phytonutrients found in the palm tree. And while it contains the same four calories per gram as other sugars, it has been shown to have a lower glycemic index.

When it comes to finished products being developed with organic ingredients, baby and toddler foods are big. Serenity Kids, Austin, Texas, a marketer of shelf-stable baby and toddler foods is rolling out World Explorer Pouches, which offer an international twist to standard baby food, according to the company. The meat-based line provides a culinary adventure honoring dishes from around the world, including Argentina, Japan, India, the Mediterranean, Mexico and Thailand. The World Explorers line is formulated with regeneratively farmed meats and organic vegetables, herbs and spices. Varieties include free-range chicken coconut curry, grass-fed beef chimichurri and wild-caught salmon teriyaki.

The regenerative angle

Across all organic ingredients and whole foods, the topic of sustainability has entered the conversation, as sourcing ingredients farmed in a manner that considers environmental and social impacts is a way to further differentiate organic foods to shoppers. Enter regenerative organic certification.

To be certified regenerative organic, farmers must demonstrate their farming practices take soil health and animal welfare into consideration and that farm workers are treated fairly. The farming practices have been shown to improve crop yields, reduce pests and increase biodiversity.

“We’re confident that a growing number of households want to select regenerative organic products for their personal and family health but also for the long-term sustainability of our planet,” said Ted Robb, co-founder, New Barn Organics, Fullerton, Calif., which now offers regenerative organic certified almond milk and pasture-raised eggs.

Chicago-based SPINS attributes the growing appeal to regenerative organic to the fact shoppers’ preferences have become more values driven. For the 52 weeks ended Nov. 5, 2023, unit sales of products labeled organic were down 4% across combined natural and conventional channels, while unit sales of products sporting regenerative organic certification were up 39%.

SPINS also said “as the dairy industry has long battled with the image of being bad for the environment, we see products that are certified regenerative organic buck the trend. Consumers are willing to pay more for dairy products that have the regenerative organic certification.”

Regenerative organic certified dairy ingredients are helping brands differentiate. Cheddies, Austin, Texas, partnered with Alexandre Family Farms, Crescent City, Calif., to create a formulation in which one serving of the cheese crackers provide 6 grams of protein.

Once Upon a Farm, Berkeley, Calif., also is working with Alexandre Family Farms and has launched no-sugar-added organic A2/A2 Whole Milk Shakes. To further demonstrate the opportunity in organic baby and toddler foods, Once Upon a Farm is adding three new snack items in bar, puff and melts formats.

“Having started with refrigerated, cold-pressed pouches seven years ago, consumer feedback was overwhelming in asking to bring our high standards, clean nutrition and fresh taste to a shelf-stable snack,” said Cassandra Curtis, founder and chief information officer. “We believe all food for babies and toddlers should be packed with wholesome real ingredients, taste great and be convenient for busy parents. Our new snacks deliver on all three fronts, promoting self-feeding and important developmental milestones.”

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