ERP Manufacturing Insights

5 Ways Food Companies Can Switch to Organic Options

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5 ways food manufacturers can switch to organic options

The popularity of organic foods continues to soar, and food manufacturers old and new are scrambling to find a way into this market that’s projected to be worth $70.4 billion by 2025. A business that can successfully meet consumer demand for organic products is on its way to building its presence in a market that’s sustainable – not just in demand but in production methods.

Of course, if going organic were that easy, all manufacturers would do it. The market presents plenty of unique challenges and difficulties. However, with smart planning, resource management and commitment, it’s possible for most food manufacturers to at least introduce organic options. Businesses eager to enter this market should take note of the five processes outlined here.

1. Gain familiarity with USDA Organic standards

Unlike natural” and some other common food marketing terms, organic” is a term with an official USDA definition. Any food manufacturer who wants the USDA Organic label on their products must comply with the following basic standards in that product’s production process:

  • Organic processed foods may not contain synthetic dyes, flavors or preservatives.
  • Produce must be grown in soil not treated with anything from the prohibited substances list.
  • Animals (for meat, eggs and dairy) must be allowed to engage in their natural behaviors such as grazing, must be fed with all-organic feed and may not be given growth hormones or antibiotics.
  • No ingredients or feed products may include genetically modified organisms.

Manufacturers should also know about additional labels such as the Made with Organic” label and other non-governmental labels such as the Non-GMO Project.

2. Talk to a USDA-accredited organic certifier

Food and beverage manufacturing companies who wish to get any of their products certified as organic must contact a USDA-accredited organic certifier. This group includes 80 organizations worldwide, 48 of them in the United States, who are accredited to declare a product either USDA Organic or Made with Organic Ingredients. Businesses which import ingredients will need to work with one of the 32 non-United States certifiers.

Moreover, businesses should know the details of the inspection procedures that they can expect from certification authorities. These annual inspections cover a food producer’s facilities top to bottom and ensure compliance with USDA Organic regulations. From invoice audits to testing soil and produce samples for pesticide residue, the broad powers of organic certification inspectors mean that everything needs to be squared away well in advance. ERP for food manufacturing software can make this process much easier by providing sophisticated record-keeping and a transparent and integrated view of compliance practices. 

Erp and organic food manufacturing
ERP for organic food manufacturing

3. Start small with organic ingredients from local sources

For most businesses, transforming their sourcing practices into all-organic models overnight is not realistic. It can take time to build up the necessary network of suppliers and distributors. That’s why the best first step is often to start small, by sourcing some ingredients organically from local organic farmers.

There is unfortunately no single central database of organic producers that businesses can use to source ingredients, but there are numerous places to start. Many USDA certifiers maintain databases of the producers whom they certify. Since most of these organizations operate at the state or regional level, they’re good places to look for organic food partners. For ingredient sourcing on the West Coast, for example, a food manufacturer could turn to the database maintained by CCOF Certification Services, which has over 5,000 certified members throughout California, Oregon and Washington. Meanwhile, some organic food databases, such as Local Harvest, cover the entire United States.

Depending on how much a business is able to source organically, it may be able to list the organic ingredients on one or more product display panels. But there are stringent standards for which conditions the ingredients must fulfill, what phrases can be used and where they can appear. The USDA’s Organic Labeling Standards provide further detail. 

4. Perform market research into relevant areas.

Some types of products are more easily transitioned into organic supply chains than others. The more elements of a sourcing and supply chain that go organic, the more potential complications and problems arise. Organic crops are often more vulnerable to damage, pests and contamination, and prices may be less consistent due to supply fluctuations.

It’s important that a business moving into the organic sector build as many of these considerations as possible into its business plan. The profitability and branding advantages of organic food need to be carefully weighed against the additional difficulties that producing under organic standards can cause. Moving to organic production standards often represents an enormous investment, and businesses will want to be as certain as possible that market demand is sufficient to produce ROI.

5. For businesses with their own farming operations, start taking steps to go organic

Transitioning a business’s farming operations to Certified Organic practices is no small task and often requires years of planning and concerted effort. Almost any business that wants to start organic farming should cease pesticide use as soon as possible, since a key element of the USDA Organic standards is that land must be untreated with pesticides for at least 36 months before its produce can be certified as organic. This process should be documented in detail, as certification authorities will want to see records.

It’s also important to identify potential concerns regarding cross-contamination of pesticides from neighboring farms. In theory, pesticide use rules should prevent this, but farm operators don’t always follow the rules and may be spraying pesticides in high winds or using other banned practices. If soil samples that should be clean come back contaminated with pesticides, it’s important to address the issue with neighboring farms as soon as possible. 

Erp usda certification
Organic crops are often more vulnerable to damage

There’s no shortcut to a USDA Organic certification. But there are simple steps that businesses can begin taking now so that they’re prepared to hit the ground running in the organic markets of the future. If there’s anything that’s clear, it’s that demand for organic food isn’t slowing down any time soon. The sooner a business begins taking these steps, the sooner it can compete in this red-hot market.

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