Garrett McBride: Hey, there. Welcome to Get the Scoop with Smirk’s Podcast, where bulk ingredient conversation happens. We’re sharing our knowledge and expertise as bulk ingredient importers, tapping into the latest trends we are seeing and commenting on what that means for natural food businesses as they approach ingredient purchasing, product development, and marketing. You’ll hear the latest market reports, ingredient specifications, and product applications from Smirk’s in-house experts, as well as origin stories from our growers and processors around the world. Listen in for the scoop on what’s happening with bulk ingredients.
Elisa Louis: Hello again to our wonderful listeners, and happy new year. Welcome back to another exciting episode of get the scoop with Smirk’s. I’m Elisa Lewis, and I’m cohosting today with Donny Edson. We’re really excited to delve into the world of organics with none other than the experts themselves. That’s right. We have Adrienne Messe and Scott Rice from the Organic Trade Association joining us today to share about the important work the OTA does and the valuable support and service it offers its members. On the regulatory side, we’ll For the new strengthening organic enforcement, so you can expect to gain some key takeaways in preparation for the March 19th deadline. And if your business profits in any way, shape, or form with organic products, you’re gonna wanna tune in.
We’ll also learn some great insights about organic Trends that the OTA has uncovered through their member survey and SPINS Nielsen data. And even if you’re on the fence about pursuing organic products, You’re gonna wanna listen in to find out valuable resources available to help you, including the OTA’s insider tips on how to select an organic certifier.
Donny Edson: Adrienne and Scott, we’re honored to have you here. Welcome to our podcast. I believe because the script says so, this is our 10th podcast. So you’ve helped us enter into double digits. Could you share a little bit about your roles at the OTA and a little bit about your professional background? Adrienne, could you start us off?
Adrienne Messe: Absolutely. Thank you so much, Donny and Elisa. We are so excited to be on your podcast today, so thanks first for hosting us. And thanks also for having this podcast. I think it’s a really cool resource that you’ve created for the industry And for your partners, so thanks for doing it. Thanks for having us. So I manage all of OTA’s event engagement, In person events and virtual opportunities. So we host some events, but then we also have strategic planning around other industry events that we engage in.
Adrienne Messe: Areas where organic community is showing up, organic conversations are happening, or areas where agriculture is being discussed, And we wanna make sure that organic is a piece of that conversation too. So our events are really focused on bringing the organic community together. It’s a pretty close knit Community in general. We really want to grow and protect organic from all stakeholder perspectives. So A big goal of ours overall is to grow the organic audience and include new diverse stakeholder perspectives so that we can continue to meet the needs Of the future of the organic industry. Because it’ll be different tomorrow than it is today as it was different yesterday, as we all know. So OTA hosts a few events. 1 of our one of our biggest events, our biggest event is organic week in Washington, DC.
Adrienne Messe: And that is an annual conference to bring the organic community together in 2024. It’s going to be taking place May 14 through 16th In Washington DC, it’s a 3 day conference. We have 2 days of conference programming, touching on topics are relevant to the industry, and then we have one day of hill visits. So we organize hundreds of meetings across the hill for our members that are in DC. So it’s really an inspiring Week to bring together all the different missions of our industry and our trade association in person in DC. So it’s really a cool week. You don’t have to be a member to join that, so anyone listening is welcome.
Donny Edson: Can I ask about how many people come to that?
Adrienne Messe: Couple 100. There’s usually, I’d say, 300 people that are there in person for the event. So like I said, you know, the organic community is a close knit group, but it is growing and changing. So We have a lot of long standing participants who come every year and continue to bring more members of their team, but we also have new members that are joining And bringing into the fold. The cool thing about hosting it in DC is that we get to really draw from those local policymaker Connections that are there local in DC and can attend in person too. So Cool. About about 300 people, conference setting, But we keep you busy for that 3 days. It’s conference programming all day long and then evening receptions too.
Adrienne Messe: So one event that we host As a part of organic week is our leadership awards celebration. So it is inspiring to get the whole community together to do work, but it’s also important to recognize the leaders in the industry that are really helping to make change and grow the industry. So we have our leadership we’ll be handing out.
Donny Edson: Is that when you do the Lifetime Achievement Award stuff?
Adrienne Messe: Yeah. Yeah. There’s 5 awards this year. We added a few new into the mix as well. So we have 5 awards that we’ll be giving out. And again, it really is inspiring. Like, we’re busy all day working on the the tough work of policy and government affairs. And then to come together and look back at, okay, we’re all making a difference here, and that’s important to celebrate too.
Adrienne Messe: And so it’s cool that we do that during our Our main OTA event in DC every year.
Donny Edson: Awesome. I filled out a nomination letter for someone who I can’t sit Nice. On here because we don’t know what’s gonna happen with it. So Right. I may have to come this year. So yeah.
Adrienne Messe: Thank you for nominating someone. It’s it’s really important, I think, for all of our members to kinda come together and participate in that nomination process, so thanks for keeping an eye on those messages.
Scott Rice: I’m sure
Adrienne Messe: you’ve received a lot and submitting a nomination, so thanks. I’ll also just mention too, you know, aside from those events that we host like organic week, we also There’s hundreds of events in the agriculture industry in general. So we have a presence at a lot of those industry events too where organic is on the agenda or should be on the agenda. And so we’re kind of working round the clock to make sure that we can prioritize those opportunities too. And Like you guys have noticed through this podcast, you can reach a lot of people virtually. So we also have 1 or 2 webinars a month To be able to be reactive to those industry topics that come up and serve our members. So with that, I’ll pass to Scott.
Scott Rice: Thanks, Elisa and Donny. So happy to join you here. Just a big second on, Adrienne’s description of organic week. As a previous Attendee, before I was on staff, I was always super impressed with how well it’s put together and fun to be a part of it and looking forward to joining everybody in May for this coming year edition. I joined the team at at OTA as a regulatory director in June of last year, Coming most recently from the Washington State Department of Agriculture’s, organic certification program. When I was there, I was involved in a lot of Facts of certification and regulatory and policy issues, input material review, accreditation and quality management. I often say that the regulatory world is all sort of the wonky bits that you may not see on the face of a product at the grocery store. But In the end, it all adds up to ensuring the integrity of the organic label and giving consumers, that organic product that they expect.
Scott Rice: My organic career started on a mixed vegetable farm in Northern California and continued with, kind of a big dive into More wonky bits, the material review at the Organic Materials Review Institute. Did some small farm direct marketing in the Puget say, Excuse me. Puget Sound in New Zealand. Also, served a term on the National Organic Standards Board representing certifiers there. Here at OTA, do a lot of what I’ve done in my career as Regulatory Director. I assist our members Navigating that regulatory landscape, as it relates to and kind of impacts organic production. I help troubleshoot Domestic and international trade issues, develop resources for members. Adrienne’s gonna talk a lot more about kind of what we do.
Scott Rice: And do all that so that, members can help better understand and comply with what those regulatory requirements are and really kind of navigate that successfully. There’s always a ton going on in this industry And at our organization, you know, in the last year, we’ve seen some pretty significant rules passed. We’ve had the strengthening organic enforcement rule. It’s the most extensive update to USDA organic regulations since, their passage More than 20 years ago. We’re going to talk a lot more about that in the coming time here together. And we also saw the long awaited organic livestock and poultry standards rule, which We were very pleased to see and clarifies a lot of important, production standards when it comes to livestock. And Most importantly, allowing or ensuring that organic animals always have outdoor access. Even outside these big years, We always track what’s happening.
Scott Rice: There’s regular cycles of the National Organic Standards Board, which is the 15 member volunteer group That sets the standards with USDA of what organic means. And we’re always keeping an eye out For developments in other agencies that might impact members in the trade, there’s never dull moment and that’s what makes it Fun and and exciting. So great industry to be in.
Elisa Louis: No doubt about it, Scott. Thanks so much to you both for those intros. Really appreciate that. And, hey, Scott. You know, being from Seattle, it’s pretty cool to have a fellow northwest person on the podcast today, so Kudos to the northwest.
Scott Rice: Happy to happy to represent.
Adrienne Messe: Right. We’re all over the map on this
Elisa Louis: place today. Adrienne, Where are you podcasting from?
Adrienne Messe: I’m our East Coast representation. I live in Vermont.
Elisa Louis: And we got Donny in good old Fort Morgan, Colorado. Alright. Well, hey, let’s get going here. So, Adrienne, could you tell our listeners kind of who are unfamiliar with the organization A bit more about the mission of the OTA, who you primarily serve, and a brief overview of the types of services, support, and You’ve talked about some of the events, but get into it a little bit for us so people can understand what you do for your members.
Adrienne Messe: Definitely. There’s a lot of associations out there, to be honest, in the agriculture industry or just for general business development, so It’s totally understandable. I think if people are a little confused about who’s who, what exactly they’re doing, who they should go to for what questions, who are partners in the industry. So we totally understand that and are are happy happy to explain that further. So our mission at the Organic Trade Association is to grow and protect organic With a unifying voice that serves and engages its diverse members from farm to marketplace. And as Scott alluded to, There’s never a dull moment. It’s a busy industry and there’s a lot of different stakeholders involved. So our membership really is quite diverse.
Adrienne Messe: We work with growers, farmers, Shippers, processors, certifying agencies, associations, retailers, distributors, All the above. We work with all stakeholders in organic. And we really value that because everyone’s perspective Is a little different, but we need to make sure that we do have a unifying voice of all aspects of the industry, opportunities, and challenges So that we can all continue to thrive and grow and meet the needs of the future, which are different than today. So we we really work hard to Make sure that we are growing that perspective and including diverse stakeholder perspectives in the conversation. So Aside from the fact that we are so we are a trade association. We do you pay dues to our association in order to be a member, But really, we’re representing all of the operations that are certified to the USDA standard because the work that we do on policy, government affairs Implicates everybody who is behind that standard. So we’re really representing all of the operations in the industry. I wanna Call out to the organic center.
Adrienne Messe: So like I just said a 2nd ago, there’s so many organizations out there. It’s hard to keep them straight. We have a nonprofit Arm of our organization, and that’s called the organic center. So sometimes you’ll see that logo also, but that’s really our research arm. They’re a separate nonprofit, but they’re under our auspices. And that’s our our research branch. So we’re working constantly to partner with research into institutions and other service providers and associations to make sure that we’re collaborating on research and Conducting new research to make sure that we can have data to support the growth of the industry moving forward. So I always just wanna call that out About the organic center because people are like, is that you? Are they different? And it’s kind of both.
Adrienne Messe: So in terms of Services and support that we offer to our members, there’s a lot. We’re doing a lot all the time. But that’s great because you can always find An aspect that’s going to help support your business or a place where you can see your voice represented. Government affairs and policy work is really a big part of what we do. The farm bill, as many people know, is the biggest piece of agriculture legislation, and it’s updated every 5 years. So that’s really the biggest and best opportunity for increased funding to support the growth of the industry. That farm bill is $428,000,000,000, And only 0.1% of that is dedicated to organic specific programs. And that 0.1% is about a half a $1,000,000,000.
Adrienne Messe: So it’s a lot, but there’s a lot of room for growth there. And we work with offices on the hill year round. So I mentioned we Organize a lot of 1 on 1 meetings on the Hill during organic week, but year round, we have a presence in DC to Have constant conversations about organic in hill offices so they can understand the economic impact, the growth opportunities, and the areas to support The industry, all leading up to the farm bill. Every year we’ve been able to increase every 5 years we’ve been able to increase funding for organic in the farm bill, and that’s a huge success. And it’s also just something we can’t miss the boat on because 5 years will go by, and we need it to to increase every time and then continue to facilitate those programs. So continuous improvement is really the core of the USDA organic label. It’s was the whole purpose of establishing a national standard Is to make sure that there is consistency and accountability with people that are certified. So a big piece of work that we’re really proud of recently is The Continuous Improvement and Accountability and Organic Standards Act.
Adrienne Messe: OTA was able to spearhead the largest organic Coalition in recent history to support this bill, and it’s really focused on adding that transparency and accountability to that federal regulatory process To make sure that USDA is acting in a timely manner, in a transparent way. So that was A big policy piece that we were successful in recently. Another really important aspect of our advocacy work is regulatory, which is really Scott’s Bread and butter, and he’s gonna be able to elaborate on all of this a lot more today. But the takeaway is that Or USD organic is the only label claim on the market. You know, we’re all shoppers. We see now that you look at a label on any product on any aisle of the Grocery store and there’s a lot of label claims now, a lot of words on that front panel, and it’s hard to know what means what. But the USDA organic label is the only one That is federally enforced with third party verification. So because of that, it does take constant attention to make sure that the standards behind that label are really being enforced, and everyone’s accountable to what that really means.
Adrienne Messe: So Scott mentioned the National Organic Standards Board, which he served in his past, which is awesome. The and but for people who aren’t in this work every day, Everyone’s familiar with the USDA, most likely. The National Organic Program is the division within the USDA that focuses on organic. But the reason that there’s the National Organic Standards Board is to make sure that there’s that additional advisory board of people that are really representing The true interest in stakeholders of organic to advise those policymakers in DC. So it’s really a pretty cool system set up to make sure that there’s not only Policymakers in Washington writing organic policy, but there’s really actual stakeholders within the industry able to advise on that board as the decisions are being made. So we’re a part of those conversations. Our staff, Scott, you know, and is attending those meetings twice a year so that we make sure that we’re representing our members’ interest in those conversations as they pan out. So it’s a huge benefit of being a member of Organic Trade Association is that you have a direct line to those conversations, not only As the conversations are happening so that we can defend and protect everyone’s interests, but also when things are released, we can help you Kinda digest what that means and help you make sure that you’re becoming compliant.
Adrienne Messe: So Scott is gonna talk a lot more today about the strengthening organic enforcement rule, Which is, like he said, the biggest update to the standard since they started. But we were a part of those discussions the entire time they were being written, which is definitely helpful now as people are trying to become compliant by March. So this regulatory work is really a big Part of what we do and a huge benefit to being an OTA member. Few other things to to note about our membership, I keep saying that we have A lot of diverse stakeholder opinions included. So we have groups that we call member communities within our membership because, As you can imagine, a grain supplier questions or challenges are gonna be different than that of a dairy company or that of a produce company. Within our membership, we have opportunities for you to collaborate on sector specific conversations. These groups you would usually meet quarterly, And there’s really a lot of helpful collaboration that can happen within those and a lot of like minded business owners that are probably experiencing maybe the same thing as you, And it can help to kind of bounce those ideas off each other. So another piece of those member communities is our task forces.
Adrienne Messe: So sometimes things come up in the industry and a few members are like, this is an issue, or we really need to figure out a solution to this that’s gonna serve organic. And so our members come together and collaborate in really cool ways through these task forces. Most recently, we had this really cool toolkit that we launched And it was created through a task force. So many people have maybe heard of our organic opportunity communications toolkit, and it’s a data driven toolkit that helps Our members effectively educate about the requirements of organic and also the attributes. So The work came about because some of our members were meeting with big retailers like Walmart and Amazon who have Climate smart purchasing, you know, they each have a different name for it, but it’s basically in their platforms you can choose, I just wanna purchase products that are climate smart. USC organic wasn’t included in that. And we know, of course, that organic is the original climate smart agriculture. But in hearing that Experience from our members in having these retailer conversations, we realized that there’s an opportunity to educate because clearly they didn’t understand Why they should be prioritizing organic on their shelves, and then in turn why shoppers should be purchasing those products from their shelves.
Adrienne Messe: So we created this toolkit Specifically for those retailer conversations, but our members have really taken it and run with it. So they’re really able to take The science behind organic and the specific attributes about why organic is good for people, good for business, good for the planet, And really translate their brand story in that lens and further communicate in their meetings with partners to Advocate for organic and educate about what it means. So it’s a really cool resource that now so many of our members are using, and it came about because a few of our members were able to get together and create a solution. So there’s a lot of opportunity for that within our membership.
Elisa Louis: Oh, that’s awesome. And, Adrienne, Just a question on that. Yeah. Does that give them, like, some key bullet points, visuals? What does that toolkit kinda look like?
Adrienne Messe: Yeah. So it’s a pretty comprehensive toolkit, and there’s a lot of templates within it. So I mentioned the organic center is our research arm. And they so we use all the data, the science behind organic through the research, through the organic center to have some key attributes. So we actually have Within the toolkit, an organic wheel of sustainability that is a circle like a wheel. Yeah. And it has USD organic in the center. And then it has 3 sections.
Adrienne Messe: Good for people, good for planet, and good for business. And then further from there, it takes it and outlines About like 6 or so attributes of each of those. So instead of saying, you know, organic is good for the planet, businesses can say organic helps To sequester carbon or it helps with soil biodiversity. And so you can really understand A little bit more of a tangible impact, and then also attribute some of that data in your own brand story through the templates that we have. So Our members are really able to use those templates, insert their own information, but have it all be tying back to the attributes of organic.
Elisa Louis: Oh, I love it. Very cool.
Adrienne Messe: Yeah. It really is awesome, and it’s helpful that that template now exists because I think There’s a lot of education that needs to happen on every level with retailers, with consumers, with all member supply chains. So as much as we can get this information out there and educate the people who are in the decision making positions to put organic on the shelves is a benefit to all of us. So it’s helpful that this toolkit now exists for everyone in the industry to utilize.
Scott Rice: We’ve seen some of our members really use it as a jumping off point for, some pretty fun marketing campaigns and really engaging visuals, and as Adrienne said, just really put some tangible benefits In, real plain language and kinda you can grasp organic and and all that it offers beyond just A seal.
Elisa Louis: Yeah. Oh, fantastic. Even though it’s been around for so long, it feels like you’ve kind of breathe new life into it. What that seal really means.
Adrienne Messe: Well, and I think it helps educate it like, you know, it helps educate at every level also in the face of the other label claims out there. Yep. There are actual proven scientific points of the benefits behind organic, and there’s data around that. And the other label claims don’t have that as much. There’s a lot of greenwashing that happens in the industry, and we’re not in the game of pointing fingers at anybody else, but we are in the game of and promoting and defending what organic does mean because it does mean something. A few as a few other things I wanna call out about OTA membership. I could go on and on and on forever.
Donny Edson: I don’t
Adrienne Messe: know if you Tell, but there’s a lot of different aspects of our membership that are benefiting the whole industry and our members. And I think our diversity entrepreneurship program deserves a special shout out. So food systems and social injustices are deeply linked, And we recognize that history, and we’re also consciously working to not perpetuate those inequalities in the industry. So we have created Our diversity program, we extend complimentary membership to BIPOC and women owned businesses through our diversity and entrepreneurship fund. And then we work 1 on 1 with those businesses to make sure that their needs are being met and there’s no barriers to them being successful in organic. Sometimes the organic message doesn’t reach all audiences, but it is our mission to make sure that we are meeting people where they’re at in their learning journey And also helping them to source solutions to their challenges. So it’s been a really successful program. We’ve been able to Bring a lot of really awesome businesses and organizations into the fold through this.
Adrienne Messe: We also launched a diversity resource library, which is A library that houses BIPOC speakers, influencers, partners, farmers, media professionals, so that We can support BIPOC businesses in all areas of our projects. And so that’s a resource, is a library that’s available to anyone. If you’re looking to hire a contractor, Support a new farmer. You can search this library and really help to support those businesses that might not have visibility in other areas. Another thing which I think we mentioned a little bit today is that we have our organic industry survey. We really are, at the Organic Trade Association, the lead Data provider on the trends of the organic industry, and it’s a report that we come out with annually in the summertime. So the 2023 data will be out in summer of 2024, and it really is a whole comprehensive picture of the current trends, Opportunities, challenges in the industry, and it’s something that’s free to all of our OTA members and definitely a a benefit of joining the trade association. And then events I already kinda mentioned.
Adrienne Messe: We bring the organic community together in in person and virtual events here in the US like organic week or other industry events, But also we take US companies abroad to foreign trade shows or trade missions to help them facilitate growing their brand in international markets because USC organic worldwide, honestly, is seen as a trusted A trusted brand. And so when you’re looking for a product that you wanna trust exactly what’s behind that label, Not only here in the US as we know, but in global markets, there’s definitely a trend to purchase US Organic products, which is super cool to put us on the map.
Donny Edson: Wow. Thank you.
Elisa Louis: No. Right? Sorry. That’s a lot.
Donny Edson: Lot lot of stuff there.
Adrienne Messe: We’re busy.
Donny Edson: I’m gonna chat a little bit of my history with the OTA, which a number of the things you mentioned off, I haven’t even been a part of. So Through a whole different experience.
Adrienne Messe: We’ll get you on board, though.
Scott Rice: Yeah. Yeah. I believe that. The opportunity abounds. I believe it.
Donny Edson: I mean, I’ll tell you that The first time I was introduced to the OTA was in 2012. And it was through the Colorado Department of Agriculture. And they said, look, we need some people To go on this OTA trade mission to Europe, to go meet all these people in Europe, and then go have a booth at BIOFACH. And I thought, Okay, what the heck? Let’s try this out and see what it is. So, we went to Holland and we got to tour so many cool different spots. We got to meet a lot of the big European organic companies and they showed us their business. They took us to their warehouses. We got to meet their teams.
Donny Edson: And then we got to go to Do retail tours there to see how organic was working there. And then, and it was several people from the US. It was really cool. And so, ultimately, what that led to me is a couple of companies from Holland that I’ve worked with since I met him in 2012 For international trade, both us selling to Europe and then and then us buying through them from Europe as well. And then it led to, actually, an introduction to a lot of people in the organic industry in the United States as well. So that I became close friends with, who we’ve been Business partners with since we met. It’s this thing, so. And then ultimately, we got to go to BIOFACH, which for all the listeners is The biggest organic food show in the world happens every February in Nuremberg, so it’s actually coming up in, like, I don’t know, 3 weeks, I think. 2 or 3 weeks. I know is I always miss Valentine’s Day. So, yeah. We all do. So, that’s really cool. And so, What OTA has done for us as well over the years has helped us with BIOFACH, which I’ll talk a little bit more about later on in the podcast as well. So But that’s how I got to know OTA.
Donny Edson: And so a lot of the people I’ve met and I stay in touch with both in and out of OTA Stem from that like original trip that we went on there. And then all the times OTA’s invited us to take part in different events as well. So I’m Really excited for the BIOFACH again this year. So
Adrienne Messe: It’s cool to to hear your reaction to that though, Donny, because I can’t tell you how Many times I hear that from members. We’ve had members engaged for very long like you have been and other members who maybe participate in 1 or 2 things or they Are constantly talking to Scott about regulatory issues, but they didn’t know we had these other programs. And so I think we really are working on a lot all the time. And there’s always something new to learn about areas to engage with.
Donny Edson: Yeah. I’m learning a ton today, which is why we’re doing this.
Elisa Louis: So cool.
Scott Rice: And I love, I love, Donny. You know, you really highlight the importance of relationships and how despite being a Sixty, what, $7,000,000,000 industry, this industry is still very much based on those relationships. You know, it It is transactional, but it’s relational, and that’s really what makes it builds the trust, it builds The community, and it really builds the brand of organic.
Donny Edson: It’s, to be honest, from me. From that community aspect, one of the things I appreciate is we might call Our competitors are friendemies, you know. We’re all friendly even though we compete, but we all do business back and forth with each other. And Ultimately, at the end of the day, I think our number one goal is to take care of our families and our employees. Right? So we’re trying to we all help each other out and we share information back and forth, when it comes to organic on who maybe isn’t to be trusted. What maybe you need to verify To just to make it a level playing field. And I think that’s one of the things we’ve talked about with the changes coming in March is, It hasn’t always been a level playing field sometimes. So it’s good that they’re bringing some structure to this.
Donny Edson: And that it is because the companies that Do it the right way and can stand behind their product. They sometimes are at a disadvantage from the people who just do it however they do it. So as well, but yeah.
Elisa Louis: That’s just such a great story, Donny, hearing you reminisce about how your first experience with an OTA Trip to Europe and everything and just what Scott just said. Here at Smirk’s, we’re just so passionate about building partnerships And and those long term relationships, it’s it’s a big part of our company mission. But with that, aside from that, Donny, I’m just curious, like, what are some of the other things that stand out for you when you think about the services and the support and the regulatory guidance that Smirk’s has received from the OTA over the years.
Donny Edson: Yeah. Absolutely. I mean, first off, the BIOFACH programs, as they put together I have to tell a funny story because I just remember this from the very When we were all in this giant booth together, and we want we all wanted a martini. So somebody went and found, like, organic vodka, And then somebody went and found organic olives, and we came back and made organic martinis inside of our booth. So it was a great time. But BIOFACH of all places would be an easy place to source all of those ingredients.
Donny Edson: We have an wine tasting area with, like, 300 organic wines that you just get a glass and you go through and try them all. So it’s also a very fun thing. But so anyway, So the BIOFACH Program, they make it really affordable and easy to travel to Germany to have a booth at the trade show. So they’ll help pay for air Fair and they’ll help pay for your booth space there. So we’ve taken advantage of that several times over the years Where we’ve gone and we’ve displayed there, and we’ve met people from all over the world that we saw or get ingredients to at this show. Literally, I mean, I’ve met people from South America, from Israel, Europe, even Asia. So we’ve met different people there that Never will we thought with the business that we’re in, where we view ourselves as food importers more than exporters. We would be able to connect the dots on a lot of this organic stuff that we have over the years. So that’s been really cool.
Donny Edson: But in addition to that, I you know, there’s a lot of people from North America like us that go and walk this show To find ingredients that we want to work with or look for trends or whatever it is. And so, when we have booths there, we actually meet people from North America that we’ve never met before. So Some of my, like, favorite closest customers that we’ve met in 2012 and we’ve worked with ever since. So and these are great companies that same thing as us, so they’re walking the show. So, I mean, yeah, we have customers we’ve worked with over a decade that we’ve met. We go to Germany to meet somebody from North America, but nonetheless, it connected the dots from that piece of it. So I think that’s one one of the great things from the the program. And I know that there’s a number of other programs they do with Seattle and Anuga and Gold Food, and We’ve been invited to Asia several times.
Donny Edson: So so there’s a lot of programs whether you’re in the ingredient business like we are, or if you’re a brand and you wanna take your brand globally. If you wanna break into Asia and you’re an organic brand, this is a great way to take advantage of that program at a very low cost and then have the support of the OTA behind you to do that.
Adrienne Messe: I’ll just flag too, Donny, in response to that. I mean, I events are are always an awesome way to build those connections and have those conversations and keep Up to date on all the trends. And for anyone listening too who has a a question about anything in terms of these international markets, because of our Funding source through the the market access program. We have really close relationships with the foreign agricultural service offices in global market. Even if it’s not at BIOFACH or it’s not at CL Paris, if it’s not through a trade show, but you have a specific market question or you need to check-in with one of your Buyers or a company within that market, you can reach out to us and we can help you get connected with other foreign ag service people anywhere in the world.
Donny Edson: Yeah. That’s awesome. And it just goes on to my next example of things. So aside, you know, aside from the business side of things, for us, the OTA has been a great resource for helping us to navigate the rules Of being in the organic business. Right? There’s a lot of rules. When you’re talking about the farm bill, that’s a big bill. Right? I mean, there’s a lot of rules that go along with this stuff. And so And ultimately, nobody goes into anything wanting to break the rules.
Donny Edson: They may just not understand the rules sometimes. So that’s where we’ve We’ve been able to lean on the OTA, and they’re very receptive to jumping on and explaining something to us or jumping on and explaining to one of our customers with us even on a conference call and just talking through things. So we’ve been talking with the OTA a lot more about all the new rules that are coming out in March, which is the reason we wanted to do this. And they’ve been just a great resource for us to be able to give get information to pass on to our business partners, whether it’s customers, brokers, suppliers, whatever it is. So Those are just a couple examples of the of the things that I’ve personally since met the OTA, which originally was like, oh, a free trip to Europe. Let’s do this. And then, but it’s evolved from there. So
Elisa Louis: Oh, that’s awesome, Donny. That’s awesome. And I agree. I mean, personally, I Attended one of your, OTA webinars on the new strengthening organic enforcement, or I’ll say SOE for short. And it really helped me to gain a high level understanding of what Smirk’s QA team has been Preparing for for these past months, because I know they’ve they’ve really been hard at work to make sure that they’ll be prepared. So I can only imagine that, Scott, you and your team and the team on the webinar have fielded tons of questions. Your inbox must frankly be full of members reaching out to ask about this topic. But for those that are maybe not so familiar, could you Please kinda give us a brief overview of the SOE.
Scott Rice: You bet. Absolutely. And, Yeah. It’s definitely keeping us on our toes and keeping us Busy, there’s a lot to it. A lot of it is brand new to a lot of folks, but I think we’re gonna dive into some of those crunchy details, but Just as a real overview, you know, we talked about earlier this is the single biggest update and so there’s a lot in it. And, you know, in brief, it really it closes the gaps in where the regulations are now, And it builds consistent certification practices, and all of that adds up to preventing fraud, improving transparency, And improving traceability of organic products. And that’s not to say that wasn’t there before SOE, but It gives a lot more strength, just as the name says, to certifiers, to the National Organic Program, to the trade itself. And so, you know, I think it’s important to point out with organic in general, you know, this is The rules in came about initially because the industry asked for it.
Scott Rice: You know, we had a patchwork of Different standards state by state, region by region. And so many years ago, that industry, sort of nascent industry coming together said, hey, we need, We want regulation, we want a common rule to help us build this brand that we’re working so hard on. And so not unlike that initial push, You know, we were seeing need for some updates for some things that frankly were We’re maybe missing here and there from the initial rules. So this came from the community through the National Organic Standards Board that Adrienne talked about, Through requirements in that farm bill, also from areas where NOP, the National Organic Program, saw a need for kind of greater greater Clarity and and enforcement. So I’ll try and keep it high level on this first dive, but It strengthens our regulations in a few key ways. 1st, you know, except for a few narrow exemptions, It requires just about everybody in the organic supply chain to be certified. Many of them were subject to certification before, but this really tightens up Where those gaps existed for a while. It also, it requires exporters to and importers of organic products Into the US to be certified.
Scott Rice: And for those imported products, NOP, National Organic Program, NLP is a lot of alphabet soup here, but it requires import certificates for any of those products regardless of their country of origin or How those are packaged. And that those certificates will be generated in the Organic Integrity Database, which is a really fantastic tool that the USDA maintains of all of the certified operations that are certified USDA organic. And Again, all of these moves are to add more traceability and accountability in that system. The rule also requires Certified operations and certifying agents to incorporate supply chain traceability and fraud prevention into their practices. So as part of this, All certified operations must develop and maintain what we’re calling a fraud prevention plan, kind of to help Identify where where are the weak points in my supply chain and where can I most identify where that greatest risk is? Another change is the requirement that all nonretail containers, regardless of size, shape, or use, That those be labeled with information that identifies the contents as organic and that identification has Unique information that links the container to overall audit trail documentation. And that’s one that we’ve spent a lot of time on As it represents kind of one of the bigger changes in practices in terms of how those things are handled and labeled. Organic certificates are getting a makeover, whereas kind of the landscape has been Certificate’s looking different depending on the certifier. SOE requires that certifiers generate A standardized certificate from that organic integrity database.
Scott Rice: And that’s gonna be important because it’s for a couple of ways. It’s gonna simplify how maybe somebody like Donny looks to verify just what this company is certified for, where In other versions, you kinda have to hunt and pack maybe a little more or get used to this certifier’s format or that certifier’s format. This really kinda standardizes that so that everybody can kinda just be used to looking for where that vital information is. And it also makes it so that there’s less of a chance that that is, far less of a chance I think that those are going to be Fraudulent. It’s pretty easy. I shouldn’t say easy, but it’s there’s, In a system that was built on kind of paper certificates, you would see fraud on an amended certificate or a mocked up one, and this really reduces the incidence of that by having it both unified and generated out of Something that USDA maintains. There’s a few other little bits and bobs of the update, but for the sake of the audience, I think here and For what you all do, I think that’s the most the most applicable parts there.
Adrienne Messe: I just wanna elaborate too on 1 piece of that that Scott just mentioned. And by the way, Scott, like, we’ve obviously been talking about SOE for a long time, and it is a huge piece of work. And it is so helpful to hear just kinda like a high level overview that you just Gabe, so I think that’s super helpful for everyone who’s out there in the industry trying to figure out what to do by March. One piece Of a resource that’s available for OTA members and nonmembers is our organic fraud prevention guide. So A piece of the rule as Scott mentioned is that all certified operations now have to have a fraud prevention plan within their organic system plan, And we and but they don’t outline a specific approach for how to do that. They just say you have to have 1. But we created a guide That’s basically a 9 step process for establishing a fraud prevention plan by looking at your vulnerabilities, outlining mitigation measures against that, and then adding it to your organic system plan. It’s obviously a plan that’s ever changing just like an organic system plan is, but USDA does point to Our program and our guide is kind of the best practice for setting that up.
Adrienne Messe: So just another example of ways that our trade association can see resources that are needed by the industry, and we create them, and we have them available to you.
Scott Rice: Definitely. And sort of hand in hand with that fraud Prevention plan are we have a network of what we call trusted advisors. So I’ll highlight a little more on those SOE resources, but in Specific to the fraud prevention plan, we’ve got folks that have gone through fraud prevention training. They’re very familiar with our materials and these are folks We feel really confident pointing the industry to you and just letting you know you’re not alone. Like, I think a lot of people look at all the parts of this and especially, like, how am I gonna make a fraud prevention plan? There’s a lot of what you do in your industry already that maybe with Various food safety programs that put you on a really good solid footing to get these in place pretty efficiently. And If it seems like a big barrier or it’s a little scary, you know, we have that trusted advisor network. We have these resources to give you a leg up.
Donny Edson: Awesome. Well, I mean, with SOE in mind, I wanna make sure, you get a chance to touch on the key things everyone should be aware of With the March 19th deadline, the looming March 19th deadline, right, as we all have the hangover of XpoS, I guess. SMRX has held our organic certificates since, I think, 2011, I think, is when we started. I remember the process way back when. But With that being said, this one is new for this is new for a lot of our partners in the industry. So I think it’s safe to say there’s a fair amount of Confusion out there in the industry. I know there’s a fair amount because they just returned from a conference and I asked several people and they were very confused or shocked actually. So Scott, the question is, which parties within the supply chain will be required to hold an organic certification?
Scott Rice: Sure. Happy to clarify that. I think it’s made easier to talk about The exemptions to help frame what is required. So outlining those Is maybe the best place to start. And listeners, if you don’t recognize yourself in any of these exemptions, it’s pretty likely that you require certification. So with that, if you receive, store, or prepare for shipment product that is in a sealed Tamper evident package when you receive it and it remains in that same sealed tamper evident packaging while it’s in your control, you’re exempt. But You must keep records that demonstrate those products were identified as organic, that were identified as organic, were indeed organically produced and handled. Those records must verify the quantities of the product that was received.
Scott Rice: Then if you buy or sell organic products or ingredients in sealed, Tamper evident retail packaging and that product remains in that same sealed tamper evident retail package while it’s in your control also exempt. But same again, must maintain the records that show that products identified as organic were organically produced and handled. And that’s essentially, You’ve got, you know, a verification of that. You’ve got a certificate that says as much. If the product does not stay In that same sealed tamper evident packaging or you do other handling such as Processing it, repacking it, relabeling it, culling. If you’re treating or conditioning it, That often is the case with produce. You must be certified because any of those activities are seen as as what we would call handling, and handling Kind of spurs that certification. Now when we talk about I think there’s a lot of folks understandably that get nervous Who are transporting or transloading organic product.
Scott Rice: So touching on that, if you’re Transporting or transloading organic product and those products remain in the same packaging and you’re not doing any other handling, you’re exempt. If those products are unpackaged, say, bulk grain is a good example, bulk anything, The locations where those are loaded and unloaded, those must be certified because they’re gonna be handling those in ways that Maybe allow for that integrity to potentially be compromised. If you’re a transporter and you do other handling Such as combining, containerizing, repacking, packing, you’re treating it, you’re sorting it, Opening and closing or labeling. If you’re doing anything of those, of that nature, then that, again, Kind of puts you in that you must be certified category. The other sort of limited exemption here applies to Licensed custom brokers, logistics brokers, and freight forwarders. So if you fall into one of those camps and you don’t do Any other handling, such as selling, importing, or trading, then you’re also exempt. So that that helps kind of Put the outlines hopefully on where you might slot in if if you are exempt, but if you don’t, It’s pretty good chance that you’re subject to certification.
Donny Edson: Great. Thanks. Again, a good overview. I think starting with the exemptions is a pretty good way to go. My next question for you, Scott, which is, for those that need an organic certification, what does the process look like?
Scott Rice: What does that look like? Yeah. And just real quick, you know, next week, I’m gonna be in San Antonio in a room full of most Of the USDA accredited certifiers where they gather every year for their annual training and Conference. And so I’m going to be having a ton of these conversations and try and get into some of that granular detail of where everybody’s at. So it’s a constant conversation, but in terms of what does certification look like, you can kind of boil that down into The 5 steps of certification. So that first one, you need to develop what we call an organic system plan, An OSP, kind of like a business plan, but kind of like a sort of view of your operations. And it’s the the foundation of the certification process. It outlines everything you do in your operation with your organic product and what you’re doing to comply with the regulations based on your unique Practices in business. So these are they’re purposefully flexible in terms of adapting to your business, but it Must kinda transparently show how your operation is preventing, say, if you’re handling organic and nonorganic, how it’s Preventing the commingling and contamination.
Scott Rice: How you’re managing your facility pest management program. For a farmer, it might be how you’re managing water and application of inputs and whatnot. So You develop that and then the 2nd step is implement it and get that system going, apply for certification, That plan will be reviewed by a certifying agent. That review may entail some back and forth. It’s not just, here you go, done and done. There’s probably gonna be some questions and kinda clarification on what you meant by describing a particular practice, and they’ll be Just so that that certifier can solidly understand what you’re doing, it’s important to understand that the certifier’s role is to evaluate your operation. And while they can clarify the regulation, they can’t provide advice or suggestions on how to comply. They’re there for Like a technical assistance that helps you understand the regulation and what is required, but they can’t help you Overcome barriers to certification.
Scott Rice: That’s the part of the third party certification system that makes it sound. The next, you’re gonna receive an inspection. Once the certifier determines that that plan is compliant And they’re gonna send a certifier to verify that everything that you have on that plan has been implemented, that is actually what you’re doing, And that the practices that that that certifier or excuse me, that inspector, who is a representative of the certifier, That what they observe is indeed compliant. The number 4, review of the inspection report. So that report, Those findings are presented to the review staff at the certifier, and They’re gonna compare that to the system plan that you submitted and see that those things match up. That inspector will have assessed, sort of that risk of contamination from prohibited materials. They may take a sample. That’s a tool that certifiers use and test for prohibited materials.
Scott Rice: And then finally, at the end of all of this, a review decision is made. And so the certifier is gonna review that report. If they find it compliant, they’re gonna issue that organic certificate that you just worked so hard to A team. That process, it generally takes on average about 90 to 120 days. That kind of varies depending on complexity, depending on how well that system plan was put together or understood, Any issues that maybe came up at inspection. It is a it’s a conversation that happens throughout that. We’re 52 days away from March 19th. So 90 to a 120 days on average, we’re at 52 days.
Scott Rice: So it’s if you haven’t Applied for certification at this point, it’s pretty unlikely that you’re gonna make it. So and have a certificate in hand by the time strengthening organic enforcement rule becomes fine or it’s by the time enforcement starts, I should say. Now, the big but on this is don’t despair, don’t say, Well, never mind, I’m not even going to do this because You still need to do it and don’t delay. Start now. Get in line with the process and just Get that going so that at least you’re moving in the right direction.
Donny Edson: Thank you very much. I mean, how would somebody or, you know, if What advice would you offer to people that need to choose an organic certifier? Like, what kind of things should they look at or look for or ask about?
Scott Rice: Yeah, it can be a little overwhelming. I’ll grant you that. We’ve got, I think 70 plus USDA accredited certifiers out there. So I would say that the USDA’s Integrity Database that we mentioned a little earlier, they have a pretty cool certifier locator where you can find all of those certifiers. You can see the types of operations that they work with there that they have kind of a greater representation of in terms of type of business. You know, I would say, look at this as you would hiring somebody to do work on your house or just Start interviewing them. Start seeing, you know, what’s a good fit. Who answers your questions in ways that make sense for your business, That give you the confidence that you 2 can work together well.
Scott Rice: Keep in mind that that certifier doesn’t have to be Near you or even in the same state or region, you know, location might be a factor when you’re determining this because they’re gonna be sending An inspector from perhaps not their home office. It might be somebody who’s regionally located in next door or in the same county, but that can, if they are coming from a further distance that can of course add cost and Inquire about what that looks like when you’re talking to them. You know, that can kind of help give you a sense of what that cost will be if you kind of know that ahead of time. I think importantly, especially for a business-like Smirk’s that’s handling a lot of product And has a lot of moving parts, like you might have a greater need for review and things that Changes in your certification. So ask about what the timelines are, not just for the initial certification, but for, Say, issuing import certificates. You know, if I’ve got a lot of product moving, how long does that take any time that I need that? Or, You know, it just who’s kind of got the systems in place that that are most in line with what it is that you need? And right now, certifiers are admittedly pretty maxed out. March 19th is tomorrow, pretty much. And They’ve got a lot of these folks that we know are new to certification and They started coming to them, you know, last year.
Scott Rice: They’re still coming to them now. So I think A little bit of patience and a little bit of understanding that everything is really ramping up, and I think It’s important to understand, like, this rule became final about a year ago, almost to the day. That’s when everybody got the final text and Saw what it is that we’re dealing with. And when I say everybody, that’s you, Donny, that’s Asset OTA, that is importantly, that’s also your certifier. And so nobody got a head start on this. We all had a pretty good idea of what was gonna be in there. But in terms of those We’re all working on that same timeline. And so there needs to be some understanding of that as We’re looking for these kind of tough answers to the questions that we have of, you know, who is or is not subject to the certification? What does that look like? How is this particular thing gonna work in terms of those standardized certificates or that import certificate? You know, we’re all working together to figure that out, but I think Having that understanding as we work towards that March 19th date of we’re all on the same path is a little bit helpful for everybody Because there’s a lot lot of moving parts there.
Donny Edson: Yeah. And I know everyone in the industry is trying to prepare for this. And, there’s obviously Still a lot of questions. We’re asking them today to you as well. So, at Smirk’s, we’ve been working hard to ensure we were prepared. Our QA team’s been working the past year, as you mentioned, to make sure we comply with the SOE. But even in the case when you feel prepared, there’s still a level of Uncertainty about the interpretation and the enforcement of the new rules. So what do you predict will happen March 20th? And what should people expect going forward?
Scott Rice: Yeah. A lot of anxiety around this, understandably. And I’m getting a lot of phone calls and having a lot of conversations. And as Elisa mentioned, that inbox is filling up, but They’re all good questions, all good conversations. And I would say as hopefully some reassurance, USDA National Organic Program has been pretty consistent in their communication that this is You know, the March 19th date, while a date of enforcement and there’s an expectation to be certified and that we have all of our ducks in a row on all the things that are in SOE, We’re working on a it’s a process more than an event, so we’re still working through that process. And We understand and USD understands that while indeed enforcement’s gonna begin, There’s gonna have to be a little bit of grace and that folks who are doing their due diligence to get certified are Not gonna see trade interrupted to a great degree. There may, of course, be Some questions and additional verifications that might add a little bit of time, but I think the program really, National Organic Program in their communication With folks lately, they’ve illustrated day 1 priorities as they’re gonna review certifier control system Update. So there’s a lot in that I didn’t really cover in that summary.
Scott Rice: There’s a lot in SOE that addresses what certifiers have to do to get their systems kind of Strengthened and bolstered and updated. So they’re USDA is gonna be looking at at how certifiers have really done that. They’re gonna flag and investigate invalid import certificates. They’re gonna start warnings of Uncertified importers and exporters. You know, a warning is, I would say that sounds scary, but it’s really, it’s kind of education. If that warning is gonna say, Hey, we saw that there was this import. It looks like it’s organic. It doesn’t look like your exporter was certified or the importer was certified.
Scott Rice: Here’s what you need to know, and here’s what you need to do in terms of getting certified if you’re gonna continue to work in this organic environment. Beyond day 1, I think the next steps they’ve expressed are enforcement With non compliant certifiers. So the certifiers haven’t quite ramped up their systems. They’re gonna use a lot of what is an SOE is really Kind of grounded in in a risk based assessment. Like, where is the greatest risk here? We wanna put our energy and our Resources. We’re the greatest risk in the industry where we know that maybe we’ve seen some some past Fraud here and there, or we know that, hey, this is a high value commodity. There’s a potential that somebody might wanna take advantage of that. So That’s where the resources will be focused.
Scott Rice: The program will also start expanding kind of the flagging of the import certificates and a You know, stronger follow-up on that. They’re gonna assess that broader implementation of the provisions by and large. They’re gonna work with Partner organic programs to assess just kind of all those systems in place and that’s maybe with trade partners overseas as well. And conducting surveillance at the certifier and operation level. So the certifiers are there At least annually at your operation as a certified business, potentially they’re on an unannounced inspection. But what also happens is the certifier gets an inspection too. As part of the accreditation process, they see USDA At least they’re gonna see them every 5 years for their reaccreditation audit, and they’re gonna see them for midyear or a midterm audit, like, about every two and a half years. And so That will include USDA staff accompanying your certifier potentially on your operation And they’re kind of shadowing.
Scott Rice: They’re seeing that those certifiers have put all of those measures in place. They’re looking at the inspection process. They’re looking at the review process. It’s just another check. And finally, it’s enforcement. We’re talking about March 19th as an enforcement date. So I think when the program is seeing that folks are pretty, you know, most areas of the should be pretty well educated at this point. Enforcement will start.
Scott Rice: And that’s gonna be with a bit more than a warning. It might be, You know, they’ll use other tools at their disposal, but it’s really, I think we’re gonna be leading with a carrot, not a stick on this. As much as this has really given us tools To to really bolster and and strengthen integrity of organic, we want people to come along with that. You know, we wanna educate and Get everybody onboard before we have to take advantage of kind of that enforcement action.
Donny Edson: Sure. Still, Anxiety,
Scott Rice: as you put it. Yeah. So, yeah,
Donny Edson: I’d be a little anxious on it, maybe. So are there any other important changes that you would you you wanna highlight about the SOE?
Scott Rice: There’s some other areas, but I think there’s anxiety, there’s, people are feeling overwhelmed, but I think The rule’s here for a reason. It’s given USDA and certifiers and everyone in the supply chain kind of better and stronger tools To just really keep that integrity of the USDA organic seal and we want to protect This organic market. Donny, I think you said 2011 was when you got your certificate. You know, That’s a lot of work to get that and then also to keep it. And we wanna make sure that all the hard work that we’ve invested in this Is worth it and protected and we make that seal what consumers expect of it. And so it’s a lot, There are some big changes and it’s a big new thing to the folks that are new to it, but you’re not doing this by yourself. I think As we went through a lot of resources that are out there and, Adrienne really put a big point on the OTA resources that we have. And we’ve got that organic fraud prevention guide.
Scott Rice: We’ve got a really detailed overview of that import certificate process, And we’ve got a whole SOE page for members. We’ve done webinars, not unlike this based on specific topics or just a big Open round robin. We’ve had some great, a great webinar with Jenny Tucker, a deputy administrator at National Organic Program, and We’re here for the industry. We’re here to provide those resources and make it so that you’re don’t feel like you’re you’re alone in doing this.
Donny Edson: Sure. I mean, and a couple of things I can talk about from our side so far as this has been coming on down is we certainly seeing a lot longer lead time to add new organic products Onto an organic certificate. In addition to that, we do take our product to a lot of people and have stuff done to it it has to be added to their organic certificate as well. So it’s taking generally speaking, Really 15 to 20 days, business days to add stuff on. Unless you want to pay the expedited fee, which is $3.50 to try to get it done sooner when it’s expedited. And we still see that around 5 days. So in terms of planning, what do you recommend when a company is Formulating and needing to add new items to their organic certificate.
Scott Rice: Yeah. As we mentioned, certifiers are Working overtime right now and, doing their best to keep up on this. You know, another Thing to keep in mind is as this industry has grown, there’s been a lot of work to increase the organic workforce. You know, a lot of Work that I did when I was working on the National Organic Standards Board was to kinda really brainstorm in the industry and Get some recommendations on how we bring more people into that certification side to really broaden that workforce and Keep it there where we can meet those expectations. So just keeping that in mind that everyone’s aware that There’s a lot that’s needed and we’re trying to bring people into the professional pipeline to meet that. But specifically, When you’re working with a supplier change or a formulation change, you expect that to happen, but sometimes that happens unexpectedly. If you, as a business, can somehow build in lead times into your processes and kinda anticipate and buffer that As best as possible. I know that’s sometimes impossible, but best you can do to plan ahead on that And kind of account for maybe some of those delays, the better.
Scott Rice: So in all of that, communication is key. So making sure the folks in your company that are Drafting and creating new labels understand what the requirements are and what needs to be on that label or what can’t be on that label, What color that seal can or can’t be, the better informed and the better you’re communicating with them so that they understand that You’re gonna be in better shape so that that label is only reviewed once. You don’t have to pay to pull back a label run or Find out that last minute issue is there. So make sure sourcing managers communicate changes as early as possible so you can get a jump on those revisions that have impacts on a label change. And any of those changes, Just remember, those have to go to the certifier first before those hit the market. You know, in certification days, It really hurt to tell somebody, hey, we got a complaint or our inspector found an inspection that you’ve been selling x label for a few months now and or it made it into the market before we got a chance to look at it, and this isn’t correct. It’s kind of an insurance policy for you to run those through your certifier so that you don’t have to scrap that whole label run or Make an adjustment. So that communication all across the board in your company and as well with your certifier is gonna put you on solid footing.
Donny Edson: Yeah. And and I’ll add one thing to that too. I mean, as an example, we may use 1 processor to Clean and repackage 10 different kinds of beans for us that we handle. So they’ve been proactive in the same manner of bring us everything at one time. Whether you’re going to do it or not, if you think it’s a possibility, let’s just get it on the certification now. So when the time arises, we don’t need to do it. So There’s definitely been some who’ve been very, very proactive along this line. So I would recommend to listeners that are in business is similar to what Smirk’s does Or in other facets of things too.
Donny Edson: Over prepare. Do the items that maybe you may you may or may not. So that that’s not something that holds you up before anybody will touch it when you’re desperately trying to get something done to a product so that you can get it to the marketplace or to a customer to use as an ingredient. Just like imagine everything possible and just do it all at once. So it’s a lot easier to have it on there and not use it than it is not have it on there and need to use it.
Scott Rice: Absolutely. Yeah. Really great point.
Elisa Louis: Yeah. Thanks for bringing that up, Donny. And I think that if anybody’s working with Smirk’s and and they wanna Potentially add something to their mix that we’re involved with or they want us to be involved with. Hey, reaching out to us, being proactive, we can help with that process as well. And, you know, just 1 before we dive into the next because I have question for Adrianne, just my key takeaway and what we’ve kinda talked So far about SOE is it yes. It’s a little bit overwhelming and scary right now, but on the other hand, Scott is saying, look, even if you haven’t started the process, It’s not too late. Just get started on it. And don’t feel like, oh, I just I’m gonna give up because, There’s no time like the present to get it going.
Elisa Louis: And this conversation is kind of been really helpful on that point. I don’t think the Sky is going to fall on March 20th necessarily. There’s gonna be people there to support you if you need it, you know, as long as you’re working through the process. That’s kinda my takeaway.
Scott Rice: Yeah. And I think certification, I should have noted, it’s not as scary and hard, I think, as some folks maybe initially think. There’s a lot of systems that you have in place, again, with those food safety systems, with those standard operating procedures, just your business Practices are probably already aligned in large part with what organic requires. So Go into it with, okay. I can do this. Not a, oh my god. How am I gonna do this? You know, I totally get it. It’s a scary thing to first jump into, but You’ll probably be pleasantly surprised that there’s a lot of what you already got there that can feed right into what certification looks like.
Elisa Louis: Awesome. Well, you know, just on that on that point, you know, Adrienne, I know you’ve OTA has developed a lot of tools to help people. But If you are in the situation where you’re feeling a little overwhelmed and because you’re new to organic or you’re contemplating pursuing organic products, What advice do you say or what do you say to people that are kind of in in that circumstance?
Adrienne Messe: Well, listen, We totally get it. We’ve talked about being overwhelmed in a lot in this call. And, honestly, we’ve spent a lot of this call talking about the additional Requirements and paperwork that are required with organic certification. So if you are listening and you’re like, wow. Wow. This is a lot. And you’re saying that if I don’t go organic or I choose not to pursue a new organic line, I can avoid all this because that’s probably sounding pretty nice right about now. But I think there’s a few important things to note about it.
Adrienne Messe: I mean, it’s We’re not just requiring these things. USDA and NOP are not requiring these things just to make you do more paperwork. They’re really trying to add those levels of Trust and transparency through the supply chain to update those original regulations to make sure that they’re growing and changing to meet Not only the business owners needs but also the consumers needs. People are choosing to purchase organic. People are Wanting to make sure that their purchases are healthy for their families, produced in an environmentally friendly way, And able to actually prove that. And so I think it’s not only that these are just requirements in their paperwork and you have to check the box. But you wanna do those things as a business owner and you put yourself at a really big risk if you’re not. So just keep in mind that This isn’t just paperwork.
Adrienne Messe: It’s really a helpful framework to help you set up your business practices in a way that will help you continue to be successful. And at the end of the day, I think anyone who’s selling products wants to move with the trends of the Consumer preferences. And right now consumers are really paying attention to what the brands are doing and if it aligns with their values. And USD organic It’s honestly the best and way to do that with full transparency. So I think it’s obviously so much work to just be a business owner in general, And you have to have your 1st priority be keeping the lights on, paying your people, working with partners that you can trust, But really building that supply chain and the framework that this whole strengthening organic enforcement rule sets up is the framework that can help you be successful as a business owner. To have that transparency with your customers, but also continue to grow sales. The trends show that organic shoppers Purchase products at a higher price point, but they purchase them loyally. And we have data that shows that from our organic industry report.
Adrienne Messe: And so those are customers that you want, And you don’t want to open your business up to the risk that not having this transparency really, really opens businesses up It’s a pretty severe risk in the partners that they’re working with and the loyalty of their customers. So don’t think of it, as we keep saying, as This overwhelming, daunting thing, but really think of it as you can rest assured that your business is set up for success and is closing the loopholes, closing the links in those chain that are in your supply chain that Before SOE, we’re kind of vulnerable to fraud.
Adrienne Messe: I mean, you can do your own checks and balances. You can really do your due diligence in picking your partners and following your Product through the supply chain, but without these requirements for the handlers and every single link in the chain, there were opportunities for there to be Unfair players in the game. And you don’t want that as a business owner. You don’t want your product to be subject to that and you don’t wanna compete with people who are Making money off the organic label, but not really playing the game and following the rules like you are. And so It’s not just this daunting overwhelming thing. It really is something to help you set up the integrity of your business. And It’s a great point to just say get started. Like, it’s not like, oh, if I submit it now, the certifier is not gonna get to it in time.
Adrienne Messe: Just get Started. And honestly, the 1st year of setting all these practices up might take a little bit longer than they will in subsequent years. But once you have that framework, And then you can just continue to add to it. Continue to refine. Continue to to think about these things when you establish new business partners. So And then we’re here to help. I think Scott made a really good point earlier that we hear a lot. Certifiers are in a really unique position to not really be able to answer all of your questions.
Adrienne Messe: And that’s good because they’re the auditor. They can’t be the one guiding you through the process or consulting when they’re the ones who are doing the check and the audit at the end of the day. So it’s good that the organic certification process has those roles in place to keep those elements separate, but it can be frustrating when you’re at operation and all you wanna do is do the right thing from the start. And you go to your certifier and say, hey, I need to build a new fence on my organic operation, where should I put it? And they’re like, put it somewhere And we’ll tell you later if it’s gonna work or not. That’s frustrating to hear as a business owner. We totally get that. But know that we’re here to support you in those questions. If you’re an OTA member, you can call Scott and he can help guide you through what they’re asking.
Adrienne Messe: Again, he’s not a consultant. We aren’t consultants. We aren’t the ones approving your organic system plan, but we have so much experience with this and we work with all the stakeholders to understand what the common questions are. And so if you’re ever experiencing something like that with your certifier, first of all, you could shop around. Like Scott said, you can be working with any of those Seventy ish accredited certifiers, and you should do some interviews and figure out who’s best fit for your product line and your business. But also come to us, say, hey. My certifier can’t answer this question. What am I supposed to do? I don’t wanna get a noncompliance report After the fact, I just wanna spend the money to do it right from the beginning.
Adrienne Messe: And that is support that we can provide, and it’s support that consultants that we’re connected with can provide. So The answers are out there, just get started. And honestly, it’s worth it to be able to build that trust and transparency with your customers through the label.
Elisa Louis: Awesome. Adrienne, thanks so much for that. Hopefully, you’ve eased some people’s minds here. And thanks for touching on trends because that’s something I’m super excited about in this podcast today. I wanna hear about kind of the overview From your last, member survey back in 2022, as well as the Spinza Nielsen data that you’ve captured, To learn, you know, what what are the the trends for organic products that you’ve uncovered?
Adrienne Messe: Yes. Totally. And it kinda builds off of What I was just saying and that everyone should see themself in the future of organic. There is a piece of the pie for everybody and consumers are Choosing to purchase organic products, and I think all business owners want a part of those sales and they wanna be a part of that story. So So this data is important. You know, taking a big step back, we all grocery shop. We all think about these things every single day in our work and also just in our Own purchasing patterns. But if you take a step back and really look at what are the trends saying.
Adrienne Messe: My own observations in the grocery store Aligning what’s what’s going on in the rest of the industry. And so this is a report that we come out with annually. We do survey our members, but then we add Syndicated data from SPINS and Nielsen to ensure that we really have a comprehensive picture of what the organic industry Looks like and what the trends are, and not only what our members are reporting to us. So this is, Like I said well, like we’ve both said here, this data right now is looking at 2022 data, and it came out in summer 2020 3. So you can all look forward to seeing 2023 data next summer, which we will launch, and I’m excited for that already. But looking at 2022 data, the industry has grown so much. So we started doing this survey in 1997, and at that Time, the organic industry was $3,600,000,000. In 2022, the industry has grown to 61.7 $1,000,000,000.
Adrienne Messe: So that is huge, especially over that that growth period of, you know, about 25 years. That’s Big growth. The trends have grown along with that. We’re not only seeing just obvious increase In organic sales, but the data now also includes nonfood products. So organic is really showing up on all aisles of the grocery store. So those nonfood products are things like fiber, supplements, personal care products. So it’s not just food even though I think most people really think of Organic as a food label and it is primarily, but this data does include non food. And this data is really diving into organic sales, The places where organic products are showing up, brick and mortar stores, online sales, local farmer’s markets.
Adrienne Messe: These are some of the primary places where organic Products are sold and purchased, and this data shows trends and it also helps us as the trade association really engage in What some of the challenges are? What some of the opportunities are? And so that when we see these trends, we can say, oh, wow. Here’s a little bit of an area where we might, As the trade association need to put a little bit more attention to better serve our members. Or, oh, wow. This is a big growth area. We’re gonna be able to see a lot A lot more members, a lot more questions coming from these type of of product categories and sectors. So a lot of value of of the data overall. So to dive into just some highlights of what the numbers look like for 2022, 61,700,000,000 in organic sales, 90% of that is food. So that leaves 10% of for those non food products.
Adrienne Messe: But those non food products At 10%, it’s still $6,000,000,000. And so it’s really not small potatoes, and those areas are growing a lot. People can really Live a completely holistic organic lifestyle with their the sheets on their bed, the clothes on their body, the food in their fridge. So There’s organic everywhere and that’s really great to see. Some kinda high level trends in 2022 which are really important to note. In 2022, inflation was double the rate of growth. So overall, price increases in organic in 2022 were The primary driver and not increased products being sold. And so this also demonstrates that Those organic shoppers are really loyal shoppers.
Adrienne Messe: Even during times of inflation when money in their pocket is tight, they’re still choosing to purchase organic products and that’s Really great to see. So in terms of that 90% of that of the overall 61,700,000,000 in sales, the largest category is Always fruits and fruits and vegetables. So 36% of the total market is fruits and vegetables, and that’s particularly fresh produce. I mentioned that there’s also some unique challenges for each of these sectors, and some of these trends can kinda help Help show that as well. So for the produce industry, labor is an ongoing challenge for The produce sector and then also climate related weather events. So, obviously, growing these food on the on the farms outside is It’s difficult in a lot of areas where where you can grow these products. There’s a lot of these climate related weather events that have been hitting the industry pretty hard. So interesting to note and also an area where we can focus and try to help and support the produce sector in those times.
Adrienne Messe: The 2nd largest category, drum roll please, because it’s a little bit interesting for 2022. The 2nd category is Typically, dairy and eggs. And in 2022, it was beverages for the first time. So beverages surpassed dairy and eggs as the second. The biggest category is 15% of overall organic food sales were beverages. Coffee being the biggest category of beverages. And there’s a couple kinda key takeaways for this. People aren’t as price sensitive when they’re buying a beverage.
Adrienne Messe: I know I can speak to that. Like, I’ll see a really cool package and drink that’s $12 somehow, and I won’t think twice and buy it because I wanna Try it. The flavor sounds good. The packaging’s cool. And that’s kind of a trend overall in the industry. People are more willing to take a risk and Reach for that product at a higher price point in the beverage category. It’s also a really great place for Businesses to experiment with their product. So experimenting with new ingredients, new flavors, new packaging, New trends like lifestyle trends are big for the beverage sector.
Adrienne Messe: So just kinda interesting takeaway from that data that beverages was that number 2. So that brings dairy and eggs to the 3rd category. 8% of the organic sales in 2022 were dairy and eggs. An interesting note here in 2022 was that the avian flu was a really big influence on the conventional egg supply, but it actually didn’t impact The organic egg supply as much. In fact, it actually helped to kinda level the playing field in terms of Pricing because the conventional egg availability increased the price, and it actually made it a little bit easier for shoppers to Choose the organic, and there wasn’t as big of a price difference. So interesting takeaway for the that particular sector. So those are the 3 largest categories. It really is the bulk of that 90% of the food sales are in those 3 primary categories.
Adrienne Messe: After that comes packaged prepared foods at the center of the store, breads and grains, sweet salty snacks, condiments, and then meat, poultry, and fish. So That smallest category, meat, poultry, and fish, it still saw 5% growth in 2022. So like we mentioned, there’s unique challenges in in each of these sectors There’s specific to the product. Meat and poultry are really at the mercy of feed prices, and feed prices have been historically high. There was also some other factors in 2022 like drought, the war in Ukraine. The USDA has equivalency agreements with A number of foreign markets and they discontinued the equivalency agreement with India. All of those external factors in the global marketplace Really led to extreme spikes in feed pricing, which then in turn leads to to other challenges on the farm that need that feed. So, Actually, your 5% growth is a real victory, I think, for this category in the face of those external challenges.
Adrienne Messe: So that’s a high review of of the food sales, the 90%, the 10% in that nonfood category. Fiber is the biggest, so 40% Of the nonfood sales of organic or fiber, supplements is the 2nd at 34% of sales, and then personal care is the 3rd after that. So it is a little bit different trying to regulate these products that aren’t for human consumption. That’s kinda where the Technicality comes in that gray area that Scott talks about. So but still great to see each of those growing And for people to be trying to think about organic in more aspects of their lifestyle than just in the food that they’re consuming and the food that they’re feeding their families. So overall, it’s great that that organic is expanding in these ways. It’s really cool to be able to see these trends year to year Through our organic industry survey report and looking forward to seeing the 2023 data when it comes out in summer 2024. And just to mention too, this is really what I just said is a real snapshot of what that data looks like.
Adrienne Messe: The full report is a very, Very comprehensive report. So no matter where you are in this space of organic, there’s gonna be a whole chapter just for you and a lot more data deep dive into specific sectors and specific products for you to really see yourself In the future of organic as it continues to grow.
Elisa Louis: Fantastic. Thanks so much for those great insights, Adrienne. You know, I found it also really interesting about organic beverages pumping up like that. We work with a fair number of organic beverage companies here at Smirk’s, and I wasn’t surprised by snacks being pretty high up there, because that’s an area that we work with all the time. But on the nonfood side too, because Smirk’s is getting pretty involved with personal care companies, that popped out for me because we we work with a fair number of soap companies and other great personal care products. So that’s really exciting to see the growth there as well.
Adrienne Messe: Yeah. And I think that’s a great point. I mean, I think that, Like we keep saying, business owners kinda need to be reactive to what people are buying. Right? You’re selling a product and you kinda need someone to buy it at the end of the day. And I think that Consumers are telling us what they want in their products, and it’s that trust and transparency that this label really Does provide. And so it’s awesome to see it expanding to all aisles into these non food categories, and people are really Thinking in every aspect of their life, is there an organic option for this, and where can I buy it?
Elisa Louis: Yeah. Absolutely. Good stuff. Well, moving on, I kinda wanna focus Donny, I wanna put you on the spot here for a minute. You know, Smarts offers organic certified and non GMO conventional Products, of course, but we definitely skew organic. So, Donny, could you comment on the scope of our organic bulk ingredient business and its Overall growth over the years?
Donny Edson: Yeah. Sure. Organics continues to grow at Smirk’s. It represents about 65% of our annual sales right now Based off the numbers I just closed out for last year. So, a lot of the things you’re talking about being in multiple aisles in the grocery store, I was just you guys are having a conversations, I was thinking about a lot. I was thinking about first about my favorite organic oat milk that I like to drink every morning. My coffee, but also Not only with personal care, cosmetic side of stuff, but also in pet food. We’re selling a lot of organic ingredients into pet food, Whether it’s coconut or chia or, sunflowers or pumpkin, there’s a lot of different organic ingredients that we sell into the pet food market too.
Donny Edson: So we actually see that as an Every evolving market too on the organic side that a lot of people are picking up organic for their pets as well. Generally speaking, We’ve always noticed that people will spend more on their pets than they will on themselves. So it’s very interesting. Yeah. But, some of the things, we’ve noticed just Over the years, it’s been coming up in the industry. Kind of in an interesting time as we’re gonna actually take off too. But as the next generation of consumers is coming in to buy stuff. They care a lot more about organics, about what they’re putting in their body, What they’re feeding themselves, what they’re feeding their children and what they’re feeding their pets as well.
Donny Edson: So We’ve seen prices deflate over the years to have a smaller price gap between where organic and conventional pricing is. So Not so long ago, organic was almost double the price of conventional on so many items. But As increased farming and more efficient farming practices have happened over the years, the supply has grown and now in some cases the price is just Slightly different than conventional. There’s certain items that we import where price is minuscule, the difference on it. And mostly because it might be something that is inherently organic. They just hadn’t gotten the certification before. So cashews to grow in West Africa, They don’t apply anything to them. They don’t make enough money to spend money to find something to apply to them.
Donny Edson: Brazil nuts are collected. They’re not farmed, they’re a collected item. Right? So they’re collected from jungle. So there’s just different items around the world that Once they go through the process of getting the certification for organic, they don’t change anything they’re doing with their agricultural practices. It’s all the same. So, So we’ve seen that price gap close on some items and that’s been good too. So some other things, but overall, I mean, I just think that that really the is driving this and they keep asking for more organic items, which makes us ask for more organic items in our business, Which then leads people to look at the opportunity to produce organic as well. So that’s some of the stuff we’re seeing right now with the growth.
Elisa Louis: Very cool. And in the last couple years, have you seen any specific organic bulk ingredient trends here at Smirk’s?
Donny Edson: I mean, the last couple of years are so hard to gauge because of COVID.
Adrienne Messe: Yeah, for sure.
Donny Edson: All the data is so skewed. You don’t know what’s real and what wasn’t real at that time. But I can say that some of the largest opportunities we’ve seen in the organic space are around snacking. We’ve chatted about this on past podcasts and America’s becoming a large consumer of snacks with people using snacks To replace meals, myself included, I snack throughout the day more than I eat meals. So however, within the snacking space, one area we continue to see growth in is dried fruit. Organic fruit fits into this very well as it’s generally a single ingredient item. For example, organic dried mango is that. It’s mango.
Donny Edson: It’s nothing else. It is mango that has been dried. And we see more and more growth around the fruit category every year. And we thought 3 or 4 years ago, we would continue to see growth around that because it is just delicious, first off. And it’s pretty and it tastes great. And, there’s no added sugar to it. And thing and he’s still eating fruit. So outside of ingredients, I think what we’re seeing is the next evolution of organic with additional certifications or callouts.
Donny Edson: So, ROC, for example, the regenerative organic certified. That’s a certification that’s come on Pretty strong recently. And a lot of people are starting to get into it and look into it. And it pertains to kind of the next level of farming with organic, has to do with the soil health and how you’re treating the ground and everything. So, And I think we’ll continue to see more of that as we go along. So, These are just a couple of the trends we’ve we’ve noticed recently.
Elisa Louis: So great points, Donny. I mean, single ingredient organic dried fruits are definitely having a moment for sure. We get a lot of requests in this area and more companies are looking to incorporate them into stand alone snacks or added into a mix for sure. Now switching gears, just to kinda wrap this up. As you think about it, what are some of the key highlights since Merckx has joined the OTA?
Donny Edson: Well, I mean, and speaking of my experiences with the OTA, I can say some of the highlights have been most probably my favorites too. Being included in the trade missions to Europe, Which really forged long term relationships personally with people I’ve met and for Smirk’s business as well. So those are some of the best things. Access to BIOFACH and other shows around the world every year have helped us to meet more customers and suppliers. In addition to this, the OTA’s Been great in helping us to learn and navigate the changes coming in March. We’ve been spending a lot of time with them learning about that. So I do really recommend getting active with the OTA if you’re handling any organic ingredients, or you’re thinking about hunting organic ingredients. They offer so many opportunities and tools that’ll help you grow your business. A lot of stuff that I learned about today that I didn’t even know about. Even in our preparation for this, As we chatted, I just keep learning more and more stuff that they’re doing, so it’s awesome. So we are very grateful for the work that the OTA does, and we wanna make Sure our listeners know that they can reach out to the team through their website, which is ota.com for more information.
Donny Edson: And we’ll include links, The resources and our show transcript notes. So in summary, Adrienne, what would you say are the key reasons for a company to join The OTA.
Adrienne Messe: Well, first of all, I wanna thank you, Donny, for for sharing those plugs for OTA. They were unsolicited, but they Are well received and we appreciate your long standing membership, absolutely. But I also think it’s just helpful for other folks to hear Your perspective as a member and to hear the value that you’ve gotten out of it. And to hear that even as a long standing member on this call, you’re still learning more about ways you can engage with us. So Thank you. And thanks for including our whole story in this podcast today too. I mean, it sounds kinda cheesy, but we are stronger together. It’s easier to do this altogether than alone.
Adrienne Messe: I mean, even just hearing this overview of this latest update of SOE from Scott today, This is information you have access to all year long, and you’re not necessarily gonna get it from your certifier. You’re not necessarily gonna have time to read The jargon that is in these these official regulatory reports, but Scott can read it for us and translate it for all of us in a very way. So that honestly those policy advocacy regulatory support that our trade association can provide to our members is key. And the industry is constantly changing. So although this SOE rule is something that we’re talking about right now, what’s gonna be the next update? What’s gonna be the next question that the industry faces. There’s going to be changes. The industry, we want it to grow, but there’s new growing pains with those changes, and that’s that’s okay. But you can rest assured that we you have a voice directly to Washington in the government affairs department.
Adrienne Messe: You have a A voice directly at those national organic standards board’s meetings to make sure that your your sector, Your business is being accounted for as things are written, but also that when they come out, you get this really helpful guidance and 1 on 1 support with our team to make sure that you understand what it means for you and your business. So at the end of the day, it really is easier to do all of this together, and The voice of all trade association members is louder than just your voice can be alone as one business owner. So I hope that you all learned something today on this call about organic trade association, but you that you can also see yourself in the future of organic, And that you can utilize some of our resources to help ensure that your business can be successful moving forward.
Elisa Louis: Fantastic. Well, Adrienne, Scott, this Conversation has been very timely, you know, with the strengthening organic enforcement ruling coming soon in March, but it’s always a good time to talk about what OTA is all about and how organic products could be relevant for people’s businesses and what that looks like to get Into that process and and the flow of it. Thanks so much for your time today. The information shared here was just enormously helpful.
Donny Edson: Yeah. And I’d like to thank everybody at the Organic Trade Association, but you, too, in particular, because this was a lot of work putting this together and taking the time to do it with us. So It’s been awesome having you on the podcast today and we just we appreciate you both and we appreciate you joining us, so thank you.
Adrienne Messe: Thank you so much, Johnny and Elisa. We really appreciate your time today too in putting this information out there, and we’re happy to speak further with anyone else if they’re interested.
Scott Rice: Absolutely. We’re here as a resource and, just really thank you for including us. It’s been great.
Elisa Louis: Excellent. Well, that’s gonna wrap up another interesting feature story on Get the Scoop with Smirks. I appreciate our listeners hanging in. This one is longer than was longer than usual, but I think so much good information shared today by the OTA. So we hope you’ll reach out if you all have any questions for us at whatsnew@smirks.com. And thanks again for listening, and hope you come back next time.
Organic Feature Story with Dean Soicher
Garrett McBride: Hey there, and welcome to The Get the Scoop with Smirk’s product feature. Today, we’re gonna take a different approach for this segment. We’re going to talk about the evolution of certified organic products over the years. But before we dive in, I want to give you some quick background information. Although it seems to those of us that have been in this business for a long time like organic has been around forever, USDA’s National Organic Program or NOP was actually first rolled out in October 2002. When it comes to food In the most general terms, organic refers to products that have met specific regulatory standards including prohibiting the use of synthetic fertilizers, Sewage sludge, irradiation, and genetic engineering. It is worth noting that all organic foods are inherently non GMO.
However, Not all non GMO foods are organic. Today we’re going to go on a journey exploring the organic product industry through the lens of our colleague and friend Mr. Dean Soicher and Executive Vice President here at Smirk’s. Dean’s experience in the organic food industry spans nearly 3 decades. We’ll get Dean’s perspective starting in the mid-nineties when he worked hard to pitch organic product to the large and mostly conventional supermarkets and look at the growth of the organic category over the years bringing us to where we are now. We’ll also dive into Smirk’s journey selling organic ingredients and talk about what’s popular and trending today. Hey, Dean. Thanks for joining us today, man.
I’m super excited for you to tell your story.
Dean Soicher: Thanks, Garrett. I’m really thrilled to be here. I can tell.
Garrett McBride: Now we always joke with you that whenever somebody meets you for the 1st time, right off the cuff, They learn immediately that you’re originally from New Jersey and that you’re a vegan. Can you tell us a little bit more about your background and how you first got into the organic food industry?
Dean Soicher: Absolutely, Garrett. After graduating college in 1986, I became a vegetarian. I was greatly influenced by my friends and family. About 10 years ago, I became a vegan. I started working in the supermarket industry as a nonfoods buyer. One day, I actually opened the newspaper, and there was a job offering for organics food buyer, which better suited my lifestyle and my passion for organic foods. This welcomed me into a new career in the innovative and interesting industry I am part of today. I’m sure we all know, Garrett, that it’s best that you can work in an industry you’re passionate about. Organic Foods also runs in my family as my brother was an organic farmer in Hawaii for about 20 years.
Garrett McBride: And I can’t believe the path that led you here started with a chance opening him a newspaper. That’s amazing. You know, it really shows that things are meant to be. Certainly is. Additionally, an organic farmer in Hawaii sounds like about the best job you could possibly have. I’m in. Need to be connected with your brother. So I understand one of your responsibilities while working for a distributor was getting organic food programs adopted into largely conventional supermarkets in the mid to late nineties.
Garrett McBride: What was that like?
Dean Soicher: Well, in 1995, Garrett, I was working for a natural organic food distributor, and they decided to create a position to try to get Organic foods placed in the supermarkets on other mass market channels. I was promoted into this position, and believe it or not, back in the mid nineties, About 95% of the mass market channels, they didn’t want organic foods in their stores. They just didn’t understand This new exploding category, and they could not figure out how to merchandise properly.
Garrett McBride: Well, it’s amazing given that short period of time that we went from a 95% rejection rate to where we are today. You can find organic foods almost anywhere. Come a long way. Did you start to see a shift when retailers like Whole Foods started to grow and expand and offer more organic product choices?
Dean Soicher: Yeah, we certainly did, Garrett. Interesting enough, when Whole Foods and other supernaturals started proliferating the market and gaining popularity probably, between the mid nineties and Early 2000, most consumers went to Whole Foods and the other Supernaturals for their organic purchases, And they bought the rest of their needs in the mass market channel. The mass market channel then saw that they were losing sales, And all of a sudden, they were interested in organic foods. Not only were they interested in organic foods, but a lot of consumers as they came into stores We’re asking questions that some of the managers in the stores could not possibly answer. So we also had an educational program It taught them about organic food industry and organic definitions so they could help their consumers Purchase and make more better informed choices.
Garrett McBride: Yeah. That’s amazing. It’s a good thing you were around to to provide that level of education. Otherwise, this This whole industry might not have gotten to where it is today. You know, later in your career, you worked for a CPG company that offered organic products. What brought you from their Smirk’s?
Dean Soicher: Thanks again, Garrett. This was an interesting segue for me to join Smirk’s as I now understood importing and was more knowledgeable in what was needed. This would include food safety and organic certifications and all the documents required to import organic industrial ingredients to North America.
Garrett McBride: Yeah. That’s a complex process. A lot of moving parts and pieces there. You know, since you joined the Smirk’s team and especially over the past couple of years, What kind of growth have you seen with organic ingredients?
Dean Soicher: Smirk’s has set itself as part concentrating on certified organic ingredients. And we have the scale to be very price competitive with these items. We attend BIOFACH. I’ve been there for the last 4 or 5 years, which is the largest organic Food show in the world every year. The reason we go to that show is to keep up on trends, market information, and learn about new categories And products. In some cases, we can offer organic food for the same price of just a little more than some conventional ingredient offerings depending on the country of origin.
Garrett McBride: That’s pretty cool. You get to go all the way to Germany and support the organic industry and learn about what’s happening. Fantastic. What would you say some of the organic trends, are that you’re seeing these days?
Dean Soicher: Well, I think from day 1, there’s always been health and environmental concerns. I think a lot more consumers nowadays wanna see More transparency and traceability in the food supply. A lot of, consumers have also told me, like, they like working with Small scale farmers in the organic industries. And the interesting part too is even though back in the mid nineties, Early 2000, most supermarkets didn’t want anything to do with organic foods. Now it was all of a sudden, they’re doing a lot of organic private label products. I just found that very interesting as well.
Garrett McBride: Sure is everywhere now. These big retailers are doing a fantastic job of it. Very impressive. Well, Langston, those are great insights. This is super helpful. Sure seems like the future of organic food ingredients is limitless. You know, Smirk’s trades hundreds of organic ingredients across dozens of categories. It’s impossible to narrow it down to a short manageable list.
Garrett McBride: But gonna take a few minutes to focus on some of the key ingredients from Smirk’s portfolio. Organic chia, huge item for us. We do a large volume and we can offer it sterilized at origin, sterilized stateside.
Or if a ready to eat product is needed for a customer’s application, we can do that or we can it to you raw. Check out Episode number 7 of The Get Scoop with Smirk’s podcast to learn a little bit more about Chia. Organic sunflower is another item This gigantic and Smirk’s portfolio happens to be the foundation of what Smirk’s was built on. Check out episode 1 to learn a little bit more about that. You know, started early in our history and we import large volumes of it. We are a go to supplier for so many people for raw and ready to eat sunflower. We also buy and sell product of the USA. Organic pumpkin seeds, another big player for Smirk’s.
Garrett McBride: Coming from origins such as China and Mexico, we offer in both ready to eat and raw. Double A and single A grades are also core items for Smirk’s. Check out episode number 8 to learn a little bit more about pumpkin kernels.
Dean Soicher: Thanks, Garrett. I just want to add some other categories that Smirk’s is big in on the organic side. Organic coconut is definitely 1, and you can check out podcast number 4 for that. More information on organic coconut. We do sell desiccated coconut, chips, medium, macaroon, smiles. Smirk’s is also, very big in organic coconut cream, organic coconut milk, and organic coconut milk powder. We are industry leaders in organic coconut sugar, which can be offered as gluten free and fair trade certified if needed. We’ve talked a lot about organic food products, but, just to let everybody know, Both organic VCO, organic RBD coconut oil can be also used in personal care products, Which are be becoming more popular from the organic perspective.
Dean Soicher: Other big items that, Smirk’s sells On the organic side are grains and seeds, such as flax, sesame, quinoa, and amaranth. On the organic nut side, Smirk’s is a go to supplier for walnuts, pecans, cashews, and various peanuts mix. And lastly, and to include some dried fruit as well, Smirk’s customers look to us for organic mangoes, apples, pineapples, and golden berries.
Garrett McBride: Well, Dean, it’s been a blast traveling down memory lane with you today. Absolutely incredible how much the organic market has changed, you know, from those days when you had a 95% projection rate From retailers to to where we are today. Based on 2022 figures from Grand View Research, the organic food and beverage market in the United States Was valued in the mid $90,000,000,000 range. Globally, the organic food and beverage market was valued at just over $208,000,000,000 With a projected compound annual growth rate of 11.7% through 2030, unbelievable numbers there. Can’t thank you enough, Dean, for your valuable insights and for the experience you bring to Smirk’s. We all appreciate you and what you do and what you know and what you bring to the table supporting all of us. We’re sure you’re excited to bring more organic bulk ingredients to market each year.
Dean Soicher: Garrett, I really, enjoyed the time spending time, talking about organic foods and my personal experience on the call today?
Garrett McBride: Thanks, buddy. Well, for our audience, if we didn’t mention an organic item that you’re wondering about, please don’t hesitate to reach out. There’s a very good chance we can help you as our organic portfolio is broad reaching. Wanna thank our listeners for tuning in and encourage you to contact us if you have any questions or need any assistance with organic or conventional ingredients, Smirk’s is here to help. You can contact us by email at whatsnew@smirks.com. Thank you. We’ll see you next time.
January Market Report
Donny Edson: Here is your January 2024 Get the Scoop with Smirk’s market update. Okay. So unlike some of our last market updates, there’s actually a lot going on right now. Many things have changed in the last few weeks, so let’s dive into some of these. I think probably the biggest change right now has to do with ocean freight. The attacks to ships in the Red Sea has led to shipping lines stopping service in that part of the world. The Red Sea feeds into the Suez Canal in which approximately 15% of the world’s shipments pass through daily. The alternative to going through the sea’s canal is to go all the way around Africa, which adds 3 to 4 weeks of additional transit time.
Donny Edson: This has caused an immediate disruption in the availability of ships, shipping containers, and booking spaces globally. In addition, it’s made the price of shipping surge instantly. In some cases, we’ve seen increases anywhere from 3 to $5,000 per container almost overnight. Shipping lines are very quick to raise prices, and we’re seeing that right now. So we’re paying Higher rates for slower service, and this will cause a lot of disruptions. So, really, where it’s gonna hurt things a lot is Asia to the East Coast to the US right now. So Alternate routes to the East Coast from Asia are through the Panama Canal. And that’s been stressed for months as we’ve been talking about already because of the Slowdown of ships going through there because of the drought and how low the canal is.
Donny Edson: So there’s a lot of bottlenecks going on right now. And it’s not just affecting those ships that go through the Suez Canal. You have to consider that most of the stops after they go through the canal are in the Mediterranean. So now to get service from the Mediterranean, you need to enter from Spain and come back in and do it. It’s not a good flow of of ships moving. So it is truly a a global disruption that happened very fast. It’s gonna add a lot of time onto things. So that’s one thing that everyone needs to be aware of.
Donny Edson: There are gonna be shipping delays. There are gonna be increased shipping costs. It’s going to be very disrupted, particularly Asia to the East Coast is one of the harder markets right now, and it’s really hard to get bookings of stuff. So no one saw this coming. So aside from shipping issues, here are some other key dates and things to keep in mind. For this time of year, the Chinese New Year begins February 10th. So If you haven’t got your booking and your arrangements already made out of China, you will not get anything to ship out of China until late February or early March. It’s, At this point, it’s a little too late to get any new bookings there.
Donny Edson: So do look for if you haven’t got your stuff booked, it’s going to be a little while till you get it. If it’s going to the East Coast, then you’re gonna be battling what we just talked about. That holiday in, Vietnam is the same timing as the Chinese New Year. Most of the packers in Vietnam are booked Through mid to late March already, so it will take longer to get new purchases from Vietnam as well. Ramadan begins March 10th this year and runs through April 8th. Is a couple weeks earlier than last year. The state’s important if you are using coconut sugar from Indonesia. This time of year is when we see supplies Tighten up a lot and stress to begin on the supply chain.
Donny Edson: Indonesia shuts down for a period of time during Ramadan, so generally there’s a surge in demand for sugar after the holiday. After you might remember last year coming out of Ramadan, the trees were not producing very good quality nectar, and that led to the trees being very stressed, which then led to a lot Stress on the supply chain. So, it’s almost not a great situation depending on what the weather does right now in Indonesia, but I would certainly plan out if you’re using coconut sugar way, way out. Some packers, if you call them today and say, when is your next availability, will tell you that it’s available in June. So just to give you an idea, we do see the possibility of a little bit of issues with coconut sugar on the horizon. So Here’s kind of a current assessment of the marketplace for importers right now. Most importers have run tighter inventory And more of a just in time inventory, and this is because everyone had a lot of dead inventory after COVID and lost a lot of money. Then interest rates increased as did warehouse costs.
Donny Edson: So when you add all these things together, it made more sense to run with tighter stocks than it did to speculate and keep extra inventory. So that’s the 1st piece of this. There’s already a little bit less inventory in the US. The disruptions in the supply chain from the Red Sea situation mean that getting inventory to the East Coast from Asia is very difficult. So, that’s the 2nd piece. The next piece, we may see some very, very Tight and out of stock situations happening as we get further into the Q1 and into the Q2 because of what we just mentioned, less stock in the US, people are carrying less. All these Asian holidays going on where they’re shut down, so there’s no prompt shipments and then this disruption of the Shipping lines everywhere. So the Panama Canal backed up bottleneck.
Donny Edson: The Suez Canal, no one’s going through it right now. You’re adding 3 to 4 weeks of shipping time on. Availability of containers, very tight to get because now all the containers are going an extra 3 or 4 weeks around Africa. So all these things add up. So We highly recommend you work with your suppliers to ensure that you are giving ample lead times on everything and accurate forecasts, or you may find Some items are not available. So, planning is going to be very, very important, especially for the next, I would say, end of end of Q3 right now. Make sure you got your stuff lined up, so people have time to bring stuff in. What we used to say, you know, just in time inventory meant we may be ordered at 8 weeks from origin, we got to treat it more like 12 to 14 weeks right now for that.
Donny Edson: So some current market information. Smirk’s just visited the Peanut and Tree Nut Processors Association annual Conference in Florida. And I would say overall, the attitudes were a little bit more optimistic than past years, and I think everybody is upbeat. Again, a lot of the things we’re talking about today, we’re talked about there, but some major takeaways we took from the tree nut sector. Probably the biggest one that I took personally was that China has woke up. So, 2023 was the first time since 2019 they could have their annual autumn festival, which traditionally is a time they consume a lot of nuts and seeds. In addition to that, the Chinese New Year is happening this year and it’s for the first time since 2020 that the country has not been on lockdown. So This is one of the largest global events for the consumption of nuts, seeds, dried fruits, and so on.
Donny Edson: Meaning, for the first time in a long time, they’ve been buying larger volume of tree nuts, Seeds, pumpkin, and everything to be ready for this. In addition to that, the fall festival is also a time they consume more of that stuff. So that’s made a little bit of a change in some of the markets, so we’ll talk about that. 1st off, we’ll talk about walnuts. I just found it very interesting at the PT and PA, what we learned about it. So, Although we’ve seen a much larger crop and great quality this year, what I learned was the supply of organic walnuts has tightened up quite a bit and we expect organic prices to continue to increase. So, if you’re using organic walnuts, I would lock them up now and make sure you got some supply to go, so that is actually tightening up a little bit. On cashews, China did a lot of purchasing of the whole grades in the Q4.
Donny Edson: So, as we mentioned, feeding feed loading up for the Chinese New Year, loading up after the harvest festival, for the 1st time they’ve been in there buying a fair amount of the larger colonels. 2 40 count cashews have been very tight and now 3 twenties are starting to get a little bit tight too. So, New crop does appear to be very good quality so far, but things you gotta keep an eye on are, you know, increases in the shipping costs. The holidays in Vietnam and China, buying stuff that’s firming up the market a little bit. There is possibility of this market firming up a little bit on cashews. They have been trading at Such low prices, so. Macadamia nuts, in a strange change of events, the macadamia market, The processors, they did an excellent job of selling out of their huge stocks. How did this happen? Because, you know, we’ve been talking about how there’s so many macadamias, how there’s always gonna be some macadamias.
Donny Edson: Are the macadamia guys gonna do? Well, the biggest change that caught everybody by surprise was the amount of in shell macadamias China purchased again. With that, Kenya who’s always had an export ban on their in shell macadamias, meaning they want to keep their macadamias there to be processed in the kernel so that people have jobs processing them into kernels. But for the 1st time, they lifted the export ban of the in shells because there was So much carryover still and the price was so cheap. So to help the farmers, they did that. The prices were so cheap. The product shipped out immediately. Kenya ran out of in shell product. There is virtually nothing left there to process right now and so everyone is waiting on new crop.
Donny Edson: In addition to that, if you talk to any of the processors at this conference we just went to, no one really had anything to offer. Everybody’s waiting for new crop. So, they did a great job of selling that stuff out. So, what does this mean? I would expect tighter, more expensive inventory going into the new crop. There’s not much left. So, if there is stuff coming in that isn’t sold or committed to, It will probably sell for a little bit of a premium. We also expect new shipments not to happen until April or May for most origins. Packers will not be as desperate to let go of inventory, especially if China remains active in the purchasing of the inshell product.
Donny Edson: So, we expect the macadamia prices to firm up a little bit from those crazy lows that we saw last year because they were able to sell through all the old inventory. On Coconut, most of the major packers are booked into the Q2. Some are taking, shipments only in June now as well. So, Prices have firmed up across the board. Whether you’re talking about desiccated coconut or you’re talking about virgin coconut oil, we have seen the prices increase. So, Inventory in the US is finally getting lower and most of the very aged product is about gone. For the buyers who took the advice Last year, to book out as far as possible, you will be rewarded with lower costs that you locked in as the market has risen everywhere And Ocean freight keeps increasing. So, we are a little bit bullish on the coconut front.
Donny Edson: Coconut sugar as mentioned earlier, We do think this could get a little tight because of Ramadan. It is recommended to communicate what you might need Very soon to your suppliers, so they can make sure they allocate stuff. If we’re your supplier, please let us know so we can allocate stuff, because again, We don’t anticipate, this going real smooth with the shipping delays and with Ramadan and with El Nino effects still going on down there. So, Let’s talk about something good. Chia, very stable in South America right now. We do not foresee any supply chain issues from this current crop. We’ll be watching planting reports as they start planning to get an idea of the total acreage planted. But we do think there will be a sufficient carry over this year, they’re going to work hard to try to sell it.
Donny Edson: So that is actually one where the prices have probably even softened a little bit. The last one we’ll talk about today is pumpkin seeds. So organic. Organic pumpkin is rising weekly. As we had previously reported, the crop was a lot smaller this year and demand has been picking up. Stocks in the USA are very, very low. So that’s adding pressure at origin. Coupled with Chinese New Year and increased freight, we do not anticipate pumpkin price to go down until new crop in the fall.
Donny Edson: I know I was talking about organic mainly there because that’s the one we’re most worried about for the pricing right now. It’s a legitimate supply issue. Conventional Has moved up a little bit. There has been a lot more demand. Domestically in China, which ultimately drives it too, not moving as much as the organic is Still available, but prices have firmed up and ocean freight. Ocean freight from China has gone up considerably. So, There’s a lot to track right now. It feels pretty chaotic.
Donny Edson: If you look at everything from the shipping delays, the holidays in Asia, to shorter Stocks in the US, the market starting to increase. So be sure to get yourself covered and plan with your suppliers further out. Forecasts are gonna be very important to make sure you keep in stock with stuff. So, thank you all very much, and that is our market report for January 2024.
Garrett McBride: So that’s it for this episode of Get the Scoop with Smirk’s podcast, where we bring you the latest market reports, insights into bulk ingredients and their origins, as well as in-depth product information. So, if you have any questions, feedback, or just want a sample to taste for yourself, visit smirks.com website or email us at whatsnew@smirks.com. Never miss a future episode. Be sure to hit the subscribe button wherever you listen to your podcasts. Thanks so much for tuning in.