Newsletter 38 : The Selling of Organic

Organic farms have historically been small, family-run mixed farms producing for local markets, but this story is starting to change as conventional agribusiness and the supermarkets move in. Organic shops, too, are expanding, or being bought up, and increasingly resembling their non-organic counterparts.

ORGANIC POT NOODLE ANYONE?

Multinational food corporations have developed organic versions of their best selling brands, some have been pushed into it by WalMart; which has put pressure on the big food corporations to produce organic versions of their big brands. The big food companies with organic ranges include: Heinz, General Mills, Kellogg’s, Groupe Danone, Nestle, Unilever Bestfoods, RHM, Mars/Masterfoods, Kraft, Premier Foods, Northern Foods and Pepsi-Co. You can now get all your favourite processed foods in organic versions: ketchup, baked beans, rice crispies, creamed rice,custard, ready meals and, for a brief while, an organic version of Pot Noodle (though that’s now been discontinued) What started out as a method of producing healthy and nutritious food is now turning out highly-industrialised multi-ingredient (but organic) products.

The large food manufacturers are careful not to make their non-organic foods look unhealthy. Organic foods are instead being ‘niche’ marketed along with vitamin-enriched products and functional foods, in the eyes of General Mills [a US food corporation], ‘organic is not a revolution so much as a market niche’.

ORGANIC SALAD MIX GOES INDUSTRIAL

In the late 1980s organic salad mix (a mix of baby lettuce and other salad leaves) was a niche product served in upmarket restaurants in San Francisco and produced by small local farmers like the Goodmans at Earthbound Farms. The Goodmans hit on the idea of bagging the salad mix in resealable bags, this innovation allowed them to sell their salad to supermarkets throughout the US. They bought more land, as well as produce, from other smaller producers. Demand for salad mix grew, prices rose and that drew in new converts to organic farming, prices then fell squeezing the smaller growers out. New post-harvest washing and sorting processes were also developed which required capital, again squeezing out the smaller growers. But Earthbound Farms formed a partnership with Tanimura and Antle (the biggest conventional lettuce grower in the US) and continued to grow.

But as one critic says, ‘Earthbound’s compost is trucked in, the farms are models of West Coast monoculture, laser-levelled fields facilitate awesomely efficient mechanical harvesting and the whole supply chain from California to Manhattan is only 4% less gluttonous a consumer of fossil fuel than that of a conventionally grown head of iceberg’. Earthbound Farms is now the largest organic vegetable producer in the US, controlling 26 thousand acres of organic land and producing and distributing 22 million servings of organic salad across the US each week. Some of this Californian salad even reaches the UK, when UK organic salad is in short supply.

RACHEL’S DAIRY SELLS OUT

The dairy set up by Rachel Rowland’s grandmother was the first certified organic dairy farm in the UK, and has always promoted itself as a family firm based in rural Wales. To maintain this image there is no mention on product labels or on Rachel’s website that the company is now owned by Dean Foods, the largest dairy corporation in the US. Dean Foods operates more than 120 processing plants and employs 28,000 people. Dean Foods’ main shareholders include some of the biggest corporations in the world: Microsoft, General Electric, Philip Morris, Citigroup, Pfizer, Exxon/Mobil, Coca Cola, WalMart and PepsiCo. Dean is busy increasing its share of the organic dairy market with their brand – Horizon, dubbed the ‘Microsoft of organic milk’, already controlling over 55% of the US retail organic milk market. To increase this further, it has teamed up with WalMart to sell Horizon products in large volumes at low prices, pushing smaller cooperative and family-owned organic dairies out of business.

Rachel’s says it is passionate about natural and nutritious food. Dean Foods has repeatedly been criticised for using genetically engineered bovine growth hormone (rBGH), which increases milk production, but also causes mastitis in cows. Though it has recently converted to rBGH-free production on some of its farms. Horizon’s organic milk is ultra-pasteurised, a high-heat treatment that kills the enzymes and many vitamins, reducing the milk’s nutritional value, but allows the company to deliver its milk all over the US.

Rachel’s may assure consumers that all its milk is from UK farms, certified by the Soil Association, but the same high standards do not apply to Dean’s organic brands in the US, which in a recent survey were found to be ‘ethically challenged’ and scored zero points. Horizon still buys half of its milk from small family organic dairy farms, but the rest comes from huge factory farms. US organic standards, created under pressure from US big agribusiness, are ‘scale neutral’ – there is nothing in the standards that prevents the operation of organic dairies with thousands of cows in confined feedlots. While animals must have ‘access to pasture’, how much is not spelled out.

Dean Foods of course has no commitment to organic foods per se, only to the profits that adding a portfolio of successful organic companies to its business can bring. Rachel’s grandmother is lucky that so far the more stringent UK organic standards are still protecting her ideals.

BERNARD BUYS THE BIRDS

Cherryridge Poultry, a struggling organic turkey farm in Norfolk, was bought by Bernard Matthews, the UK’s biggest turkey producer, in December 2006. It is not alone: other conventional poultry companies like Lloyd Maunder have also gone into organic. Undercover investigations at Bernard Matthews’ plants have shown crowded, dirty conditions with severely injured, diseased and dead birds. During a major bird flu outbreak in 2007 government investigators found serious bio-security shortfalls, including holes in the turkey sheds where birds, rats and mice could get in, leaking roofs, and uncovered bins where seagulls were seen carrying off meat waste. Many consumers will never know they are buying their organic turkey from Bernard Matthews, however, as it will be sold behind a supermarket own label.

NOT SO WHOLESOME FOODS

From one store in Austin, Texas, Whole Foods Market has grown through a series of acquisitions and mergers to become the largest natural food supermarket in the US, with 250 stores. Recently the company won a legal battle with the US competition watchdog over its planned merger with its biggest rival Wild Oats. The watchdog tried to block the merger arguing that consumer choice in the natural and organic sector would be undermined if the deal went through.

Whole Foods Market has also come to the UK, first buying up the Fresh and Wild chain in 2004, and in 2007 opening the first Whole Foods Market store in London’s Kensington. Company blurb talks about offering ‘an engaging shopping experience’, but many say it’s too glitzy, there’s also not much organic produce in evidence and its difficult to tell how local it is. Prices are also high; in the US the company has earned the nickname ‘Whole Paycheck’. With respect to UK expansion, Whole Foods has implied that it may try to open as many as 45 stores.

Despite its humble beginnings, Whole Foods Market has bought into the capitalist agribusiness model and has played an important part in the industrialisation of organic food production in the US. While US Whole Foods Market stores may buy some fresh produce locally, many of the largest organic farms (Earthbound Farms and Cal-Organic) supply it and hence much produce is shipped to its stores from these big producers in California. As Michael Pollan says, ‘whilst growing the rocket is organic, everything else is capitalist agribusiness as usual’.

John Mackey, founder and CEO of Whole Foods Market is an admirer of WalMart and says ‘What a great, great company! WalMart has single handedly driven down retail prices across America.’ He also approves of WalMart’s policy of ‘crushing the parasitical unions’. Despite being in Fortune’s ‘100 Best Companies to Work For in America’, Whole Foods Market is as anti union as WalMart, and has been criticised for firing two workers involved in unionising the Madison, Wisconsin store. With respect to its suppliers, Whole Foods stores in the US stock tomatoes from one of the most notorious Florida sweatshop producers and has ignored an appeal from the Coalition of Immokalee Workers to pay an extra penny a pound for these tomatoes.

Wholefood’s expansion plans in the UK and its business practices essentially mirror those in the conventional retail sector, so we can expect more small organic suppliers and wholefood retailers and distributors disappearing as big organic takes over.

See our forthcoming publication Eating up the Alternatives for more information on corporations and organic food.