Eurorganics

By Laura Sayre
The Natural Farmer Spring, 2006 Vol. 2, No. 68
Northeast Organic Farming Association, Spring 2006
http://www.nofa.org/tnf/index.php

In the EU, corporate inroads into the organic world are following different paths than in the U.S., but debates about potential consequences for farmers and consumers sound familiar

Pop quiz: Where’s the world’s most valuable organic market?

The United States? Japan? Australia? Guess again. It’s Western Europe. Thanks to a series of nightmarish food scares, a strong euro and what politicos call “a favorable policy environment,” the European Union has outpaced the U.S. in organic sales as well as in organic acreage and number of organic farms. Retail sales of organic products in the EU-15 (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom) for 2003 totaled €9.966 million, according to a recent report from the USDA Economic Research Service, compared to €8.019 million for the United States.

The recent admission of ten new member states--Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovak Republic and Slovenia--and the possible future admission of Bulgaria, Romania, Croatia and Turkey promise to make the EU an even more formidable presence in the global organic marketplace in coming years, both for production and consumption. (Estonia, Poland and Slovenia in particular have shown spectacular growth in organic acreage in the past few years). Unconfirmed reports peg the 2004 European organic market at a whopping €20.7 billion, with projected continued expansion in the double digits.

Those are not the kind of numbers that escape the eyes of the world's biggest food companies. It should come as no surprise, then, that in a stroll down the aisles of an average supermarket across the pond you may encounter such items as Lipton's organic tea, brought to you by Unilever, Kenco organic instant coffee, brought to you by Kraft, and Billington's organic sugar, brought to you by Associated British Foods, a multinational processor and supplier of sweeteners and oils.

While here in the U.S. a series of acquisitions of successful organic startups over the past decade has focused attention on the increasingly powerful role of corporate food giants in the organic marketplace, allied trends at work overseas have received relatively little notice from U.S. organic food and farming advocates. In many cases--again not surprisingly--the same corporations are involved. Some companies have used their international reach to introduce organic product lines originally developed in the U.S. into European markets. In Britain you can now buy pasta sauces and other packaged organic foods under the Seeds of Change label (owned by M&M Mars, the ninth-largest food and beverage company in the world). Hain Celestial Group has brought its organic Rice Dream brand to Europe. Heinz, which owns a stake in Hain and ranks 25th on Food Engineering magazine’s list of the 100 largest food and beverage companies in the world, markets Heinz Organic ketchup, canned tomato soup and other products in the U.K. and elsewhere.

In other cases, as in the United States, large food corporations are acquiring successful independent organic brands or launching new organic products within select markets. To complement its repertoire of organic brands in the U.S., Hain holds a number of European brands that are either all organic or have organic lines, including Biomarché, the leading distributor of organic fruits, vegetables, and prepared salads and other convenience foods in Belgium, and Grains Noirs, a Belgian catering outfit supplying meals on the region’s high-speed rail networks. Switzerland-based Nestlé, currently the largest food and beverage corporation in the world, has entered the European organic market with a line of organic juices and teas aimed specifically at pregnant and nursing mothers. Another brand in the Unilever stable is Bertolli, the world’s leading olive oil label, which now offers Bertolli Organic in some countries.

One of the highest profile European organic buy-ups was of Rachel’s Organics, a phenomenally successful organic yogurt company founded at Britain’s first certified organic dairy, Brynllys Farm in west-central Wales. Brynllys has been farmed by Rachel Rowlands’ family since 1942, but in 1999 they sold the brand to Horizon. Two years later Horizon partnered with Dairy Crest, the UK’s leading conventional dairy company, to create Rachel’s Organics milk. (As most Natural Farmer readers probably know, Horizon was acquired by Dean Foods in 2003.) Dairy Crest seems to be taking a cue from the success of its organic venture with its announcement of St. Ivel Advance, a non-organic milk enriched with omega-3, expected on supermarket shelves by early summer of this year.

Another overseas acquisition Americans may have heard about was Cadbury Schweppes’ purchase of Green & Black’s, the leading European organic chocolate brand and one that is also available in the U.S. Green & Black’s was originally a division of U.K.-based Whole Earth Foods, a pioneer in organic foods processing and distribution in Europe.