One stroll around IFT’s Food Expo last June is all the evidence that anyone associated with the food industry might need as proof that demand for organic food is on the rise. Just in case IFT was not convincing enough, along comes Wal-Mart, the world’s largest retailer, vowing to become a major supplier of organic products. Flavor suppliers who forged into the organic market as early pioneers have made great strides in their efforts to develop and manufacture organic products, but suppliers may need to redouble their efforts as demand increases, regulations change and competition grows.

“Frutarom got into the organic market early,” says Bill Graham, vice president and general manager of the flavors division. “Initially, it was a point of differentiation, but it is becoming more competitive. Now the challenge is to develop the next generation of organic flavors. These flavors will be better tasting, more cost competitive and have greater stability.”

Recordkeeping and raw material sourcing remain the two biggest hurdles for organic food processors. The difficulty in sourcing may soon be compounded by a change in the rules, notes Graham. Currently, a processor has to certify that it has attempted to source an organic raw material from at least three suppliers without success. After the processor proves to its organic certifying organization that it was unable to procure a particular organic raw material, it receives permission to substitute a natural GMO-free product in its place. However, a change in the rules effective June 2007 will require that all natural agricultural materials come from organic sources. The reason behind this change has to do with the expectation that enough sources now exist to fill the pipeline of demand. “Right now there are sources of most essential oils,” adds Graham, “but quantity may become an issue in the future. There are some risks to committing to new raw material sources that may not be available.”

Assurance International (QAI) is the organization responsible for organic certification of Frutarom’s flavors. QAI’s organic certification program follows a five-step process that includes application, inspection, review, resolution and certification. All of these procedures adhere to the regulations and requirements that are stipulated by the National Organic Program. Multinational companies expect ingredient suppliers to provide both the U.S. and the European market with organic ingredients. As a result, ingredient suppliers must be well versed in both European and U.S. regulations. Fortunately, QAI can offer support for international standards, notes Graham.

Frutarom’s organic flavor line includes options for bakery, dairy, beverage, confectionery and savory markets. “Beverage is currently the largest area, but we are seeing more volume in cereals and baking products,” says Graham. These growth trends will surely increase if the Organic Trade Association’s predictions are correct—organic sales in the U.S. are expected to top $16 billion in 2006 and projected to reach $32 billion by 2009.

For more information:
Frutarom Inc., North Bergen, N.J.
William Graham •