Organic and natural dairy: it's been a year since Wal-Mart took organic mainstream, and with a growing raw milk supply, organic continues to find its place along with natural products and no-rBST milk

Dairy Foods, June, 2007 by David Phillips

[ILLUSTRATION OMITTED]

At the Organic Trade Association's All Things Organic trade show last month, Horizon Organic introduced several new products, including organic milk with DHA, single serve bottles and ice cream. As the top marketer of organic milk in the U.S., Horizon's entree into the ice cream aisle makes sense. It also helps that Horizon is a Dean Foods company, and therefore has familial relationship with a good number of outstanding ice cream makers.

Horizon's booth at All Things Organic was right next door to Stonyfield Farm's and on the other side of the organic yogurt leader was Organic Valley Family of Farms, the top organic farm cooperative in the country--itself no slouch in the organic milk business.

For three days in May the real muscle of the organic dairy industry stood shoulder to shoulder in Chicago. All three had exciting things to talk about, and that should come as no surprise. Once ignored as an insignificant niche, organic dairy now accounts for more than $2.5 billion in annual sales, according to trade association data. It's expected to eclipse $3 billion by 2010.

Food industry insiders once shrugged at the term "natural" claiming it was ill-defined, but that was before the standards employed by retailers like Whole Foods clearly distinguish between yogurt and ice cream products that are truly made with all natural ingredients and those that are just giving lip service. Then there is the no-rBST issue.

Publix Super Markets is the latest retailer to announce that it is phasing out milk from cows treated with the synthetic hormone. And while Monsanto and some producer organizations are protesting with complaints to USDA about so-called marketing claims, most dairy processors are claiming their right to choose milk made without a chemical boost.

The emergence of no-rBST products is unsettling in itself for those involved in organic dairy, and if you throw it together with the ongoing debate (and wait) regarding pasture access and changes to the Organic Standards, and mix it up with the uncertainty caused by the artificial big flush of organic raw milk, it's hard for anyone to say where the whole thing is going.

"It's difficult to predict," says George Siemon, president of Organic Valley. "You have to step back and say, 'OK, where is the top end?' We know that the organic consumer has determined that that there is quality in what we produce, but we have to constantly remind ourselves that there are new organic consumers all the time, and we have to ask what brings them to organic."

And while organic and natural are distinct descriptors, the distinctions may not be made by all consumers, and they may be just part of a group of distinctions the natural and organic consumer looks for. There are fair trade products that offer another added value, and there are high-health functional foods that compete with the wholesomeness of organic. And in dairy, the way milk is pasteurized, (or even if it's pasteurized) can be part of the internal debate an educated consumer goes through when making food choices.

A recent TIME magazine cover story tackled the wider food-as-politics debate by illustrating how these choices are made. The author took a very personal approach, describing an experience he had in a Manhattan grocery while trying to choose between an organic apple from California and a more locally-grown conventional counterpart.

The story includes a thorough discussion, but a cursory reading might lead one to conclude that locally-grown might be a consideration that could replace organic. "There's room for everyone," says Nancy Hirshberg, v.p. of natural resources at Stonyfield Farm. "We are still, with organics, like 4% of the U.S. dairy business--it's still a tiny piece, so there plenty of room for everyone."

The author of the magazine article noted that for him, locally-grown became a greater priority than organic. But something else about the author's decision making may support Hirshberg's proposition: He bought both apples.

A year ago, the story about organic was that it was becoming mainstream, with major retailers like Safeway and Wal-Mart fully buying in along with major food manufacturers. Undoubtedly that trend will continue, despite the multi-front volatility organic is currently undergoing. Still, the question on the minds of those with a stake in the fledgling organic and natural foods industry has to do with a different use of the word sustainability: Can organic sustain its growth, its optimism and its integrity?

More milk

Late in 2005, growing demand and numerous other circumstances on the supply side led to a seriously tight supply of raw organic milk. The shelves in some dairy cases actually went empty. New Hampshire-based Stonyfield looked at the possibility of importing some organic powder from New Zealand, but ultimately, the company converted some of its organic product lines back to conventional milk. It put messages on its packages asking consumers to be patient, and earlier this year the patience began to pay off, as Stonyfield began to convert back to organic.