Organic ingredient price decrease means more conversions

Related tags Organic food Organic trade association

House of Bread Franchising has finally decided to start producing
organic bread after a decrease in ingredient prices makes
production a viable business option, reports Philippa

The specialty bakery business that is headquartered on California's central coast has debuted its foray into the organic market with honey whole wheat bread.

Sheila McCann, the company's founder and CEO, explained to that she had looked into producing organic bread four years ago, but found that ingredient prices were too expensive.

"Four years ago it cost $37 for a 50 pound bag of wheat berries; today this costs $17,"​ she said. This sharp decline propelled her into action. Prior to organic production, McCann was making bread from chemical free wheat berries, which sold for $10 a bag.

The extra cost of organic flour means that a one pound honey whole wheat loaf sells for 40 cents more than its non-organic counterpart.

The most expensive ingredient for McCann is the honey and she will continue to use a non-organic variety. The bottom line was the inability to source organic honey locally, plus she believes that by nature it is a fairly pure ingredient and that even if she had managed to find a suitable supplier it would have been far too expensive. Likewise, the salt and yeast are not organic.

Despite this, over 95 percent of the end product's ingredients are organic and therefore the bread can be labeled as such.

"Seven out of 10 customers buying honey whole wheat bread now purchase the organic loaf,"​ said McCann.

As a small bakery, House of Bread competes with grocery store breads, of which few are as yet organic. However, McCann believes that the trend towards eating more fiber and a rise in consumer awareness about food ingredients will encourage more producers to create organic alternatives.

She added that House of Bread plans to reevaluate sales figures in the near future and depending on consumer response, the company could decide to sell only organic bread.

The decrease in prices of organic ingredients has been driven by a significant increase in the number of Americans buying organic foods and in turn more farmers turning over their fields to grow organic produce.

Earlier this month a deabte into what constitutes an organic ingredient was opened when the Court of Appeals in Boston called for changes to the regulations that govern the National Organic Program (NOP), pointing out technical inconsistencies between the national organic standards implemented in 2002 and the Organic Foods Production Act (OFPA) of 1990.

For multi-ingredient products that are labeled as organic, the Organic Food Production Act of 1990 stated that they must contain at least 95 percent organic ingredients and no synthetic substances. However, regulations have allowed 38 synthetics, such as baking powder, to be used in these organic processed foods on a limited basis after strict review.

Moreover, the court said that it would require that food manufacturers wanting to use agricultural products not available commercially as organic in multi-ingredient products labeled as organic (up to five percent of such ingredients is permitted), will have to get the products individually reviewed.

Finally, the court pointed out that NOP regulations have allowed dairy herds transitioning to organic production to use 80 percent organic feed for the first nine months, while the OFPA requires all organic dairy animals to receive organic feed for 12 months prior to the sale of milk or milk products.

The USDA has the option to appeal the decision and has issued a notice demanding that comments regarding the NOP process be submitted by 4 April.

The Organic Trade Association (OTA) said it would work with the USDA to address these issues.

The organic food market in the US is estimated to be worth $10.4 billion and it shows no signs of tiring - it grew by 20.4 percent in 2003 - and sales are expected to reach $16.1 million in 2008, according to a recent report published by Eurominitor.

"Sales of organic food have outpaced those of traditional grocery products due to consumer perceptions that organic food is better for them,"​ said the report.

According to a 2002 study by the Food Marketing Institute (FMI), 61 percent of consumers felt that organic foods were more beneficial for their health, 57 percent of them said that they had purchased organic foods in the past six months or had used them to help maintain their health. This figure was up from 50 percent in 2001.

The survey also found that fans of organic food believe it offers a "richer, deeper taste"​ than conventionally grown produce. Among Americans, the most frequently purchased organic food types are vegetables, fruit, cereals/grains, closely followed by yoghurt, UHT milk and dried pasta products.

National standards for certifying organic foods became effective in the US on 21 October 2002, establishing a national definition for the term "organic". Items that meet the new requirements are able to bear a green and brown "USDA organic" seal that certifies that the food was organically grown.

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