CHICAGO, Ill. – Katherine DiMatteo saw first-hand the positive effect a national regulation had on the U.S. organic industry and is confident it will have the same impact north of the border.
“You’re going to see that sales of organics are going to grow,” said the former executive director of the Organic Trade Association.
The Canadian government plans to publish and seek public comment on its draft regulation in the next few weeks.
Once that regulation is implemented and the federal government begins promoting its Canada Organic trademark, food companies can expect a boost in domestic and international sales of their organic products, said DiMatteo.
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At least that’s what happened in the United States.
According to an ACNielsen analysis of grocery store sales conducted six months after the October 2002 implementation of the U.S. National Organic Program, organic products were flying off store shelves.
The study found that sales of fresh organic products increased 20 percent during that period. Sales of processed goods containing 95 percent organic ingredients grew 29 percent and those with at least 70 percent organic content increased 11 percent.
By comparison, sales of processed foods containing no organic ingredients expanded by six percent during that six month stretch.
Four years later, organic retail sales continue to grow at 15-20 percent per year, due in a large part to consumer awareness and acceptance of the NOP label.
“There is less uncertainty about whether that product is indeed organic,” said DiMatteo, who was part of a panel discussing government involvement in the organic sector at the All Things Organic conference in Chicago, Ill.
A 2006 study conducted by the Harman Group shows 56 percent of American consumers are aware there is a government standard for organic products.
When three out of five consumers have heard the pitch that is a pretty good uptake, she said.
Maintaining a 20 percent growth rate for more than a decade is unusual for a new category of food products because as sales expand, it gets harder to keep up the pace.
DiMatteo said if it wasn’t for the national regulation, sales would have slumped by now. It boosted the exposure of the industry in the national press and generated questions from retailers and farmers wondering how they could get in on the action.
“With the organic program coming into place, it kind of reinvigorated our sales growth,” she said. “I would expect that you would see the same kind of thing (in Canada).”
Dag Falck, organic program manager for Nature’s Path Foods Inc., one of the largest manufacturers of organic foods in Canada, agreed with that assessment. He expects the federal government’s organic regulation to have a profound effect on shoppers.
“It’s going to tell the domestic consumer in Canada that this is for real,” he said.
Falck expects to see similar consumer acceptance of the Canada Organic label as there was of the United States Department of Agriculture’s organic seal.
It will also resolve another lingering problem for the industry.
“We’re in the embarrassing position right now where our government can’t negotiate with other governments until we have a regulation.”
