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Sunday, March 23, 2008

The Selling of Organic

Newsletter 38

Organic farms have historically been small, family-run mixed farms
producing for local markets, but this story is starting to change as
conventional agribusiness and the supermarkets move in. Organic
shops, too, are expanding, or being bought up, and increasingly
resembling their non-organic counterparts.

Multinational food corporations have developed organic versions of
their best selling brands, some have been pushed into it by WalMart;
which has put pressure on the big food corporations to produce
organic versions of their big brands. The big food companies with
organic ranges include: Heinz, General Mills, Kellogg's, Groupe
Danone, Nestle, Unilever Bestfoods, RHM, Mars/Masterfoods, Kraft,
Premier Foods, Northern Foods and Pepsi-Co. You can now get all your
favourite processed foods in organic versions: ketchup, baked beans,
rice crispies, creamed rice,custard, ready meals and, for a brief
while, an organic version of Pot Noodle (though that's now been
discontinued) What started out as a method of producing healthy and
nutritious food is now turning out highly-industrialised multi-
ingredient (but organic) products.

The large food manufacturers are careful not to make their non-
organic foods look unhealthy. Organic foods are instead being 'niche'
marketed along with vitamin-enriched products and functional foods,
in the eyes of General Mills [a US food corporation], 'organic is
not a revolution so much as a market niche'.

In the late 1980s organic salad mix (a mix of baby lettuce and other
salad leaves) was a niche product served in upmarket restaurants in
San Francisco and produced by small local farmers like the Goodmans
at Earthbound Farms. The Goodmans hit on the idea of bagging the
salad mix in resealable bags, this innovation allowed them to sell
their salad to supermarkets throughout the US. They bought more
land, as well as produce, from other smaller producers. Demand for salad
mix grew, prices rose and that drew in new converts to organic
farming, prices then fell squeezing the smaller growers out. New
post- harvest washing and sorting processes were also developed which
required capital, again squeezing out the smaller growers. But
Earthbound Farms formed a partnership with Tanimura and Antle (the
biggest conventional lettuce grower in the US) and continued to grow.

But as one critic says, 'Earthbound's compost is trucked in, the
farms are models of West Coast monoculture, laser-levelled fields
facilitate awesomely efficient mechanical harvesting and the whole
supply chain from California to Manhattan is only 4% less gluttonous
a consumer of fossil fuel than that of a conventionally grown head
of iceberg'. Earthbound Farms is now the largest organic vegetable
producer in the US, controlling 26 thousand acres of organic land
and producing and distributing 22 million servings of organic salad
across the US each week. Some of this Californian salad even reaches
the UK, when UK organic salad is in short supply.

The dairy set up by Rachel Rowland's grandmother was the first
certified organic dairy farm in the UK, and has always promoted
itself as a family firm based in rural Wales. To maintain this image
there is no mention on product labels or on Rachel's website that
the company is now owned by Dean Foods, the largest dairy corporation in
the US. Dean Foods operates more than 120 processing plants and
employs 28,000 people. Dean Foods' main shareholders include some of
the biggest corporations in the world: Microsoft, General Electric,
Philip Morris, Citigroup, Pfizer, Exxon/Mobil, Coca Cola, WalMart
and PepsiCo. Dean is busy increasing its share of the organic dairy
market with their brand - Horizon, dubbed the 'Microsoft of organic
milk', already controlling over 55% of the US retail organic milk
market. To increase this further, it has teamed up with WalMart to
sell Horizon products in large volumes at low prices, pushing
smaller cooperative and family-owned organic dairies out of business.

Rachel's says it is passionate about natural and nutritious food.
Dean Foods has repeatedly been criticised for using genetically
engineered bovine growth hormone (rBGH), which increases milk
production, but also causes mastitis in cows. Though it has recently
converted to rBGH-free production on some of its farms. Horizon's
organic milk is ultra-pasteurised, a high-heat treatment that kills
the enzymes and many vitamins, reducing the milk's nutritional
value, but allows the company to deliver its milk all over the US.

Rachel's may assure consumers that all its milk is from UK farms,
certified by the Soil Association, but the same high standards do
not apply to Dean's organic brands in the US, which in a recent survey
were found to be 'ethically challenged' and scored zero points.
Horizon still buys half of its milk from small family organic dairy
farms, but the rest comes from huge factory farms. US organic
standards, created under pressure from US big agribusiness, are
'scale neutral' - there is nothing in the standards that prevents
the operation of organic dairies with thousands of cows in confined
feedlots. While animals must have 'access to pasture', how much is
not spelled out. Dean Foods of course has no commitment to organic foods per se, only
to the profits that adding a portfolio of successful organic
companies to its business can bring. Rachel's grandmother is lucky
that so far the more stringent UK organic standards are still
protecting her ideals.

Cherryridge Poultry, a struggling organic turkey farm in Norfolk,
was bought by Bernard Matthews, the UK's biggest turkey producer, in
December 2006. It is not alone: other conventional poultry companies
like Lloyd Maunder have also gone into organic. Undercover
investigations at Bernard Matthews' plants have shown crowded, dirty
conditions with severely injured, diseased and dead birds. During a
major bird flu outbreak in 2007 government investigators found
serious bio-security shortfalls, including holes in the turkey sheds
where birds, rats and mice could get in, leaking roofs, and
uncovered bins where seagulls were seen carrying off meat waste. Many
consumers will never know they are buying their organic turkey from Bernard
Matthews, however, as it will be sold behind a supermarket own label.

From one store in Austin, Texas, Whole Foods Market has grown
through a series of acquisitions and mergers to become the largest
natural food supermarket in the US, with 250 stores. Recently the
company won a legal battle with the US competition watchdog over its
planned merger with its biggest rival Wild Oats. The watchdog tried
to block the merger arguing that consumer choice in the natural and
organic sector would be undermined if the deal went through.

Whole Foods Market has also come to the UK, first buying up the
Fresh and Wild chain in 2004, and in 2007 opening the first Whole Foods
Market store in London's Kensington. Company blurb talks about
offering 'an engaging shopping experience', but many say it's too
glitzy, there's also not much organic produce in evidence and its
difficult to tell how local it is. Prices are also high; in the US
the company has earned the nickname 'Whole Paycheck'. With respect
to UK expansion, Whole Foods has implied that it may try to open as
many as 45 stores.

Despite its humble beginnings, Whole Foods Market has bought into
the capitalist agribusiness model and has played an important part in
the industrialisation of organic food production in the US. While US
Whole Foods Market stores may buy some fresh produce locally, many
of the largest organic farms (Earthbound Farms and Cal-Organic) supply
it and hence much produce is shipped to its stores from these big
producers in California. As Michael Pollan says, 'whilst growing the
rocket is organic, everything else is capitalist agribusiness as

John Mackey, founder and CEO of Whole Foods Market is an admirer of
WalMart and says 'What a great, great company! WalMart has single
handedly driven down retail prices across America.' He also approves
of WalMart's policy of 'crushing the parasitical unions'. Despite
being in Fortune's '100 Best Companies to Work For in America', Whole

Foods Market is as anti union as WalMart, and has been criticised
for firing two workers involved in unionising the Madison, Wisconsin
store. With respect to its suppliers, Whole Foods stores in the US
stock tomatoes from one of the most notorious Florida sweatshop
producers and has ignored an appeal from the Coalition of Immokalee
Workers to pay an extra penny a pound for these tomatoes.

Wholefood's expansion plans in the UK and its business practices
essentially mirror those in the conventional retail sector, so we
can expect more small organic suppliers and wholefood retailers and
distributors disappearing as big organic takes over.

See our forthcoming publication Eating up the Alternatives for more
information on corporations and organic food.

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