Organics not embraced by Canadian processed food makers: Report

By Caroline Scott-Thomas

- Last updated on GMT

Related tags Percent organic ingredients Organic food

Food manufacturers are resistant to using organic ingredients because they perceive investment to be high and returns to be low, says a new report from the USDA on the state of the Canadian organics market.

Canada’s organic sector has undergone a massive shake-up recently, culminating in the adoption of new certification standards that were implemented at the end of June. Products must contain at least 95 percent organic ingredients in order to be allowed to carry the new Biologique Canada Organic logo. Those containing 70 to 95 percent organic ingredients will have to carry additional information on the product label identifying the percentage of each organic ingredient, and products that contain less than 70 percent organic ingredients will be restricted to making organic claims on the ingredient list.

Interest-level perception

But the latest Organics Annual from the USDA’s Foreign Agricultural Service said that manufacturers of processed foods are put off buying organic ingredients by a perception of little return on their investment and a view that consumers of organic foods are unlikely to be interested in processed foods.

“There is relatively less overlap between consumers of organic foods, and consumers that are less health conscious and are open to foods that are highly processed and contain additives and preservatives,”​ the report said. “…Use of organic food products in mainstream, high volume food processing in Canada is very limited. Interest from major food processors is low as the investment into organic ingredients is perceived to be high and return is perceived to be low.”

Although there are some organic processed foods on the market, the report added: “While there was growth in the number of organic SKUs ​[stock keeping units] from 2001 until 2005, growth has been flat over the last 2-3 years.”

It is expected that Canada’s new organic regulation will greatly improve export opportunities for growers and manufacturers of organic products. However, it is uncertain at this early stage of the new regulatory framework how far this benefit will extend.

The USDA report estimated total Canadian retail sales of organic products to be $2.1–2.6 billion in 2008 with 15–20 percent annual growth. It is estimated that about 80 percent of Canada’s organic food production is exported.

Until now, Canada has had a hotchpotch of different voluntary and mandatory organic certification in place in different provinces across the country. The new Organic Products Regulations require all Canadian organic products to be endorsed by a certification body accredited by the Canadian Food Inspection Agency (CFIA).

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