Kashi’s Certified Transitional program shows paying more for ingredients switching to organic adds brand value

20-Feb-2018 - Last updated on 20-Feb-2018 at 14:43 GMT

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The steady growth of Kashi’s Certified Transitional program in the past two years along with positive consumer and retailer response to the protocol shows how paying more for ingredients from farms in the process of becoming certified organic can also pay off for brands.

Since Kashi teamed with organic certifier Quality Assurance International in 2016 to launch the Certified Transitional program, the company has paid more than $1 million in premiums over conventional pricing to farmers navigating the expensive and arduous process of transitioning to certified organic.

It also is helping 15 farmers – up from only four two years ago – become organic certified, which can be intimidating for farmers who often must invest more in new equipment and techniques to meet organic requirements but for three years cannot reap the higher profits that organic commands at the store shelf.

“There are a lot of barriers to farmers to convert their land to organic, and this program we hear time and time again, that it is a very meaningful incentive to help them make that lead and go organic,” Nicole Nestojko, senior director of supply chain and sustainability, told FoodNavigator-USA.

She added that as a result of the program, more than 4,200 acres will supply Certified Transitional crops to Kashi in 2018 – helping the brand to expand its portfolio of products made from the ingredients.

“Last year we launched a line of Chewy Nut Butter Bars made with certified transitional ingredients, which built on the success of our Dark Cocoa Karma Shredded Wheat Biscuits made from CT ingredients. And now we are adding another cereal – a Cinnamon French Toast that uses CT corn and has 6 grams of sugar only and is also gluten free,” Nestojko said.

“We are really proud of this one,” which was inspired by a French breakfast brioche and tastes of warm cinnamon and a hint of maple syrup, she said, noting that “the office is snacking on it nonstop, so it’s proving to be more than just a cereal you eat with milk to also be a great snack.”

All the products are competitively line priced and do not pass along to consumers the higher price that Kashi pays for Certified Transitional, Nestojko said. But, she said, they are driving value for the brand in other ways, including with increased distribution and engagement with retail customers.

“These are some of our most successful launches and … our customers are excited to learn about this program and how they can help encourage the movement,” which strives to expand organic agriculture in the US beyond just the 1% that is available currently, she said.

As shoppers learn more about the program through in-store displays and messaging on packages, the program could eventually create a new revenue-stream for retailers and brands by reaching shoppers who might want but currently can’t afford organic, which sells at a higher price point.

This in turn could entice more brands to adopt similar programs to ultimately drive the availability of even more organic agriculture in the US, Nestojko said.

“We believe so strongly that this is a great way to expand organic agriculture in the US beyond 1%, and I think our biggest hope is that the program expands beyond us to really help drive scale and broader impact than we can drive on our own,” she said, adding Kashi is “in conversation with like-minded brands about the program,” which is owned and managed by QAI.