Gary Hirshberg, who co-founded Stonyfield Organic and is on the boards of numerous better-for-you and organic companies, explains that as Americans continue to avoid traditional grocery retailers for fear of being exposed to COVID-19 they are discovering the “extraordinary bounty of products that they can get through their local food ecosystems,” including products promoted as healthier for them and the planet.
According to Hirshberg, this shopping shift has helped many smaller and organic farms avoid some of the woes of their larger, conventional counterparts, such as leaving produce in the field or dumping milk for lack of ways to process or distribute their products before they spoil. But, he says, organic farmers still face plenty of challenges and many need a helping hand similar to the one that USDA has extended to some conventional farmers.
In this episode of FoodNavigator-USA’s Soup-To-Nuts podcast, Hirshberg and Stonyfield farmer Rhonda Miller Goodrich of Mollybrook Farm describe the impact of the ongoing pandemic on the organic industry, including how Stonyfield’s Direct Supply program has helped farmers navigate the shifting landscape, and where aid from USDA could help. They also share where they see consumer shopping trends headed as they try to stay healthy during and after the pandemic.
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A silver lining: Reconnecting with food’s origins
Like many Americans, Hirshberg is intimately familiar with the fear, grief and uncertainty that comes from watching loved ones battle, and sometimes lose to COVID-19, but he says every crisis has a silver lining and for him the pandemic’s silver linings include people rediscovering local food and the role it can play in health and disease prevention.
“I don’t want to be lightfooted about this, but with every crisis there is a silver lining… and people are figuring out that we are what we eat, that eating organic and eating well is actually preventive health care. And everyone’s obsessed now, of course, with keeping our families safe,” Hirshberg said.
To keep their families safe, he added, more consumers are joining community supported agriculture, co-ops and accessing locally grown, and often delivered, food.
Miller Goodrich agreed, adding that more people are approaching her as a farmer looking for options and insights. “People are really starting to think about their food in a different way that we’ve experienced before,” she said.
In addition to local, Hirshberg said, demand for organic is up. An April 15 report from the Organic Produce Network confirmed total organic dollars increased 22.1% from March last year, which is significantly higher than the dollar increase of 8% for the first quarter. Likewise, it notes, the 25.8% increase in organic volume purchased in March also outpaced the 22% growth of conventional options in same period.
For example, Hirshberg says, demand for Stonyfield’s large 32-ounce tubs of yogurt are selling at a rate the likes of which he has not seen in his 37 years in the business. He attributes this to consumers seeking products with immunity support, such as probiotic-packed yogurt, and also to the value proposition offered by bulk or larger products.
Coronavirus pandemic boosts organic industry
Consumer demand for products they perceive as healthier has helped insulate the organic dairy industry from some of the same challenges that have plagued its conventional counterpart, including lower prices at the farmgate and an inability to quickly redirect product from foodservice to retail.
“Organic farmers are not dumping their milk. The organic has not suffered losses” like those of conventional milk from restaurants, schools and cafeterias closing, Hirshberg said. He adds that the premium price of organic milk means most of it is sold at retail where the demand has been the highest.
Hirshberg adds that organic’s unique business model, including Stonyfield’s Direct Supply program, have also helped protect the segment and individual farmers, such as Miller Goodrich.
He explains that in 2014 Stonyfield began its Direct Supply program as a way to strengthen organic dairy in the Northeast by cultivating relationships with specific farms from which it buys milk directly. The program includes grants, technical aid and more.
For example, Stonyfield has paid the same price to Miller Goodrich for her farm’s milk since the pandemic began and continues to pick up each order so that she hasn’t been stranded with excess product.
USDA aid needed
While many organic farmers are faring better than some of their conventional counterparts, Hirshberg said they still face significant risks because of the pandemic and as such could use help from the US Department of Agriculture, including in the form of payments from direct assistance programs at least at the same rate as conventional producers.
Specifically, he said, USDA should open its general risk management program for new dairy farmers who never could have anticipated the risks posed by the pandemic. In addition, he lamented that organic farmers are typically excluded from payment programs that help make up for shortfalls.
Miller Goodrich added that while her farm continues to thrive with Stonyfield’s help, many other organic farms are not as fortunate and could use help from the government.
Threats loom with recession risks
While organic dairy so far as held its own during the pandemic, the threat of an economic downturn looms large over all of organic. And while Hirshberg acknowledges that the premium price of many organic products likely will be harder for under- or unemployed shoppers to reach, he also believes that the category’s health proposition could help buoy the segment.
“First of all, to level set cheap food is not cheap. It may be cheap at the cash register, but when you tally the environmental consequences” of producing it “you realize that may not be paying for it right there, but you’re paying for it somewhat with farm worker health, with all kinds of other social costs,” Hirshberg said.
But he also acknowledged when money is limited, consumers need to make tough choices and compromises on their purchases. However, he said he thinks consumers won’t cut corners on organic, but rather in other areas, such as animal protein.
For support, he pointed to the near doubling in the past month and a half of Stonyfield consumers who consider themselves health devotees and are willing to purchase organic dairy even though it is more expensive.
“The bubble has suddenly gotten bigger,” and while consumers may not be able to buy everything organic, Hirshberg said, “the number one concern for people is taking care of themselves and their families.”