This decade has seen market influences such as the low-carb craze, rising commodity costs and now an economic downturn. Yet through this turbulence, the organic food market keeps increasing sales at a steady pace. Continued growth is predicted, and grain-based foods should play a role. Grain-based food manufacturers wanting to invest in organic products should be aware of increasing availability and options in organic ingredients, including grains and sweeteners.

Research and Markets, Dublin, Ireland, a source for international market research and market data, expects the global organic food market to reach $70.2 billion by the end of 2010, according to its "Emerging Organic Food Markets" report released this year. The North American organic food market grew at a compound annual growth rate (CAGR) of about 21% during 2005-07, according to the report, and North America and Europe accounted for 96% of global organic food revenues in 2007. Packaged Facts, Rockville, MD, estimated the natural and organic food and beverage market in the US grew nearly 68% between 2005 and 2008, for a CAGR of nearly 19%.

Two grain-based organic food categories have surpassed $100 million in US sales, according to The Nielsen Co., New York, NY. Organic ready-to-eat US cereal sales were $130 million for the 52 weeks ended July 12 in food, drug and mass merchandiser stores, excluding Wal-Mart Stores, Inc. The sales figure marked nearly a 6% increase from $123 million in the previous 52-week period. Organic tortilla chip sales reached $101.4 million, up 4% from the previous year.

Annual US sales of organic bread are nearing $100 million, according to The Nielsen Co. Sales reached $95.5 million in the 52 weeks ended July 12, up more than 18% from $80.7 million in the previous 52-week period.

The economic downturn’s potential negative effect on organic products was touched upon in the June issue of "Facts, Figures & the Future," a newsletter edited by Phil Lempert and published with Nielsen and the Food Marketing Institute.

"Are foods and beverages with organic claims (and higher prices) immune to the deepening economic plague of 2008?" the newsletter asked. "Nobody knows for sure — though recent surveys show consumers are less confident and expect to shop thriftier to nourish their families, which could prompt more purchases of conventional consumables at the expense of organics.

"Yet the counter-trend to eat healthfully, even if it costs more, remains strong. Nielsen LabelTrends data show that even as the economy took a downturn in 2007, the sales growth of organics segments across the selling floor remained as lusty as ever."

Grain-based food manufacturers offering snacks and other sweet goods should know sourcing sweeteners for organic product may be different from sourcing sweeteners for conventional products. Because organic corn is difficult for farmers to raise and thus in short supply, corn-based sweeteners are not often used in organic products, said Prescott Bergh, director of marketing for Ciranda, Hudson, WI. Agave syrup and tapioca syrup may be used instead, he said.

Organic sweeteners were on display earlier this year at the "All Things Organic" exposition in Chicago, IL. Briess Malt & Ingredients Co., Chilton, WI, featured its organic BriesSweet tapioca syrup as a 1:1 replacement for corn syrup. Minneapolis, MN-based Cargill featured an organic cranberry almond granola bar sweetened with organic glucose syrup, which is derived entirely from organically grown wheat and hydrolyzed with natural enzymes.

In October, Cargill introduced Gerkens 10/12 natural and lightly alkalized organic cocoa powders. The standard fat, alkalized organic powder provides smooth, full-bodied and balanced chocolate notes in applications such as baking and compound coatings. The supply of organic cocoa also increased when Barry Callebaut, Zurich, Switzerland, acquired a 49% stake in Biolands, a Tanzania-based exporter of certified-organic cocoa.

Consumers interested in organic may want other benefits in products. Ciranda recently launched organic inulin from agave, which works especially well in organic bars, Mr. Bergh said. Inulin, a prebiotic fiber, aids digestion.

According to Mr. Bergh, a third party recently certified Ciranda’s palm oil partner/grower as being socially and ecologically sustainable. Supply of organic palm oil is not a problem, he added.

"Frankly, we deal with a lot of tropically based ingredients," Mr. Bergh said. "We deal with cocoa and chocolate and tapioca ingredients. From our perspective, we spend a lot of time sourcing from the right suppliers and qualifying them. We don’t see anybody having any shortages in anything we are carrying."

Supply of organic grain has surfaced as a problem this decade, but it’s been more of an organic feed grain problem for beef, poultry, dairy and egg companies. Grain fed to livestock pulls from the same stream of organic soybeans and corn for organic crackers or extruded snacks, said Kate Leavitt, director of international sales and marketing for SunOpta Grains & Food Group, Hope, MN.

"There are some supply constraints from the crop harvested in the fall of 2007," she said but added that this year’s crops should ease these constraints. "We are going to see some natural corrections. We’ve seen this happen a few times before."

The melamine and general food safety problems in China may have an indirect effect on the US organic products, Ms. Leavitt said. Organic soybeans from China normally enter the US as organic feed grain and free up the North American supply of organic soybeans for food use. The food safety problem, however, may keep Chinese soybeans out of the US and also lead other countries to seek US soybeans instead of Chinese soybeans.

Also, the organic dairy market has put a strain on feed grain during the past couple of years, according to Curtis Bennett, vice-president of operations for Clarkson Soy Products, LLC, a subsidiary of Clarkson Grain Co., Inc., Cerro Gordo, IL. "We did see a huge rise in the need for grains to feed that market," he said.

But that’s generally not been the case for producing organic foods, he said. "Human consumption of anything is far less than what animals consume," Mr. Bennett concluded.

Clarkson Grain offers organic yellow, white and blue corn to organic food companies. Clarkson Soy Products is one of the few suppliers of organic lecithin, a soybean extract, in the world. The company plans to launch two new organic lecithin products later this year. "Approximately 90% of companies can use our standard unbleached lecithin," Mr. Bennett said. "But for convenience reasons, they might want a dry product. It functions the same, but it’s not as sticky."

Wheat is the featured grain in the OrganicEssentials line from Bay State Milling, Quincy, MA. The company offers an organic high-gluten wheat flour made from hard red spring wheat; bread flour, milled from hard winter wheat; whole-wheat, a finely milled 100% organic and 100% whole-grain flour; and semolina, made from select organic durum wheat.

Sales of Kamut wheat products increased 32% globally from 2006 to 2007, according to Kamut International, Great Falls, MT. Kamut wheat may be grown organically only under a licensing agreement with Kamut International. More than 37,000 acres of the grain were grown in 2007, primarily in Alberta, Saskatchewan and Montana. Twenty-eight percent of Kamut wheat products are sold in the US and Canada while the other 72% are sold in Europe.

Earlier this decade, food manufacturers offering conventional products showed some resistance to offering organic products, Mr. Bergh said. They may have thought an organic product line would shed a negative light on the company’s conventional line. That resistance has generally disappeared, he noted.

"We see broader sectors and greater numbers of companies of all sizes doing organic," Mr. Bergh said. "With the mainstreaming of organic, everybody is becoming more comfortable with it."