Organic Processing Vo1.8 #3

Urban Agriculture to the Rescue

Besides gaining access to farmers markets, those living in urban areas are also learning how to grow their own healthy, organic food through community gardens. One community leader that has garnered many accolades is Will Allen, a former professional basketball player, and now, through his organization Growing Power ( www.growingpower.org), an organic gardening mentor to scores of inner city teens. Because of his work in Milwaukee and elsewhere educating

urban youth how to grow sustainable food, Allen was named in 2010 one of Time magazine’s 100 Most Influential People in the world.

“If people can grow safe, healthy, affordable food; if they have access to land and clean water, this is transformative on every level in a community. I believe we cannot have healthy communities without a healthy food system,” says Allen.

In awarding a $500,000 Genius Grant to Allen in 2008, the MacArthur Founda-
tion said, “Will Allen is an urban farmer who is transforming the cultivation, pro-
duction and delivery of healthy foods to underserved, urban populations … Allen
is experimenting with new and creative ways to improve the diet and health of the
urban poor.”
Other organizations bringing organic to the inner city: Denver-based
Growhaus ( www.thegrowhaus.com), an indoor farm, marketplace and educa-
tional center in Denver’s Elyria-Swansea neighborhood, whose goal is “to provide
healthy, affordable food for the surrounding community and raise awareness

says marketing director Maria Emmer-Aanes.

Another of the biggest contributors to the cost of organic is transportation, says
Eric Newman, vice president of sales for Organic Valley. Five years ago, the com-
pany took a hard look at its transportation cost and found that 75 percent of its
trucks were carrying less than a full truckload (LTL) of product. To lower shipping
costs, Organic Valley started Organic Logistics, a trucking company that not only
hauls Organic Valley’s products, but ships products from other companies as well—
including their competitors—to maximize shipping efficiencies. Today, Organic Val-
ley has literally turned these numbers upside down, with 75 percent of their trucks
hauling a full load, and only 25 percent with LTLs. “Our goal with this is to increase
efficiency so that we can deliver organic food at a lower price to the consumer,”
says Newman. “It also saves the companies that we work with money as well. The
organic industry is small, so we don’t have the same efficiencies as the big guys,
but in cases like this we can improve the situation by working together.”
And then there are those who cut their own margins to make organic more af-
fordable. Steve Demos, the co-founder of NextFoods, maker of GoodBelly probi-
otic drinks, recently sent out a letter to customers announcing a blanket price
reduction of 10 to 12 percent on all of its products. This was done without chang-
ing the formulation or quality of ingredients. The letter stated that rather than rais-
ing prices to maintain profit margins, GoodBelly is absorbing additional costs to
help minimize the economic impact on consumers.

Maggie’s Organic Clothing, with its slogan, “It’s Organic, Not Expensive,” is another company that has proactively set lower margins. Company founder Bena Burda says that she sets her prices much lower than a lot of other organic cotton products to appeal to a wider audience of consumers and she pushes retailers to do the same. “We are talking about socks here. This is not a luxury item that should be marked up a lot. It is a basic need and it should be affordable,” says Burda.

Retailers are also seeking to offer organic at a lower prices, primarily through private label. Many, including Safeway, Kroger and Target, have introduced their own private-label organic brands—to the point where Safeway’s “O” Organics, with more than 300 certified organic products and sales in excess of $400 million, has become the leading organic brand, according to Organic Monitor’s November 2010 report, “Global Market for Organic Food & Drink.” Private label product sales increased from 15 percent of total food sales before the recession to 18 percent in 2010, according to research firm Booz & Company.

Since 2006, Wal-Mart has also made it a goal to offer organic products at more affordable prices, with the intent to price organic products no more than 10 percent higher than their conventional counterparts. Wal-Mart serves more than 200 million annual consumers, through more than 8,446 retail units. By committing to organic, Wal-Mart single-handedly has made organic products more accessible to many rural and urban consumers that may never otherwise have been directly exposed to them.

In response to the recession, and in order to counteract its reputation of being too expensive, Whole Foods Market has also been taking steps to decrease prices on staple products. Research from Frozen and Refrigerated Foods Retailer found that when similar basic items were purchased at four different Manhattan stores, Whole Foods was 15 percent cheaper than Food Emporium, an independent grocer. Trader Joe’s, however, was 30 percent lower than Whole Foods. While Whole Foods does cater to the premium grocery shopper, one can often find better deals on organic there than can be found elsewhere—like Organic Brae-burn apples for 99 cents a pound, as highlighted by OTA’s Savvy Organic Shopper blog.