Natural and organic claims bring bakery challenges

Consumers may be clamoring for organic and natural baked products, but meeting their needs isn't exactly as straightforward as it may seem.

Bakers who choose to go the organic, vegan or all natural route find the move isn't as easy as sourcing appropriate ingredients and packaging, says Dan Holtz, vice president and co-founder, Liz Lovely, Waitsfield, Vt., which produces vegan, organic and gluten-free cookies.

Bakers will need to evaluate each step of the process to determine just how organic, gluten-free or natural they'll want to be. These designations are not either/or stipulations. Although organic labeling is regulated, it exists along a continuum, as the USDA defines three levels of organics.

U.S. federal legislation dictates that products made entirely with certified organic ingredients and methods can be labeled “100 percent organic.” Products with at least 95 percent organic ingredients can use the word “organic.” Both of these categories may also display the USDA organic seal. A third category, for those products containing at least 70 percent organic ingredients, can be labeled “made with organic ingredients.” Baked products that contain fewer than 70 percent organic ingredients can't display the word organic on packaging, though bakers can list the organic ingredients in the ingredient statement.

Also, USDA rules dictate that a maker of spelt bagels and breads cannot label those products gluten free, though they can be marketed as an aid in a low gluten diet.

The move to organic and natural products itself comes with plenty of points to evaluate. Costs and sourcing challenges must be weighed against payoff in distribution and marketing gains, Holtz says.

How organic is organic?

At Liz Lovely, the challenge of creating an organic, vegan, and then a gluten-free baked product included finding appropriate suppliers, meeting certification requirements, and appropriating and denoting ingredients and percentages on packaging, Holtz says. He and his wife Liz founded the bakery six years ago to create an organic and vegan cookie that includes no butter, eggs or milk.

“The challenge we immediately found was we couldn't get ingredients in the right quantities,” Holtz says. They located ingredients that were either organic or vegan, but they had a hard time sourcing ingredients that met both requirements. When they found ingredients that were both vegan and organic, they couldn't source them at large enough quantities to bake at the wholesale level. Or, the quality of the ingredient didn't meet the bakery's standards.

Keeping up with production in the face of changes to ingredients can test a bakery's resourcefulness. For example, Liz Lovely's products were made with an organic butter alternative. But as the cookie company grew, the supplier couldn't keep up with the bakery's needs. After much experimentation, Liz Lovely eventually made the switch to organic palm fruit oil, which is non-hydrogenated.

Another reformulation came three years ago. The bakery had been producing vegan cookies. In 2007, its owners sought to add organic labeling to the product, which proved far more difficult than originally thought.

“We'd been using an egg replacement powder made up of starches. It was natural, but some ingredients were unacceptable in terms of organic certification,” Holtz says.

The question then became — as it does for many wholesale bakers looking to meet organic labeling requirements — what organic classification Liz Lovely would decide to meet and how far would its owners go to procure the organic label. To meet organic labeling standards, Liz Lovely would need to reformulate its line to do away with the egg-replacement powder.

“It was a technique thing,” Holtz says. “We played around with the mix times and the hold times and baking temperatures and the amount of water. We had to adjust the finer points of the way we do the formulas.”

Then, the payoff: the company's cookies became certified organic in 2007. The designation was quickly followed by an even larger payoff. With the organic certification, United Natural Foods, a large U.S. natural foods product distributor that supplies products to the likes of Whole Foods, could label Liz Lovely products as organic in its catalog.

“Your product isn't considered organic in their book unless it's 95 percent,” Holtz says. United Natural Foods will distribute products that do not meet the 95 percent organic cutoff, but they don't list it in their literature and catalog as organic. Many retailers pay attention to that distinction, he adds.

Ingredient sourcing challenges

The cookie bakery continues to move its vegan and gluten-free products toward the 95 percent organic category. The gluten-free cookies, for instance, meet the 70 percent organic labeling requirement.

“We're committed to 100 percent organic, but we don't want to box ourselves into a corner,” Holtz says. “At first we said, ‘We're not going to release anything that's not organic.’ Then when we got into the gluten-free area, we realized we didn't have that choice.”

“For instance, we still can't find the organic potato starch we'd like to use in significant enough quantities to make our cookies gluten-free and 95 percent organic,” Holtz adds.

Ensuring a continuous supply can also be a problem, adds Holtz, who has looked into why organic potato starch isn't available on a large scale. He says demand for the starch still isn't high enough, despite the amount of gluten-free bakery products now on store shelves and the fact that many of these products are made with organic potato starch.

Also, many of the potato farms that produce organic potato starch have already signed contracts with makers of organic soup mixes or dried mashed potatoes, meaning not a lot is leftover to create the potato starch used by Liz Lovely and other bakeries.

Though the cookie maker can sporadically purchase the organic potato starch, Liz Lovely won't create 95 percent organic products until it can be certain the starch can be supplied on a consistent basis, Holtz says.

Quality becomes an issue when wholesale bakers balance the need to procure organic ingredients from certified suppliers against the need for high quality ingredients in large amounts. Finding quality, organic ingredients in the amount needed can definitely be a challenge, Holtz adds.

“We could buy organic flour that's pretty average in quality; we were using run-of-the-mill bulk organic flour for years,” he says. But recently, Liz Lovely joined other local bakers in a group buy and purchased organic flour of much better quality from a small, organic flour mill.

“Finding good suppliers can be very challenging, but fortunately we do the same thing everyday, so we can buy things in fairly large quantities,” he adds. “Once we get a good supplier, we can lock it in and move on to the next sourcing problem. Always ensuring you're getting your ingredients from a good supplier is a circular problem.”

Thinking labels

Noncertified organic bakers also face sourcing, packaging and labeling difficulties, notes Beth George, owner, Spelt Right, Yarmouth, Maine., which produces bagels, breads and pizza dough made with organic spelt flour. Although spelt contains gluten, some people find it easier to digest than common wheat.

George started her operation in the summer of 2007, making bagels in her home kitchen. That September, she moved into a shared wholesale bakery operation. George knew she'd have a hard time achieving an organic certified status while sharing quarters. Her bagels, for instance, were baked on the same production lines as non-organic products. In 2008, George moved Spelt Right to its own baking facilities.

Despite the new location, George still hesitates to seek organic status. She uses an extra virgin olive oil in her products that, although non-organic, is of high quality. The price point of organic olive oil is too high, George notes. She prefers to use non-organic oil, rather than one that is of lesser quality.

She considered seeking 70 percent organic status, but she is worried, the USDA certification rules will change quickly, leaving her with both excess and expensive packaging that boasts a certification status she can no longer maintain.

“As a former lawyer I can research the statutes and the rules, but it's all so complicated and it changes so fast, which is the scary part,” George says. “You're printing packaging that costs thousands of dollars, and the industry requirements can change so quickly without a lot of notice.”

Holtz says that many consumers don't read beyond the word “organic” blazoned across a baked products' packaging. These consumers aren't concerned, for instance, with whether every single ingredient in the product's make-up is organic. So even a 70 percent organic status may work to bakers' advantage, he says.

A different spin for foodservice

Bakeries, such as Tribeca Oven, Carlstadt, N.J., that produce all-natural fresh and par-baked artisan bread mainly for the foodservice industry do not worry as much about packaging labels. Though the bakery supplies some in-store bakeries and retailers, the emphasis isn't on packaging, says David Allen, vice president of sales and marketing. Thus, consumers are less concerned about the natural or organic status of ingredients. Instead, consumers are more interested in quality, flavor and freshness.

“We primarily partner with hotels and restaurants across the country that are looking for a quality baked product,” Allen says. In cases like these, the product can speak for itself, he adds.

While the public continues its love affair with natural and organic baked products, bakers still struggle on the back end to meet their needs. Though Holtz and others expect organic ingredients will be easier to come by in the years ahead, the main challenge for now is maneuvering through a maze of certification requirements.

Building a consensus for Natural Claims

Since no standard of identity exists for what constitutes a natural product, much of the interpretation is left up to consumer perception. Consumers perceive natural products as more healthful and better for the environment. As such, sales of natural products have reached $20.4 billion, up 45 percent from 2005, according to Mintel, a market research firm. Also, natural claims appeared on 23 percent of food and beverage launches in 2008, a 9 percent increase from 2007.

While the food industry leaders agree on some aspects of the claim “natural,” many other aspects remain in question, according to the article “What is Natural” (Food Technology, Nov. 2008), which overviewed a Webcast hosted by IFT on the topic.

One prime example of a conflict concerning natural status involves high fructose corn syrup (HFCS). In June 2008, the FDA “informally” responded to a request about a natural claim for HFCS. Initially, the FDA said HFCS should not be considered natural because a synthetic fixative in the active enzyme is used to produce the product. On July 3, 2008, the FDA issued a letter of clarification to the Corn Refiners Association after new information revealed the synthetic fixative for the active enzyme is not “added to or included in” HFCS, under certain production methods. Under these conditions, the FDA would not object to the use of a natural claim for HFCS, according to Food Technology.

It is unlikely the FDA will expend the resources to define or regulate natural claims, thus it may well be up to the food industry to reach a consensus on its own to avoid future conflicts, such as that currently affecting HFCS.

Reasons for pursuing a consensus on natural claims include: avoiding regulatory or legal action, boosting consumer confidence, avoiding mainstream media publication of false information and preventing certain lobbying groups from dictating regulatory policy.