Organic food is one of the fastest growing food segments, and bakery products are no exception. Perceived healthfulness and sustainability are pushing the trend.
Bakery in Kensington, N.H. has always been an organic bakery, that fact was more of a secret than a selling point when the bakery opened six-and-a-half years ago.
“We pretty much kept it hush-hush, so we wouldn't scare people off,” explains owner Amy Mastronardi. “For a long time, there were many misconceptions about how organic foods would look and taste.”
Meg Ray faced similar skepticism when she opened her Miette Patisserie in San Francisco in 2001.
“Many people expected our products to taste like health food store flax muffins rather than delicate pastries from a fine French bakery,” she says.
Now, however, The Hippie Chick's organic desserts are hot sellers with high demand for wedding cakes as local brides and grooms seek out “green” alternatives for everything from invitations (recycled paper) to diamonds (non-conflict). At Miette, 100 percent organic lavender shortbread cookies, cheesecakes and gingerbread cupcakes topped with cream cheese icing also virtually “fly out the door,” Ray says. Last year, her overall sales increased by about 20 percent.
According to the 2007 Manufacturers Survey from the Organic Trade Association (OTA), overall sales of organic foods increased by more than 20 percent between 2005 and 2006, from $13.8 billion to $16.7 billion, making organic one of the fastest growing market segments within the food industry. OTA also anticipates that organic food sales will continue to increase by an average of about 18 percent per year through 2010.
In its 2006 Shopping for Health consumer study, The Food Marketing Institute (FMI), a national trade association of food retailers and wholesalers, found that one-half of U.S. shoppers buy organic foods. OTA reported that breads and grains were the second fastest growing organic category (behind dairy products), with sales rising from almost $1.4 billion to almost $1.7 billion between 2005 and 2006 and projected to increase to $2 billion in 2007.
During the past year, Michelle Garcia has experienced this sales surge first-hand at her all-organic Bleeding Heart Bakery in Chicago.
“Our weekday retail sales have doubled and our weekend sales tripled,” Garcia says. “Wholesale has also gone through the roof, making it necessary for us to dedicate a full-time staff of three to this part of the business and quadruple the number of daily wholesale deliveries from an average of three to twelve.”
To provide workspace for this increased business, Bleeding Heart recently moved from its original 1,500-sq.-ft. facility to one that is more than twice as large, Garcia notes.
Dan Leader, whose Boiceville, N.Y.-based Bread Alone bakery has been producing organic-only loaves since 1983, estimates awareness of organic foods has grown 100-fold during the last 10 years. Bread Alone operates three retail stores and sells product at more than 40 farmers markets in the New York City metropolitan area. The company also services more than 200 wholesale accounts.
“Our sales have been growing at a rate of about 15 percent per year,” Leader says.
Sylva, N.C.-based Annie's Naturally Bakery also is seeing its all-natural and organic bread and pastry business boom. Annie's Naturally distributes to national and regional grocery stores and regional and independent restaurants. A growing number of its larger wholesale accounts — which company owner Giuseppe (Joe) Ritota defines as chains with two to three hundred stores — include organic in their merchandise mix.
Ritota reports that the bakery's sales, which also include sales from the company's e-tailing Web site, have been growing at an average of 30 percent to 40 percent per year. Eighty-five percent of Annie's Naturally sales are from bread.
Historically, natural and organic foods were often relegated to specialty health-food stores, but they now are available in more than 70 percent of mainstream retail food stores, according to FMI.
“Even Wal-Mart carries organic foods,” says Leader.
Ritota attributes this rise to consumers reading labels and menus more closely. “This is particularly true among younger and middle-aged consumers,” he says.
FMI reports that 57 percent of shoppers in the “Younger Baby Boomers” (42 to 51 years old) category regularly buy organic foods. “Generation X”-ers (aged 28 to 41) follow close behind at 55 percent, then “Generation Y” (ages 18 to 27) at 51 percent and “Older Baby Boomers” (52 to 60) at 50 percent. Not quite half (46 percent) of “Matures” (61+) regularly purchase organic foods.
Leader and Ritota's sales increases support the findings of a recent study by foodservice research firm Technomic Information Services that organic and natural breads and grains are one of the major drivers in the growth of the organic and natural marketplace.
When Le Pain Quotidien Bakery and Communal Table, a bread-based quick-service chain with more than 80 stores in 11 countries, including almost 30 in California, New York and Washington, D.C., conducted a customer survey in 2005, half of the respondents said they came because they knew they would find organic products, says Catherine Lederer, the company's director of sustainability. With the increase in consumer awareness in the benefits of organic, she says that number has probably risen.
In addition to scratch-made, certified organic breads, Le Pain Quotidien also offers pastries made with natural and, whenever possible, organic ingredients.
“Our customers associate ‘natural’ and ‘organic’ with high standards of ingredient and production quality,” Lederer says.
Garcia agrees. “We don't have to spend as long explaining what organic means as we once did.”
Although there is no formal, government-regulated definition of “natural,” the Food and Drug Administration (FDA) allows the term to be used to describe food products that do not contain added color, artificial flavors or synthetic substances. “Organic” applies to the growing and production methods as well as to the food itself, and its use on labeling is closely regulated by the U.S. Department of Agriculture (USDA).
According to the USDA, “organic” foods must be produced by farmers who emphasize the use of renewable resources and the conservation of soil and water to enhance environmental quality for future generations and without using most conventional pesticides; fertilizers made with synthetic ingredients or sewage sludge; bioengineering; or ionizing radiation. To sport the “USDA Organic” seal, a product must be at least 95 percent organic. While they may not use the seal, products made from at least 70 percent organic ingredients may say they include these ingredients on their labels.
Today, “natural” and “organic” aren't the only attributes that are important to environment preservation-conscious consumers. Increasingly, they are looking for earth-friendly, local products made from ingredients that are grown in a sustainable manner.
“More and more consumers are recognizing that just because something is organic doesn't mean it's sustainable,” The Hippie Chick's Mastronardi says. “Bringing out-of-season fruit in from Chile isn't healthy for the environment because of the fuel required to import it.”
In the spirit of sustainability, Bread Alone's Leader buys his flour from a mill a five-hour drive away from his bakery, rather than one that is a 30- to 40-hour drive away.
Although the USDA makes no claims that organically produced foods are nutritionally superior to other foods, more than 70 percent of consumers in a national survey conducted by Technomic equated natural and organic products with healthfulness. More than 60 percent believed organic products were made “using the freshest ingredients.”
Fortunately, Ray says, organic suppliers are easier to find now than seven years ago when Miette opened. Back then, she had to go to a local health food store to buy the 50 pounds of organic flour she needed every month. Finding other organic ingredients, such as sugars and cream cheese for her traditional French pastries, was even more difficult, she recalls.
“The challenge of sourcing and learning to use these ingredients is one of the main reasons why pastry has been the last frontier of organic,” she says.
Ray emphasizes that she was never willing to compromise on quality to make her products organic. In fact, she says, switching to an organic cream cheese six months ago has actually improved her cheesecakes and the icing for her popular gingerbread cupcakes.
“The organic cream cheese has a better flavor, less air and incorporates much better into the cheesecakes,” she explains.
She also has located a source for organic confectioners' sugar, which will allow her to make Miette's signature macarons (also made with house-ground almonds) totally organic.
For organic bakers, cost of ingredients remains a challenge. “It's still not easy — nor is it cheap — to be green,” observes Annie's Naturally's Ritota.
While grain prices across the board have risen dramatically in the past year, organic wheat prices are even higher as demand exceeds supply and energy prices have climbed to astronomical levels. Leader speculates that a loaf of organic bread may leap to $5 within the next year if wheat prices continue to escalate.
But, to many consumers, eating organic is worth the extra effort and premium price. According to Technomic, “the value placed on these items is so high that most consumers are willing to pay more money for these specialty items.”
Leader also has found consumers looking for higher quality foods tend to be less sensitive to price.
“Not everyone is willing to pay $5 per loaf, but even though the price of organic bread is going up, demand in the marketplace is growing faster,” he points out.
“Our customers care deeply about the quality of the food they eat and about the environment,” adds Ray. “They trust that we share their commitment to both.”
America's taste for organic, natural and sustainable breads and grains continues to increase, according to Technomic. According to the company's recent research, “operators who cater to this growing consumer trend by offering appealing menu items — particularly breads — will see a positive response from customers.”