Organic Moves Forward:
A Pioneer’s Perspective
An interview with Gene Kahn, Small Planet Foods
In 1972, Chicago native Gene Kahn moved out West and started farming organically on a few acres of gorgeous land in the Upper Skagit Valley of Washington’s North Cascade Mountains. With the help of a small group of dedicated supporters, Cascadian Farm soon became a thriving organic food company, preserving and selling the bounty of their harvests as jams, frozen fruits and vegetables.
By the mid-1980s, demand for Cascadian Farm products had grown so much that the company began contracting with other organic growers in the Pacific Northwest, just to keep up. In subsequent years, Cascadian Farm worked hard to recruit and train hundreds of other organic growers, ensuring that the company’s products would include only the finest organic ingredients.
In 1998, with the addition of the nation’s first large-scale certified organic tomato processor, Muir Glen, Cascadian Farm became part of Small Planet Foods, which was purchased by General Mills in 2000.
Kahn, who is president and CEO of Small Planet Foods, Inc. and vice president, General Mills, Inc., spent a few moments with Organic Processing Magazine to share his insights as an industry pioneer and to discuss the current trends and challenges of the organic industry.
OP: In your opinion, Gene, what are the most significant developments or initiatives in the organic industry in the last several decades, and why?
Kahn: Clearly the commercialization, or mainstreaming, of organic is one of the principle trends because it has spurred market growth to such a large degree. Organic has gone from a small niche business to a more mainstream phenomenon, and this is a key part of looking at the industry retrospectively. Mainstreaming organic has taken place in every area of endeavor. On the agricultural side, we’ve experienced major improvements in our ability to produce excellent quality organic products effectively with reasonable control over insects and diseases. The changes in food distribution and retail systems have also benefited. We’ve taken tremendous strides in improving the quality of service we provide to our consumers, the merchandising of organic products and the infrastructure.
One of the unintended consequences of this, however, has been the intense amount of consolidation in the organic industry, which has sorted out of a lot of the smaller players. This has occurred on a variety of fronts, including farming, manufacturing, distribution and retail. I think that’s unfortunate. And I don’t think we should be cavalier about it and say that the strongest have emerged. I think they’re unfortunate and unplanned consequences of our success.
OP: What’s the next big trend in the evolution of the organic industry?
Kahn: I think we’re seeing a trend in increased consumer awareness of the benefits of organics, which have yet to be quantified, dimensionalized and well marketed. The consumer and the public policy sides have grown in such a way as to give us a huge opportunity to communicate the benefits of organic. We need to look closely at and identify the environmental benefits of organic and how can they be brought to life for consumers and for the trade in general.
We have the opportunity to bring forward a consolidated view of those benefits so that manufacturers are not constantly communicating disparate, and sometimes conflicting messages. We need to bring the science forward, the many articles that have been published in peer review journals that clearly show certain superior characteristics of organic. I think that is a huge trend that is just peaking today.
OP: What kinds of changes do you think will be made in growing and processing operations now that the USDA National Organic Standards are in place?
Kahn: The organic industry has been working on the development of the National Organic Standards for a very long time, and it’s certainly a big change to have a federal program in place. Essentially, the standards help us to achieve our goals and increase consumer confidence.
However, as far as any changes that will be made in organic operations as a result of the national standards, I would have to say that I don’t foresee any. I say this because the organic standards, in terms of growing and processing, are largely consistent with the standards that were in place for many, many years. From the perspective of Small Planet Foods, it’s business as usual here and we’re not doing anything differently.
However, I’m not saying that other companies won’t do things differently. Certainly, the organic standards will affect companies that have been misbranding and mislabeling their products, that have been using a fuzzy distinction on organic products, and that have been working with organic halo products. The National Organic Standards create a more consistent, competitive set that make it more difficult than ever for industry under performers and organic halo companies to maintain a strong presence in organic.
OP: Why do you think that consumers have embraced organic products in recent years? Are they more educated as to the benefits of organic products?
Kahn: As I mentioned, more and more reliable information is surfacing that gives us reason to believe in the organic benefit. For example, a University of Washington study that came out a few months ago showed that pesticide residues in the urine of children who eat organic foods are much lower than those who don’t. There are a whole host of these studies. Consumers have a tacit understanding that pesticides are not good for human health. It doesn’t take a rocket scientist or scientific proof to illustrate to a consumer that fewer pesticides or no pesticides are better than more or some pesticides. It’s a no-brainer. We don’t claim that organic foods contain no pesticides, but we largely don’t use pesticides and certainly not synthetic ones. So, no matter what anyone says, common sense does prevail: no one wants to consume pesticide residues, either directly or indirectly. This is one of the key benefits of organic foods that is largely understood by consumers.
OP: What are the biggest challenges the organic industry faces in the next few years, and why?
Kahn: Increasing market competition is always going to be a big challenge. I think that organic manufacturers also face a potential slowing of market growth if we’re not able to overcome some of the key obstacles facing our industry. One obstacle is price. We have to be diligent in removing cost wherever we can, while at the same time, not destroying on-farm profitability. That’s a huge challenge. I would say that a lot of the premiums that price organic out of the marketplace for some people are incremental distribution costs, unnecessary deficiencies in farm production caused by expensive weed control protocols, and the lack of research that is done in improving on-farm profitability. A whole host of different cost of goods related issues have to be addressed.
The problem is that on-farm profitability is in decline, with the exception of the larger producers. So, it is of key importance that we find other innovative ways to improve supply chain efficiency without sticking it to the farmers. And that is a big danger. If growers can’t make money farming organically, we will have no organic industry.
OP: What are the next steps that organic producers and processors can to move the industry forward?
Kahn: We need to support research in organic agriculture through organizations like the Organic Farming Research Foundation (OFRF) and the new Organic Center for Research and Promotion (The Center) in its mission to develop scientific evidence to support our claims regarding organic superiority.
We also need to be super focused on driving down costs wherever we can without harming our agricultural infrastructure.