Organic Herbs and Spices:
Tips for More Effective Sourcing

By Laurie Demerit


Herbs and spices command attention with intense flavors and the power, with just a pinch of this and a dash of that, to shape the unique taste profiles of popular prepared foods. From snack crackers (think rosemary and sea salt, four-cheese, Mediterranean herb), to couscous and pilaf mixes, frozen entrees, meat marinades and pasta dishes, it’s typically the addition of seasoning blends that make these products stand out and strengthen their appeal to consumers.

Long-time staples on the conventional side of the aisle, such as popular processed foods, are in growing demand on the organic side as well, bringing sourcing and pricing of every ingredient category—herbs and spices, included—to the fore for manufacturers looking to tap into the organic market. All developers face the issue of raw material costs, whether they’re conventional, natural or organic. But in some instances, despite increasing supplies in many categories, the premium on organics can be hard to swallow.

Manufacturers who have been using conventional herb products and want to convert to or add organic can experience sticker shock. A basic organic herb blend can be twice the price or more than a comparable conventional blend. But there are legitimate reasons for those cost differences. Processors need to understand what factors are at play and evaluate the feasibility of their product development plans accordingly. It’s great to formulate a seasoning blend that the customer accepts, but it’s frustrating if you can’t commercialize the product due to price and supply issues that haven’t been carefully considered up-front.

Cost Breakdown
Understanding the key factors that drive up the cost of organic herbs and spices begins with putting things in perspective. Despite great visibility for organics in recent years, brisk product development among the major manufacturers and the rapid expansion of organic-driven retailers, such as Whole Foods Markets and Wild Oats, the organic product category still represents a small percentage of the total U.S. food supply—just 1-2% percent, according to the U.S. Department of Agriculture (USDA). As such, supplies are often limited.

Processors who don’t plan ahead may find themselves scrambling to source the ingredients they need and unable to establish consistent, reliable supply lines. With demand soaring for organics, that scenario is beginning to change in categories where producers have grown their businesses and expanded their organic offerings. However, sourcing can still be challenging. Beyond basic supply-and-demand issues, several other factors contribute to the high cost of organic herbs and spices, including:

• Costs that farmers incur in their efforts to isolate organic farmlands and/or convert conventional farmlands to organic and achieve organic certification.

• More expensive pest and weed control systems. Conventional pesticides and herbicides aren’t used, so farmers must rely on other, more costly systems to produce high-quality organic products. In weed management, for instance, mechanical cultivation and hand weeding, representing higher fuel and labor costs, remain the most commonly used alternatives.

• Longer production timetables. Organic crops, by virtue of being slower to produce than conventional agricultural products, are more costly to grow and produce. Issues to consider include land preparation and utilization of organic fertilizers that take longer to decompose and make nutrients available for crops. It also takes longer for smaller producers to build up their capacity to provide consistent supplies, both in terms of quantity and quality.

Nonetheless, there are some bright spots in the supply and price scenarios for organic herbs and spices. Traditional and commonly used seasoning ingredients, including basic herbs, onions, and garlic are now widely available as organic. Prices haven’t yet come down significantly but supplies are steady and there are more being introduced all the time.

What Level of Organic?
Organic food processors who aim to source herbs, spices and seasoning blends more effectively also must be attuned to the fine points of the product claims they wish to make. Determining whether the end product will make the 100% organic, certified organic, or made with organic claim is a good first step in the process of developing and matching seasonings to your product’s specifications. Many companies that are new to this market and see the opportunity for organics don’t have the training to understand the fine points of the segment. This lack of knowledge can translate into higher costs, such as expenditures on ingredients that do not meet the standard of the claim. Based on initial market research, a determination can be made for how the seasoning blend can best be formulated.

The primary marketing categories under the organic umbrella are:

• 100% Organic. As the name implies, products labeled as 100% organic must use seasoning blends formulated from all organic raw materials (excluding salt and water). Every ingredient used in a product labeled as 100% organic must be 100% organic, not “certified organic,” which allows for up to 5 percent of non-organic approved substances if no organic ingredient is commercially available. Unless this blend requires a unique flavor profile or functionality, it is usually straightforward and easy to develop with organic spices and herbs.

• Certified Organic. Products marketed as “certified organic” are required to have at least 95%+ of their ingredients (excluding salt and water) be truly organic, with the remaining percentage made up of allowable substances that are not currently commercially available in an organic form. There are strict provisions in the National Organic Program governing the use of these other ingredients that are “non-agricultural” or non-organic.

• Made With Organic. In this category, which does not carry a USDA seal, 70% to 95% of the ingredients in processed foods marketed as “made with organics” must be certified organic. Again, sourcing for the non-organic raw materials can help improve pricing, but potential compromises could be made in the processor’s ability to get the premium pricing that is associated with certified organic and 100% organic products.

Plan Ahead
Once a blend or seasoning has been developed and approved, the best thing processors can to do help control their costs is to forecast carefully and plan ahead. The sooner it can be determined what type of volume is needed, the sooner contracts with vendors can be negotiated to ensure timely and consistent supplies.

Careful planning and forecasting can also help ensure that processors get not only consistent supplies, but also consistent quality. Because of their intense flavors and the key role that herbs and spices play in creating flavor profiles, consistency is a top priority for most food processors, ensuring that quality is part of the trust that a company puts in its vendor network.

Supporting that vendor network at any seasoning supply company should be extensive in-house quality assurance. All products coming in should be carefully inspected to ensure they meet both company and customer expectations. That applies to verification that the products meet all organic production and certification requirements, as well as to specific in-house quality and flavor specifications.

National Players Change the Dynamics
Another driving force behind quality and supply improvements in the organic raw materials segment has to do with mainstreaming. Today, large national brand manufacturers are ramping up to introduce more organic processed foods. USDA statistics show that 73 percent of traditional supermarkets today market organic products along with conventional foods.

In fact, the 2004 Organic Food & Beverage Trends Study by The Hartman Group, a Bellevue, WA-based research firm, shows that many mid-level and periphery organic consumers are not willing to experiment with small, “strange” organic brands with which they’re unfamiliar. Rather, they want to experience organic with the brands they already know and trust and from the conventional stores in which they already shop. Additionally, they prefer organic products to be integrated within conventional product categories, particularly for baby food, snacks, and frozen foods.

Therefore, one of the realities is that major manufacturers that are developing organic products won’t accept lesser quality organic ingredients than they expect on the conventional side. They will not likely take that risk with their brand name on the label. These companies increase the competition for top-grade herbs and spices among processors, but the result is improved quality and increasing supplies as producers work to satisfy demand. Those factors benefit the organic segment in general—and organic consumers in particular.

Cynthia Sasaki is senior manager of research and development at Kerry Ingredients, which is part of Kerry Group, an international food ingredients and consumer foods corporation. She can be reached at csasaki@kerrygroup.com.