The Top 8 Ways to Ensure Effective
Organic Ingredients and Raw Materials Sourcing

By Howie Ross


As an organic food processor, you want to make sure your customers are going to be well satisfied with your company’s final products in terms of quality and wholesomeness that meet the label claim. One of the most important ways to ensure that your final product is of the highest quality is to purchase certified organic ingredients and raw materials that are of the highest quality and functionality. Whether you are a new organic product processor or an established manufacturer developing new organic products that require ingredients that are new to your operation, effective sourcing of these ingredients means keeping abreast of agricultural supply trends, market indicators and organic certification standards on the world stage.

But how do you know what to look for, when to look for it and where to find it? For most manufacturers, successfully keeping on top of everything that affects ingredient and raw materials procurement—from seasonal and growing climate considerations, to commodity pricing trends and country-specific certification and labeling regulations—means working closely with your ingredient suppliers and distributors. The keys to success include educating yourself about sourcing raw materials and establishing a good relationship with suppliers who take a holistic approach to your business. Let’s consider eight ways that will help your business reap the benefits of effective sourcing practices.

A Recipe for Success
1. Suppliers Should Understand the Customer’s Needs and Target Markets. First, expect your ingredient suppliers and distributors to be the professionals. They should be knowledgeable about the ingredients and raw materials they supply to manufacturers. Select ingredient suppliers and distributors who understand your products and target markets, and who can anticipate the challenges and raise issues that you haven’t thought of or didn’t know to ask about. These professionals’ technical expertise and experience, coupled with your own in-depth knowledge of your products and processing operations, will help to ensure that the ingredients you purchase are in compliance with relevant standards and will function as you desire in the finished product.

For example, you want to make sure that the ingredients you are buying are compliant with the market in which you will sell product. Selling raisins into the U.S. market is pretty straightforward: They must be certified by a certifying agent and accredited to the National Organic Program (NOP) standard. If an oil has been added to prevent the raisins from clumping, the oil also must be certified to the NOP standard. The food processor who imports the raisins for inclusion in a final product and intends to sell that product into the European Union (EU) market, however, needs to be aware of the various certification standards and regulations in each of the member state countries to which the product will be exported. Certifications can vary from country to country and even within certifying agencies. Suppliers and distributors who understand your products and their intended markets can assist greatly in helping you avoid noncompliance issues that can cost you a market.

2. Get Good Market Intelligence. This means knowing what ingredients and raw materials are currently available on the market so that you can better forecast for short- and long-term purchase planning. Although it is typical in an agriculture-based industry that a short supply of a commodity this year will spur farmer’s to grow more of that commodity next year, resulting in a glut on the market, organic food processors must try as best they can to forecast and plan procurement. A few years ago, for example, major quantities of organic flax commonly used in cereal and bread products were purchased by large-sized companies in the market and smaller players found themselves in a short supply situation. Your ingredient and raw materials suppliers who are in touch with supply trends in the marketplace can provide you with some advance warning about shortages or gluts.

3. Gain Knowledge of Available Sources and Steady, Reliable Year-Round Supplies. Organic processors can more effectivley source ingredients and raw materials if they know where and in what seasons those products are grown in different parts of the world. As with produce imported into the U.S. from South America in this hemisphere’s winter months, many ingredients that are out-of-season in North America can be sourced from other countries with different climates and growing seasons. Keeping up to date on China and Argentina’s flax-growing seasons will help you to maintain a steady, reliable year-round supply of the ingredients you need for your finished products.

4. Understand Certification Requirements for Different Markets. While our national organic certification regulations were developed over a 10-year period, the implementation of these rules has only just occurred in the last two years when the rule became final. As such, interpretation of the certification requirements has been varied from all levels—government, certifiers, and even different professionals within the certifying agencies. It can get a little confusing, so it is very helpful if your supplier has a grasp on these issues.

If your supplier is selling one or two ingredients or raw material products, they usually will have a good understanding of any certification issues related to that limited amount of products. If you are dealing with a multi-ingredient supplier, you are, in essence, dealing with multiple countries and their certification requirements in addition to the NOP certification standards. In the EU, for example, some countries require that organic ingredients and products are certified solely by EU certifiers, while some certifiers within the EU require both IFOAM and specified certifiers from certain countries. As any company that exports knows, interpretations of certifications is not cut and dried; things change and processors need to stay current on the impact these changes in interpretation might have on their sourcing operations.

5. Establish Quality Control Measures and Require Lot-Specific Certificates of Analysis (COAs). The organic industry is truly a global system, which means that standard quality control measures should be in place to assure that wherever your ingredients come from they are verifiably what you expect. We’ve all heard stories of boots arriving in a load of beans from a developing country, for example, but those days are gone. In part, this is because of an increased commitment by particular organic growers and processors in developing countries to implement quality control measures at the farm level and from the encouragement of more experienced countries such as the U.S., Japan and EU member states that have helped developing countries to set up quality control and certification systems. Nations such as Mexico, China and India have greatly matured in their organic growing practices, quality control systems and certification compliance, but wherever your ingredients come from, make sure that your suppliers conduct appropriate laboratory testing and provide COAs on each specific lot.

6. Efficient Responses to Deal with Quality Issues That May Arise. The fact is that organic processors use ingredients and raw materials that were on a farm just a few weeks before. Dirt, birds, animals and insects, bacteria and all kinds of different inputs exist on these farms. While quality control systems are in place at the farm level, problems do occasionally arise with these products and you want to work with a company that has a quarantine system or a sample holdback system, so that if a problem arises it can be quickly corrected.

Essentially, organic processors should look for ingredient or raw material suppliers that have both recall systems in place and maintain good lot numbering practices—a requirement of organic certification—to ensure excellent traceability all the way through the process, from farm to final consumer. For example, let’s say you get a high bacterial plate count in a bean or seed sample, or in the case of fresh produce, testing has identified a chemical contamination. You need to find out how the contamination occurred in order to correct it. There is an old example of fresh broccoli that was grown organically and certified but following a random test at the retail level, was found to be contaminated by a pesticide. After investigation, it was found that the contamination occurred during the transportation of the produce: Iced conventional broccoli was placed above the organic broccoli in the truck and the melting ice, which contained the offending chemical residue, dripped down onto the organic broccoli. Measures have been developed to help prevent the unintentional commingling of conventional and organic product, which further protects the integrity of the organic industry’s products and brands.

7. Understand Product Shelf Life, Storage and Transport. The shelf life of the ingredients and raw materials that you purchase is an important factor in the ultimate quality of your finished product, and ultimately, will affect the salability of your product to consumers. It’s a good idea to check the date codes of ingredients with your suppliers, letting them know your expectation of the finished product’s shelf life to make sure that the ingredient they are selling to you conforms with that goal.

As mentioned, the methods of storage and transportation of ingredients can dramatically impact the quality of your final product. If you’re reading current reports, you know that there are doubts as to whether there is sufficient segregation of conventional and organic products during growing, storage and transportation to protect organic products from contamination by genetically modified organisms (GMOs), for example. When using crops that are subject to GMO contamination, you want to work with suppliers who are aware of this issue and who are doing something about it. Of course, the organic certification standards state that you cannot use GMOs in the processing of organic products, but arming yourself with knowledge about what growers and ingredient suppliers/distributors are doing— not only to prevent it but to guarantee it—is a good way to ensure ingredient quality. Organic processors can apply measures of their own, including establishing practices to ensure that storage containers and trucks are properly cleaned and educating shipping companies about the issue of commingling.

8. Know Competitive Pricing Based on Current Market Conditions. Again, you need to be current and knowledgeable about what’s going on in the world. No one is going to buy organic garbanzo beans from Mexico if, all things being equal, the price in Turkey is half that. A few years ago, for example, the supply of flax was low due primarily to drought conditions in some major growing regions. Manufacturers put in large orders because they anticipated a price increase. However, in reality there was a glut: There was a good supply of flax coming out of South America and China. A good ingredient supplier will be knowledgeable about the state of the supply—whether it is available in ample supplies and certified to the correct standards—from different parts of the world. This, in turn, assists processors in planning their ingredient buys more cost-effectively.

The Bridge to Better Sourcing
As an agricultural-based industry, organic ingredients and raw materials are “live” products, which means there are many climatic, seasonal, political and financial considerations that affect their availability, quality and quantity. By keeping this is mind, organic processors can benefit from staying abreast of the trends in organic growing operations and by working with knowledgeable ingredient suppliers, who provide a bridge of valuable information between growers and manufacturers.

Howie Ross is V.P., Organic Verification and Procurement with Organic Planet, Inc. Ross has been involved in the organic and natural foods industries for 30 years in a wide variety of segments and capacities, including as a grower/farmer, food processor, retailer and international import-export trader. Ross served as the first Chair of the GMO Task Force of the Organic Certifiers Council (OCC) and as a member of the Organic Trade Association (OTA) GMO Task Force. Contact him at howie@organic-planet.com.