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Chr Hansen taps into soaring organic ingredients market

By Lindsey Partos , 24-Aug-2005

Tapping into lucrative opportunities for the growing organic processed food market, Danish ingredients firm Chr Hansen rolls out a package of flavours, colours and dairy cultures for organic processors.

Already on the market, the firm has repackaged its range of organic ingredients to target US organic manufacturers working in a market growing at about 20 per cent annually.

 

The range, that includes seasonings and probiotic cultures, applies for use in foods labelled "made with organic ingredients", as defined by the American National Organic Program (NOP).

 

The US marks the first global roll out for the repackaged organic range from Chr Hansen. But for the moment, there are no immediate plans to launch the package in the EU.

 

"For now the number of requests from customers has not been as significant as in the US, but we are of course following the market. As soon as it's evident there is a greater need in Europe, we will react," a spokesperson tells FoodNavigator.com.

 

Chr Hansen reports that its organic ingredients portfolio includes organic colours - for example Annatto for Cheddar cheese - derived from natural sources and developed to be acid, heat, and light stable in organic foods and beverages. Some of these colours also can be used as phytonutrients, says the firm.

 

In the US flavours allowed for use in organic foods must be from non-synthetic sources, and must not be produced using synthetic solvents and carrier systems or any artificial preservative.

 

"Chr. Hansen's NOP compliant dairy cultures for use in organic cheese, yoghurt, and other fermented milk products offer acidification, gas formation, flavour, texture, and phage resistance characteristics," the firm continues.

 

Recent figures suggest that annual retail sales of organic foodstuffs have soared tenfold to top €1.51 billion in UK alone in the past decade, encouraging more growers and food makers to get involved.

 

The Soil Association, the country's major organic accreditation body, has about 2383 producers and 1227 processors on its books.

 

The surge in demand has been particularly evident in organic sausages, ready-meals, and baby food, report market analysts Organic Monitor.

 

A surge that has clearly created new opportunities for suppliers of ingredients, particularly those sourced locally.

 

"A recent survey by the UK government's DEFRA found that after taste and health, locality was the third driving force for consumer purchases of organic foods," says Simon Wright , a consultant on organic foods.

 

While structural barriers exist in building up sources of organic ingredients, gains could be maximised by UK suppliers playing to the strengths of the country's climate.

 

Obvious as this seems, they can not compete on organic vanilla or organic tea, but they can on brassicas, vegetables, high protein wheat for bread, for example.

 

But competition could still be tight. According to Wright, British Sugar has just pulled out of the UK organic market because of a lack in demand. Their product had to compete with the less expensive imported cane sugar from Brazil.

 

Rules that govern the labelling of organic foods sold in Europe come from Regulation EC2092/91, and are, as for all labels, designed to ensure that consumers are not misled.

 

For a product to be termed 'organic' it must meet the standards of an approved independent control body, which has inspected all aspects of its production.

 

The EU regulation recognises that it is not yet possible to make products entirely from organic ingredients.

 

As a result the manufacturer can use up to 5 per cent of certain non-organic food ingredients and still label the product as organic. However, genetically-modified ingredients and artificial food additives are never allowed in organic foods.

 

For foods which contain 70 to 95 per cent organic ingredients, the word organic appears only in the ingredients list, and as a description on the front of label to show the percentage of ingredients which are organic.

 

Earlier this month French private equity firm PAI became the new owners of Chr Hansen's ingredient business, paying €1.1 billion for the number one culture maker. Chr Hansen Holding - and thus the Chr. Hansen Group - is now a purely pharmaceutical company.

 

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