Testimony Outline.docx

Testimony Outline.docx

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TestimonyOutline

Statementof

CarenWilcox,ExecutiveDirector&CEO

OrganicTradeAssociation

BeforetheU.S.HouseofRepresentatives

AgricultureCommittee’s

HorticultureandOrganicAgricultureSubcommittee

April18,2007

Mr.Chairman,RankingMember,andMembersoftheSubcommittee,IamCarenWilcox,ExecutiveDirectoroftheOrganicTradeAssociation（OTA）,themembership-basedbusinessassociationfororganicagricultureandproductsinNorthAmerica.IamheretodayspeakingonbehalfoftheOrganicTradeAssociation（OTA）.WebelievethatthisisthefirstinformationalhearingonorganicissueseverconductedbyaCongressionalcommittee.Thankyou.

OTAisthevoicefortheorganicbusinesscommunity,andhashadthisroleforovertwenty-twoyears,sinceitsfoundingin1985.Sincethattime,OTAmembershiphasgrownmorethaneightfold,andnowencompassesapproximately1600membersacrossallpartsoftheorganicfarming,processing,distribution,andretailingsupplychain,forfood,organictextilesandpersonalcareproducts.

Weappreciatetheopportunitytoprovidethistestimonyaboutthebusinessclimatefororganicproduction,itshistory,andwhereOTAbelievesweareheaded.Organicagricultureformsthebasisofafastgrowingpartoftheagriculturaleconomy,andoffershopetofarmsandshoppersalike,whilecontributingtotheimprovementofourland,airandwaterresources.

OTAalsoappreciatesthefactthatthesubcommitteeextendedaninvitationtosomanyindividualssteepedintheorganictraditionandpracticestotestifyabouttheirindividualexperienceswithorganicproduction,transition,marketingandsales.Asanyexecutiveofatradeassociationwilltellyou,thereisnothinglikehearingfromtheindividualswhodirectlymaketheirlivingsintheproductionandsaleofgoods.Manyfarmbusinessesinvolvedwithorganicproductionhavestartedwithavisionofchangingagricultureforthebetter,andhavegrownovertheyearstobecomewell-knownproducts.Youwillhearfromseveralfarmersandbusinesspeopletodaywhorepresentthatvision.Andyouwillheartodaythatorganicproductionisalifeexperiencerequiringattentiontoourenvironment,eachcroporanimal,andtheintegrityofgrowinganddistributingtheproductthroughtotheconsumer.

TodayIwouldliketotellyousomethingaboutthecurrentexcitinggrowthintheorganicmarketplace,andthelaws,regulationsandpracticesthatunderliethatsuccess.OTAprovidesprivatemonitoringofthegrowth,andhasbeeninvolvedwithpassageofthelawsandregulationsfordecades.AttheendofthistestimonyIwillcoversomeoftheissueswebelieveneedtohaveattentionsothatorganiccancontinuetogrowforconsumersandforthebenefitoftheenvironment.

OrganicIntheU.S.Marketplace

IntheUnitedStates,thebuzzaboutorganichasbecomeasteadyhum.Organicproductsareincreasinglyappearinginmoreandmorenewvenues,fromballparksanduniversitycafeteriastolocalrestaurants,mainstreamsupermarkets,clubstores,andmass-marketretailers.Atthesametime,U.S.collegecurriculumsarebeginningtoaddmorecoursesthatfocusonorganicagriculture.

U.S.OrganicSales

TheU.S.organicindustrygrew17percentoveralltoreach$14.6billioninretailsalesin2005,accordingtoTheOrganicTradeAssociation’s2006ManufacturerSurvey.Organicfoodsgrew16.2percentin2005andaccountedfor$13.8billioninsales.Organicfoods’shareoftotalretailfoodsalesisupto2.5percent.Thefastestgrowingfoodcategoriesandtheirratesofgrowthoverthepreviousyearareorganicmeat（55.4percent–fromaverysmallsalesbase）,organicsaucesandcondiments（24.2percent）anddairyproducts（23.5percent）.Thefastest-growingnon-foodcategoriesareorganicflowers（50percent）,petfood（46percent）,andfiber（44percent）.

Organicproductscanbefoundingrocerystores,cooperatives,specialtystores,farmer’smarkets,farmstands,online,inmanyrestaurants,andmanyotheroutlets.Organicfoodsareincreasinglysoldinmainstreamretailestablishments,whichtogetherrepresentroughly46percentofsales.Largenaturalfoodchains,alongwithsmallnaturalfoodchainsorindependentnaturalgroceriesandhealthfoodstores,representedabout47percentoforganicfoodsales.About4percentoforganicfoodissoldthroughfarmer’smarkets.（Source:

TheOrganicTradeAssociation（OTA）andOrganicTradeAssociation’s2006ManufacturerSurvey）

WhileOTAiscurrentlyinthefieldwithanewstudyaccordingtotheOTA2006survey,salesoforganicfoodswereexpectedtoreachnearly$16billionbytheendof2006.

Nonfoodorganicproducts（personalcareproducts,nutritionalsupplements,householdcleaners,flowers,petfood,andclothing,beddingandotherproductsfromorganicfiberssuchasflax,wool,andcotton）grew32.5percent,tototal$744millioninU.S.salesin2005.

Sixty-onepercentofrespondentstotheOTASurveysaidtheydisplaytheUSDA（U.S.DepartmentofAgriculture）Organicsealontheirproducts.Ofthe39percentnotcurrentlyusingtheseal,53percentintendtousetheUSDAOrganicsealinthefuture.Also,55percentofrespondentsreportedthattheUSDAlabelingandcertificationprogramshadincreasedtheirsalesoforganicproducts.

BecauseUSDAdoesnotyetdocomprehensivemarketstudiesoforganicsales,asitdoesforconventionalU.S.agriculture,OTAperformsthisresearchontheindustryforitsmembersandthepublic.

Industrywatchersagreethattheorganicindustryisatanewtippingpoint.Neverbeforehasitexperiencedthedegreeofacceptanceandinterestfrommainstreamsupermarketsandconsumers.Manysupermarkets,infact,haveaddedprivatelabelorganiclinestotheirofferings.

Notonlydonaturalfoodstoresandallofthemajormainstreamretailersseeorganicasagrowingcategory,butmoreandmoremainstreammanufacturersareaddingorganicproductstotheirtraditionalbrandlines.Inaddition,smallproductdeveloperscontinuetocreatethenewproductsoftheirdreams.

Suchheightenedinterestinorganicisdrivingdemandforrawmaterials.IntheOTAsurvey,fifty-twopercentofrespondentsreportedthatalackofdependablesupplyoforganicrawmaterialshasrestrictedtheircompanyfromgeneratingmoresalesoforganicproducts.Thishighlightstheneedforadditionalmeasurestoincreasethesupplyoforganicingredients,andtheopportunitiesforU.S.farmerstosupplythoseneeds.

Therearenoup-to-datestatisticsavailableonU.S.importsorexportsoforganicproducts.ThesestatisticsarenotbrokenoutfromoverallconventionaldatabyCustomsorCommerce.TheonlyfiguresareinaFebruary2005USDAreport,whichestimatedtheUnitedStatesimported$1billionto$1.5billioninorganicproductsin2002,andexportedsomewherebetween$125millionand$250million.However,inaMiamiHeraldarticlepublishedDec.18,2006,aspokespersonfortheCenterforFairandAlternativeTradeStudiesatColoradoStateUniversityestimatedorganicexportstotheUnitedStatesfromLatinAmericaalonewouldreachapproximately$250millionin2006.

Consumeracceptance

Almostthree-quarters（73percent）oftheU.S.populationbuyorganicproductsatleastoccasionally,upfrom55percentin2000,accordingtoTheHartmanGroup.Corebuyers,whobuyorganicproductsatleastweekly,represent23percentofU.S.consumers,accordingtothereport,Organic2006:

ConsumerAttitudes&Behavior,FiveYearsLater&IntotheFuture.

Meanwhile,TheNaturalMarketingInstitute’s（NMI’s）2005HealthandWellnessTrendsstudyestimated56percentofconsumersuseorganicproductsinvaryingfrequenciesacrosssixproductcategories.Householdpenetrationbycategoryisasfollows:

freshfruitsandvegetables=44%;packagedfoods=29%;dairyandmilk=24%;personalcare=21%;beverages（excludingmilk）=20%;andclothing/linens=7%.

Moreandmoreconsumersreporttryingadditionalcategoriesofprivatelabel,naturalandorganicpackagedfoods,accordingtoTheHartmanGroup.Consumersareseekingouttheseproductsatchannelsassociatedwithmiddle-incomeshopping,suchasCostco,TraderJoe’s,Wal-Mart,andmainstreamgrocers.

Whatdrawsconsumerstowanttopurchasetheseproductsandfarmerstoproducethem?

MarketDevelopment:

Strong,SteadyGrowthatRetail

Unliketheinformationthatisdevelopedalmostonadailybasisforconventionalagriculture,organichashadtoquantifythemarketsizeandchangesovertimebycompilingthisconsumerdataprivately,andunfortunatelybecausethisisnotthenormalmarketdatacompiledbyUSDAforconventionalagriculture,thisdatamaynotbereadilyavailabletoAmerica’sfarmers,whocouldbenefitthemostbytakingadvantageoftheopportunitiesrevealedbytheconsumerdata.WeatOTAworktomakeitavailabletothemhowever.

Itisimportanttonoteherethatorganicagricultureandprocessingincorporatespracticesandavoidssubstancescommonlyperceivedtocontributeadverselytotheenvironmentandtohealth.TheNationalOrganicProgramisamarketingprogramoverseenbyUSDAandisnotmarketedasahealthprogram,butoverthelongdebateabouttheimpactofsuchsubstancesaspersistentpesticidesandherbicides,hormones,anti-bioticsaswellasotherhealthorienteddebates,manyconsumershaveidentifiedapreferencetoavoidthesesubstancesintheirfood,textilesandpersonalcareproducts.Thispreferenceisrevealedwhenorganicconsumersarestudiedbysocialscientists.

WewouldalsoliketocalltotheSubcommittee’sattentionthefactthatorganicfoodproductslikeallfoodproductsintheUnitedStatesmustmeettherequirementsofnational,stateandlocalfoodsafetylaws.

U.S.Consumers

Shopperswhochoseorganicpr