Natural growth: Organic farming is no longer fringe: it’s big business

Labeling for products that meet the USDA-NOP s...

The USDA is pretty particular about who gets to use this logo.

By Lisa Allen
Contributing Writer

Published Jan. 6, 2012

Consumers’ interest in organic produce has never been greater during his 27 years at Karns Foods, said produce director Doug Diffenderfer.

To meet demand, the seven-store Silver Spring Township-based grocery chain’s organic section is gobbling up floor space.

“In the last three months, we’ve expanded it in three of our stores and plan to do three more,” he said.

It doubled the space in some stores and bumped it up by 60 percent in others, Diffenderfer said.

Organics account for nearly half of sales at

Four Seasons Produce, a wholesaler in East Cocalico Township, said Ron Carkoski, president and CEO.

“In 1996 we were at zero percent for organics, then we started working on it,” he said. “The last five years is when we started adding exponential growth.”

Organics at Four Seasons Produce jumped from about a third of total sales last year to
45 percent this year, Carkoski said, adding that the typical proportion for wholesalers is 12 to 15 percent.

Four Seasons also lends marketing expertise to both traditional and natural-food clients, Carkoski said.

“Buying and selling produce doesn’t take a lot of talent, but adding value does,” he said.

Successful retailers treat organics carefully to build customers’ trust that what they are getting is special, he said. Part of that is making sure traditional and organic items are handled separately and displayed separately.

The biggest growth areas are in college towns and urban areas, Carkoski said.

“There are fewer retailers that have been successful outside of urban areas,” said Jason Hollinger, director of procurement for Four Seasons. “They have to be committed to it. You have to be in the right area. And you can’t just try a small set. You have to have a full range of products, and you have to give it a chance.”

Organic produce does exceptionally well at Karns‘ Derry Township store, as well as the Paxton Square and Mechanicsburg stores, Diffenderfer said. They sell less organic produce — which costs 15 percent to 25 percent more than traditionally grown produce — at the New Bloomfield and Middletown stores.

“That has a lot to do with demographics. A lot of the people there (New Bloomfield and Middletown) are on fixed incomes,” he said. “We’ve tried this a number of times in the last 10 years; but in the past year, I’ve seen an increase in the number of requests and sales.”

The big sellers are packaged salads, apples, potatoes and onions, most of which are supplied by Four Seasons, but Karns also buys from the organic-certified Lady Moon Farms in Chambersburg.

“This time of year, you’re not going to buy anything locally,” Diffenderfer said.

Pennsylvania ranks sixth in the country for the number of certified organic farms, with 586, and third in organic sales, at $213 million, according to a 2008 survey by the U.S. Department of Agriculture. Those are the most recent figures available from the USDA.
U.S. sales of organic food and beverages grew from $1 billion in 1990 to $26.7 billion in 2010, jumping nearly 8 percent from 2009 to 2010, according to the Organic Trade Association, based in Brattleboro, Vt. Organic fruits and vegetables now account for more than 11 percent of all U.S. fruit and vegetable sales, it said.

Organically grown vegetables and animal products do not use synthetic pesticides, herbicides, fungicides, fertilizers or synthetic hormones; they also weren’t irradiated and do not contain genetically modified organisms, known as GMOs. The processing and repacking facilities are certified and don’t permit artificial colors or flavors, and the fields and facilities are inspected each year by an independent certifier, according to the trade association.

Organic farms had average annual sales of $217,675, compared with the $134,807 average for U.S. farms overall, according to the 2008 USDA survey. Expenses were higher, too, at $171,978 per farm versus $109,359 for all farms nationwide.

So far, supply is keeping up with Four Seasons’ demand, Carkoski said.

“It is well thought through and maintained,” he said. “There are very talented growers.”

But like all crops, supply varies by season, region and weather, Carkoski said.

“The one thing we’ve noticed over the past five to 10 years, is there has been more interest from consumers on how their food is grown and how animals are treated,” said Mark O’Neill, media relations director for the Pennsylvania Farm Bureau. “What our farmers have been trying to do is reach out to consumers and tell them how they raise their crops and treat their animals.”

Farmers are selling directly to consumers via community farmers markets, farm-owned markets and roadside stands. Another option is community-supported agriculture, known as CSA, in which customers become members of the farm for the season. They pay a set amount upfront and pick up a bundle of produce each week.

It’s a bit of a culture shift for farmers, O’Neill said. People want to know who is growing their food.

“If you own your own farm market, you are cutting out the middle man,” he said.

“The other part of that is you have to be consumer friendly. Some farmers don’t want to deal directly with consumers.”

On the flip side, some new farmers aren’t farmers at all.

Phil Stober, president of Bare Foot Organics at Greystone Farm in West Cornwall Township, was a sports marketer who said he saw business potential in organic produce.

He said he immediately pursued certification for the 3-year-old farm.

“I thought the USDA organic label would give us instant credibility. It’s a good use of money,” Stober said.

It costs about $1,300 each year for the certification, but two-thirds is rebated under a state program to promote sustainable agriculture, he said.

The CSA farm had eight members the first year and 130 members this year, Stober said. He also sells to about 10 restaurants, half of them local and half in New York City, where he plied his trade in sports marketing, he said. And he has set up farm stands in Lebanon and in New York City, the latter at which he said he sells organic tomatoes for $5 per pound.

He is exceeding his planned annual sales growth of 22 percent, he said.

“It’s encouraging,” Stober said.

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