ORGANIC FOOD PROCESSING BASICS What does “organic” mean? Organic is a guarantee about how an agricultural product was grown and handled before it reached the consumer. It’s also a set of require- ments for farmers who grow food and for processors who manufac- ture food products. Organic farmers use management systems that promote and enhance biodiversity, biological cycles, and soil bio- logical activity. Organic processors maintain food’s organic status by segregating it from synthetic and other prohibited materials, carefully tracking ingredients, and using detailed record keeping.

The United States Department of Agriculture’s National Organic Program (NOP) oversees the national organic rule (7 CFR Part 205) that went into effect in 2002. The NOP establishes consistent national standards for organic production, facilitates interstate and international commerce, assures that organic food meets a consistent standard, and protects consumers from fraudulent organic claims. The federal organic rule is posted on the USDA web site: www.ams.usda.gov/nop

One component of the NOP’s Final Rule important to food processors is the “Na- tional List of Allowed and Prohibited Substances.” Although most natural materials are allowed in organic, this list details which synthetic products (processing aids, ad- ditives, etc.) may be used to make organic products. The list is available on the NOP web site. The Organic Materials Review Institute, www.omri.org, also publishes information on additives and processing aids by generic and brand names.

What is organic processing? equipment, product packaging, and storage areas used for final products To use the term “organic” on a food must all meet the NOP requirements. product, the ingredients must be prevent commingling and contamina- grown and the product manufactured Cleaning products and solvents must tion of the organic ingredients and according to the national standards appear on the National List or must be final products. Ingredient storage specified by the NOP. “Handling” completely rinsed away before organic must be dedicated to organic or you includes cooking, baking, curing, heat- production so that no residue on food must document that containers are ing, drying, mixing, grinding, churn- contact surfaces will contaminate the clean before using them for organic. ing, separating, distilling, extracting, final product. Pest management in Synthetic fungicides, preservatives, and slaughtering, cutting, fermenting, organic operations is most often dealt fumigants may not be used on packag- eviscerating, preserving, dehydrating, with through preventive practices such ing materials or storage areas and con- freezing, chilling, or otherwise manu- as exclusion, sanitation, removal of tainers. Any containers that have been facturing, packaging, canning, jarring, pest habitat, management of environ- in contact with non-organic products or otherwise enclosing food in a con- mental factors, mechanical or physical or prohibited substances must be tainer. If you do any of these things, controls or lures/repellents (see section thoroughly cleaned so that they pose you’re a handler. 205.271 of the NOP). no risk of contaminating the organic product. The certification agency must Both the ingredients and the facil- Organic and non-organic products approve finished product labels for ity where the food is processed must may be produced in the same facility compliance with the National Organic be certified organic. This means that – this is known as a “split operation.” Standards before use. buildings where ingredients are stored, Split operations must take measures to What are the benefits to processors? How do I get organic certification? 1. Application: The NOP requires that organic processing facilities be certi- Organic is one of the fastest fied by a USDA-accredited certification agency. Each certifying agency has growing sectors of the food its own application package and sets its own fees. Applications are gen- erally about 10 pages long. They ask the processor to provide a detailed and agriculture industry in organic handling system plan and require documents such as floor plans, Minnesota, the nation, and flow diagrams, and sample labels. Section 205.201 of the NOP lists a plan’s necessary components: abroad. With organic retail sales growing by about 20% • a description of practices and procedures to be performed and maintained; • a list of all substances used in production or handling; per year, consumers have • a description of monitoring practices and procedures; shown they are willing to • a description of the record keeping system; pay premium prices for certi- • a description of management practices and physical barriers established to prevent commingling or contamination; and fied organic products. Large • any additional information required by the certifier. retail chains have responded The certifying agency reviews the application and works with the processor to consumer demand by to make any necessary changes to the organic system plan. adding organic products and 2. Inspection: The agency assigns an inspector who reviews the even “Organic” sections to application materials and facility records, then visits the plant their stores. for an on-site inspection, which generally takes 3 to 5 hours. Complete access to the production or handling operation, The organic market cur- including any non-certified production and handling areas, is required. The inspector then completes an inspection report. rently offers opportunities The complete report usually consists of a document completed on-site and for businesses because of co-signed by the operator and the inspector, and another report completed by the inspector off-site. high consumer demand, less competition, and fewer 3. Review and Decision: The certifying agency reviews the inspection re- of the slotting fees that the port. If the agency determines that the facility meets NOP requirements and is following its own organic handling plan (created in Step 1), certification distribution system for con- is granted. Certification allows the use of the term “organic” and use of the ventionally produced goods USDA Organic seal. Continuation of certification requires udating records on requires. file with the certifier, an annual on-site inspection, and renewal fees. The whole inspection process, from application to certification, generally takes at least 8 weeks depending on the availability of inspectors and the certifier’s workload. Whether you are considering Records related to certification must be maintained for not less than 5 years. starting a new business, add- ing an organic line to your How do I choose a certifying agency? existing operation, or con- It is important to find a certifier you are comfortable working with. The verting your entire operation Minnesota Department of Agriculture recommends that you contact sever- al agencies. Ask about fee schedules (which can vary widely), services, and to organic, this fast-growing their policies about follow-up calls during the year. Each certifying agency market may provide an op- is required to provide a list of its clients to the public. You may want to portunity to improve your call certified organic processors in your industry and find out which agen- cies they are using. If you intend to sell to international markets, find out bottom line. which certifier your foreign customer prefers. You can get a list of accred- ited certifiers at www.mda.state.mn.us/esap/organic. Labeling options The NOP specifies four levels of labeling that may be used on retail packaging:

“100% organic” “Organic” “Made with organic …” Less than 70%

If the final product When the final product When the final product Products containing less contains only organically contains at least 95% contains at least 70% or- than 70% organic ingre- produced ingredients by organic ingredients by ganic ingredients by weight dients by weight (exclud- weight or fluid volume weight or fluid volume or fluid volume (excluding ing water and salt) may water and salt), you may (excluding water and (excluding water and only identify each organic use the statement “Made salt), you may use the salt), you may use the ingredient on the ingredi- with organic ____ (and term “100% organic” or term “organic”. Agricul- ent list and identify the specify up to 3 ingredients “organic”. All processing tural ingredients must be or food groups like sweet- percentage of organic aids must also be certified organic if commercially eners).” Conventional ingredients on the infor- organic. The label must available (e.g., you cannot agricultural ingredients mation panel. There are identify the certifying use conventional vanilla may be used in the remain- no restrictions on the non- agency and all ingredients. simply because it’s less ex- ing 30%, provided that organic ingredients. The You may display the pensive), and the product they are not genetically USDA Organic seal and USDA Organic and certify- may not contain organic engineered, irradiated, or the seal of any certifying ing agency seals. and non-organic forms of grown using sewage sludge. agency must not be dis- the same ingredient. All All remaining non-agri- played. Processors that remaining ingredients cultural ingredients must only handle product follow the National List. and processing aids must in this category do not The name of the certify- follow the National List. have to be certified. ing agency must appear The label must identify on the information panel the certifying agency and and each organic ingredi- The NOP describes the size must identify all organic ent must be identified in of type and the locations ingredients in the ingredi- the ingredient list. You where organic information ent statement (it is per- may list the total percent- may be placed on packaging missible to use an asterisk age of organic ingredients defined elsewhere on the in the product and display in sections 205.303-305 and package as meaning or- the seal of the certifying 205.307-309 of the NOP Fi- ganically produced). You agency on the information nal Rule. It is important for may display the USDA panel. The USDA Organic certifiers to review labeling Organic and certifying seal must not be used. and packaging before prod- agency seals. ucts enter the marketplace. Photo Courtesy of Organic Trade Association, Geoffrey Wheeler

Case studies: What are the concerns Country Choice for processors? Country Choice, in Eden Prairie, Minnesota, entered the organic market • Careful recordkeeping is in the late 1990s thinking it would be a good niche market for a small required – you must be willing company. At the time, organics had limited consumer appeal and little and able to maintain the attention from mainstream retailers. Ten years later, the company is ben- paperwork trail that ensures efiting from burgeoning consumer and retail interest in organic products. compliance with the NOP. Country Choice’s line of organic hot cereals and cookies are available throughout the U.S. and Canada in conventional grocery stores as well as • Organic ingredients may natural food retailers. And with unprecedented levels of consumer inter- be more costly than their est, Country Choice’s growth exceeds the organic industry’s 20% annual conventional counterparts. growth rate. One of the company’s biggest challenges is the supply chain. Organic source materials may sometimes be limited, which can lead to • Some organic ingredients may price fluctuation and margin pressure. Country Choice tries to reduce occasionally be in short supply. these potential problems by contracting some items in advance to set Contracting in advance with prices as much as possible. suppliers may be helpful because reformulating a product due to Country Choice works closely with the Minnesota Department of Agri- supply chain shortages can be culture and the company’s president, Chuck Enderson, is a member of difficult and costly. If the label the Minnesota Organic Advisory Task Force. Country Choice encourages states an ingredient is organic, it Minnesota farmers to consider growing more organic products in order must be organic in all production to meet the growing demand from customers. runs. “Organic when available” is NOT an allowed labeling category.

Helios Nutrition, LLC • Extra time must be budgeted to Helios Nutrition, LLC, in Sauk Centre, Minnesota, (also doing business as train employees and contractors, Pride of Main Street Dairy) produces organic kefir and milk. This com- such as truckers and pest control pany found an empty niche in the market and moved to fill it. Kefir, a companies, on the importance cultured dairy drink similar to thin yogurt, is popular with ethnic Rus- of preventing commingling sians and health-conscious consumers. Helios introduced its product at and contamination, especially national trade shows, where retailers expressed interest. Once the com- if you also process non-organic pany had customers, distribution was easy to arrange. The business has products. Lack of proper grown at levels close to 20% per year. training has been a source of noncompliance problems. Because Helios/Pride of Main Street has organic and non-organic opera- tions, the plant uses dedicated storage tanks to prevent contamination • Production of organic and does organic processing as the first run of the day. President George products can easily fit into Economy warns that although there are currently no slotting fees in a good Hazard Analysis and the organic market, the large national organic distributors and retailers Critical Control Point (HACCP) sometimes require “new product introduction fees” or “ad commitment plan. Documentation needed fees” or require “free fills”, which can impose additional costs on organic for organic products is similar processors. to records that a sound recall program requires.

Minnesota Department of Agriculture 90 West Plato Blvd., St. Paul, MN 55107, 651-297-8916 www.mda.state.mn.us/esap/organic

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