Green Side of IPE

Organic Agriculture, Gardening and Retail

Organic Gardening

Global Emerging Industry

The purpose of this work is to explore the feasibility of entering into the industry of either retail of organic food or perhaps the possible agricultural realm of the organic food industry. This work will examine all aspects of the organic food industry in brief as well as exploring the marketing possibilities as well as the financial report of a sampling of those doing business within this industry.

Organic food products are growing in terms of customer demand and that is good news for those in the business and indeed for those who desire to see this industry expand which will offer more choices in health wise consumption to consumers as well as providing employment for those who may be otherwise considered non-employable due to educational limitations and finally this industry may very well provide at least some of the answers as to sustainability within communities in terms of alleviating hunger.

There exist within this industry sector and its corresponding market several options for the individual interested in this type of product base. One may decide to run a wholesale operation buying directly from farmers and then reselling to retail consumers or one may choose to be the owner or operator of an organic farm growing the produce for market. Regardless of the role chosen in this industry the rewards hold great promise in terms of financial satisfaction but more importantly in terms of having assisted the world at large in achieving sustainability at a time when resources are pinched as well as in terms of safety due to food contamination throughout the entire scope of the food industry as it is known today. Organic gardening is a method of growing produce or raising lifestyle that is non-inclusive of pesticides, steroid use but is focused toward 'natural' methods, or indeed nature chosen methods in raising healthy, nutritious and safe produce for human consumption.

Organic foods are emerging and setting new standards in food quality in relation to the "freshness," "texture," "flavor" and "variety," according to Organic Faming Principles, 2004.

The management of organic crops is through use of 'proactive practices to prevent problems. In organic gardening the focus is stated to be the striving to:

Replenish and maintain the fertility of the soil

Eliminate the toxic and persistent use of chemical pesticides/fertilizers.

Restore, maintain and enhance ecological harmony

Build and support biologically diverse agriculture.

Responsibly and practical use of the earth's natural resources is the core of organic farming, helping the earth to help the full spectrum of creation in terms of health and the belief that what helps one aspect of life assists another as well such as clean air, water, and healthy food to eat.

I. The Background and History of Organic Farming / Gardening:

Organic farming or gardening is a process by which farmers or individuals grown produce or raise livestock without utilizing the generally accepted methods of fertilization, pest control and disease control but instead institute more holistic environment and earth-friendly practices in the solutions needed for the aforementioned challenges in produce and livestock farming. Some of the methods that have been historically used in this type of farming are that of crop rotation, cover crops, release beneficial insects and the addition of compost to the soil.

Crop rotation is the process of alternating crops in the field from one year to the next. Different crops require different minerals and leaving one crop in a field year after year will deplete the mineral content in the field leaving the field non-productive and making it necessary to leave the field lying fallow, or that is unplanted for a few seasons for rejuvenation in the soil to occur.

Cover crops is a process wherein specific type of plants with certain root systems are planted in the soil to keep it aerated as well as becoming a source of fertilizer for the soil when plowed under during the preparing of the field for seed or at season's end when plowing is done to prepare for the next season. Crop covers also help to retain the moisture within the soil encouraging the lifecycles of organisms and insects within the soil which in turn keep the problem causing bacteria, fungi and other disease type problems from overtaking the soil.

In order for organic livestock to be raised the requirements of clean air and water, outdoor access, proper housing as well as feed that is completely organic in content assisting in reducing the animal's stressors and keeping the animal healthy which serves to produce healthier meat for human consumption. There are no growth hormones or genetically engineered type products used, no animal by-products in the livestock feed, access to pasture is readily available and the process of slaughter must be humane. Finally the manure is managed for the prevention of contamination of crops, soil, water and other factors within the farming environment.

II. Overview of the Financial Aspect of Organic Produce & Livestock Farming:

The financial and market reports for this industry look very positive as well as promising. Whole Foods Market Investor Relations reported that total sales increased last year by 23% totaling a record $3.9 billion. Net income in the business rose to $137 million, or by 32% for the year. Store sales which were comparable increased by 14.9% which set a new record and strength across the board was observed from the top down and back up in all stores that were over the age of 8 years old. EPS grew to $2.09 which is the growth rate of 26% ahead of the initial prediction of $1.87 to $1.95 for the year. Of the 137 stores that Whole Food Markets is owner of 84% of the stores set weekly records on sales during fiscal 2004. World Foods Market also states claims that their stock prices experienced an increase of 50% during the fiscal year starting at $53.41 on 9-26-03 to the amount of $84.73 on 9-24-04. World Food Market's corporate rating was upgraded from investment grade to speculative grade.

Not only are potential profits touted in the industry the USDA ahs just awarded an amount of $4.5 million in grants to individuals and firms for organic agriculture projects. Reported by the U.S. Department of Agriculture is that the USDA is awarding $4, 614,980 in grants that are funding 11 projects in six states in order to strengthen the Integrated Organic Program (IOP) Research, extension and higher education programs are supported by the IOP in order to assist organic farmer in the incorporation of new technological advancements in to their agriculture operation as well as assisting them in development of innovation in their marketing approach. The six states that were included in the award of grant were Arkansas, California, Massachusetts, Minnesota, New York, Vermont, and Washington.

III. Whole Food Markets: A Model for the Industry

Whole Food Markets was born in the minds of three men who believed that the timing was right for organic food grocery stores. The business opened in New Orleans during the fall of 1974 with a stated mission of providing "good, wholesome food" and mind you not a 'health food' but a wholesome and natural food. Four years later in 1978 the store was doing more than $1 million per year in a small 1,100 square foot building. Other groceries such as Wellspring Grocery, Fresh Fields and others have followed in the path of Whole Food Markets and the industry is booming with the demand for organics growing strong as each year passes.

There have been stated "10 Reasons" why buying locally grown produce is optimal. Those reasons which have been listed are:

1. Locally grown produce and other food sources taste better, it is fresher and doesn't have time to make the changes that food tends to make when traveling for days and days to the final destination market.

2. Local produce is better for you. According to the author at the www.mariquita.com organic farming website a recent study resulted in finding that fresh produce tends to lose nutrients very quickly and that it is best to can and freeze produce soon after picking in order to retain the natural elements that are so healthy for the human.

3. Locally grown food preserve genetic diversity: So often the quickest way to a sale is utilized in the industrialized agriculture industry with all types of modifications being made to produce in order to have it ripen earlier, grow faster and so forth. Locally grown organic produce will not have these genetic modifications and will be more nutritious, healthier and taste better as well.

4. Locally grown produce is GMO-free. Genetically modified fruits and veggies are being sold through licenses of use to agriculture operations but generally only to the factory farms and not to the smaller local farmers. The studies of bioengineered foods have not been completed precisely enough, nor have they been in the stages of completion long enough to make any claims to nutritional aspects or the level of safety in the products. Bioengineered products also are known to cause the naturally grown products to become sterile upon contact with the bioengineered imposter crops.

5. Support of local food is support of local farmers and their families: It is important that the farmers who are farming as their main occupation are supported in the community through patronization of the produce stand of the farmer.

6. Building Community: There exists a time-honored bond between the farmer or grower and the eater, the customer purchasing the produce as well as the other priceless benefits derived from speaking with a local farmer about his home grown produce.

7. Local food preserves open space: The increase in value of homegrown food lessens the chance of the farmland in the area being sold to developer for crowded land eroding patio home villages.

8. Taxes are a consideration: Since farming operations make more tax contributions that they require in services. For each one dollar in revenue generated by farm, forest and open space projects the government spends the amount of $.34 on services.

9. Local Food benefits wildlife and the environment: A well-managed family farm is a setting where the soil and water resources are treasure. Those that are good stewards, in terms of the land make sure to grow cover crops, practice rotation in the fields and those who practice the method of 'conservation tillage' are in effect sequestering 12 -- 14% of the carbon that is in the environment due to vehicle and industry emissions. Also, the maintenance of a farming environment is also the maintenance of an environment that is conducive to wildlife.

10. Locally grown food is the future: Supporting local farmers will aid the farms to remain in your community in the years to come so that the following generations will have the access to food that is nutritious, delicious and safe. The Sustenance of local farms depends on the patronization of local citizens within the locale and community.

IV. Organic Farming Timeline:

The organic farming timeline runs from the 1920's up until the present time. The following is a brief timeline to aid the scope of vision as to the progression of organic farming and the expedient creation of profits in this industry.

1920's to 1940's: Influential works were published on the basics of organic gardening in relation to the health of plants, animals and humans being all tied together in the natural system.

1940's: Pesticides and Herbicides of a synthetic base made their introduction of agriculture in America and were well accepted at the time.

1940's to 1950's: A loosely connected network of individuals who were farmer shunned chemical agriculture and began using organic methods as well as writing on the subject.

1953: Natural Food Associates (NFA) founded in Atlanta, TX in order to provide a connection for organic growers in markets that were new and un-established lacking stability in the markets.

1962: The pushlishing Carlson's 'Silent Spring' which was a documentary of negative consequences in chemical use brought that to the attention of other individuals and was stated to have renewed the focus in this area.

1973: DDT was banned in the United States during this year and the dawn of the environmental movement began which boosted sales in the organics industry as individuals turned away from the chemical pesticides as an acceptable option. During this decade (1970's) organics growth was joined by grouping of advocates and activists across the entire region of the U.S. And standards were created with the California Certified Organic Farmer becoming the first in establishing an organization for the certification of organic farms in North America.

1980: Whole Foods Market, a conjoined effort of Safer Way Natural Foods and Clarksville Natural Grocery (NRDC) in their carcinogenic growth report identified an element in tumor growth related to a regulator used on apples.

By the 1990's the estimations of sales in organics was that in excess of $1 billion as well as was witness to the passing of the Organic Foods Production Act of 1990 by Congress. It was this Act that established the framework used in creation of 'National Organic Standards'.

V. Recent News, Trends and Other Vital Information:

A report out of Austin, Texas states that, According to the Whole Foods Market Organic Foods Trends Tracker the survey released today:

"More than one-quarter of Americans (or 27%) are eating more organic products than just one year ago."(Hopfensperger 2004)

The report related also that there are many various reasons why Americans purchase organic foods with the following percentages revealing some of the reasons for organic food purchases as well as the trending across the population, at least as represented in this sampling.

54% of Americans have tried organic foods/beverages

1 in 10 Americans use organic products regularly (several times a week)

58% of American state organics use is for environmental reasons

54% of American state organics use is for health reasons

57% of Americans believe that buying and using organics is better for small local farmers

32% or one in three Americans believe organics taste better

42% of Americans believe that organics are better in terms of quality

"Sales trends agree with the findings of the survey with sales in organic food products hitting the sum of $10 billion with a sales growth rate of 20%" according to Wittenberg, Whole Foods Market VP of Governmental and Public Affairs for the company. Wittenberg relates that 25 years ago when she first began the organics food product business that the original product base was comprised of mostly items in the produce aisle. There is now in existence a larger variety both in terms of choices but also choices within food groups and inclusive of all food product groups. The following is a report of the survey's stated findings: