photo credit: Secret Pilgrim

Profit over Organics: Nation’s Largest Dairy Marketer Sets Up Competing Market Category

by Mark Kastel of the Cornucopia Institute

At a time when organic family farmers around the country are in financial crisis due to a glut of milk, Dean Foods—under its Horizon brand—has introduced “natural” dairy products (made with conventional milk) that will directly compete with certified organic farmers.

While responsible participants in the organic industry are using their marketing strength to ramp up organic demand, Dean Foods, the nation’s largest dairy processor, with over 50 brands, has instead chosen to profiteer at the expense of the hard-working family farmers who have built this industry.

Dean Foods promotes its Horizon “natural” products—a yogurt aimed at children and single-serve milk—as being without growth hormones. But Dean Foods will not be able to mention that the products are produced without pesticides, herbicides, antibiotics and other drugs, and genetically modified feed crops, or that the cows are required to graze in pastures rather than confined to factory farm feedlots. These are all factors that truly differentiate organic production from natural/conventional agricultural and livestock production.

Dean officials say their “natural” products will be “easier on the pocketbook.” In other words, they will be designed to undercut certified organic on price. This is problematic since many consumers do not understand green terminology. According to a national consumer survey by The Shelton Group, more consumers prefer the word “natural” over the term “organic.” As Suzanne Shelton, The research organization’s president, explains: “More consumers prefer the word ‘natural’ over the term ‘organic,’ thinking organic is more of an unregulated marketing buzzword that means the product is more expensive. In reality, the opposite is true: ‘Natural’ is the unregulated word. Organic foods must meet government standards to be certified as such.”

By creating a product category that competes with organics, Dean Foods is likely to profit from this consumer confusion. This understandably worries dedicated farmers who have made a great investment in developing the organic market. “It is apparent to us that moves toward “natural” dairy products offerings will have a negative impact on the organic category,” said Jack Lazor a certified organic dairy farmer from Westfield, Vermont. “It is now more important than ever that consumers of organic dairy products understand the benefits of organic foods and farming. We need to cultivate meaningful relationships with our customers so that we can cut through the veil of corporate greed where natural is easily mistaken for organic.”

Many of Dean’s competitors in this industry, including the second-largest organic marketer, Organic Valley, a farmer-owned cooperative, are exclusively organic. Like their farmers, they will live or die by the value and reputation the organic label holds with consumers. Dean Foods can afford this dangerous experiment. If it fails, they can just walk away from the Horizon brand. But how many competitors and lives of farmers might they destroy in the process?

The organic farmers, consumers and ethical business people who built this industry did so in effort to create an alternative food system with a different set of values. We at The Cornucopia Institute will work hard to defend what so many good people spent so many years to create.

Mark Kastel is co-founder of The Cornucopia Institute, a farm policy research group based in Cornucopia, Wisconsin and director of its Organic Integrity Project. The institute’s goal is promoting economic justice for family-scale farmers and protecting market access to “authentic” food for consumers.

The Organic Integrity Project acts as a corporate watchdog, assuring that no compromises to the credibility of organic farming methods and the food it produces are made in the pursuit of profit.  Cornucopia actively resists regulatory rollbacks and the weakening of organic standards to protect and maintain consumer confidence in the organic food label.

Visit The Cornucopia Institute’s website, www.cornucopia.org, to access their organic dairy scorecard, analyzing and rating the ethical approach of 110 different organic brands.

This post is part of the Food Roots blog carnival on Nourishing Days blog. Do you know where your food is coming from? Check out more food roots blogs here.