FIGHTING FOOD, INC.

THE DEVELOPMENT AND BENEFITS OF ORGANIC FOODS

Alan R. Albrecht

TC 660H

Plan II Honors Program

The University of Texas at Austin

April 29, 2015

____________________________________________________________

Nancy K. Stalker, Ph.D.

Department of Asian Studies

Supervising Professor

____________________________________________________________

Y. Sekou Bermiss, Ph.D.

Management Department

Second Reader

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ABSTRACT

Author: Alan Albrecht

Title: Fighting Food, Inc: The Development and Benefits of Organic Foods

Supervising Professors: Dr. Nancy K. Stalker; Dr. Y. Sekou Bermiss

Are organic foods better than nonorganic foods? This thesis seeks to answer that

question by analyzing the development of the organic food industry from three separate

perspectives. Combining academic research with quantitative industry analysis, this thesis

argues that organic foods really are better for businesses, consumers, and the environment. After

an overview of the historical development of the organic food industry, this thesis explores its

three main viewpoints. Businesses in the organic food industry are more successful than those in

the nonorganic industry. Consumers gain freedom of choice and increasing social capital.

Organic food production does not harm the environment as much as industrial techniques.

Although the industry is not perfect, this thesis refutes food activists’ claims that the food

industry is a failure. Lessons learned from the development of the organic industry can be

further refined to continually improve the food industry, emphasizing sustainability, health, and

conservation.

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TABLE OF CONTENTS

Introduction . . . . . . . . . . 4

Chapter One: Historical Perspective . . . . . . 9

Chapter Two: Business Perspective . . . . . . 18

Chapter Three: Consumer Perspective . . . . . . 27

Chapter Four: Environmental Perspective . . . . . 35

Conclusion . . . . . . . . . . 43

Works Cited . . . . . . . . . . 46

Biography . . . . . . . . . . 50

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Introduction

In 2006, Michael Pollan, a popular food activist, wrote a bestselling book called The

Omnivore’s Dilemma: A Natural History of Four Meals which explored the American food

industry through its titular four meals. The New York Times heralded the book as one of the ten

best of the year. Two years later, Pollan narrated Food, Inc., a documentary directed by Emmy-

winner Robert Kenner that exposed distasteful practices in industrial agriculture and

agribusiness. Both works perfectly exemplify a recurrent thread in food activism when looking

at the food production industry – a thread that claims the industrial, mass-produced, and

processed method of agriculture and food production is “bad” and the all-natural, organic, and

local method is the “good” alternative. They presuppose an organic ideal: food produced

without synthetic chemicals, with conservation and sustainability in mind, not shipped

nationwide but sold in local markets, concerned equally with human, animal, and plant health,

and produced in pursuit of quality, not profits. The organic ideal wants to be completely separate

from the industrial methods that prioritize efficiency, yield, and uniformity. Furthermore, such

influential voices lament any crossover between the two methods; Pollan even coined the phrase

“Big Organic” in The Omnivore’s Dilemma, referring to the unholy union of industrial

techniques in organic agriculture. They want to go back to a time when both practices were

wholly separate.

Why are there such divided opinions on such similar foods? Imagine two plates filled

with the same foods. You wouldn’t be able to tell them apart visually. You wouldn’t even be

able to tell them apart by taste or smell. Nevertheless, they are different – one plate has foods all

produced organically, and the other all produced through standard industrial methods. Is one

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better than the other? Should we prefer the organic plate, as food activists would suggest? Does

any crossover between the two spoil its purity?

I wanted to answer these questions about why the organic movement started and how it

has changed. I have found that organic foods are indeed better in surprising ways. Furthermore,

Big Organic should not be written off; the combination of organic and industrial methods has

improved the American food industry in ways that the organic ideal could not do alone. I will

argue that we do not need to go back to separate methods; rater, we should celebrate current

accomplishments and continually refine current techniques. Organic foods are better from three

different perspectives: business, consumer, and environmental.

Some recurring words and terms that I use throughout this thesis need definition. I will

often use the terms organic movement, organic ideal and organic industry. More precisely,

organic movement refers to the social phenomenon that began in the 1960s to create an

alternative food supply. Organic industry refers to the companies, farms, and individuals that

have adopted that movement to produce and sell organic food products to consumers. Organic

ideal refers to the ideals I outlined in the opening paragraph, indicating the values and goals of

the early organic movement, which were more strict and idealized than current USDA

regulations – including greater environmental consciousness, rejection of corporate capitalist

ideals, complete avoidance of synthetic inputs, and an overall movement away from the

mainstream. In addition, I will use terms like industrial and conventional to refer to nonorganic

food products and their corresponding social and economic environments. These terms are not

meant to suggest that organic foods do not use modern industrial equipment or that industrial

agriculture is conventional in the sense of being more acceptable; rather, these terms establish

certain widespread methods that the organic movement wished to depart from.

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My research covers a broad range of popular and academic writings. In the first instance

are writings that influence how we think about food. Writers like Pollan and Jane Goodall

criticize industrial and Big Organic practices and persuade us to avoid them. Pollan’s seminal

book in this area is The Omnivore’s Dilemma, as I mentioned earlier, which disapproves of

meals containing industrially produced food and presents a perfect meal that is local, all-natural,

and lives up to the organic ideal. Jane Goodall holds similar views in Harvest for Hope: A Guide

to Mindful Eating. She draws on personal experiences and values to influence western society to

embrace organic food in its purest form and shun the evils of unnatural, industrial agriculture.

More moderate writers seek to inform rather than influence, such as Marion Nestle and Warren

Belasco. Nestle’s What to Eat looks through the many sections in a grocery store and helps the

reader make informed decisions. Belasco’s Appetite for Change: How the Counterculture Took

on the Food Industry recounts the beginnings of the organic movement and how its idea have left

their mark on American society and industry. Countless more writings fall everywhere along the

scale telling us what we should and should not eat.

On the other hand are the writings in each of the three perspectives. Industry reports and

financial publications focus on the success of the organic industry and its companies. The

organic industry has also followed a common pattern of growth identified in population ecology

of organizations. This theory, identified by Michael Hannan and John Freeman in

Organizational Ecology, explains how the consolidation of large firms in an industry creates

space for new entrants at the periphery to carve out new niches, just as early organic producers

were able to do. Shorter academic papers such as Benjamin Gutman’s “Ethical Eating: Applying

the Kosher Food Regulatory Regime to Organic Food” propose new ways to approach industry

regulation. Many other authors have explored the social implications of food from a human

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perspective. The Taste Culture Reader: Experiencing Food and Drink, edited by Carolyn

Korsmeyer, combines discourses on food experiences across cultures and time periods. Josee

Johnston and Shyon Baumann’s textbook, Foodies: Democracy and Distinction in the Gourmet

Foodscape, takes a closer look at food’s societal implications in modern America, describing

how personal identity can be expressed through food. Finally, numerous scientific studies and

papers have examined the nutritional content of organic foods and the environmental impact of

both industrial and organic agriculture. Meta-analyses, such as “Does Organic Farming Reduce

Environmental Impacts?” by Tuomisto et. al., combine many of these studies together to

examine their conclusions in aggregate and provide a more definitive answer. I also rely on

other academic works to support smaller, more specific claims.

This thesis contributes to the field of writings on organic food by systematically

analyzing the benefits from three separate perspectives: a business, an individual, and the

environment. I will show how the industry was formed out of a counterculture movement and

transitioned to overlapping with a mainstream model. I will look at how companies in this

industry compete and capture value. Furthermore, I will consolidate the advantages of organic

food for the consumer and for the environment, showing how that might differ from the founding

expectations and promises of the organic movement. Discourses on organic foods are often

clouded by political agendas and personal values; my contribution will be an unbiased argument

for organic foods synthesized from different perspectives. I have approached this topic by

bringing together research in areas that have little overlap and synthesizing them to address my

central questions. Some papers analyze the environmental effects of agriculture, but not its

economic impacts. Other papers examine social connections around organic food but ignore its

historical development. I want to bring all these topics together into a cohesive whole and apply

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business theories to this specific industry. By applying this method, this thesis will fully capture

the development and benefits of organic foods.

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Chapter One

Historical Perspective

With increasing awareness about the national food supply chain and the explosion of

successful, alternative grocers like Whole Foods and Central Market, organic foods seem to be

the hot new thing. However, this view is only true from a perspective born out of the modern

industrial agriculture of the 19th and 20th centuries. Evidently true organic foods were the only

kinds of foods for the vast majority of human history; “organic” would have been a redundant

modifier. What happened to make that salient modifier necessary? As scientists began to

understand agriculture, farmers could harness and manufacture it. Chemical fertilizers and

artificial pesticides allowed farmers in any climate to grow nearly any crop. With bigger, more

bountiful yields and advanced preservative measures, they could stock giant grocery stores and

supermarkets which provided incredible cost savings and convenience to the growing urban

population of 20th century America. The convergence of numerous advances, such as chemical

fertilizers, refrigeration, transportation, and packaging, created a food supply chain that was

dominated by unnatural techniques until a dedicated few started a counterculture in the 1960s

that would transform into the organic industry we know today.

The transition from farming to big agriculture took great leaps in the 19th century.

Farmers had long been a mix of subsistence and commercial; if you wanted to spend your life

pursuing something other than the next meal, you had to have someone else do it for you.

However, there was a limit to what one farmer or family could produce. Certain crops did better

than others, rotating crops seemed to restore the soil, and organic plant and animal waste

improved crop health, but they were mostly at the mercy of their environment. Three letters

spelled the change of all that: NPK. During the mid-1800s, Justus von Liebig, a German chemist,

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demonstrated the importance of nitrogen, phosphorous, and potassium (whose periodic table

representations are N, P, and K, still demarked on fertilizer bags at the local garden store) to a

plant’s growth. These three chemicals, in addition to the usual soil, water, and sunlight, would

guarantee healthier crops and bigger yields. In addition, Liebig deduced that it was the minimum

of these components that most limited crop growth.

It seemed like a miracle. Farmers simply had to add whichever of nitrogen, phosphorus,

and potassium was least present in their soil, sit back, and watch their fields prosper. Suddenly

areas with less than perfect land were perfectly suitable to grow all kinds of crops. In addition,

steam engines from the Industrial Revolution, and later gas engines, were finally small enough to

develop mechanical tractors, ploughs, and planters. A single farm could now expand many times

over its former boundaries. To connect the new supply with demand, farmers utilized the

dominant railroad systems of 19th century America and later the highway systems of the 20th

century. Chemicals, coal, oil, and gas were now indivisible parts of industrial agriculture.

Other advances in food retailing allowed for even more steps between cultivation and

eating. Processing techniques could alter foods to add ingredients, both natural and artificial.

Preservation techniques were refined in the 1890s and early 1900s, as commercial and consumer

refrigeration became common. Vacuum canning and plastic packaging allowed foods to sit on

shelves for extraordinary lengths of time. Chemical preservatives were added to processed foods

to eliminate bacteria and preserve freshness. Economical single- and family-sized packaging

became standard. Companies emerged to capitalize on the opportunity, and the convenience

food industry took off.

Markets welcomed the increased production capabilities. For years people would get

their produce from a farmers’ market, their meat from a butcher, and their dry goods from a

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general store. The process was time consuming and needed to be repeated frequently.

Convenient, self-service grocery stores opened to sell the new convenience foods alongside the

normal fare. The first, tested, successful self-service grocery store was Piggly Wiggly, opened

by Clarence Saunders in 1916. Kroger and Safeway emulated and expanded upon the concept in

the 1920s. Ten years later, the first supermarkets opened their doors with slogans like “pile it

high, sell it low.” These giant stores could sell you both food and household needs in one, at an

affordable price. The trade-off for such offerings was diversity; supermarkets were only

profitable by selling huge quantities of relatively few selections, taking advantage of economies

of scale. To fill that demand, regional distributors arose that could buy up product from widely

dispersed farms and food producers. Such distributors quickly realized they could also benefit

from economies of scale by reducing the number of suppliers they bought from, pushing farms

and producers to get bigger, faster. The only way was to increase the use of industrial

agriculture techniques, and the cycle sustained itself. The industrial paradigm of food supply

dominated America by becoming the only food supply for most of the nation.

Even though the average consumer only had one choice, alternative ideas for food

production did not die. Instead, it was picked up by the fringes of society. Organic, as it became

known, did not mean simply replacing one link of the established food supply chain, but rather

implied an entire shift, an independent chain with its own processes. It reimagined everything

from the literal ground up. Early proponents believed in a better way of farming, a different way

of supplying and distributing, and a new way of consuming.

Some agronomists did not buy into the NPK mentality. Emulating and perfecting

nature’s millennia old example seemed superior to conquering and modifying it. The crown

jewel of this school of thought was Sir Albert Howard’s An Agricultural Testament in 1940. He

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melded a wholesome approach to agriculture with rigorous scientific testing by conducting

experiments without chemical or artificial inputs. He believed his research displayed nature’s

self-renewing power and he urged farmers to cooperate with their lands. The most important

contribution of An Agricultural Testament was its demonstration of the benefits of composting

and soil maintenance. Howard’s tests proved that all the necessary nutrients for a farm could

come from organic waste, requiring no additional inputs. Furthermore, this method created

byproducts that could simply be put back into the system to sustain it. Instead of the technique

of chemists like Liebig to break down soil into a product with its elemental components, Howard

viewed soil as a process that needed tending. General farming practices and wisdom of

preindustrial agriculture had finally been scientifically proven and codified.

Despite his contributions, Howard’s Testament went unnoticed until counterculturalists in

late 1960s and early 1970s America picked it up. A man named Jerome Irving Rodale tried to

bring it to American farmers’ attention in the 1940s by publishing its advice in a periodical

called Organic Gardening and Farming (OG&F). Yet, as Warren Belasco writes in his book

Appetite for Change, “he failed, however, to interest American commercial farmers, who were in

the 1940s being bombarded with government and chemical industry advice to increase, not

decrease, their reliance on artificial means.”1 It wasn’t until twenty years later, with the

periodical losing money each year, that OG&F began to pick up. The chief countercultural

publishing, The Whole Earth Catalog, gave it stellar reviews with the editor saying, “Organic

Gardening [sic] would be the first publication I’d squash, because it is the most subversive.”2

1 Warren Belasco, Appetite for Change: How the Counterculture Took on the Food Industry, (Ithaca: Cornell

University Press, 1989), p. 81. 2 Belasco, Appetite for Change, p. 82.

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By 1971, readership of OG&F exploded to 700,000, and every disgruntled citizen that wanted

out of mainstream American culture began experimenting with organic methods.

Nevertheless, the industrial cycle was too entrenched at the time for organic practitioners

to cause any real change. Instead, truly committed devotees removed themselves from the cycle

completely by establishing their own communities. To be sure, food was not the only cause for

establishing “independent” communes in the 1970s, but it was the largest factor that they all

shared in common. Besides all the things communes did not want present, from politics to

clothes, people still have to eat. Belasco tells of a pseudonymous memoir from a participator,

“we want to eat food…that hasn’t had all the goodness processed out of it…to stand in good

relation to the soil – to feed it well, so we will be fed by it.”3 Despite its ideological

attractiveness, such communities found it practically hard to both survive and stick to their

ideologies. Organic communities wanted to eat pork but not raise and slaughter the hog. As the

food industry had learned long before, combining production with consumption was inefficient

and unsustainable on a large scale. Still, the demand for an alternative was clearly present, and

before long businesses stepped up to supply it.

The first market attempts to bridge the gap and bring organic foods to urban areas were in

the form of co-ops. Communes and households would buy in bulk from organic producers to

offset high startup prices. By establishing urban co-ops, they hoped to provide a middleman that

would encourage more organic farmers. In addition to selling these foods, co-ops were sources

of home-grown health information and moral support. Austin, Texas’ Wheatsville Co-op, for

example, opened in 1975 with a mission to “create a self-reliant, self-empowering community of

people that will grow and promote a transformation of society toward cooperation, justice, and

3 Belasco, Appetite for Change, p. 88.

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non-exploitation”.4 While some, like Wheatsville, managed to remain successful even to this

day, most succumbed to the same problem as communes. How do you balance the “economic

and idealistic goals, price and ideology, pure shopping and pure revolution?”5 As attention grew,

so did demand, and market forces pushed the organic food supply system to grow as fast as its

industrial counterpart. Local initiatives were simply inadequate.

Cascadian Farms is the archetypal example of how the entire organic movement

responded. Founded as any other counter-industrial agriculture commune in 1971 by a young

man named Gene Kahn, Cascadian Farms found great success selling its organic produce to

regional stores. Driven by demand, Kahn became comfortable with minimal processing in his

organic products, such as freezing produce or making jams. Cascadian Farms could then ship

and sell its foods in stores across the country, increasing profits. Pretty soon, “the whole notion

of a ‘cooperative community’ we started with gradually began to mimic the system,” Kahn

recalled in an interview in Michael Pollan’s The Omnivore’s Dilemma.6 In the 1980s, Cascadian

Farms realized it was cheaper to buy organic food products from other farms and sell them under

its brand name than grow the foods themselves. After a failed attempt to grow too big too fast on

borrowed cash in the early 1990s, Kahn had to sell a majority stake to Welch’s (of Welch’s

Grapes), which was in turn consumed into General Mills company. What had started out as an

organic community farm had been completely subsumed by the industrial agricultural cycle.

Soon Cascadian Farms became a branded front for General Mills to push through any and all of

its organic products, and is nothing more than, “ ‘a General Mills showcase – a P.R farm.’”7 The

Industrial Organic food supply was born.

4 Wheatsville Co-op, < http://wheatsville.coop/co-op/about> 5 Belasco, Appetite for Change, p. 101. 6 Michael Pollan, The Omnivore’s Dilemma: A Natural History of Four Meals, (New York: Penguin, 2006), p. 160. 7 Pollan, The Omnivore’s Dilemma, p. 154.

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Industrial Organic marks the transition of “organic” from an ideological modifier to a

legally-defined label. Despite their original disregarding of the trend, as the organic movement

continued to expand in the 1990s, the United States Department of Agriculture and the Food and

Drug Administration had to address what could and could not be called organic. Consumers had

already demonstrated their desire for food separate from the industrial supply, and organic

proponents wanted to protect their processes with a label that could not be thrown onto just any

packaging. The originators and organic purists wanted to maintain the independent status of the

organic process, and wanted as narrow a definition as possible. Meanwhile, companies like

General Mills with recently acquired and quickly growing organic divisions wanted to cash in on

the craze with a widely defined, and therefore widely applicable, label. The first set of standards

in 1997 were too broad, allowing almost anything to be called “organic,” but consumer backlash

brought the parties back to the table. It took many years to balance consumer demands with

industrial realities and desires, resulting in regulations that seemed to favor the big industrial

players. As Pollan notes, “many of the philosophical values embedded in the word ‘organic’ …

did not survive the federal rule-making process,” – the organic ideal had been tarnished.8

The formalization of the organic industry marked a departure from the ideals of An

Agricultural Testament and Organic Gardening and Farming. Instead of the wholesome

approach to soil maintenance and a completely separate food supply chain, Big Organic

producers could substitute chemical inputs for approved organic ones, bundle their products in

friendly packaging, and ship and sell them through the same channels as non-organic foods. Big

grocers, like Safeway and Kroger, found it economically feasible to provide organic offerings,

where the previous barriers of a scattered supply were eliminated.

8 Pollan, The Omnivore’s Dilemma, p. 163.

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Although this new organic food supply chain may seem to fall well short of the

ambitions of the 1970s counterculture, Pollan notes that the standards still do, “an admirable job

of setting the bar for a more environmentally responsible kind of farming.”9 Instead of mega-

farms using chemical fertilizers, mega-organic farms use mass produced compost, usually from

animal waste. Instead of toxic pesticides, organic farms use beneficial insects. Instead of

herbicides, they use propane torches and frequent tilling to kill weeds. On the one hand, this

tilling kills all sorts of organisms in the soil, leaving the land less robust than an ideally organic

farm, and uses gas-guzzling machines to do the hard work, but on the other hand, it’s still more

environmentally friendly than using industrial techniques. The editor of The Whole Earth

Catalog from the 1970s might look on and say “organic” has gotten worse; the urban consumer

might just say “industrial” has gotten better.

The industrial-organic hybrid is undeniably successful. The USDA shows that in the ten

year period from 2004 to 2014,

organic food sales have grown

close to 200% from $12 billion

to over $35 billion, averaging

nearly 10% growth a year

(Figure 1). Of this, the lion’s

share has been organically

grown fruits and vegetables.

The organization’s organic

market overview notes that organic foods still claim a premium in the marketplace, and the

9 Pollan, The Omnivore’s Dilemma, p. 164.

Figure 1

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consumer profile has evolved from a dedicated minority to an occasional majority. One grocer

has emerged as the front-runner: Whole Foods.

Whole Foods Market, Inc. opened as SaferWay in 1978 by its still CEO John Mackey

and partners in Austin, Texas. Natural growth and a few mergers and acquisitions during the

1980s laid the groundwork for the grocery chain expanding nationwide. In 1992, the company

went public, trading on the NASDAQ. Today, it is the largest pure-play organic grocer in the

country, with over 350 locations. Like Cascadian Farms, Whole Foods had counterculture

origins that quickly became mainstream. Mackey, a previous member of a vegetarian co-op,

figured he could do it bigger and better, and that organic foods were ready for the supermarket.

The company realized it could not expand on its own and dropped its co-op aspirations, but not

its co-op like products, when it went public. Whole Foods has paved the way for other specialty

grocers like Central Market and Rice Epicurean, and sets the ideological example, with organic

imagery and stories behind its products scattered throughout its stores. These stores have created

a successful market, and every healthy, all-natural, or alternative food producer wants to get its

products in Whole Foods. It seems the alternative organic food chain is complete, from farm to

market. Has this system completely met consumer demand?

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Chapter Two

Business Perspective

The food industry, both production and retailing, is a mature industry. Practically every

product from bread to energy drinks to bell peppers has an established landscape of competitors,

similar margins, and uniform growth prospects. An investor would hardly expect his or her

money to skyrocket in a food corporation as if it were Apple after the unveiling of the iPhone.

After all, a smartphone was something nobody had. Yet everyone buys groceries. However,

over the past decade, organic food was that smartphone. Nearly all the new growth in a mature

food industry can be attributed to the organic revolution. The following numbers quantifying

that growth will make it exceedingly obvious that organic foods were great for business, but

additional factors such as new opportunities, information transfer, better competition, and

regulation also helped make organic foods an attractive endeavor.

Growth of the organic foods market in the United States has been staggering. According

to a MarketLine Industry Profile, the industry has grown at a compound annual growth rate

(CAGR) of 8.4% for the five years from 2009 to 2013, with a 6.3% growth from 2013 to 2014,

as determined by retail sales10. Compared to the slow annual growth of the meat, poultry, and

fish segment (1.4%)11 and supermarket & grocer segment (1.3%, which surely includes their

organic sales)12 in the same time period, organic foods expanded rapidly. In an environment of

contested shelf space, organic foods annex more and more aisles to the benefit of both the

retailer and their organic suppliers. One major public retailer, Whole Foods, Inc., has seen its

stock grow over 300% in five years, from $18 per share to over $56, representing a market

10 Marketline Industry Profile, Organic Food in the United States, (London: Marketline, 2014), p. 7. 11 Marketline Industry Profile, Meat, Fish & Poultry in the United States, (London: Marketline, 2014), p. 2. 12 Will McKitterick, IBISWorld Industry Report: Supermarkets & Grocery Stores in the US, (IBISWorld, 2015), 3.

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capitalization, or value, of just over 20 billion dollars13. Clearly organic foods make great

products.

In addition, forecasted growths are projected to be just as healthy. MarketLine estimates

a forward five-year CAGR of 6.0%, once again greatly surpassing most other segments of the

food industry14. Despite its outstanding growth, organic food represents only 4% of all food

sales, demonstrating almost limitless potential for the future15. As consumer’s desire to eat

healthy increases, this share will surely go up. In fact, IBISWorld attributes much of the growth

in the supermarket & grocer industry to organic foods, saying, “industry participants have

benefitted from the sale of organic goods.” In addition, “as consumers demand a greater variety

of premium products, such as organic produce, industry revenue increases.”16 Their Healthy

Eating Index projects consumers to be 2% more health conscious in the next five years, a

significant growth in an index that has shown a mere 7% growth in the past 30 years17. All this

growth indicates a ripe industry that rewards its participant firms.

Now, these numbers may not seem like such a great blessing to businesses in the food

industry if they are cannibalizing sales in other areas. After all, American appetites have not

grown in such extraordinary bounds, so if consumers are just substituting organics for non-

organics in their shopping carts, businesses would not expect to see much difference in their

bottom lines. However, the key benefit to organic is its large price premium over standard

competition. According to the USDA, organic foods can claim a price premium from 30% to

100% and more over non-organic substitutes18. Furthermore, for retailers, organics do not cost

13 Whole Foods, Inc. historical stock price data from February 2011 to February 2015. 14 Marketline Industry Profile, Organic Food in the United States, p. 11. 15 McKitterick, IBISWorld Industry Report: Supermarkets & Grocery Stores in the US, p. 8. 16 McKitterick, IBISWorld Industry Report: Supermarkets & Grocery Stores in the US, p. 5. 17 IBISWorld, IBISWorld Business Environment Report: Healthy Eating Index, (IBISWorld, 2015), p. 2. 18 USDA, Organic Market Overview, 2014. < http://www.ers.usda.gov/topics/natural-resources-

environment/organic-agriculture/organic-market-overview.aspx >

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nearly as much as their premiums would indicate. As IBISWorld notes, organic foods are,

“sourced at similar prices as nonorganic foods and then priced at a premium.”19 These margins

definitely translate to the bottom line, explaining the meteoric rise seen earlier of Whole Foods’

stock price. A clearer example comes from one of the largest national grocery retailers,

Safeway, Inc. While revenues

over the five years from 2009-

2013 have stayed flat, and even

dipped in 2013, their profit

margins skyrocketed from 2% to

11%, pulling net income up over

the time period (Figure 2).20 A

primary contributor to this growth was their internal organic brand, O Organics. As companies

adopt more organic products, their profits rise.

Such growth and attractive margins encourage new participants to enter the market.

Organic food represents only 4% of all food sales, indicating a landscape not yet saturated like

that for nonorganic foods. Smaller firms have taken this opportunity to gain market share,

increasing competition and dividing the profits into more hands. Small companies are also better

suited to this market because of a unique characteristic not present in the traditional model –

information transfer. Price used to be the only information a consumer could pass up the supply

chain to the producer; there was no “story” behind the product on the supermarket shelf.

Organic foods allow the producer to tell their story of a free-range chicken or an herbicide free

carrot. Consumers can pass value judgments on these stories, indicating their preferences.

19 McKitterick, IBISWorld Industry Report: Supermarkets & Grocery Stores in the US, p. 6. 20 Marketline Industry Profile, Organic Food in the United States, p. 19.

Figure 2

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Michael Pollan defines this idea as the “supermarket pastoral.”21 Whole Foods exemplifies the

phenomenon with agricultural murals on the walls and small signs describing certain products on

the shelves. In fact, the premiums discussed earlier derive their magnitude from these value

judgments. Small companies can adjust accordingly to better meet customer demand, capturing

more value the more efficiently they adjust.

There are two ways to improve a company’s performance, either cutting costs in relation

to the competition, or increasing consumers’ willingness to pay. The first holds prices steady,

the second raises them in relation to the added product value. Food producers, especially for

perishable items such as meat and produce, have long focused on the first approach. By

developing better and better methods, farmers could boost the yield of their fields for the same

cost. Agricultural corporations could plant, harvest, and sell in bulk quantities, reducing

production costs. Economies

of scale practically demanded

producers get bigger and

bigger. The dynamics of

organic foods allowed new

players to focus on the second

approach. They saw the

increase in consumers’

willingness to pay reflected in the premiums discussed earlier. Costs were not quite so important

anymore. Now firms could compete on two dimensions, cost and the organic ideal (Figure 3).

21 Pollan, The Omnivore’s Dilemma.

Figure 3

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The previous one dimensional line allowed for very little differentiation, but the new two

dimensional graph creates a frontier of possibilities for competitors.

The changing landscape opened new doors for the small time farmer. By switching to an

organic standard, they could resist the downward pressure of large-scale producers. For

example, Pollan discusses his visit to Polyface Farm, a small operation run by the Salatin family.

This farm is the embodiment of the organic ideal, raising, “chicken, beef, turkeys, eggs, rabbits,

and pigs, plus tomatoes, sweet corn, and berries on 100 acres of pasture patchworked into

another 450 acres of forest.”22 The farm is self-sufficient and sustainable, running off only the

family’s hard work and what nature provides. Polyface’s reputation for its adherence to organic

standards has increased its popularity to the point that Salatin can bypass the traditional food

supply chain and sell directly to consumers. The farm feels almost no pricing pressure, as

customers will come from all over to buy its products. While most other small, organic

producers do not enjoy this degree of freedom, they do escape much of the cost competition that

nonorganic producers cannot.

Large-scale producers, used to their dominance, were not about to miss out on the new

opportunity either. In fact, the most successful ones were able to bring the cost cutting

economies of scale to organic production as well, playing both sides by capturing the price

premium cheaply. For example, Cascadian Farm began with aspirations similar to Polyface

Farm. As it grew in popularity, its founder Gene Kahn continued to scale up his operation to

meet demand and grow profits. While still organic, the farm began to incorporate industrial

methods like processing and nationwide shipping.23 The farm went through a number of

22 Pollan, The Omnivore’s Dilemma, p. 134. 23 Pollan, The Omnivore’s Dilemma, p. 155.

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acquisitions, and now serves, “as a PR farm” for General Mills.24 Industrial producers with an

organic arm will cultivate acres of organic produce right next to their acres of nonorganic

produce. The only difference will be substituting certain approved inputs in the organic fields.

The underlying philosophy remains unchanged, however; produce as much food per acre as

possible for the lowest cost.

The major benefit to the new paradigm was that both small players like Polyface Farm,

and large players like General Mills, could coexist. The creation of the “supermarket pastoral”

allows for a wide range of consumer value judgments. One organic consumer may place greater

emphasis on small farm, free range chicken and not as much on lettuce, while another will be

just the opposite. Firms all along the curve can capture value. Nonorganic foods only have the

one dimension of price, with slight variations in brand. Anyone who could find a way to drive

this price down had a distinct advantage over their competitors. With two dimensions, however,

firms can achieve better differentiation and approach efficient equilibrium.

As discussed in the historical section, the label “organic” is a regulated, defined term that

was shaped by the more powerful companies in the industry. The current standards span dozens

of pages in the USDA’s handbook, incorporating features expected of organic, such as absence

of genetic modification, as well as decidedly inorganic substances and manmade additives that

help preserve freshness, providing a beneficial edge to companies that want to ship their product

nationwide. However, a broad definition for what counts as organic, such as the current

regulations provide, benefits all producers in the organic industry. Fewer rules means more

options for the firm, and more ways to achieve the organic standard that clearly provides

monetary benefits. Clearly the national food companies that bought into organic early on and

24 Pollan, The Omnivore’s Dilemma, p. 155.

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helped shaped the regulations, like General Mills, wanted this advantage. This self-

determination was a boon to producers that did not want to completely overhaul their practices.

The single largest shortcoming of the organic food industry also represents its greatest

opportunity. The organic movement started as consumers demanded an alternative to the

industrial food supply. They chose a set of values and ethical considerations. Businesses that

provided products that best aligned with those values captured larger profits over those that did

not. However, as Gutman notes, “’organic’ refers to a set of philosophical beliefs about our

relationship to the environment, not merely to the characteristics of a product.”25 Government

regulation ensured uniformity in the characteristics of organic products, but falls short of

capturing the value judgments and beliefs of the organic movement. For this reason, “the

distance between organic and conventional agriculture has closed … because the stellar market

performance of organic foods has attracted producers who are ‘organic’ only by virtue of

minimal compliance with standards that no longer embody the original visions of organic

agriculture.”26 Pollan and other critics use the term “Big Organic” negatively to refer to those

producers that meet only the minimum requirements. Nevertheless, such firms can still enjoy the

benefits of marketing to consumers as a truly organic product. Consumers are left with less than

perfect information on a product and may end up rewarding certain producers that they would

have otherwise avoided with more transparency.

Reducing the information asymmetry between what a producer can claim it is doing

versus what it is actually doing, in relation to customers’ organic values, can boost profits and

further clarify the competitive landscape. In regards to profits, the market already exhibits price

25 Benjamin Gutman, “Ethical Eating: Applying the Kosher Food Regulatory Regime to Organic Food”, (New

Haven: The Yale Law Journal Vol. 108, 1999), p. 2352. 26 David and Rebecca Nowacek, “The Organic Foods System: Its Discursive Achievements and Prospects”,

(University of Illinois at Urbana-Champaign: College English Vol. 70 No. 4, 2008), p. 403.

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premiums and growing profits despite the uncertainty of information. Without the uncertainty,

consumers would be more willing to pay those premiums over nonorganic substitutes. In regards

to the competitive landscape, the competitive frontier would be solidified if each producer’s

adherence to the organic ideal was more clearly defined. Low cost operations meeting the

minimum standards could no longer claim the same level of fidelity as other producers.

A couple options exist to reduce the information asymmetry. Regulations could tighten,

using government oversight to ensure certain standards. However, given the potential losses to

incumbent firms in the industry from tighter regulations, and the power these firms exhibit in the

regulatory process, such a change is highly unlikely. Instead of pure government regulation,

Gutman proposes a combination of regulation and private oversight exemplified by the American

Kosher food industry. Like organic, kosher foods represent both philosophical beliefs and

specific characteristics of products. Also like the organic label, certain regulations govern the

kosher label, and producers are motivated to keep those regulations as broad as possible.

However, the kosher food industry has an additional layer of private oversight by the Jewish

community, “to alert consumers to the kosher status of food.”27 Organic purists could emulate

the practice with private organizations to verify the organic status of food. The Non-GMO

Project is a related example which certifies products free of genetic modifications with a clear

label. Certain producers actively seek out their certification to improve their performance in the

market. If the distance between organic and conventional methods continues to shrink, such an

organization may be necessary on top of government regulation of the organic label.

Critics of business practices in the organic industry too often focus on the negative

aspects and see all companies as trying to get away with as many industrial methods as legally

27 Gutman, “Ethical Eating”, p. 2353

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possible without regard to the organic ideal. However, a complete examination of the organic

market reveals the opposite; firms benefit from adopting organic methods and approaching that

ideal. Firms that can best satisfy the large demand for organic foods capture the most profits, but

not to the consumers’ detriment. The general movement of the food industry to these methods

has actually improved the industry in more than just profits by allowing companies to compete

on organic standards and deliver more value to the customer. Greater transparency through

tighter regulation or watchdog groups will further improve the market and weed out producers

that don’t deliver on their message. Big and small organic operations will continue to improve

the food industry.

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Chapter Three

Consumer Perspective

From a human perspective, the viewpoint of the individual consumer, organic foods are

superior to conventional alternatives on multiple dimensions. When discussing food, “better”

usually means better in the physical and nutritional sense – our lives are inundated with advice

on foods good or bad to eat. However, while organic foods derive some value from their

nutritional benefits, a purely nutritional argument for organic foods’ popularity, cost,

proliferation, and superiority would be unsatisfying. Rather, most of what sets organic foods

apart as better for the individual is the freedom of choice that they represent. Organic food

allows people to express their personal values through food choice. Individuals create new

social ties and increase their social capital in unique ways. Furthermore, the social dimensions

of the organic movement create an entertainment value unseen in nonorganic counterparts.

Some or all of these benefits help explain why organic foods have become so popular and why

so many people are switching to organic.

As soon as organic alternatives appeared in the market, both critics and supporters

wanted to know if the new foods were healthier. After all, if there were no tangible,

physiological benefits to them, why bother with their demanding production and, more

importantly, expensive consumption? The evidence seemed to be a victory for the skeptics.

Suddenly switching to an all-organic diet was no miracle weight-loss program. Organic chicken

has just as many calories as nonorganic birds. However, organic supporters appealed to the

underlying logic of organic production. Organic food inherently and by regulation were free of

certain chemicals, pesticides, and other non-food inputs used in the conventional food supply,

and therefore must be less risky and less prone to contamination. In fact, recent studies support

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this logic. An analysis published in the British Journal of Nutrition in 2014 found that organic

foods have statistically significant, higher concentrations of antioxidants (which dampen the

harmful effects of free radicals), lower amounts of pesticides, and lower concentrations of heavy

metals like cadmium (a known carcinogen above certain levels)28. Skeptics point to further

studies that question the significance of these differences, noting that both organic and

nonorganic foods exhibit levels of chemicals that are well below acceptable limits29. However,

health conscious customers look to accumulate all the nutritional benefits possible, regardless of

their magnitude. Even skeptics do not try to argue that organic foods are nutritionally worse.

Even if organic foods are nutritionally no different for the average consumer, the

exceptional customer can benefit from organic regulation. A 2014 study published in the Annals

of Allergy, Asthma and Immunology by the American College of Allergy, Asthma and

Immunology found a link between food allergies and traces of antibiotic pesticides found in

blueberries30. Eliminating the presence of these foods in their diet lowers the risk of allergic

reactions for sensitive individuals. Furthermore, pregnant women and parents of young children

are commonly more conscious of their food choices. Many trust organic foods as a way to lower

risks that may be at acceptable levels for adults but unknown for children. An article in Time

magazine sums up these fears, saying, “infants and children are particularly vulnerable to

chemicals” and that, “organic food reduces the risk of exposure to toxic pesticides”31.

28 Marcin Baranski et al., “Higher Antioxidant and Lower Cadmium Concentrations and Lower Incidence …

Literature Review and Meta-analysis”, (Cambridge: British Journal of Medicine, 2014), p. 2. 29 Faidon Magkos et al., “Organic Food: Buying More Safety or Just Peace of Mind?”, (London: Critical Reviews in

Food Science and Nutrition, 2006), p. 23. 30 Anne Des Roches, (Arlington: ACAAI, Annals of Allergy, Asthma, and Immunology, 2014),

< http://acaai.org/news/you-may-have-watch-what-your-fruits-and-veggies-eat> 31 Alan Greene and Anna Lappe, “Why Organic is the Right Choice for Parents”, (New York: Time, 2014).

<http://time.com/2914155/organic-food-children-health/>

Albrecht 29

Consumers wishing to control non-food substances in their diet choose organic for the additional

safety promised by regulations on what can be used in organic food production.

More important than the limited nutritional benefits, organic foods provide consumers

with freedom of choice. Eating is a rich personal and social experience because we are, literally,

what we eat. Numerous authors have remarked on the importance of choice, such as Elisabeth

and Paul Rozin saying, “Of all behavior, eating is surely the most intimate because it involves

the irrevocable incorporation of things into the body.”32 Paul Freedman further notes that,

“gastronomy expresses an outlook, an aesthetic.”33 It is only natural that individuals would

prefer to consume foods that reflect their personal identity and ethical values. Organic foods

provide more variety and more opportunity to better reflect those choices. They are inherently

environmentally-friendly. In addition, the organic movement’s foundation in the 1960s and

1970s carried with it some of the cultural values of that generation, such as personal expression,

civil rights, and self-determination. In fact, a study published in the Journal of Consumer

Behavior found that ethical values and political motivations had the most influence over how

favorably consumers viewed organic foods.34

Choosing organic food, similar to ethnic, local, and haute cuisine, becomes a way for

individuals to distinguish themselves or join new social circles. Johnston and Baumann’s

textbook, Foodies: Democracy and Distinction in the Gourmet Foodscape, takes a sociological

view of food consumption, examining how self-proclaimed and self-denying “foodies” –

individuals that place more value on the role of food in their lives than the average person –

32 Elisabeth and Paul Rozin, “Culinary Themes and Variations”, (New York: Berg, The Taste Culture Reader), p.

38. 33 Paul Freedman, Food: The History of Taste, (Los Angeles: University of California Press), p. 21. 34 Pirjo Honkanen, Bas Verplanken, and Svein Olsen, “Ethical Values and Motives Driving Organic Food Choice”,

(Journal of Consumer Behavior, 2006).

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create, exchange, and maintain social status through food. They say, “knowledge of foodie

phenomena … can be cultural capital, even in recessionary times.”35 Organic foods are an

integral part of this system and certainly the most widespread of these phenomena. Just as

literary critics or moviegoers keep up to date on recent trends and place value on the best works,

foodies show their sophistication through appreciation of a variety of foods. In an opinion piece

in the New York Times, 2012, William Deresiewicz realizes that food, “has developed, of late, an

elaborate cultural apparatus that parallels the one that exists for art, a whole literature of

criticism, journalism, appreciation, memoir and theoretical debate.”36 Purchasing and consuming

organic foods is a way for the discriminating foodie to express his or her personal stance on

issues beyond the food itself. These choices are tangible representations of underlying values

which are then consumed in the body. The more widespread these values are, the more

important organic foods become to the individual.

Furthermore, buying organic foods is an easy way to express political views on

environmental issues and industrial agriculture. Consumers can send a message to the market

and to individual producers with their spending. By making value judgments on what the

producer is promising in the foods, customers reward the companies they believe to be delivering

what is most important. For example, animals’ rights sympathizers can choose to buy meat from

only the most humane sources, or biotechnology skeptics can purchase their organic produce

trusting it to be free of genetic modification. This is a motivating factor for foodies as, “it is

often easier to express one’s politics through a food purchase than it is to...participate in social

35 Josee Johnston and Shyon Baumann, Foodies: Democracy and Distinction in the Gourmet Foodscape, (New

York: Routledge, 2010), p. XV. 36 William Deresiewicz, “A Matter of Taste?”, (New York: New York Times, 2012), <

http://www.nytimes.com/2012/10/28/opinion/sunday/how-food-replaced-art-as-high-culture.html>

Albrecht 31

movement politics.”37 The organic movement was started in a climate of political upheaval in

the 1960s and, although tamed by popularity and time, buying into the alternative, organic food

chain still carries a message of nonconformity. On an individual level, Benjamin Wurgaft writes

that, “consumers are willing to pay a little more for their products, not just because they want the

highest quality, but because they want assurance that they are doing no wrong.”38 In aggregate,

these actions can influence change. Wurgaft sums up the effects, saying,

The United States, the world’s greatest consumer, has significant

effect on the countries that produce our goods: my coffee habit, when

combined with my neighbors’ coffee habits, bears upon all the

plantation workers growing the stuff.39

Belasco argues in Appetite for Change that these were the primary motivations for the crusaders

in the 1960s. In a chapter titled “Radical Consumerism,” he notes how citizens that were put off

by the “Frankenstein’s monster” of industrialism and disenchanted with the lethargic political

system could, instead, embrace ecology and an organic lifestyle. “In electoral politics, you had

to wait four years to make changes at the top…. In ecology, however, you could act right away,

in your own household.”40 Of all the changes you could make, “dietary change was one of the

more substantial household reforms,” because it required greater discipline.41 Anyone could

profess their agreements with the cause; it was much more difficult to physically consume it.

Similarly, Foodies describes similar motivations for current consumers,

37 Johnston and Baumann, Foodies, p. XVIII. 38 Benjamin Wurgaft, “East of Eden: Sin and Redemption at the Whole Foods Market”, (Los Angeles, University of

California Press, Gastronomica: The Journal of Food and Culture Vol. 2, No. 3, 2002), p. 87. 39 Wurgaft, “East of Eden”, p. 88. 40 Belasco, Appetite for Change, p. 30. 41 Belasco, Appetite for Change, p. 31.

Albrecht 32

As the environmental and health risks associated with industrial

agriculture become more apparent in the public sphere, making

different kinds of food choices becomes a way for foodies to protest

environmental degradation and injustice, as well as a way to protect

their health.42

In aggregate, these consumer choices send a big message to producers and politicians beyond

what any one person could change.

At the same time that the organic movement tries to break away from the mainstream, it

has created new class distinctions based on both social consciousness and wealth. The

convergence of the counterculture with widespread acceptance of organic foods has brought

organic to new social circles. Shopping at places like Whole Foods and Central Market are

reserved for either the most organically dedicated urbanites or upper-middle class shoppers that

are not affected by the higher prices. Some of the original spirit of the organic movement may

be lost on such consumers that just want to class up their Sunday dinner. Furthermore,

companies that label their products organic only have to follow the regulatory requirements;

whether or not they embody the intentions of the organic movement is not required. Therefore,

consumers may mistakenly misplace their trust in certain products, intending to deliver a

message that goes unheard. The distinctions consumers try to gain by choosing organic products

must be actively displayed, lending a snob appeal to places like Whole Foods. Not every

customer considers all these issues, however.

Even consumers that pay no attention to or actively put aside the social and political

aspects derive benefits from the simple entertainment value of organic foods. As discussed in

42 Johnston and Baumann, Foodies, p. XVIII.

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the previous chapter, businesses invest heavily in establishing the “supermarket pastoral,” the

stories and images behind the organic product. The descriptive signs and murals make a trip to

Whole Foods more than a basic grocery run. They play on a sense of adventure and exoticism.

Along with the experience, you will find communal gathering spots in these stores. Cafes and

bars are common places to meet like-minded individuals. Farmer’s markets, which consumers

enjoy as an alternative to the conventional grocery store, have grown in popularity. The USDA

estimates that the number of active farmer’s markets in the U.S. has grown by over 30% in the

past five years.43 In a country where three quarters of the population live in urban areas, organic

foods provide a chance to experience the rural without going too far.

The motivations for buying organic foods are as varied as their benefits. More health

conscious customers like parents look for the marginal improvement in nutrition. Many want to

avoid the chemical fertilizers and pesticides that can be sensationalized in the media, and know

more precisely what can and cannot be present in their organic foods. However, the vast

majority of customers buy organic foods for the benefits of choice and personal values. Organic

foods can play an integral role in lifestyle choices for politically and environmentally minded

individuals, just as it did for readers and followers of Organic Gardening & Farming over 50

years ago. The clear link between buying organic foods and embodying a whole lifestyle of

related choices has declined since then, as the label has become regulated and widespread in

national supermarket chains, but not everyone tries to establish that link in the first place. An

adventurous disposition and simple appreciation of quality foods leads many into the extensively

43 USDA, “Farmers Markets and Local Food Marketing:, <

http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateS&leftNav=WholesaleandFarm

ersMarkets&page=WFMFarmersMarketGrowth&description=Farmers+Market+Growth>

Albrecht 34

decorated aisles at Whole Foods and farmer’s markets. However you slice it, organic foods

offers significant benefits for anyone that takes the bite.

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Chapter Four

Environmental Perspective

Besides the advantages of organic foods for humans that I have discussed, whether

producing and selling or buying and consuming, organics also benefit the environment. With the

explosion of concern in America over humanity’s environmental impact, including pollution,

sustainability, and global warming, this section alone would be enough to convince some people

about the superiority of organic foods to nonorganic alternatives. Both industrial and organic

agriculture try to cut down on their environmental footprint, for reasons of both genuine concern

and regulatory requirements. Organic agriculture takes these attempts further than mandated,

however, as one of its central and founding pillars rests on environmental sustainability,

cooperation, and preservation. For the first organic farmers, the less human, “artificial”

interference, the better. The whole purpose was to be as natural as possible. While organic

requirements for today’s organic agriculture are not as strict, the organic method of production

still preserves the land, air, and water it uses much more efficiently than industrial agriculture.

First and foremost, organic agriculture must follow extensive regulations laid out by the

USDA that ensures that, “irradiation, sewage sludge, synthetic fertilizers, prohibited pesticides,

and genetically modified organisms were not used.”44 Most of the regulations are directed at

limiting pesticides and herbicides used in industrial agriculture. Industrial agriculture does not

have free license to use any chemicals, as some like DDT are so harmful that they have been

banned nationwide, but in general it has access to chemical pesticides that can control insects,

44 USDA, “National Organic Program”, <

http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&navID=OrgStandardsLinkN

OPAboutUs&rightNav1=OrgStandardsLinkNOPAboutUs&topNav=&leftNav=&page=NOPOrganicStandards&resu

ltType=&acct=nopgeninfo>

Albrecht 36

crop disease, weeds, and any other invasive species that would limit yield. Organic farmers

instead rely on natural solutions to such problems. In Pollan’s visit to many farms, he noted the

use of organic substitutes to accomplish the desired effect of preventing insects and weeds. For

example, many farms spread out lacewing eggs, an insect that, once hatched, feeds on the very

pests that devour crops. Furthermore, farmers till their soil more often than nonorganic farms – a

process of turning over the soil that destroys invasive plant roots.45 Large organic operations,

being unable to regulate potential crop disease with chemicals, segregate and frequently monitor

their fields for signs of disease. Required periodic residue testing by the USDA for organically

certified farms ensures the lower levels of synthetic pesticides and herbicides. Furthermore, the

avoidance of the synthetic in organic agriculture limits the use of fertilizers to boost phosphorus

and nitrogen levels in the soil – two of the three letters in NPK that is so crucial to industrial

agriculture.

These synthetic limitations produce two environmentally beneficial effects. The first is a

decrease in pollution and an improvement in water quality and air purity. Runoff water is the

primary method that agricultural byproducts escape into the surrounding environment. Nitrogen

rich wastewater can cause algal blooms that disrupt the ecosystem in numerous ways, such as

blocking sunlight to underwater plants, choking out wildlife, and even increasing toxins secreted

by the algae themselves.46 By reducing the amounts of pesticides and nitrogen and phosphorus

rich chemicals in this water, the impact of runoff water is greatly reduced. Furthermore,

agricultural studies have shown that organically handled soil retains water better than

synthetically fertilized alternatives. The chemicals strip the soils ability to hold the water,

resulting in both a greater quantity and a greater degree of contamination to the runoff water.

45 Pollan, The Omnivore’s Dilemma 46 Nancy Diersing, “Phytoplankton Blooms: The Basics”, (Florida Keys National Marine Sanctuary, 2009).

Albrecht 37

Because the soil retains more water over time, organic farms require slightly less irrigation,

further reducing water runoff concerns. Similarly, lower amounts of nitrogen rich chemicals

lead to fewer greenhouse gas emissions from nitrous oxide. This gas escapes from over-

fertilized soil that cannot retain the high concentrations of nitrogen and contributes to

degradation of the ozone layer. A study on over 50 organic and industrial farms found that

emissions of nitrous oxide, carbon dioxide, and ammonia, three greenhouse gasses, were lower

per unit area on organic farms. This was a direct result of avoiding chemical fertilizers; “lower

nitrous oxide and ammonia emissions from organic farming per unit of area were mainly due to

lower overall nitrogen inputs in organic than in conventional systems.”47 Overall, both water and

air quality are better on organic farms than industrial counterparts.

The second major benefit results in an increase in the biodiversity in the area, one of the

strongest indicators of environmental health. Biodiversity simply refers to both the amount and

variety of species, animals and plants, in either a given ecosystem or the world as a whole.

Greater biodiversity indicates a richer ecosystem that can sustain many different kinds of life,

and impacts human health as well.48 Organic farming promotes biodiversity in both small

organisms like fungi in the soil and larger, visible organisms like birds and insects that would die

from pesticides. One study focused on the levels of arbuscular mycorrhizal (AMF), an important

fungus that forms symbiotic relationships with crops to fix nutrients such as phosphorus in the

soil of organic and nonorganic farms. The authors concluded, “AMF diversity is higher under

organic farming, and AFM richness increases significantly with time since conversion to organic

47 H. L. Tuomisto et al., “Does Organic Farming Reduce Environmental Impacts?”, (Elsevier: The Journal of

Environmental Management, 2012), p.310. 48 Eric Chivian and Aaron Bernstein, “How Our Health Depends on Biodiversity”, (Cambridge: Harvard Press,

2010).

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farming.”49 A further meta-analysis of numerous studies showed similar benefits for birds and

insects, noting that these organisms responded positively to organic farming systems, showing

increases of as much as 50% over nonorganic farming systems.50 Furthermore, organic farming

provides both richness and evenness of local species as well as natural pest control.51 Finally,

organic farms typically rely on greater crop rotation to restore nutrients to the soil, which more

closely resembles how the environment would have developed naturally.52 The avoidance of

chemical pesticides and reliance on natural fertilizers and soil management on organic farms

result in increased biodiversity and environmental health.

Improvements in biodiversity also act to mitigate risk to both the farm itself and the

overall food supply. Monocrop fields on industrial farms that rely on a single product growing

over a large area may benefit from efficient use of resources, but they are also more susceptible

to environmental changes that could eliminate the entire yield. A slight change in soil

composition or climate could render that specific species infertile; a diversified field would lose

only a small fraction of its usefulness in such a situation. Furthermore, diversification allows

organic farms to adapt more quickly and precisely to climate change. As global climate change

continues to be a major concern in agricultural production, adaptability may be crucial to

maintaining the global food supply.53 The lessening of these risks can offset the corresponding

decline in yield from less efficiency.

49 Verbruggen et al., “Positive Effects of Organic Farming on Below-Ground Mutualists”, (New Phytologist, 2010),

p. 977. 50 Janne Bengtsson et al., “The Effects of Organic Agriculture on Biodiversity and Abundance”, (London: Journal of

Applied Ecology, 2005), p. 262. 51 David Crowder et al., “Organic Agriculture Promotes Evenness and Natural Pest Control”, (Macmillan

Publishers, Nature Vol. 466, 2010), P. 108. 52 Bengtsson et al., “The Effects of Organic Agriculture on Biodiversity and Abundance”, p. 262. 53 Radu Criveanu et al., “Organic Agriculture, Climate Change, and Food Security”, (Craiova: Economics,

Management, and Financial Markets Vol. 9.1, 2014), p. 118-124.

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The improvements in water quality and biodiversity positively impact the sustainability

of organic farms as well. Such operations can deliver high yields consistently over a greater

number of years than nonorganic farms that need to give certain fields a break or restore their

fertility through more artificial means. Extensive research has shown the unsustainability of

modern industrial agriculture. A short paper from the Geographical Association summarizes the

key problems:

The loss of biodiversity (e.g. wetland, moorland and forest); the nitrification

(pollution) of groundwater and eutrophication of watercourses from the use

of inorganic fertilizers; rising levels of soil erosion and salinity; the lower

of water tables from the draining of wetlands; the increased incidence of

soil compaction; the discharge of pesticides into rivers; pollution of ground

water by wastes from intensive livestock units; and overgrazing of pasture

land.54

Organic agriculture reduces or completely eliminates these problems. Refusing to utilize

synthetic fertilizers increases biodiversity and lowers nitrification, having a ripple effect that

improves water and soil quality, and decreases pollution from pesticides. Even the effects of

livestock production are mitigated. Waste is reused in compost and as a natural fertilizer for

crops. Overgrazing can still become a problem. However, the USDA requires organic livestock

producers to have a minimum amount of space to raise the animals and they have on average

more room than nonorganically raised livestock.55 Both organic crop production and livestock

production represent a more sustainable model than the industrial standard.

54 Ian Bowler, “Developing Sustainable Agriculture”, (Geographical Association, Geography Vol. 87 No. 3, 2002),

p. 206). 55 USDA Organic Livestock Requirements

<http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5102526>

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Moreover, organic production considers animal ethical implications to a greater degree

than industrial techniques. While any producer that handles livestock must meet criteria

regarding the animals’ health and well-being, animals raised for consumption under the organic

model are even more protected. For example, organic meats like chicken and beef are free from

antibiotics and growth hormones that permeate industrial livestock production. Furthermore,

organic animals and birds are often “free range,” a term that indicates the animal had space to

roam. This space may vary from a superficial and small yard to acres of pasture, but either way

is more than the typical cage space on an industrial farm. The impacts on the quality of the

organic food procured may be negligible, but the ethical implications of organic livestock

production are important to many who disagree with the industrial model.

Despite the numerous environmental advantages of organic farming over industrial

farming, there are still some issues. Primarily, organic farms are not as efficient and require

more resources per unit of yield than industrial farms. Although the environmental impact of

individual organic farms is less than what an industrial farm would be, the organic farm also

outputs less product. In a meta-analysis of research on the environmental impacts of organic

farming, Tuomisto et al summarized by saying, “organic farming practices generally have

positive impacts on the environment per unit of area, but not necessarily per product unit.”56

Because each product unit requires more inputs, organic farms must ensure those inputs are not

harmful in order to capture the “generally positive impacts on the environment.” However, the

USDA only monitors the inputs, not the extent to which the inputs are used (or misused).

Continuous improvements in farming techniques and efficiency will be required to sustain the

environmental advantages of organic farming.

56 H. L. Tuomisto et al., “Does Organic Farming Reduce Environmental Impacts?”,), p.318.

Albrecht 41

The regulations surrounding organic production and the economic incentive through

higher premiums have led some to question whether organic farming has completely abandoned

its roots. “Big Organic,” the term used disparagingly by Pollan and others, indicates those

producers that meet the minimum requirements for organic without regard to the environmental

impact for the economic gains. Some of these large players were able to shape some of the

original regulation to include things that could be considered contrary to the organic spirit, such

as synthetic additives to prolong shelf life. They also wanted to incorporate some industrial

techniques to boost yields and make up for the loss of pesticides and fertilizers, such as excessive

tilling. As noted earlier, this process breaks up invasive weeds’ roots, but too much tilling can

destroy the small and microscopic organisms in the soil that promote biodiversity. Nevertheless,

organic farms that fall short of the original organic ideal still offer environmental benefits that

overshadow industrial methods. Furthermore, paragons such as Polyface Farms set an example

for many environmentally conscious producers to follow.

A transition to an organic model of agriculture is also costly, and will require extensive

investment. Nevertheless, as environmental management becomes more important and

environmental neglect becomes more costly, investment in organic farming will be necessary

and pay off. In fact, the agricultural industry alone contributes between 10 and 15 percent of

climate changing emissions in the United States.57 Lowering this percentage will be a crucial

step in protecting the environment. Organic farms must follow USDA regulations that lead to

greater conservation and numerous benefits. By avoiding synthetic, chemical fertilizers and

relying on natural alternatives, pollution decreases dramatically on organic farms. Soil and water

57 Environmental Protection Agency, “Sources of Greenhouse Gasses” and World Future Council, “How Does

Agriculture Contribute to Climate Change” < http://epa.gov/climatechange/ghgemissions/sources/industry.html>

and < http://www.worldfuturecouncil.org/2326.html>.

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quality improve, in turn lowering greenhouse gas emissions. The impact of an organic farm on

its surrounding environment is lower than industrial operations that diminish wildlife such as

bird and fish populations. Organic farms benefit from the diversification in biodiversity,

lowering risk from unexpected climate change. This in turn makes organic agriculture a more

sustainable approach, as the farm can utilize its resources over a longer period of time without

exhausting the local environment. Finally, animal livestock raised for consumption are treated

more humanely in the organic model, which is a cause many would like to see required in all

livestock production. These numerous benefits outweigh the high costs. Even so, organic

farming is not a perfect utopian solution to every issue, and operations and methods can still be

refined to further lessen its environmental impact and better approach the organic ideal.

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Conclusion

How important are the many benefits of organic foods? To some, maybe not so much.

Gene Kahn, the founder of Cascadian Farms and the primary example of counterculture organic

converging with mainstream industry, says, “This is just lunch for most people. Just lunch. We

can call it sacred, we can talk about communion, but it’s just lunch.” Surely, to those crusaders

who adopted the organic model early on, it was way more than lunch. Over 50 years have

passed since The Whole Earth Catalog published its review of Organic Gardening and Farming,

bringing its message and methods out of obscurity. Adopted by the subversive counterculture of

1960s America, the organic movement set out to become an alternative food supply and lifestyle

that rejected everything that characterized the existing model. Undoubtedly, organic food has

changed over the last half century – changes that some food activists see as failure to live up to

the organic ideal. After all, the organic industry has fallen short of perfection. The regulations

laid out for organic foods were shaped by the very government and companies they set out to

defy. Some cynical producers are out to get rich off organic popularity where cooperatives,

public farms, and food sharing had once existed. Organic foods are on the shelves of the biggest

supermarkets right next to their nonorganic cousins. Is this what organic was supposed to mean?

However, taking a step back and analyzing organic foods from multiple perspectives

reveals its great successes. After all, more customers across the United States are switching to

organic foods every year. The astounding success of markets like Whole Foods and producers

like Polyface Farms proves how well Americans have responded to organic. Furthermore,

companies that have embodied organic values can compete and thrive just as well as their

Albrecht 44

conventional competitors. The organic industry will continue to grow in its success, and the

organic label clearly transmits value to the food that consumers demand.

Organic is still a lifestyle choice as well. While organic consumerism may not be as

radical as it once was, the choices nevertheless reflect important values. Consumers want to

have choices that mean something. Supporting organic foods is an effective and efficient way to

proclaim a stance on a variety of topics, such as environmental consciousness, animal rights, and

even political leanings. Furthermore, individuals can enter new social circles and gain social

capital from understanding and appreciation of organic foods as much as certain foodies do for

any gourmet cuisine. Organic food companies also invest time and money into the production

value of their foods and marketplaces. Whole Foods offers a level of decoration and detail

unseen in conventional grocery stores, making the shopping experience exploratory and exciting.

Overall, organic foods transfer numerous benefits to consumers.

More lasting and perhaps more important than the profits for business or the choice for

consumers is the environmental benefits of the organic model over industrial agriculture. In a

high-energy, high-impact industry, the improvements in conservation and preservation of the

environment have profound effects. Organic farming avoids synthetic chemicals for fertilizers,

pesticides, and herbicides, leading to a reduction in harmful byproducts and pollution. Ground

water and its runoff remains cleaner which mitigates much of an operations environmental

effects. The soil is likewise more pure and can sustain crops longer. The reduction in pollution

promotes greater biodiversity in the area, a clear indicator of environmental health. As climate

change increases, organic methods may not only be beneficial but necessary to avoid widespread

crop failure and food shortages. These methods and regulations surrounding them should be

continually refined further improve the environmental advantages of organic farming.

Albrecht 45

As more people come to recognize all the benefits, organic foods will become even more

popular. The industry will grow much as it has in the past decade, driving expansion in

companies nationwide. There will continue to be a tension between companies after these profits

and the meaning of the organic ideals originally put forth. The deciding factor will be in the

hands of the consumers. Organic foods must continue to meet the demands for a better food

supply to keep its success.

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BIOGRAPHY

Alan Raymond Albrecht was born in Houston, Texas in 1992. He enrolled in the Plan II

Honors program at The University of Texas at Austin in 2011, while also pursuing a Bachelor of

Business Administration in Business Honors. During college, he was a member of the fraternity

Lambda Chi Alpha, holding the office of treasurer for two semesters. In addition, he enjoys

soccer and playing piano. He will move back to Houston after graduation in 2015 to join The

BVA Group as a financial analyst.