The Rising Popularity of 'Going Organic' Demands Supply Chain Adaptation

With the mounting popularity of organic food, progressive suppliers are moving away from the traditional supply chain in favor of new and innovative solutions.

Here’s some food for thought: when was the last time you went to the grocery store without seeing at least one item labeled “organic?” For many millennials, the answer might simply be “never.” While the organic movement is hardly contemporary (originating at the same time as large-scale agricultural practices, circa 1900) it was not until the 21st century that the idea of “going organic” truly entered the cultural zeitgeist.

Despite the relatively recent spike in consumer interest, it doesn’t appear that the demand for organic goods is going to decline any time soon. Quite the opposite, in fact -- according to the United States Department of Agriculture (USDA, for short), as of May 2016, “consumer demand for organically produced goods continues to show double-digit growth.” At the moment, organic goods are offered in over 20,000 natural food stores nationwide, as well as 3 out of 4 conventional grocery stores.

Although undeniably thrilled by the rising demand for their products, many organic suppliers are struggling to increase their distribution accordingly. Why? Because the traditional, non-local/non-organic supply chain is not currently equipped to keep up with the rising demand for local, organically sourced products. The more consumers switch to organic, the more creative these suppliers have to be with their offerings.

The Traditional Supply Chain

In a non-local/non-organic supply chain, the focus is fairly simple -- to provide quality produce consistently, regardless of season. The logistics behind this supply chain, however, are incredibly complicated. In fact, shipping food from the farm to your table is often nothing short of a global effort. In order to deliver out-of-market produce, suppliers rely upon a combination of ships, trains, trucks, and planes, all equipped with the technology necessary to refrigerate massive amounts of produce -- in other words, they utilize a cold chain.

While genetic modification and long-term storage may rob produce of some of its flavor and nutritional value, these tactics guarantee consumer access year-round. Consider avocados, for example. Since 90% of the United States’ avocado crop is grown in California, transporting America’s favorite fruit (yes, fruit) takes some serious logistical know-how. It’s only thanks to a meticulously temperature-controlled supply chain that people across the U.S. are able to enjoy guacamole in their burritos, regardless of the season or climate.

How Organic Suppliers Are Reinventing the Wheel

Herein lies the problem -- while organic produce still requires a temperature-controlled supply chain, it often can’t remain in storage for as long as its genetically modified counterparts. Between the limited number of organic farms and the growing demand for organic produce, many companies are scrambling to find new ways to increase yield. According to the Wall Street Journal, organic food purveyors like Chipotle and Nature’s Path are taking radical steps to ensure that supply meets demand, from financing farmers to tracking down organic growers, or even buying their own farms.

That being said, organic farmers are certainly pulling their weight when it comes to finding creative solutions to maintain both supply volume and continuity. While localized supply logistics can be incredibly complex, suppliers are finding new ways of streamlining logistics to minimize mileage. By partnering with restaurants, for example, farms and farming cooperatives are often able to integrate their shipments into larger distribution networks. While this might mean that produce travels further than what many would consider ‘local,’ it cuts costs and allows for wider distribution of organically sourced cuisine.

While organic growers, suppliers, and purveyors have found efficient ways to move many varieties of local produce, some products, like cage-free eggs, still present logistical difficulties. Not only will farmers have to completely alter the infrastructure of their farming practices (only 8% of laying hens in the U.S. are currently cage-free) but logisticians will have to reform every level of the supply chain process to cater to non-organic, cage-free, and organic farms. However, with supply skyrocketing, and industry giants like Walmart and McDonald’s promising cage-free eggs in the next decade, an innovative supply management solution can’t be too far on the horizon.