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Organic Food Markets in Transition Policy Studies Report No. 14 by Carolyn Dimitri, Economic Research Service, U.S. Department of Agriculture, and Nessa J. Richman, Henry A. Wallace Center for Agricultural and Environmental Policy Funded in part by the United Department of Agriculture's Fund for Rural America. Henry A. Wallace Center for Agricultural and Environmental Policy, April 2000 43 pp., $15.00, paper ISBN 1-893182-5

In the mid-1970s my husband I joined a food buying club. This cooperative was a place for us to meet others who wished to place bulk orders for cheese, flour, brown rice or peanut butter. "It's a cheapcheese club," we used to joke, referring to the fact that our coop ordered cheese from a dairy cooperative at a price less per pound than that found in the local supermarket. For us, the price of cheese and grains purchased through our "club" was just as important as learning which foodstuffs were organically grown or deciding with fellow members who would meet the truck from the regional warehouse each month and who would help weigh and distribute our orders.

Now, all these years later, members from our food buying club still meet in the basement of a local church once a month to distribute our orders. We still order cheese in bulk as well as peanut butter, rice and flour. But, our order form looks different. Much of our list is made up of prepackaged items such as toothpaste, "power bars," chips and sparkling water. The catalogue from our regional warehouse lists hundreds of items to be "specially ordered." And, should we desire a wider variety of "natural" or "organic" products, we know we will find them in our locally owned cooperative storefronts and, in nationally owned supermarkets as well.

In response to growing sales in the "natural" or "organic" food market ($3.3 billion in 1998, compared to $2.08 billion in 1995) Carolyn Dimitri of the Economic Research Service, U.S. Department of Agriculture, and Nessa J. Richman of the Henry A. Wallace Center for Agricultural and Environmental Policy compiled Organic Food Markets in Transition, an attractively packaged 43-page report describing changing concerns of retailers, wholesalers, distributors and farmers. Authors Dimitri and Richman divide their report into four chapters:

• The Organic Food Market in Perspective
• The Marketing Chain: From Farm to Market
• The Marketing Chain Up Close: Roles, Strategies, Concerns
• Looking Ahead

Attractively presented charts and tables with titles such as "What Do Consumers of Organic Food Look For" and "Top Challenges for Natural Foods Retailers" are liberally sprinkled throughout this report, as are eight interesting case studies of large and small organic producers and distributors who, in 1997-98, saw themselves as being "in transition." Appendices include the actual survey questions given to 290 food industry businesses, and used, in part, by the authors as they formed this report as well as a comprehensive 3-page bibliography.

As a reader who belongs to a food buying cooperative, shops as wisely as possible, and grows as many fruits and vegetables as her family's garden can support, I found the information included in this report to be accurate and complete. While the focus of this report is not on the consumer (an earlier report covered consumer concerns and trends), the details Dimitri and Richman included in Organic Food Markets in Transition, and the way they carefully restated changes occurring in each of the four parts of the industry (grower, processor, wholesaler, retailer) confirmed my own growing understanding of current trends. As Dimitri and Richman state in their conclusion:

"We believe that new and established firms in the organic foods industry can coexist and prosper. In fact, according to some of our case studies, the presence of both may aid in market growth. But two critical challenges remain as the market develops. The first is defining a uniform standard for organic foods and ensuring that products labeled "organic" satisfy the criteria for organic food. The other major challenge will be identifying why out-of-stock problems persist at the retail level and taking appropriate measures to correct them. If these challenges are addressed in a timely fashion — with the benefit of detailed research — the future of the organic foods industry looks bright indeed."In

— Jeanne Whitehouse

Henry A. Wallace Center for Agricultural & Environmental Policy
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