Systemic Problems with Organic Labeling and Signage: Widespread Market Place Misrepresentation

February 15th, 2011

Formal rule change request by The Cornucopia Institute will address problem

CORNUCOPIA, Wis. An investigation by The Cornucopia Institute found numerous stores in several states that carried “organic” signs on shelves of non-organic breakfast cereal, and bulk bins with non-organic granola that had “organic” bin labels.

One specific company, Golden Temple, which manufactures bulk granola under their trade name, and packaged products under the Peace Cereal brand, was responsible for widespread, national labeling problems based on Cornucopia’s research.

Similar problems with mislabeled in-store signs and advertisements of conventional Silk soymilk represented as “organic” had previously been traced to the same cause: the manufacturers of these products changed their products from organic to conventional without changing the product’s barcode. As a result, many retailers were unaware of the change from organic to conventional and continued to label these products as before.

Silk is manufactured and distributed by the WhiteWave division of the dairy giant Dean Foods.

To prevent future problems with mislabeling of conventional or “natural” food as organic, and to protect consumers from false in-store signage, The Cornucopia Institute today filed a formal request with the National Organic Standards Board, the expert panel that advises the Secretary of Agriculture on organic rulemaking, for a rule change in the federal organic standards.

Cornucopia is requesting that food manufacturers be required to change their barcode, the Universal Product Code (UPC), whenever there is a change in the product’s organic status and, additionally, to formally notify their customers.

“Any change in organic status requires new labels and packaging, since the USDA strictly regulates the use of the term “organic” on food packages. We believe that a change in the barcode is a simple step that every manufacturer should be obligated to take to ensure that all distributors and retailers are aware that the product has changed, ” says Charlotte Vallaeys, a Farm and Food Policy Analyst with Cornucopia, a Wisconsin-based food and farm policy group.

Reports of mislabeled bulk bins displaying “organic” signs while containing non-organic Golden Temple granola triggered the investigation and formal request by The Cornucopia Institute. “It’s a tribute to the passion and concern that consumers and retailers have for organic food that they care enough to raise questions when something appears improper,” Vallaeys said about the spontaneous reports received by the organic watchdog group. “The strength of the organic label centers around the vast majority of ethical industry participants that are willing to speak up and tough federal regulations, that include fines and other sanctions when necessary.”

When Cornucopia staff members visited stores in the Midwest and the East Coast, they also found numerous instances of Peace Cereal mislabeled as “organic, ” when the cereal has been conventional for the past three years. Non-organic Peace Cereal was identified as “organic” even in certified organic retail stores. And Cornucopia still found the product listed as organic in at least one West Coast distributor’s catalog.

The Golden Temple bulk granola and Peace Cereal brands are owned by the same company, which was acquired by Hearthside Food Solutions in 2010. Three years ago, the manufacturer of the two brands switched its product line from organic to conventional, without changing any of the product barcodes. While some retailers say they were notified of the change, many were not and continued to purchase and label the products as before, unaware of the change from organic to conventional.

“Our investigation shows that the vast majority of retailers were horrified when they learned that they had mislabeled these products in their stores and unknowingly misled their customers, ” states Vallaeys. “It became clear to us that the problem lies not with the retailers, but with the food manufacturers who fail to change their product’s barcode. It should be their responsibility to ensure that their customers know they are no longer organic. ”

In most stores, the ordering and stocking system is highly automated, and labor is typically provided by entry-level staff. Unless the manufacturer making the change notifies the retailers directly and changes the Universal Product Code, it is unlikely that the employees receiving the shipment will catch the change.

“We found out about Golden Temple’s change from organic to conventional from a representative of another company, ” says Rosemary Mausser, of Three Rivers Co-op in Fort Wayne, Indiana. Mausser made sure the bulk bin labels in her store were updated immediately, but notes that the nearly three-year time lag could have been prevented easily.

“If the manufacturer doesn’t tell us that the product has changed, it’s hard for us to catch the change ourselves, ” says Mausser. “The employees who unload the incoming boxes and fill up the bulk bins at 2 o’clock in the morning cannot be expected to inspect every box to make sure the organic status hasn’t changed. It only seems reasonable that manufacturers should let us know, and a change in the barcode or order number would help serve as a heads-up that something about the product is different,” she adds.

Even the venerable national chain Whole Foods Markets, which displayed inaccurate “organic” signs, was a victim of this “organic shell game” since they relied on the automated database from their prime distributor, United Natural Foods International.

After being notified by Cornucopia, Whole Foods management instituted a chain-wide audit of all in-store signage, which is now in the process of being completed.

In another prominent example that illustrates the need for this rule change, when Dean Foods (White Wave) changed the core product line of their Silk soymilk from organic to conventional without changing the barcode in 2009, many independent retailers were not aware of the switch until a report by The Cornucopia Institute, which was widely covered in the news media (including cover stories in the Chicago Tribune and LA Times), alerted them of the change.

The Fort Worth Star-Telegram printed an expose on Dean Foods’ decision to keep the organic product’s barcode on its reformulated non-organic soymilk cartons, reporting that, as a result, “specialty food markets contacted in California, Delaware and Texas said they did not discover the switch for six to nine months.”

Along with a mandatory change in the barcode, The Cornucopia Institute is requesting that manufacturers also be required to alert all customers, including distributors, vendors, brokers and all retailers, when their product no longer qualifies as organic.

“Manufacturers do have the means available to notify their customers, such as when there is a voluntary recall or an undeclared allergen we should know about, ” says Anne Vedder, of Outpost Natural Foods, a member-owned cooperative in Milwaukee, Wisconsin. “So it wouldn’t be too much to ask them to notify us as well when there is a downgrade from organic status to conventional, ” she adds.

“I’ll bet you 10 pounds of granola that a manufacturer will do anything in their power to make sure that retailers are notified when their product changes from conventional to organic, ” says Cornucopia’s Mark Kastel, the organization’s Codirector. “That’s because the organic label has real value, and it’s unfair to companies that are truly committed to organics when others profit from the organic label for months, even years, after they discontinue using organic ingredients.”

PLEASE NOTE: These examples of mislabeling are aberrations in the organic industry, and might possibly lead to a loss of consumer confidence in organics.

We believe it is important for the organic industry, especially retailers, to understand current dynamics regarding organic labeling, especially for bulk bin items. We urge all retailers to immediately scrutinize their signage and confirm they are compatible with both the Organic Foods Production Act and general ethical retailing practices.

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