dairy When it comes to organic food trends, there’s good news and bad news for the dairy industry.

Market research data culled from SPINS, ACNielsen, the Organic Trade Association (OTA) and Mintel indicate that organic dairy sales hit $521 million in 2002 and $769 million in 2004-an increase of almost 48%. While this is certainly healthy growth for any industry, dairy represents only 14.5% of all organic food sales, and its share of the overall organic market has decreased slightly.

Statistics, of course, need to be interpreted correctly, and there are two trends that have an impact on dairy sales: a switch from milk products to soy-based foods and the skyrocketing popularity of prepared and packaged foods. In fact, soy-based drinks were the fastest-growing product in the global marketplace, outperforming all other foods and beverages with a 31% increase in sales between 2003 and 2004, according to a January study from ACNielsen. Convenience, consumer recognition of soy’s health benefits and attractive pricing were the key reasons for soaring sales.

Nonetheless, experts agree dairy products will continue to experience solid growth in the organic foods marketplace. The OTA predicts dairy sales will increase by 15.3% between 2004 and 2008.

“Organic dairy products have been one of the latest growth segments in organic foods and have been the fastest-growing segment in the past few years,” confirms Rick Kment, a dairy analyst for DTN, an Omaha, Nebraska-based private company that provides information services to leading businesses, including the agricultural sector. “Though the comparative percentage in consumption of organic dairy products in relation to the overall organic food market has declined slightly over the last couple of years, organic dairy products continue to be a growing part of the dairy industry,” he tells OrganicAuthority.com.

The Switch to Soy

William Hawkins, a marketing consultant with Philadelphia-based Kings Road Consulting and a vegetarian for 20 years, cites three reasons why the formerly narrow soy market-once the limited domain of animal-rights activists-has broadened:

  • Organic consumers are concerned about health issues associated with dairy products.
  • General consumers-especially older women-are worried about the detrimental effects of consuming too much dairy, including weight gain.
  • General consumers are now experimenting with a wide range of soy offerings.

Distribution methods have also expanded, Hawkins notes.

“Instead of hole-in-the-wall health stores catering only to the very ‘informed’ or ‘concerned’ consumer, major store chains are carrying soy products,” he tells OrganicAuthority.com. “Here in the Philly region, for example, the greatly respected and reasonably mainstream Whole Foods Market and the very mainstream Super Fresh stores now carry more and more soy products. Displays in stores are also more prominent.”

Especially committed to soy is Dr. Greg Paul, director of health and nutrition for The Solae Company in St. Louis, which has researched the health benefits of soy protein for more than 30 years and helps bring new products to the marketplace.

“Soy protein continues to live up to its promise of providing nutritional benefits, such as reducing the risk of heart disease, preventing certain types of cancers, lessening the severity of menopause and helping the growth of lean muscle mass,” he tells OrganicAuthority.com. “Dairy can’t make all those claims.”

Hooked on Packaged Foods

As with mainstream consumers, organic food shoppers are pressed for time, and they’re filling their carts with larger quantities of prepared and packaged foods.

“As packaged products increase, sales in other areas, such as dairy, might remain the same in dollar volume, while their percentage of the whole decreases,” says Luddene Perry, author of A Field Guide to Buying Organic. “Moreover, most organic dairy companies-Horizon and Organic Valley, specifically-cannot find enough producers to meet the demand,” she tells OrganicAuthority.com. “There is no such problem for organic grains such as wheat, a major component of packaged products. The U.S. could make organic crackers until the cows come home, but there probably wouldn’t be enough organic cheese to put on them. Therein lies the incentive to create the organic mega-cow herds that have been derided in the news lately.” (See sidebar below.)

That’s why Organic Valley/CROPP-the largest independent farmer-owned organic dairy cooperative in the United States, representing 689 farmers-has launched its Transition to Organic Fund, which provides financial help to dairy producers who go organic.

“The farmers of Organic Valley are committed to helping dairy farmers make the transition to organic,” says Tim Griffin, national milk procurement manager. “We know how tough the transition process can be, and we hope our Transition to Organic Fund can help farmers meet the challenge.”

How Healthy Are Your Local Cows?

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Geography plays an important role in buying organic, according to Luddene Perry, a Minneapolis-based teacher of horticultural food production and garden/landscape design, as well as a member of the Independent Organic Inspectors Association. Non organic milk is less worrisome on the East Coast, she notes, while West Coast consumers-even those who have not adopted an organic lifestyle-should consider buying organic dairy products.

Health and size of dairy herds, climate and population demographics are what determine milk quality. Hot, dry weather scorches green pastures-a problem for California’s dairy farmers, who work at approximately 2,500 dairies statewide, with more than 3 million cows. By contrast, Wisconsin-often considered “America’s Dairyland,” according to Perry-has more than 15,000 dairies, with only 1.23 million cows (an average of 82 cows per farm versus California’s 1,000-1,500 per farm). Midwest and East Coast dairies mirror Wisconsin’s statistics, while Arizona, New Mexico, Colorado and Idaho face California’s challenges.

“Large herds have inherent problems-mainly, more health issues, environmental troubles and worker-safety concerns,” Perry tells OrganicAuthority.com. “Although antibiotics are not present in milk, their overuse could lead to resistance. Large herds use more antibiotics than small herds. Moreover, rBGH [recombinant bovine growth hormone] is used more in larger herds because its cost is prohibitive to smaller dairymen.”