The Co-op Food Stores

added 07/01/09

Dean Foods’ creation of a possible new product category threatens to compete with certified organic dairy farmers.

According to a recent article published in Natural Foods Merchandiser magazine, Dean Foods’ WhiteWave division has announced that they will introduce two “natural”—and thus conventional—dairy products to the Horizon label. Horizon Organic is a Broomfield, Colorado-based company and one of the first certified organic dairies to distribute nationwide. The new products will be geared toward children and are not organic, but natural—an important distinction for both farmers and consumers alike.

A New Product Category

“This at a time when organic dairy farmers around the country are in financial crisis due to a glut of milk,” writes Mark A. Kastel, Senior Farm Policy Analyst for The Cornucopia Institute. “They are, in essence, creating a new product category—‘natural dairy products’—that will directly compete with certified organic farmers and the marketers they partner with. This move comes on the heels of the recent decision by Dean/WhiteWave to switch almost the entire product offerings of their Silk soymilk and soyfoods line to “natural” (conventional) soybeans. They made the switch to conventional soybeans, in Silk products, without lowering the price.

“The news story below, from the Natural Foods Merchandiser quotes Dean Foods/WhiteWave officials saying these products will be ‘easier on the pocketbook.’ Yes, they will be designed to undercut certified organic on price.

“Horizon is the largest, in terms of dollar volume, organic brand in the marketplace. Silk holds the leading market share in soyfoods and was once, prior to Dean Foods’ acquisition, a 100 percent organic company and brand.”

Horizon Organic Introduces Two New Natural Products

June 29,2009
by Angela Cortez
Natural Foods Merchandiser

Horizon Organic, the Broomfield, Colo.-based company known as one of the first certified organic dairies to distribute nationwide, is adding one new product in July and testing another in August, and for the first time in the company’s history, the products geared toward children are not organic but natural.

Next month, Horizon Organic will launch Little Blends, a yogurt for toddlers. Milk Breakers, single servings of milk, will undergo a regional market test in the area of southeast Florida in August. These products are the first the company will distribute that are not certified organic. They are natural, don’t contain growth hormones and will be easier on the pocketbook, said Sara Loveday, marketing communications manager for Horizon Organic.

“We’ve only been organic in the past and the majority of our business will remain organic,” she said. “They are new, separate offerings. These are our first natural offerings in the marketplace, and Horizon always tries to provide great-tasting products for moms and for families. We’ve always been focused on innovation that satisfies a broader range of consumer needs.”

Little Blends is a yogurt with a fruit and vegetable purée that comes in combinations of banana and sweet potato, strawberry and carrot, and apple and butternut squash. The recommended retail price is $3.39 to $3.59 for a four-pack of 4-ounce cups. Milk Breakers, which will be available in vanilla and chocolate and are fortified with added protein, are geared to 4 to 10 year olds. The suggested retail price is $3.79 for a six-pack of 6-ounce servings.

Being natural but not organic means the company can sell the new products at a lower price and tap into a larger market. As the gap between conventional and organic widens and shoppers look to save money during recessionary times, companies are looking for ways to compete, ride the trends and offer value-priced products, said Michelle Barry, a retail and cultural trends expert and senior vice president of The Hartman Group, a research and consulting firm.

“I suspect it may be unusual, but [Horizon Organic] may be on the leading edge of companies that are struggling and in competition with other companies,” she said. “I’m not surprised they’ve done this. Their competition and consumers have been heading in this direction for some time.

“There may be some core brand loyalists that will be upset, but at the same time, they could be expanding to a much dense population and the strategy may expand their reach into more households,” Barry said.

But the move away from purely organic is a trend that doesn’t settle particularly well with Matthew McLean, vice president of the Organic Trade Association and owner of Uncle Matt’s Organic in Clermont, Fla.

Still, McLean said he understands that now is a difficult time for companies and they have to do what it takes to stay in business.

“As an advocate of organic, I hope organic holds firm and continues to grow, but each company has its own mission and vision,” he said. “Anybody in this economy, in any industry, is looking at ways to continue to grow the company and keep the light bill paid. I can only hope the organic consumer will continue to support organic, based on the quality of the products we put out. But I hope the companies stay true to organic, as well.”

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