Canada's billion-dollar organic industry is hoping a new "Canada Organic" label will allow the sector to capitalize on a strengthening demand for organic products both at home and abroad.

The new logo, part of the Organic Products Regulations first announced in December 2006 and carrying a two-year phase-in period, will tell consumers that they are purchasing products that are federally certified as organic.

The label will be permitted for use only on those food products certified as meeting Canadian standards for organic production, such as using natural fertilizers and raising animals in conditions that mimic nature as much as possible. Certified products must also contain at least 95 per cent organic ingredients.

"I think it's going to have a large effect on organic sales," says Laura Telford, executive director of the Ottawa-based group Canadian Organic Growers (COG), the largest dedicated organic organization in the country with 2,000 members and 15 chapters.

Photo courtesy of Canadian Food Inspection Agency
Agriculture Minister Chuck Strahl presents the 'Canada Organic' label to the Canadian organic food industry.

"When the USDA (United States Department of Agriculture) developed its organic logo about five years ago there was also a huge boost in the number of farmers transitioning to organic and more processors got on board."

The global organic foods and beverages market is expected to exceed US$86 billion by 2009, according to San Jose-based market research company Global Industry Analysts Inc. (GIA).

Of that, GIA says the organic produce market will be the largest segment in the organic foods and beverages market, projected to reach sales of US$33 billion by 2010.

The United States - one of Canada's top destinations for the export of organic products - is also the world's largest market for organic food and beverages, the GIA report adds.

But even though sales of organic products are growing by more than 20 per cent a year in Canada, the COG says the industry is still lagging behind its full potential.

"The demand is there from the consumers, but (our) producers don't know there is a demand," says Telford. "Between 50 per cent to 80 per cent of our (organic) food is coming from outside of our borders."

Telford is hopeful that the organic label - announced late last month by Chuck Strahl, minister of agriculture and agri-food and minister for the Canadian Food Inspection Agency (CFIA) - and the regulations that go with it will give the industry the push that it needs.

The CFIA will become the authority that provides system oversight, while existing accreditation bodies will remain in place and be authorized by the CFIA - provided they meet the criteria set out in the regulations.

Following the phase-in period ending in December 2008, it will be mandatory that all organic products be certified as "Canada Organic" if they're headed for inter-provincial or international trade.

Growers selling organic products strictly within their own province will not have to apply for the label.

However, Telford believes it could be to their benefit if they do, as consumers will likely be looking for the logo to ensure that a product is certified organic.

She adds it will likely just be a matter of time before the logo becomes the new "gold standard."

A number of provinces are planning to follow suit with their own organic regulations and Telford expects that many will follow the federal guidelines - putting an end to the "grocery store paralysis" consumers face from organic label overload.

"In Canada we currently have 27 organic certification bodies - those are just the Canadian ones," she says. "You can also see the logos of countries that import into Canada. This will help Canadians recognize Canadian organic product."

These national regulations will also be a strong step toward eliminating unfair competition from non-certified operators, adds Penelope Marrett, president and CEO of the Toronto-based Canadian Health Food Association, a 1,300-member organization representing retailers, wholesalers, distributors, manufacturers and other related associations.

Natural food retailer Planet Organic, which operates eight Planet Organic Markets across Canada and is in expansion mode, says the new label is a welcome addition.

"I think it was due," says Diane Shaskin, vice-president of marketing for Planet Organic Market. "We want to do everything we can to ensure that what we advertise is true. We have committees within our companies that monitor the (organic quality and claims of each) product."

"This is what this label is all about, making it a level playing field."

She adds it will also make it easier for producers to approach grocers or markets.

"You might have the most dedicated organic producer, but if they're not prepared to do this bureaucratic due diligence (to prove their organic claims), we won't sell their product," says Shaskin. "It will make the growers understand the global perspective on organic growing."

And that global perspective is becoming increasingly important.

Without the organic product regulations that are the backbone of the new Canada Organic label, other countries and regions such as the European Union and the U.S. - Canada's top two markets for organic exports - were going to shut the door on the Canadian organic sector.

"The Organic Products Regulation will allow the federal government to negotiate trade agreements with foreign jurisdictions; government-to-government agreements will provide easier access to foreign markets," says Marrett.

"The regulations are the government of Canada's response to requests by industry (organic) stakeholders to develop a regulatory system for organic products that addresses consumer protection and domestic and international market access issues. Canada now joins more than 40 other countries world-wide with organic regulations."

Documentation for the recognition of the Canadian organic system has been prepared and submitted to the EU, says Marrett, who adds that negotiation of acceptance of the new organic regulations will be initiated by the federal government on a priority basis with Canada's key trading partners.

Organic Growth

The latest data show that there were 3,618 certified organic farmers in Canada in 2005, with British Columbia, Saskatchewan and Quebec leading the way.

There were also 607 certified organic processors and 210 certified organic handlers.

Organic farm enterprises include:

* Field crops, grains, oilseeds: 2077

* Vegetable production: 733

* Livestock: 590

* Maple syrup: 317

* Orchards: 196

* Berries: 80

* Vineyards: 33

* Mushroom: 18 The value of certified organic food sales moving through grocery supermarkets was estimated at $412 million in 2006, up 28 per cent from 2005. Although growing quickly, organic products still represent a very small proportion of the total value of food sold through mainstream channels. The average growth rate of the sales of all certified organic products in supermarkets from 2005 to 2006 was 28 per cent. The strongest growth was seen in Alberta, with an increase of 44 per cent.

Sources: Canadian Organic Growers; Organic Agriculture Centre of Canada

(Laura Severs can be reached at laura@businessedge.ca)