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Natural food stores pursue organic seals of approval

(Sunday, June 29, 2003 -- CropChoice news) -- Dennis Blank, NY Times: As far as Joe T. Flueckiger Jr. is concerned, the exhaustive inspection and voluminous review of paperwork needed to get organic certification for the natural-food store he manages was well worth it.

"This speaks volumes for the commitment we have made to organic foods," said Mr. Flueckiger, the store team leader for a Whole Foods Market in Baltimore. "Retailers are going to benefit tremendously because of the assurances we are giving our customers."

In early June, Whole Foods Market Inc. of Austin, Tex. — the nation's largest chain of organic-food supermarkets, with sales of $2.7 billion last year — became the first major grocery chain in the nation to receive independent organic certification for every one of its stores, 140 in all.

"I see it more as investment spending in the brand consistent with what Whole Foods' strategy has been: to make a national brand consistent with its mission statement," said Andrew Wolf, an analyst at RBC Capital Markets. "It will bring more shoppers into the store."

The certification is intended to assure consumers that produce, meats and other foods that are sold as organic — free of conventional pesticides or fertilizers, antibiotics or growth hormones — are not mixed with nonorganic foods when processed, shipped or stored. Inspectors also check whether storage areas are free of pesticides that might find their way into organic foods.

Until recently, only farmers and processors had sought organic certification, which involves a review of purchasing and shipping documents and inspection of fields, crops and processing plants. The cost of certification accounts for part of the higher prices of organic food.

The private companies that certify the supermarkets — Quality Assurance International of San Diego and Scientific Certification Systems of Emeryville, Calif. — say their organic seals of approval generally cost $1,000 to $2,000 a store. Certification of stores is not required by the federal standards for organic food that were introduced last fall, unless the stores were involved in processing. If stores choose certification, however, they must separate organic foods from conventional ones, especially in the produce area.

Some retailers' interest in certification appears to reflect a sort of competitive arms race among some grocers.

"My gut feeling is they are trying to get one foot up on the competitors to instill consumer confidence," said Ray Green, director of the organic program of the California Department of Food and Agriculture. Last year, California became the first state to require registration of retail stores selling organic products.

Whole Foods' main competitor, Wild Oats Markets, based in Boulder, Colo., which has 101 stores and had almost $1 billion in sales last year, said that it was now considering pursuing organic certification of its coffee and juice bars. Some smaller independent health food stores are also lining up, and more than a dozen have been certified.

Many stores are not pursing certification, particularly traditional supermarket chains that sell nonorganic as well as organic produce, meats and other foods.

"We are not planning on becoming certified, but our practice is to buy from growers and brokers who are certified," said Nicole Townsend, a spokeswoman for Raley's, a 134-store, traditional supermarket chainbased in West Sacramento, Calif. "We take great steps in the produce department to separate organic from nonorganic so they are not commingling, and we also do this in our distribution center."

But chains like Whole Foods that specialize in organic products want their customers to know that their organic peaches, say, or organic pot roasts are as organic in the store as they were on the farm.

Ellen P. Holton, the marketing director of Quality Assurance, said a team of inspectors needed more than 10 weeks to certify all of Whole Foods' stores in the United States and Canada.

She said the voluntary certification process "exponentially raises the confidence level of even more organic consumers."

Jeff Stephens, a spokesman for Scientific Certification, said, "The primary motivating factors are a good-faith effort to meet the intention of the U.S.D.A.'s National Organic Program, and to demonstrate to their customers they are doing more than is required by law."

The Organic Trade Association, based in Greenfield, Mass., is teaching its' members' workers and store managers how to keep organic foods free of contaminants. More than 450 stores have already participated. "It is more of a discipline in record keeping, and many of the stores have implemented that out of common sense," said David Gagnon, the group's director of operation.

Certification by consultants is not limited to organic supermarkets. Safeway hired Quality Assurance four years ago to certify its milling operations that produce the chain's Select brand of organic breads.

http://www.nytimes.com/2003/06/29/business/yourmoney/29CERT.html