The SOE rule aims to revolutionize the organic food industry, creating a more transparent and collaborative landscape where everyone needs to take their responsibility for organic preservation seriously.
Brands that trade in organic products will be impacted just as much as the rest of the organic industry and may need to reassess their organic network drastically to retain their organic product labels.
So let’s delve into how the SOE rule impacts organic brands.
Is the organic food market a good place to be right now?
The short answer is a resolute yes. Even though organic products cost more for consumers, the organic food market is still a high-performing industry, with sales surging well past the $60 billion mark.
And it’s a market that’s continuously growing, especially as consumers become more aware of the impact inorganic manufacturing and production methods have on the products they consume. According to Fortune Business Insights, the growth of the global organic foods market is projected to cross the $366 billion mark by 2029, resulting in a CAGR of 12.83% over the next six years.
That’s a good space to be in for brands focused on organic consumer products.
But it’s not a space that’s without its risks.
The darker side of the organic market: How do organic fraud and compromised supply chains affect organic brands?
Organic fraud is one of the biggest concerns of the organic market. It’s not because every case is as profound as The Great Organic-Food Fraud, a scheme that involved at least half a dozen co-conspirators and racked up $142 million in fraudulent sales. No, it’s precisely the opposite. Organic fraud is a silent mold that grows and breaks down the integrity of the market over time. And the full effect will only be apparent when it’s too late.
The biggest factors that deteriorate as a result of organic fraud and compromised organic supply chains are these:
Consumer deception: Organic fraud can deceive consumers who are willing to pay a premium for organic products. This can lead to a loss of trust in the organic label and a decrease in sales for CPG brands that sell organic products.
Economic impact: Organic fraud can have a significant economic impact on the organic food industry in the long run, where it can lead to unfair competition from faux organic brands, increased costs for brands that sell organic products, and a decrease in consumer demand.
Regulatory consequences: Brands that sell organic products may also face regulatory consequences if they are found to be involved in organic fraud. This can include fines, penalties, and loss of organic certification.
How will the SOE rule combat the challenges of the organic market?
The SOE rule aims to battle these challenges by strengthening oversight and enforcement of the production, handling, and sale of organic products across the entire organic supply chain, placing responsibility on every party that forms part of that journey.
The start of that collaborative effort is the expanded certification requirements of more businesses, like wholesale suppliers and bulk importers, who are involved at critical links in organic supply chains.
Furthermore, the accuracy of organic labeling will be closely monitored by the USDA to ensure that consumers are provided with accurate and reliable information. This is to reinvigorate public confidence in the USDA Organic Label.
While these tasks fall on the shoulders of manufacturers, packagers, wholesale suppliers, and bulk importers, it remains every business’s responsibility to ensure they only work with certified organic parties, documenting their organic journey to close off the traceable organic journey.
How should organic brands make the most of the journey ahead?
Organic brands can make the most of the SOE rule to preserve the organic status of their products by taking the following steps:
Ensure compliance with the new regulations: CPG brands should review the new regulations and ensure that they comply with the new requirements.
Maintain accurate records: CPG brands should maintain accurate records that document the production, handling, and sale of organic products, including the origin of the products and the parties involved in the supply chain.
Verify suppliers: Verify your suppliers to ensure that they are certified organic and comply with the USDA organic regulations. USDA-certified suppliers can easily be verified on the centralized USDA Organic Integrity Database. The database also provides a detailed outline of each seller’s certifications.
Develop a fraud prevention plan: Just like importers and wholesalers, your business should develop and implement a fraud prevention plan that describes the monitoring practices and procedures to prevent fraud and verify suppliers in the supply chain.
Participate in the certification process: You should participate in the certification process and work with a certifying agent to ensure that your business complies with the USDA organic regulations.
Under the SOE rule, each business can help preserve the organic status of their products and maintain consumer trust in their organic catalog. That’s what the SOE rule aims to achieve – giving every party to the organic supply chain the opportunity to safeguard their territory in the bigger organic ecosystem.
But while each business will have to install the necessary internal protocols to live up to the USDA’s requirements, you don’t have to do everything alone.
Source86 can help you connect with certified organic suppliers, vendors, manufacturers, and packagers. So get in touch with us and to find out how we can make the next stage of organic preservation as simple as possible.
In the meantime, take a deep look at our Product List here, and start thinking about what your next sourcing chapter is!
