Adding value in the organic sector: Characteristics of organic producer–handlers

Abstract

Sales of organic food have soared over the past decade. Although nearly all organic commodities pass through the hands of at least one intermediary on the way from the farmer to the consumer, there is a dearth of literature examining organic food marketing, especially for the middle section of the supply chain. This paper uses new survey data on organic intermediaries (organic handlers) to characterize firms that are certified to both handle and produce organic foods, or organic producer–handlers. Because of their direct link to the production level, the producer–handler has the potential to provide insight into value-added activities in the organic sector. A logistic regression is estimated in order to identify characteristics that make it more likely that a firm would be both a certified organic handler and a certified organic producer, while survey results are also used to describe some of the main challenges these producer–handlers face in handling their products. Organic producer–handlers ranked problems with ingredient procurement and supply and international trade issues as the highest barriers to growth. The model indicated that with few exceptions, many of the operational and procurement characteristics of organic producer–handlers are comparable to the entire organic handling population. However, those facilities dedicated solely to organic handling and those certified longer are more likely to be organic producer–handlers. Use of direct markets by organic handlers has the most robust relationship in the model, although marketing to natural products independent retailers and wholesalers are also important.