DJ FOCUS: ED&F; Man Joins Organic Sugar, Cocoa Boom

By Susan Buchanan
DOW JONES NEWSWIRES
April 7, 2005
NEW YORK (Dow Jones) — As big companies tap into the organic and natural food explosion, ED&F; Man, the world's top sugar, cocoa and coffee trading house, is the latest to launch an organic group - called Corigins.

Nearly half of all U.S. households buy organic products in a $25 billion market, expanding 20% yearly and outpacing 1%-2% growth in conventional foods.

Man's foray into organic sugar follows U.S. pioneers Florida Crystals and Wholesome Sweeteners in Texas. Florida Crystals in 1994 was the first major American firm to sell organic cane sugar, and in 2003 its Domino brand appeared on supermarkets shelves. Wholesome Sweeteners, partly owned by Imperial Sugar Inc., sells organic and natural sugar, mainly to retail stores.


Manufacturers Need Dependable Ingredients

Corigins was launched in March to provide organic ingredients, along with ingredient blending and formulation services. Bruce Kirk, president of New Hampsire-based group, said the company will guarantee the availability, traceability and quality of its ingredients to customers.

If you've ever run out of an item while following a recipe, you can understand what organic food makers go through to keep enough certified ingredients on hand for their products.

"Organic food manufacturers need a reliable supply of ingredients," Kirk said. "For every major branded food product, the organic industry is developing a comparable product."

Corigins sells organic sugar from Costa Rica, Brazil, Argentina, Paraguay and elsewhere. The group also offers organic, single-origin and fair-trade cocoa and products -mainly from Venezuela, Ecuador, Jamaica and Madagascar.

The company sees its future customers as "partners in product development," Kirk said. Corigins ingredients will be traceable from farm to consumer and will more than comply with the U.S. Bioterrorism Act of 2002, he said.

Under that act, companies must record previous sources and subsequent recipients of food ingredients and products.


Many Reasons Seen For Buying Organic

Organic sugar is found in dairy products, processed foods, baked goods, juices, candy and baby food, along with nutraceuticals (nutritious pharmaceuticals) and cosmetics.

Consumers buy organic sugar and other products to satisfy their health, environmental and social concerns, said Christophe Armero, Corigins chief executive officer.

"At one time, organic products were expensive and not known for their taste," Armero said. "Consumers had to pay a premium, but prices have started to decline as better products with broader appeal reach the market."

That coincides with growing interest in health and nutrition and in the economic and social sustainability of food production, he said.

The U.S., Japan and Europe are the top markets for organic food, and "the fact that baby food is the top selling product" is telling, Armero said. Adults want the best for their kids and will spend on them, he said.

Meanwhile, in northern California, Vivien Straus of Straus Family Creamery, farmers and manufacturers said: "We use Corigins organic sugar, along with organic milk and dairy products, in our yogurt, ice cream and chocolate milk. Organic sugar has a bigger grain, a different look, and isn't processed with animal bone char (bone ash) the way some refined sugar is. Customers tell us our products have a better flavor than non-organic."

Straus products are some of the best-selling organic dairy items in northern California, she said.

Organic sugar is produced without the use of synthetic chemicals or decolorizing agents, Kirk said. Organic cane farming replenishes soils, without using toxic, synthetic fertilizers and pesticides, and water contamination is lower than in conventional agriculture. Renewable energy is used. Organic sugar-containing foods are minimally processed without artificial ingredients, preservatives or irradiation.

Since October 2002, food labeled organic and sold in the U.S. has had to meet standards under the Organic Food Production Act of 1990, managed by the U.S. Department of Agriculture.

Meanwhile, in the highly protected and regulated U.S. sugar market, USDA has a 31,000-ton import quota for organic and specialty sugar.


Corigins Offers Cocoa; Volcafe Sells Specialty Coffee

Corigins plans to be a leader in the worldwide specialty cocoa market, CEO Armero said.

"Cocoa and chocolate products are evolving along the path followed by coffee and wine, with well-informed consumers seeking premium products for superior consistency and flavor," Armero said. "The chocolate section at any Whole Foods store, with its growing array of organic and conventional gourmet chocolates, reflects this trend."

Whole Foods Market is the world's top retailer of natural foods.

In specialty-coffee sales, Switzerland-based Volcafe, part of ED&F; Man, is already a top supplier, with a focus on high quality, mild coffee. Volcafe works closely with the environmental group Rainforest Alliance and operates in Costa Rica, Colombia, Brazil and Africa and Asia.

Prior to Corigins, ED&F; Man, headquartered in the U.K., was one of the top ingredient suppliers globally, with 4,000 employees in 90 countries.

The company dates back to 1860 and earlier, and operated as a partnership until 1994, when Man Group was floated on the London Stock Exchange. In 2000, Man Group separated in two, with Financial Services retaining their stock listing as Man Group Plc, and the Agricultural Products division returning to a private company as ED&F; Man Holdings Limited (EFX.YY).


- By Susan Buchanan; Dow Jones Newswires; 201-938-5950;
Susan.buchanan@dowjones.com

(END) Dow Jones Newswires