Investing in organics has been a hot trend in the past few years. Demand for organic products is so high that some companies, like Stonyfield Farms, can't find enough organic milk to deliver on its organic yogurt orders. Organic farmers are doing well and news that even Wal-Mart would offer organic produce has inspired headlines that queried, will organics soon be everywhere?In a word, no. And what's more, it's looking like betting on organics is bad for you, financially. Whole Foods Market, Inc. (NASDAQ:WFMI), long the darling of healthy-minded investors, isn't growing fast enough. The stock is down 27% since last week. This, coupled with news that Wal-Mart might be struggling with its organics goals, has us all wondering if we should just embrace pesticides after all.
As Alyce Lomax points out and we've mentioned a number of times here on BloggingStocks, the true irony about all this is that truly faithful organics fans are almost angrily opposed to large, industrial farms. So that, by embracing this positive, healthy movement -- by making organic Rice Krispies, of all things -- in the blindly optimistic American way, which is by standardizing, industrializing, making really really big ... American businesses are perverting everything that is organic. [The Onion made hilarious fun of this trend in a satire here.] It's just not "sustainable" if it's done in tons for the Kellogg Company (NYSE:K). As BusinessWeek says so eloquently, it's "the organic paradox: The movement's adherents have succeeded beyond their wildest dreams, but success has imperiled their ideals."
Not only have ideals been imperiled, but also: profit. See here's the thing.
It's not just natural food stores that are feeling the organic hurt. There is some evidence, according to Ad Age, that organic products aren't selling that well for Big Food. A source from Unilever plc (ADR) (NYSE:UL) suggests that the company pulled an organic version of Ragu spaghetti sauce because sales were terrible. Which brings up a question: will mainstream consumers (such as, for instance, the people who shop at Wal-Mart Stores, Inc. (NYSE:WMT), pay more for an organic version of a mainstream product? Frozen pizzas, breakfast cereal, overly sweet pasta sauce: are these the things that customers who are willing to pay extra for their food will buy?
And is organics even healthy? A rating system put into place by Hannaford discovered that many foods labelled healthy (including, you guessed it, organic options) weren't that healthy, after all, with too much salt, added sugar, and other natural foods no-nos.
America may be hopped up on healthy, more and more people may be embracing sustainability, the "buy local" movement may be spreading to every locality. These things are all great, wonderful, and values that I both support and espouse. But.
But.
They're not guaranteed money-makers. Why? Because most of the consumers can't afford them. Because most of the consumers don't care. They don't want to buy the items on the top of Hannaford's star system. They want to buy potato chips, and sugary cereal. They want to buy yogurt that's highly sweet and will last a long time in their fridge.
American consumers have been conditioned to like unhealthy foods. Big Food has gotten us into this mess, but it seems as if Big Food can't get us out. For now, I'm not seeing any benefit from putting my investing dollar in organics. And I wouldn't suggest it to you, either.











Reader Comments (Page 1 of 3)
11-07-2006 @ 8:43PM
Stacie said...
Embrace pesticides...are you kidding me? You might want to brush up on your research a little before giving out advice. Did you ever try looking into what you could get away with buying conventional & what you should definately buy organic. Do you know what damage pesticides can do?(among many other awful things society has "embraced") How many physical symptoms must people continually deal with before they take the fuel they put into their body seriously?
11-07-2006 @ 9:58PM
Diane Petrowski said...
BRAVO--capitalism always wins! Organic farming isn't just harmful economically--it's hard on the environment. 10 to 20 times the acreage is needed to produce the same amount of product--how much wet-lands or natural forest do you want to eradicate to make ready-to-eat potatoe entrees?? The environmental answer is for all of us to eat a third the amount we are eating--but how likely is that?!?!?
As for livestock--their illness' can't be treated--a simple antibiotic can cure pneumonia, but if you're an "organic" cow you have to suffer as humans did before penicillin. the regular milk market allows a lengthy witholding period after honest drug use (while the cow heals). the organic industry let her suffer until she dies--suffers to death--with simple sickness.
11-07-2006 @ 10:05PM
Kendra said...
This kind of thinking is one of the things that has made many American's over weight. If American's spend a little more money on healthier products, they will spend less money on health care. Because as we all know, obesity leads to many heath problems.
11-09-2006 @ 12:37PM
Ken said...
Re: Diane Petrowski's comment:
First, no sane agricultural expert believes that, taking all factors into account, organi agriculture is more harmful to the environment than conventional. That is simply nonsense. Now, it might be more expensive to farm organicly, but that's another story.
Your comments about antibiotics are misleading. The reason why cows need antibiotics in the first place is that our industrial system is now forcing them to eat grain (corn), which is unnatural. Cows are supposed to eat grass. So true, an organic cow does not get antibiotics, but if cows are allowed to feed on the pasture, as nature intended, and are not crammed together in industrial feedlots, they wouldn't NEED antibiotics.
Anyone interested in a thorough, thoughtful exploration of these issues has to read Michael Pollan's recent book, The Omnivore's Dilemma. http://www.amazon.com/Omnivores-Dilemma-Natural-History-Meals/dp/1594200823/sr=8-1/qid=1163010604/ref=pd_bbs_sr_1/103-9036731-8059845?ie=UTF8&s=books
11-09-2006 @ 1:13PM
John Cruz said...
We can debate this until the end of time, and it won't change a thing. Corporate America only cares about 1 thing and 1 thing only; making money! Publicly owned companies have an obligation to make profit for their stockholders. Our health has absolutely nothing to do with their annual revenue, therefore it isn't important. As for the guy that commented on the cows being OK if we just treat them with antibiotics...Quit feeding the cows ground up animal by products, growth hormones, and pesticide tainted hay, and they won't need the antibiotics. By the way, those growth hormones in the beef and milk, are one of the reasons we have so many 13 year old girls that look like Pamela Anderson, and 15 year old boys that look like they should be drafted by the NFL
11-09-2006 @ 2:53PM
Faith Burgess said...
I would think that upon retirement, if you had a wonderful portfolio, but your health was quite poor, that, that portfolio really wouldn't matter much.
P.S. I have a great organic beef in my freezer, that I raised myself. Saved me alot of money to free up for my portfolio.
11-09-2006 @ 4:21PM
Scott Parsons said...
If "Continual Growth" is the sweetheart of investors, the only problem with "Organics" is that the real opportunity lies in creating marketable education systems to teach people to be independent thinkers.
The amount of misinformation and disinformation regarding this entire topic is so profuse as to render it absurd. As an small to medium scale organic grower for the last 35 years, I can tell you from experience that we can feed the entire world with far less acreage than is currently in production.
The most important thing we have done in our agricultural career is to scale down from 160 acres to creating a "suburban homestead" on .16 acre, a thousand times smaller than our big farm.
Now we design gardens for elementary schools and we also teach individuals, groups, and companies how to save money by eating simply, low on the food chain, and sticking with very gourmet, flavor-forward cuisine. In business, I suspect that Ben Franklin would agree...."A million dollars saved, is a million dollars earned!" THAT is where the simplest approaches to good food and good health will take any company or state, or country courageous enough to break the addiction to processed foods.
11-09-2006 @ 3:18PM
Joh Petrowski said...
Diane Petrowski's comments above are ridiculous. A cow is never left to suffer until she dies on an organic farm. What drugs are you on lady??? I will only buy organic items to avoid the many health hazzards from pesticides, hormones, and the rest of the crap that farmers use to grow conventional produce and non-organic meat. Capitalism DOESN'T always win you idiot. Capitalism is responsible for the rape of this Earth and for the hundreds of environmental problems we have.
11-09-2006 @ 3:24PM
Nate Graves said...
people are nuts! so WHAT if organic farming takes up more acerage!! the reason that cancer is on the rise is because of all the pesticides and such sprayed on veggies. does anyone here know that if you eat non-organic pork, these pigs have been shot up with roughly 70 and some odd different drugs? it goes into the meat! now, i'm not a greenie or anything like that, but, i know what's good for me and what is not! the one thing i do not like about organics is the fact that the shelf life is much shorter. but why is that? it's because they're not pumped full of preservatives. wise up, people.
11-09-2006 @ 3:35PM
francas salliono said...
READ THESE FACTS 1, 6LBS. OF OIL TO MAKE 2 LBS OF CHEMICAL AHEM LIKE PAYING FOREIGN GOVERNMENTS , 2,50% OF ALL THE ANTIBIOTICS ARE CONSUMED BY LIVESTOCK AND THEY DON'T DISAPATE,SO THEY ARE PSAAT ON, 3, CATTLE FEED IS ONLY CHECKED AND SOLD BY PROTEIN LEVELS, THATS WHY THEY USE ANIMAL PARTS TO BOOST UP THE PROTEIN AND GET MORE MONEY, $, COTTON SEED HUSK IS FEED TO LIVESTOCK READ THIS IS GREAT , SINCE IT IS NOT EDITABLE FOR HUMANS THEY CAN USE ALL THE POISONS NECESSARY TO KILL THE BOWL WEAVEL (ARSENIC), BUT WE EAT THE COWS. IN FLORIDA WHERE i AM FROM WE POUR AN AVERAGE OF 8 OZS. OF OIL ON EVERY SQUARE FOOT ROADS AND BUILDINGS INCLUDED, REMEMBER BEFORE 6LBS OF OIL FOR 2 LBS. OF CHEMICAL FERTILIZER AND THATS NOT COUNTING THE PESTICIDES AND HERBICIDES AND FUNGISIDES, ON THE OTHER HAND KNOW YOUR GROWER , WE NO LONGER ARE WHAT WE EAT, WE ARE WHAT OUR FOOD SUPPLIES EAT. SHIT IN SHIT OUT IN ANY SITUATION YOU SPEND MORE TIME PICKING OUT SUNGLASSES THAN THE FOOD YOU EAT WITH YOUR FAMILY
11-09-2006 @ 3:38PM
Thomas J. Heffron said...
For those that wish to understand 'organics'you might try www.rodaleinstitute.org. They started the organic farming decades ago, but the 'chemical companies 'forbid' the banks to loan any monies to anything 'organic. Times change!! Organic farming 'retains' many of the 'things' that destroy our ozone layer!! Any 'cellular biologist' will tell you how 'putrid' our cellular 'defense' is, due to the 'crap' that we eat daily. Yes, 'organics'may cost a little more, and that's because there are no 'government subsidies' that they receive. If the 'playing field' ever gets'leveled out', it will be different! In the mean time, isn't your health worth spending a little more on your diet, or are you willing to spend more on your health 'problems' later?
11-09-2006 @ 3:48PM
Ken Asmus said...
Good god. Any movement has its growing pains. It has really nothing to do how people feel about the novelty trend of organics. Eventually all of agriculture will be organic. The novelty will wear off and it will become mainstream. The technology to be organic is continually improving making it more efficient and effective for the farmer to grow the crops. As people can taste the difference in many of the crops organic will take the lead. Optimistic you say. No. Its a trend and taken to its end will mean better health to the farmer, the environment and eventually the people who consume the food. Organics is really just starting.
11-11-2006 @ 12:03PM
Dawn said...
If everyone was growing organic food we would all be healthier because of the lack of chemicals, especially pesticides. As a horticulturalist I dread the use of chemicals in the soil. It harms the soil microbes, kills the beneficial worms and it is unhealthy to be in our bodies. Organics cost so much because of the conditions that are required to be organic. When will the FDA come around and agree that all food/clothes should be organic? Too many people are making money off the "chemical way" of doing things. It can't just be my opinion that cancer and other debilating illnesses are on the rise. I don't know if you can really go organic 100% tody because most of the earth had been contaminated with one form or another of chemicals. I would at least like to see us give it a try to grow food as organically as possible.
11-09-2006 @ 3:58PM
Eerek G. said...
Like the masses with hours a day of sitting before the TV. I absorbed all I saw and that Includes Commercials and felt the powerful grip it had. I pretty much purchased all it told me to buy.
After years of being a consumer and not really caring or knowing what effects processed foods were producing,I finally had to come to my senses. I was diagnosed with a disease now known as Crohns. I was 22yrs old and just released from the service. I first was set on a strict diet that included little or no salt, no dairy(I use to drink a gallon of Vitamin D milk a day),and stay away from hard to digest foods. I went to work on research and found almost all foods on the market were laced with additives, binders and preservatives that litteraly made them hard to pass through let alone digest properly. I have since decided after finding that true 100% organic foods contain nothing but good wholesome nutrients and our bodies welcome the wholeness and it doesn't have to work to stave off the effects of processing. The body absorbs its health and wellness power. We in turn use its life giving energy not only to sustain us but also to heal our own diseases and maladies from the inside out. Being told I would not survive life unless I went under the scalpel and I would have to lose part of my intestines(to remove the scar tissue)I would probably end up on a catheter,colostomy bag or both. I decided to search for other avenues and I know I found the answer. I found the answer with true organic supplementation. I eat every chance I get whole organic foods(no matter what the cost). I went from 135lbs. at 6ft. to 182lbs. and in less than five yrs. I am living proof it does matter.
Think of how we never heard of these diseases twenty-thirty yrs. ago;
Cancer, Crohns, Diabetes I and II, Heart disease, now almost everyone is touched by it. It's Common sense people! Push pass the herd which is constantly led by commercialism and seek the truth for yourself. Remember: YOU ARE WHAT YOU EAT!!!
11-10-2006 @ 3:02PM
Sandy Watts said...
I have been involved in commercial fresh fruit and produce production, packing, and sales my entire life. I am also a former USDA Shipping point inspector. IN over 30 yrs in the fresh fruit and vegetable industry... "Organics" particularly organic fresh fruit and produce has been dallied about, revisited, and reinvented by marketers more times than Dorian from One Life to Live has had TV marriages. The average consumer has no clue why "organic" products can't be as pretty as non organic...and as long an esthetic appearance and low prices matter, organics cannot hold thier own in the mainstream market. FYI just because something is "organic" it does not mean it is better for you or that it will always taste better. As a footnote production costs for organics are often higher than those of non-organics...given the certification processes and maintenence required to produce an organic crop. Organic does not mean it is stuck in the ground and just grows. Americans in general are know very little about who produces thier foods, where they come from, how it get harvested or how it gets to the grocery market. It seems all they care about is how it looks and if it is cheap. BTW with the new immigration laws Americans can now look forward to paying more than ever for the pear, apple, watermelon, tomato and many other hand harvested items they purchase at thier local produce department. (W.L. "Sandy" Watts/Produce Marketing and Technologies Specialist)
11-09-2006 @ 4:22PM
Scott Parsons said...
Bear in mind that what "organic" really means is "anything containing carbon, hydrogen and nitrogen" A better term for the type of agriculture spoken about in these comments would be "biological."
Addition of organic matter to a soil is what liberates the nutrients in the mineral matrix and allows them to become available to the plant to enhance growth. Add water and sunlight, and there you have it---a crop. Understanding Organic Agriculture is really about understanding what is "logical" in regards to "bios" the greek word for "life." When you work with reverence for how the cycles of nature create nutrients from the soil, you discover how to create good food for people.
The Processed Food Industry is invested in marking up basic foods by changing their form and making them suitable for a long shelf-life to maximize their sales potential and profitability.
As fuel prices rise, food production will become more regional, driven by economic necessity.
We have been organic farmers for 35 years, and are now in our mid-50's. We are healthy, trim, and greet every day with excitement for what we can learn and what we can teach. We recommend that people plant a garden, or get involved with community gardening and creating school gardens to teach the next generations how to care for the planet--THAT's organic!
11-09-2006 @ 4:47PM
Deb said...
I think what the person above meant to write was the damage to ourhealth that pesticides, hormones and anitbiotics have already done to us - our children and future generations because of how it has altered our bodies funtions!!!!!!
11-09-2006 @ 4:59PM
susan long said...
It's an option for the consumer and also an ethical
moral thing for others. Just because some things are
a certain way doesn't mean you can always figure something out! especially by dollars although that's about the most important thing these days. Everyone observes these things to a certain degree know its
a problem when certain people need and want answers
to control a good thing. Usually, the real organic is certified.I do not consider myself a so called expert but I certainly like real ingredients!
11-09-2006 @ 5:59PM
Dr. s kahn PhD ND said...
Sarahs article is about investing your $ in stock with organic companies. i.e. wholefood, Walmart, etc.
claiming that it is risky to do so.
Who would want to eat the everyday foods that have added the tag "organic" to their foods, such as Rice Krispies and Pasta sauce? as a selling tool, they are still full of sugar, rendering them unhealthy!
Organic food, although healthier than traditionally grow foods, are still grown in soil that is nutrient difficient and full of pesticide, etc., from previous farming methods. The healthiest foods are grown hydroponically, with sterile water that has been infused with 52 nutrients, both large, small and trace. The shelf life of foods grown this way is 2 weeks, the cost of producing these crops is equal to traditional methods, if not cheaper, because crop rotations is every 2 weeks.
To learn more email skahn59422@aol.com BioDesign Foods
11-09-2006 @ 5:53PM
Steve Tandon said...
Sarah Gilbert--how in the hell did you get this job fot reporting on AOL. Get your facts straight as you are very misleading in your story about organics. Did you know about 50 years ago we had nothing but organic food till these BIG corporations moved in and ruined the food supply and health of the American people. Anyone who promotes digesting pesticides/hormones/antibiotics for the sake of a healthy portfolio is plain crazy. Organic is the way food should be and no other way.