Despite risks, organics gain ground in foodservice

[S.Annadana]

Despite risks, organics gain ground in foodservice

By Pamela Riemenschneider

(June 16, 4:53 p.m.) With food, fuel, labor and other costs on the rise, some operators are taking a second look at going organic.

That doesn’t mean consumer demand has diminished, however.

Interest from operators looking to open organic restaurants continues to grow steadily, said Kevin Moll, chief executive officer of National Restaurant Consultants Inc., Denver.

“I’m going to guess that because of the organic-driving market, we have maybe 25% to 30% of our clients are now opening or involved in organic restaurants,” he said. “That’s almost a 40% increase over our organic clients from last year.”

Whether or not that translates to more sales of organic produce to foodservice is unclear, said Lloyd Ligier, vice president of business development for Pro*Act, Monterey, Calif.

“Even though consumers may be demanding organics, operators are thinking ‘I need to weigh the cost differential before I jump into this,’” he said. “People are rethinking organics. That’s not to say they’re getting away from them.”

Frank McCarthy, vice president of marketing for Bridgeport, N.J.-based Albert’s Organics said his company has seen strong foodservice demand.

“Demand has grown about 20% year over year due to growth in the lunch counter/deli business at independent natural food stores, colleges and universities and gourmet restaurants,” he said.

Higher-end restaurants could suffer in this economy, he said.

“We have yet to see any weakness, but I would imagine that there is some risk in the gourmet restaurant sector,” he said.

Broad increase

Tonya Antle, vice president of organic sales for San Juan Bautista, Calif.-based Natural Selection Foods, which markets under the Earthbound Farm brand, said the company is seeing increasing demand from across the foodservice industry.

“In the past, organic food was really the province of the white-tablecloth segment, but today we see an across-the-board interest,” she said. “Health care operators are really starting to show some interest, as are school districts, many of whom are starting to have funds allocated specifically for the purchase of organic and more healthy food.”

Casual dining still has its challenges, Antle said.

“While casual dining is really trying to go organic, current economic conditions are presenting some challenges for them,” she said.

Antle said salad mixes are the most popular item for foodservice, especially in causal and institutional eateries.

“They are a great first step into incorporating organic food onto a menu,” she said. “People are accustomed to choosing organic salads at retail and are excited when they see them in their favorite eating establishments.”

David Figueroa, vice president of operations and development for Anaheim, Calif.-based Family Tree Produce, also said salads have been a good entry point.

“I’m seeing a lot of organic salads,” he said. “They’re slowly making the transition.”

Figueroa said he has some customers who have gone 100% organic while others have gone organic for a certain plate.

Considering a trial

Saladworks Inc., Conshohocken, Pa., a chain of about 100 restaurants in the Eastern U.S., has considered branching out into organics, said Joe Giannetti, vice president of franchise services.

“I like the idea of organics,” he said. “I know there’s an interest out there. The cost is tremendously prohibitive. Organics might be something we might want to try on a limited basis.”

Giannetti said the company is looking at making one salad on its menu 100% organic to see what happens with the sales.

“There have been request for organic, but it’s not so much that we think we have to have it because we’re losing sales,” he said.

Organic to Go expands

Seattle-based Organic to Go, a fast-casual café and corporate catering chain that launched in 2004, expanded to the East Coast when it acquired Washington, D.C.-based High Noon cafe’s in late-May.

Michael Johnson, vice president of business development, said the chain now has 33 locations, 29 of which are on the West Coast. More than half of those were opened or acquired in the past 12 months.

The chain, which focuses on box lunches and consumers who are on-the-go, took another step into that market with a recent expansion, Johnson said.

Organic to Go signed its first licensing partnership to serve organic food at the San Diego airport. More growth is in the works, he said.

“You will most likely see us continue to fill in existing markets and develop new ones further,” he said.

Staff writer John Chadwell contributed to this article.