Outsiders Strive to Get in

March 28, 2008: 12:00 AM EST

Several multinationals are trying to get into the US organic foods market by either offering new products or by strategically acquiring or collaborating with major brands, says Frost & Sullivan. Consumers who are increasingly wary of conventional foods that are likely to contain poisonous or unhealthy substances are driving market growth. Frost & Sullivan warns that organic manufacturers are very worried about constraints in the supply of ingredients, which could undermine long-term stability and growth. And, as demand for organics increases, manufacturers are being forced to look overseas for raw materials, not only increasing the price of the product, but also raising issues such as food miles. Frost says active processors need to integrate backward to minimize supply and quality challenges, as well as make strategic alliances with organic ingredient suppliers. Additionally, both the processors and the ingredient companies can establish long-term alliances with farmers.

"Increasing Focus on Health and Wellness Promotes Consumption of Organic Foods", March 28, 2008, via Reuters, © Business Wire

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Outsiders Strive to Get in

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