Food Business News - April 28, 2020 - 36

BEVERAGE BUSINESS NEWS

Organic beverage

©J-MEL - STOCK.ADOBE.COM

formulation in the
age of COVID-19

Spread of the virus globally may complicate some aspects of production

T

he organic beverage category continues to diversify and shows few signs
of decelerating even as the marketplace changes as a result of the coronavirus
(COVID-19) pandemic. Nutrition Business
Journal reported that 12% of organic food
sales in 2019 came from beverages.
Past growth projections may be less
likely to prove accurate as the market
moves into unknown territory as a result
of the impact of COVID-19 on the economy. However, with consumer insecurities
rising as a result of the public health
crisis, organic beverages likely will remain
affordable luxuries consumers purchase
as an investment in their well-being.
"Health and wellness will be prioritized," said Carlotta Mast, senior vice
president of content and market leader,
New Hope Network, Boulder, Colo.
While there may be a strong point of
differentiation to drive consumer interest in
organic beverages, product developers may
need to keep an eye on the supply chain.
The good news is many beverages use water
as their No. 1 ingredient, and there will not
be a shortage of water. For milk and most
juice products, the bases are domestic agricultural products, so there are no worries of
closed ports limiting availability. Imported
tropical fruits, on the other hand, may
experience some shortages. For many juice
companies, this disruption may adversely
affect stock-keeping units in a product line.
Coffee and tea are another story. While
36

Food Business News

imports may be an issue in the future, for
now, there's ample supply for ready-to-drink
beverage manufacturing. This comfortable
supply reflects that coffee and tea typically
sold through foodservice is now available
for retail production. Organic coffee and tea
may only have been a small part of foodservice, but still, supply should not be an issue.
"The spread of COVID-19 across the
US not only complicates production and
management decisions in the near term
but is likely to reshape supply chains and
consumer behavior over the long term," said
Kellee James, founder and chief executive
officer, Mercaris, Silver Spring, Md., a market
data service and online trading platform for
organic, non-GMO and certified agricultural
commodities. "COVID-19 has the potential to
become a new cyclical market disruptor.
"As a result, even if the US is successful
in its efforts to curb the spread of COVID-19,
there is a real possibility for domestic
recurrence, as well as varying success within
countries important for US trade. As a result,
COVID-19 could become an annual threat
to global production and supply chains and
continue to weigh on consumer behavior.
"For producers of organic field crops,
the direct risks from COVID-19 are largely
dependent upon the specific operation's
exposure to the virus and their access to dayto-day farm labor and management. From a
planting and inputs perspective, inventory
remains largely accessible, although some
services are operating at a reduced capacity."

The Organic Trade Association,
Washington, expects a significant challenge will be for operations in the process
of applying for new organic certification.
A remote or virtual inspection would
not allow for the issuance of an organic
certificate.
Organic beverage formulators should
maintain perspective that even before
COVID-19, there always have been uncertainties with organic ingredient sourcing.
a particular challenge for juice products,
"There are several factors that make
sourcing organic ingredients challenging," said Ilana Orlofsky, marketing
manager, Imbibe, Niles, Ill. "First and
foremost, there simply might not be a
crop available in the quantity that brands
demand. In addition, crops vary season to
season and year to year. Taste profiles may
differ, which makes it harder to create a
standardized, uniform product."
Assuming the organic beverage ingredient supply chain has few disruptions, the
new norm of how people shop, where they
consume food and what they are willing to
spend likely will impact what is produced.
Larger-volume, family-size packages, for
example, may be a better investment during
quarantine and social distancing.
"Consumers have been willing to pay
more for convenience and premiumization since the end of the 2008 recession,
but economic uncertainty resulting from
the COVID-19 pandemic makes cost a
April 28, 2020



Food Business News - April 28, 2020

Table of Contents for the Digital Edition of Food Business News - April 28, 2020

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