Organic foods not living up to firms' expectations

Organic was expected to be the next big food trend after Wal-Mart Stores Inc. and others threw their weight behind the products, but many executives are saying that overall, consumers are not yet clamoring for such fare.

"It was a big push a year ago," Alan Jope, global food group vice president at Unilever PLC, said this week. "Wal-Mart asked everyone for organic [food]. At the end of the day consumers buy benefits, and it's not exactly clear what the benefits are from organic. They might end up being niche propositions."

Still, many food and restaurant executives said their companies are working on organic and natural products to meet demand from those who want them.

The US Department of Agriculture has had standards in place since 2002 for organic products, which are produced free of pesticides and genetically modified crops. But at this point, the term natural is used loosely.

Last year, Hormel Foods Corp. petitioned for more stringent guidelines for foods carrying the "natural" label.

It contended that a natural product does not have artificial flavorings, colorings, other synthetic ingredients, or preservatives and is only minimally processed.

Cadbury Schweppes PLC expanded the distribution of Mott's organic apple juice when Wal-Mart allocated more shelf space to organic products, and sells organic apple sauce. "You've seen the growth in organics," said Cindy Hennessy, senior vice president of innovation at Cadbury Americas beverages. " It's not as rapid as Wal-Mart might have liked or as any of us might have liked, but it is definitely growing."

Many consumers won't pay the higher price that comes with organic products, executives said.

"As soon as taste and price also match the desire for these more altruistic things like organic, you'll see much more movement," Hennessy added.

Food companies are also pushing natural food, bewildering shoppers. Terms such as natural do not yet have strict guidelines.