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Natural Instinct

Have a feeling the organic market's got a lot to offer? You're not the only one.
August 1, 2003
URL: http://www.entrepreneur.com/article/63352

If you're looking for a hot market, look no further than organic products-those grown and farmed in such a way as to ensure sustainability (for example, without pesticides). According to the Organic Trade Association (OTA), the organic market is growing 20 percent every year. "Up to 60 percent of the population [is] willing to buy organic products," says Holly Givens, communications director of the OTA.

But to get those products into the hands of consumers, entrepreneurs must know their market well. The organic food and beverage market is estimated to be about $6.9 billion and is expected to grow between $12 billion and $13 billion by 2007, according to the Natural Marketing Institute (NMI), an organic market consulting firm in Harleysville, Pennsylvania. Joe Marra, executive director of NMI, notes all areas are experiencing growth, especially spices, yogurt, coffee and meats.

Jumping into the trend is Ian Diamond, founder of Organic Connection Inc. in South Salem, New York. This entrepreneur, who's been in the organic industry for 20 years, launched his Web-based organic food delivery company in August 2002. Diamond, 44, owned an organic retail store in Melbourne, Australia, in 1985, but a drought forced him out of business. He then moved to New York in 1996.

Diamond noticed that while organic food in Europe was high-end, the offerings in the United States were "middle of the road," he says. "You don't see a wide range of organic foods, artisan foods or gourmet foods. In Europe, you see every food [category] covered with organic offerings." Wanting to replicate that variety here, Diamond set up his food delivery service, which specializes in organic meats. He projects $300,000 in sales for 2003.

Within any hot market, it pays to find your niche. Rochelle A. Lavens and Marleen Trader did just that with Heidi's Homemade Inc. in Columbus, Ohio. Started in 1999, this business specializes in organic pet food. The entrepreneurs have launched a brick-and-mortar store, an online store and a wholesale business.

"My dog, Heidi, got cancer," explains Lavens, who expects six-figure sales for 2003. "I was devastated." Lavens researched what went into pet foods and discovered some ingredients included spoiled foods, waste products and even parts of euthanized animals. "It was startling," she says. "I felt like I contributed to her illness." Determined to help her pet, Lavens, 43, began making organic snacks, part of the organic diet she believes may have helped extend the dog's life by two years.

Now, says Trader, 49, the main challenge is educating consumers about how organic foods can benefit their pets. Lavens agrees: "You have to do your research. Don't mislead people-know your suppliers. Are they free range? Are they organic?"

Whatever avenue you choose, the future looks bright. "I see organic products continuing to become more available in more places and with increasing variety in the product choices," says Givens. "There's still room for additional brands and companies."

While success in the organic market is inspiring, it's certainly not without its challenges. The federal government released new regulations in October 2002 detailing the specifications any product has to meet in order to be called organic. For any organic start-up, says Givens, learning the new regulations should be your first step. Check out www.ams.usda.gov/nop for more information.

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