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Michael J. Potter is one of the last little big men left in organic food. More than 40 years ago, Mr. Potter bought into a hippie cafe and “whole earth” grocery here that has since morphed into a major organic foods producer and wholesaler, Eden Foods. But one morning last May, he hopped on his motorcycle and took off across the Plains to challenge what organic food — or as he might have it, so-called organic food — has become since his tie-dye days in the Haight district of San Francisco.
The fact is, organic food has become a wildly lucrative business for Big Food and a premium-price-means-premium-profit section of the grocery store. The industry’s image — contented cows grazing on the green hills of family-owned farms — is mostly pure fantasy. Or rather, pure marketing. Big Food, it turns out, has spawned what might be called Big Organic. Bear Naked, Wholesome & Hearty, Kashi: all three and more actually belong to the cereals giant Kellogg. Naked Juice? That would be PepsiCo, of Pepsi and Fritos fame. And behind the pastoral-sounding Walnut Acres, Healthy Valley and Spectrum Organics is none other than Hain Celestial, once affiliated with Heinz, the grand old name in ketchup.
All of which riles Mr. Potter, 62. Which is why he took off in late May from here for Albuquerque, where the cardinals of the $30-billion-a-year organic food industry were meeting to decide which ingredients that didn’t exactly sound fresh from the farm should be blessed as allowed ingredients in “organic” products. Ingredients like carrageenan, a seaweed-derived thickener with a somewhat controversial health record. Or synthetic inositol, which is manufactured using chemical processes. Mr. Potter was allowed to voice his objections to carrageenan for three minutes before the group, the National Organic Standards Board. “Someone said, ‘Thank you,’ ” Mr. Potter recalls.
Big businesses argue that the enormous demand for organic products requires a scale that only they can provide — and that there is no difference between big and small producers. “We’re all certified, and we all follow the same standards,” said Carmela Beck, who manages the organic program at Driscoll’s, which markets conventional and organic berries. “There is a growing need for organic products because the demand is greater than the supply.”
“As soon as a value-added aspect was established, it didn’t take long before corporate America came knocking,” Mr. Potter says. He says he gets at least one e-mail a week from someone seeking to buy Eden, which is based in Clinton, Mich., and does about $50 million a year in sales. “Companies, private equity, venture capital, even individuals,” Mr. Potter says. “The best offer I ever got came from two guys who had money from Super Glue.”
Eden is one of the last remaining independent organic companies of any size, together with the Clif Bar & Company, Amy’s Kitchen, Lundberg Family Farms and a handful of others. “In some ways, organic is a victim of its own success,” says Philip H. Howard, an assistant professor at Michigan State University, who has documented the remarkable consolidation of the organic industry. Organic food accounts for just 4 percent of all foods sold, but the industry is growing fast. “Big corporations see the trends and the opportunity to make money and profit,” he says.