Supply Chain management of Organic Food

Demand for organic food is growing at a much faster rate than ever before, but not without numerous operational challenges.

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Farmers, retailers and food processor manufacturers are thus looking to streamline their supply chains while addressing ever-expanding market requirements.

Most farmers, food distributors, and grocers have daunting challenges on their plates, including tight margins, unpredictable trade wars, and perishable products that require an impeccable cold chain and precise transportation schedules. Those who farm or work with organically grown produce, dairy, and meat can add a few more challenges to the menu: potential cross-contamination from conventionally grown foods and competition from criminals seeking the premiums organic foods typically enjoy, without actually doing the work required to claim their foods are organic.

In addition, many—although certainly not all—organic farmers run small businesses, making it difficult to achieve economies of scale in their transportation, cold chain, and distribution efforts. Organic farmers, distributors, and grocers are tackling these challenges through technological advances and supply chain enhancements. These efforts are increasingly critical, given the rising demand for organic food. Consumption of organic food topped $47 billion in 2018, up almost 6%, reports the Organic Trade Association (OTA). That compares to an increase of 2.3% for total food sales. Organic foods, which are grown without the use of toxic and/or synthetic fertilizers, antibiotics, artificial preservatives, flavors, and colors, now account for 5.7% of all food sold in the United States, says the OTA.

Why Organic?