| Organic Foods: A Sustainable Success An interview with Tom & Donna Stacy of Organic Foods Inc. By Tim Miejan WACONIA, Minn. -- The story of Tom and Donna Stacy is perhaps one of Minnesota's best-kept secrets. Organic Foods, Inc., producer of a wide array of natural and organic fast foods, including a salsa that was a recent taste-testing favorite among the staff of Natural Health magazine, is one of a growing number of businesses that are offering alternatives to the highly processed foods that lack the nutrition that our bodies crave. For a couple of former marketing and sales people, it's admirable that they've chosen to offer high-quality hummus, veggie wraps, burritos, cookies, soup, salsa and much more so we'll feel better about ourselves. But their story doesn't end there. Their intention, to provide the public with nutritionally sound, all-natural and organic foods at affordable prices, also includes supporting sustainable farming practices and being socially responsible. After 11 years in the food industry, the Stacys have yet to see returns of huge profits. Yet, year after year they travel throughout Minnesota and as far away as Costa Rica to talk with farmers, to share their views on switching from conventional to organic farming, to learn how they can partner with farmers in producing whole food products that not only nourish the body, but support the Earth. Here at home, in Minnesota, Organic Foods, Inc., is partnering with organic farmers on a variety of products, including a good-tasting cereal/snack -- "Organic Soy Pops" produced with high-lycine corn -- that has lower fat, higher nutrition and longer shelf life than other products of its kind, expected to be on the market this fall. And meanwhile, their product line continues to expand. Nine months ago, they introduced three varieties of two, 4-ounce Twin Packs for kids -- a black bean and rice with cheese, a white bean and brown rice Roma Italian pizza flavor, and a rice and veggie with tofu. Tom calls them a great alternative to the "god-awful Lunchables." They are working to market herbs, teas and sea salt grown and produced in Costa Rica by families -- representing small villages -- and make it a win-win proposition for everyone: We in America will have access to organic herbs that smell so vibrant and taste so good compared to bland, mass-marketed ones found now on grocery story shelves, and the families in Costa Rica will receive compensation for their efforts and be able to improve their villages and live a higher quality of life than they've been able to afford. They've established a non-profit section of their business to help people in such countries as Costa Rica save the rainforest and other issues that are important to the planet. Money goes into a land trust to buy land. Profits from Organic Foods, Inc. of Costa Rica go back to the people. The Stacys have been trained in the Natural Step [www.naturalstep.org] philosophy of environmentalism. Natural Step is a non-profit advisory and think tank organization that helps businesses and governments integrate sustainability into core strategy and operations, helping to make the market work for the environment, rather than against it. Natural Step has worked with McDonald's, Home Depot, Nike and Starbucks to envision a sustainable future. Tom and Donna Stacy are examples of what we all can become. They are people who not only have good intentions and warm hearts, but find ways to get things done. The EDGE spoke with them at their corporate headquarters about why they do what they do and why we should care. When did you establish Organic Foods? Donna Stacy: It was 1991 at the Minnesota State Fair. We wanted to see if Minnesota was ready for this type of food. Tom thought it would be a good marketing avenue to check out to see if people would accept our products and our sandwiches, so we started with about five different varieties. The co-ops happened to be at that State Fair, and when they came over and had our food, we told them that if they were interested in carrying our products, then we would start distribution after the State Fair. What would you say are the milestones over the first twelve years? Donna: One of the milestones was probably when we expanded into the Chicago, Madison and Milwaukee market in 1995-96. Another milestone was four years ago when we expanded into this facility. We were over in Victoria, Minn., in a very small facility there. It was less than 1,000 square feet. Now we have more than 4,000 square feet. Last year we expanded and introduced our frozen line of sandwiches to go through distributors to go national. That's gone well, but you know, it takes some time. We have several distributors now, covering Iowa, Minnesota, Wisconsin, Missouri and Kansas. So, we have some regional distributors and are pretty close to getting some larger East Coast distributors. In your daily life, is this the food you ate? Were you and your husband organic food eaters? Donna: We were natural food eaters. I think when our kids were very young, I started being more concerned about our food consumption and I tried to cook with more the whole grains and unprocessed foods. I love to cook. Tom took this on as a challenge also, because our son became a vegetarian and moved to the West Coast and met someone who was doing a similar business in Washington state. Our son decided he would like to try it here in Minnesota, so he came back to check out the area and he and his partner decided it wasn't quite ready yet. They thought it was about five years too early. My husband, Tom, took that as a challenge and presented the products to the State Fair Board and they approved our products within a week to have a booth at the State Fair. Did you and Tom think the people of Minnesota were ready? Donna: We knew it was going to be a struggle -- and it was. It took a while, although the first six months that we were in business we really didn't do any sales marketing. Most of our accounts, our new accounts, came by word of mouth. Somebody would hear about it and then they would want to carry it. Tom then started marketing the products. I had a full-time job at that time and I kept it for five years while Tom ran the business. We really didn't have a whole lot of money to start the business. The first six months we were in business we produced all of our products in church kitchens that we rented until we were able to get our own commercial kitchen completed. Basically, we started it with $500, so I continued to work to support us and we kept putting all the money that we made into the business. What were your expectations at that time? Donna: We really didn't know. We know that we wanted to do something in our lives that would make a difference. We felt, after researching the agricultural industry, knowing that there were a lot of chemicals or glutens in commercial food, that it was very important for organic farming to become bigger and more mainstream. So that became one of our focuses: to provide a product that would support more organic farmers to stay in business and convert more conventional farmers to become organic farmers. For the first few years, we were just trying to figure out the types of products would be successful. We introduced our line of hummus, and in a couple of years a line of organic cookies, our salsas and then our wraps. During our first five or six years in business, we were trying to make organic foods affordable. We weren't as concerned about making a huge profit, but we wanted to be sure the consumers could afford to buy them. And then after we were in business about six or seven years, we realized we also needed to be more profitable in order to grow our business. What did you do to make organic foods more affordable to people? Donna: We didn't mark up the margins very high. We didn't build in a lot of profit for the business, so we offered guaranteed sales to the stores in order to control the suggested retail price. Is your goal to keep getting bigger and bigger as a business? Donna: Our goal is obviously to grow the business. The larger we become, the more organic farmers we can help support, so obviously that's one of the goals. And we want to continue to be able to offer a very high-quality product. For example, when we compare our frozen product (such as frozen burritos) to any of the competition in the freezer case, we have 50 percent or higher more filling than bread. A lot of them have similar type of product and it isn't always all organic. Ours is all-organic. We'll meet the FDA requirements for organic when that comes out in the fall. We'll be able to say "organic" on our packaging label. Not only do we feel we have a higher-quality product, but a more nutritious one, in the frozen cases. What are your thoughts on the new governmental efforts to identify organic foods? Donna: We're glad the government is doing this and is coming out with some standards. Tom Stacy: We're pleased that the FDA is finally doing something. There've been a lot of charlatans. Like any industry, people are trying to take advantage of the marketing hype. But as far as we're concerned, they don't all fulfill the legal requirements. It's always been that if you say you're organic, you're organic. That's all there is to it. How will the organic labeling be regulated? Are there going to be inspectors who actually determine whether or not the produce or the product is organic? Tom: Yes and no. That's always been a problem with the FDA. That's nothing new. Even in the meat industry, the FDA's a problem and I just read something where they're trying to do something about that, too. So, hopefully, consumers are pushing them to get something right. There are two enforcements in reality. Number one is the certification agency. All the certification agency is determining is whether you are using organic ingredients. I have been told that the enforcement is going to be the responsibility of the states, through the Department of Agriculture. I've already talked to the Minnesota people. As soon as the law takes effect, I'm turning in a list of names of those who say they're organic, but they're not. And we're going to see what happens, because they're still out on the market. One company puts a little gold sticker on the product that says "organic." The only thing in it that's organic is the flour in the tortilla. That's exactly what we've been fighting for years and years and years. So, hopefully, this will do something. We'll find out what it will do. What's going to be the requirement for organic? Will it be 100% organic or is there a percentage. Tom: There's a percentage breakdown. If you're 100 percent organic, you can use the word "organic" on the label, right on the front panel. If you're 95 percent organic, you can also use "organic" on the front panel, but obviously you can't say "100%." You can say "organic" if you're 95 percent or greater. From about 50-95 percent, you can say "made with organic ingredients." Other than that, the word "organic" cannot appear on the front label at all, but if you have specific organic ingredients, they can be listed as organic beans or whatever on the ingredients list. I'm guessing you're going to be saying 100 percent organic? Tom: No. We're going to be in the 95 percent range. The reason we can't say 100 percent typically has been because we use sea salt. They did finally get their act together with this new law and say that sea salt is exempt. That's always been our issue. We've always used a tiny bit of sea salt in cooking our beans -- and then seaweed, for instance, cannot be certified organic either, so that's why we are not completely organic. It's hard to find some of the herbs organically grown. Part of what we're doing too is developing some of that in Costa Rica with our little farmers there, who will start growing some of those we can't find. It's easy to be 100 percent organic if you only sell corn or if you only sell beans. When you do food combining like we do, it's very difficult. I think our average ingredient list is about 10 items. How many organic farmers do you support right now? Tom: We don't really know, because we buy organic ingredients all over the world. In Costa Rica, we're working directly with between 50 to 100 family farmers. And we're going to be working with a co-op in Costa Rica that involves 1,300 families in one group. What about the movement of conventional farmers toward organic? How fast is that happening? Donna: Slowly. Tom: Some farmers are going into it not necessarily for all the right reasons, but it's happening and that's the key issue. The problem is a lot of them are going into it with their eyes not open all the way and they get disenchanted and they fall back. This disenchantment is the fault of our industry not conveying the ups and downs of organic farming. Are there more and more companies like yours, which are buying organic foods for production? Tom: Yes, because everybody's jumping in, like Kraft, General Mills and Kellogg. The volumes are all going up so the ingredients have to go up. The problem is, all of a sudden a farmer is in organic farming, and then he is out. Then you have a problem of having more demand than you have supply -- and then that creates a false high and that's not what we want to do either. We want to make organic foods affordable. That's the whole issue. Theoretically, there's a lot of speculation in the organic world, as well as the non-organic world, in the chemical area, that actually organic foods are cheaper than conventional food. The difference is at the cash register where the consumer is paying 100 percent for the cost of organic foods. You are not paying 100 percent for the cost of conventional foods. What we mean by that is principally in the area of chemical clean-ups. You've got that big slush fund out there paying for al these clean-ups. That money never trickles back to the cash register for conventional foods. But, it comes out of our tax dollars. Tom: It comes out of your tax dollars. If that cost would go directly to conventional foods, the cost of conventional foods would rise. Donna: The other aspect of that is the health issue: the number of diseases or health issues people have because they're eating conventional or highly processed foods. And all the medical bills they accumulate. If you added that into the cost of buying processed foods.... Most of our food just fills up your stomach. Tom: For a short time. Donna: I call it "hollow food." Tom: Where ours is a "whole food." Our focus is the high nutritional value. We're not in it just for market share. If we can get market share with a highly nutritional product, that's great. But, if we can't, then we don't want market share for just market share's sake. That doesn't appeal to us. There should be a purpose. I imagine as our species becomes more evolved, there'll be a time when there will be a high profit to the things that you're doing. Tom: Money has never been one of our purposes. When we first started, we wanted to make organic foods affordable, so we had a very low-profit margin and that hurt us. It hurt us very badly and it still hurts us to a point and where we don't much money to do advertising -- to do anything, really. Very few people are educated enough to understand what we have in our product offerings to really appreciate it. Those who figure it out will automatically raise the price of our food up and sell it. We've had that happen and that's why we developed a program where we try to control the retail price. Back in the early days, people realized the value of organic so they were getting $4.95 for our sandwiches and we said, "No, that's not going to happen." That's not the purpose of what we're doing. During the years, we've evolved and we're trying to make more profit so we can do more things with our money, such as the Costa Rican projects and advertising and whatever else we can do. We have to be profitable to stay in business and that's the bottom line. Do we have to be outlandishly profitable? No. And if we are, the money doesn't stay with us anyway. We put it into a wide variety of projects. We don't necessarily want a lot of money. We would rather see things like this come to fruition. Our main passion is to convert conventional farmers to organic products, and find a market for their products. We try our best with the limited time and resources that we have. For more information, contact Organic Foods, Inc. at www.organicfoods-inc.com, e-mail organicfoods@earthlink.net or call (952) 442-3983. Tim Miejan is editor of The EDGE. Contact him at (651) 578-8969 or e-mail editor@edgenews.com Copyright (c) 2002 Tim Miejan |
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