Could a flood of bogus ‘organic’ foods sour the millennial love affair with organics?

Millennials are some of the biggest fans of organic foods and drinks. Americans in this 18-35-year-old age range have become the largest single buying group for organics, according to the US-based Organic Trade Association (OTA).

Millennials with children are even more devoted to organics. According to a new OTA survey, 42% of American Millennials with children say they often buy organic foods or products as part of their lifestyle. That is significantly higher than the 33% of Millennials without children saying the same, revealing a strong link between organics and parenthood. One reason young parents choose organics is the belief that doing so makes them a better parent.

Part of being a parent is teaching children to be able to differentiate between fact and fiction.  In this era of 'fake news', that is easier said than done. This job may have just become even more difficult amid reports that large quantities of so-called 'organic' foods imported into the US are not actually 'organic' at all.

In a report that shakes the very foundation of the organic food industry, the U.S. Department of Agriculture’s (USDA’s) Office of Inspector General recently revealed that the USDA lacks the procedures to even check if a shipment of imported organic food actually meets organic standards.

The USDA’s National Organic Program (NOP) is supposed to ensure that other countries meet the agency’s organic standards. In reality, the USDA has fallen short of reconciling organic standards between different countries, verifying documents at US ports of entry, and conducting so-called 'mandatory' audits of major exporters.

Inspectors visited seven US ports as part of an agency audit and found questionable handling of so-called 'organic' food shipments. They found loopholes wide enough that you could sail a container ship through them. For example, if an organic food shipment showed any evidence of pests or disease the shipment’s owner was treating the so-called 'organic' food the same way they would treat conventional food – fumigating it with pesticides that are prohibited under USDA organic rules. It turns out that there are no special treatment methods for imported organic products.

Where organic imports come from is also deeply concerning. The Washington Post recently reported that millions of pounds of so-called 'organic' corn and soybeans were shipped to the US from Turkey even though there was evidence that these crops were actually grown conventionally and were not even grown in Turkey.

Citing USDA findings, the Post revealed that fraudulent 'organic' corn and soybeans were produced in a number of countries not known as bastions of agricultural transparency and truth including Russia, Moldova, Romania, Kazakhstan, and Ukraine. Crops from these countries were shipped to Turkey before entering the US in what looks like a creative form of agricultural crop laundering.

Turkey – apparently aspiring to be for agricultural commodities what the Cayman Islands have become for global finance – has enjoyed a meteoric rise as an organic food exporter despite growing political instability that would seem to hinder such a rise. In 2016, Turkey emerged as the leading country exporting organic soybeans to the US, accounting for 43% of the market, per data from The Organic Trade Association. Turkey was also number one for organic corn exports to the US in 2016, singlehandedly accounting for 74% of organic corn entering America from abroad.

Turkey’s sudden rise as an organic food exporter looks even more questionable when reviewing import and export data over time. As recently as 2014, Turkey accounted for just $6.8 million in US organic corn imports. By 2016, this number exploded to $117.8 million – a more than 17-fold increase. Organic soybean imports from Turkey showed similar explosive growth, from $11.6 million in 2014 to $103.7 million in 2016, a nearly nine-fold increase.

America imports organic products from at least 111 different countries, according to the Organic Trade Association. But spikes in imports of organic corn and soybeans stand out. Organic soybean imports grew from $41.8 million in 2011 to $250.5 million in 2016. Organic corn imports also exploded, rising from $36.6 million in 2013 to $160.4 million in 2016.

Corn and soybeans are significant because both are used largely for livestock feed. In order for meat and dairy products to be labeled 'organic' in the US, both must come from animals that are fed organic grains. Since almost all of the corn and soybeans grown in the US come from genetically-engineered seeds, crops harvested from these seeds are unsuitable for the organic trade. Farmers that want to transition from conventional agriculture to organic agriculture to fill the gap find that it takes three years before a crop can be officially declared “organic” – a huge barrier to entry.

While the 'devil is in the details', most of the organic food and drink buying public is unaware of the dark side of organic sourcing. Ignorance may be bliss for now, but sourcing issues for organics could be a ticking time bomb for already skeptical millennial consumers.

According to a Q1 2015 GlobalData survey, 30% of older American millennials (25-34-year-olds) compared to just 10% of Americans age 55 and older strongly agree that they are skeptical about the ethical and environmental claims made by big grocery manufacturers. This subset of millennials is nearly five times as likely as age 55 and older consumers to say with absolute certainty that they cannot fully trust any grocery business or brand.

At the same time, millennials are much more inclined to trust on-pack certifications than older consumers, setting them up for disappointment if the USDA’s organic certification program is eventually shown to have as many holes as Swiss cheese. A 2016 Q3 GlobalData survey revealed that 28% of American millennials (18-34-year-olds) found on-pack certification logos from the government or another authority to be 'completely trustworthy'. Just 13% of 55-64-year-olds and 9% of 65-and-older consumers felt the same way.

If these millennials eventually come to realize that many of the organic foods and drinks they buy (often at a premium price, relying on a sketchy governmental certification program) are not even organic, that could lead to a 'day of reckoning' that could sour millennials on organics altogether.