R&D RADIO: Non-GMO, Organic, or Gluten-Free? How to Decide Which Certifications Are Worth It

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1:20Organic is definitely doable. It is. But it really depends on the category, whether you can launch or become organic in the early days versus maybe something you could consider longer term, right? Because there's just less supply of organic ingredients, manufacturers, right? So it's just an availability component. There's definitely a barrier of entry, even just on the cost perspective, right? So if you are going on organic, you're going to pay more. You know that. But then even just finding someone that can make it can be called challenge on certain categories. So many times what we've done with the brands we've helped launch is we source organic, declare organic ingredients on the ingredient panel, but don't get certified just yet.

2:15Hey everyone, this is Adam Yee, food scientist and podcast host of Startup CPG's R &D Radio, where we interview food scientists and product developers and what they do and how they can help you build your CPG business. Today I'm interviewing Esther Levy from Evolve Food Consultants on the decision to make your product third-party certified, gluten-free, non-GMO, USD Organic. Esther's team does it all and has seen everything. She is a seasoned expert in the natural and organic food and beverage industry and holds a bachelor's of science and human nutrition along with a master's of business administration among numerous accredited certifications.

2:53Esther has over 15 years of experience in the industry specializing in manufacturing, product development, regulatory compliance, food labeling, quality and food safety and she is passionate about her work focusing on driving operational efficiency and bottom line profitability to help businesses succeed. It's really important to know that Esther has 10 years of experience in the juice industry, specifically with USDA Organic. And in this episode, you'll learn about the trade-offs of choosing to be certified, how something as simple as certifying a potato chip can be really complex, and a story you can tell your customers if you plan to go this route.

3:29Enjoy this episode with Esther. I'm sure you'll learn a lot.

3:37All right, we're back with R &D Radio, and today I have a special guest, Esther Levy from Evolve Foods. How are you today? Hi, I'm doing great, Adam. Thank you so much for inviting me. Super excited. I'm glad I'm able to talk to you when you're an accomplished food scientist and have a great consulting firm. But also I think when we talked last, I was really interested in understanding certifications. But before we kind of go into some of the stuff you do, I'd love to learn about you specifically. How did you get started as a food scientist and in product development and what you do now? For sure.

4:12Thank you. Yes. So I am Esther, the founder of Evolve Food Consultants, and I got started, you know, early in my career. I really was very interested in nutrition. So in university, I discovered the world of food science and was just very drawn by it and food production and just really was very interested. And it seemed like a really cool career path, practically, right? Like actually working in the field. So that's, I ended up specializing in food science. And after graduation, I started working with a juice company, organic, packed in glass, super high quality. And since then, that's all I do.

4:53Really, we specialize in the organic and natural channel. That's our thing. I absolutely love it and leave it. It's a belief that you can shape the food industry for the better. And that's really our mission to work with brands that have a true purpose, that want to bring wholesome, nutritious, delicious, safe food to the market. So super excited to be here and to share a little bit about my journey and the past three years working in my own firm, Evolve Food. I love it. So you mentioned organic and there's a lot of like discussions about organic, specifically certification. And I know you specialize in and you probably get a lot inbound about certifications.

5:39You know, I think this is a really interesting topic for a lot of like emerging brands, right? Like, do I get certified or not? Do I have to get certified to certified, bring more sales? I'd love to hear just how people approach you and how you talk to people about essentially being certified, whether it be gluten-free or non-GMO or USDA organic. Okay. Yeah, I love that question because we do get that a lot and we do handle a lot of certifications or just claim substantiation. And there's so many certifications you can get nowadays. I would say the main ones, at least requests we get, organic is number one, on GMO for sure, gluten-free, vegan, kosher sometimes.

6:28We've gotten curiosity on the new ultra-processed food. No one wanting to be certified yet, but definitely curiosity, like do I qualify? I do think it's important maybe today to take some time, I would like that, to understand. Because I keep having the same conversations I feel with founders, right? I think organic is definitely doable. It is. But it really depends on the category, whether you can launch or become organic in the early days versus maybe something you could consider longer term, right? Because there's just less supply of organic ingredients, manufacturers, right? So it's just an availability component.

7:14And there's definitely a barrier of entry, even just on the cost perspective, right? So if you are going organic, you're going to pay more. You know that. But then even just finding someone that can make it can become a challenge on certain categories. So many times what we've done with the brands we've helped launch is we source organic, declare organic ingredients on the ingredient panel, but don't get certified just yet. And that's something that's added, you know, and can add it at year two, year one, later on. That's our approach. Just sometimes it's possible from the start. Sometimes it might be best just to move towards it.

8:00So one example is like, let's say dates, and you can source an organic date and then you put on the label made with organic date paste or something like that, right? Exactly. Cool. So you mentioned kind of these three problems, right? I would say supply chain, costs, and the manufacturer. So I'd love to break that down a little bit. So, for example, supply chain. Do you have like an estimate about like how many people are growing like an organic variety of something versus a conventional variety? I think that would help a lot of people understand like the scale, how scarce this might be. Yeah.

8:32I mean, I don't know in percentage. That's such a hard one. I've never done that. But I have been quoting for a project organic versus conventional. We call conventional non-organics. And I can tell you, you know, there's a lot of maybe spices. We're quoting like a really cool fiber. I can't disclose too much. but the conventional it's available year-round in stock minimum order one pallet right organic is about 30 percent more four pallet minimum made to order right so you start to see the difference and it's like that for every ingredient maybe not exactly like that but definitely you know for some of them the price was even like double from the same supplier and definitely just higher minimums, make to order, just gets more complex.

9:23And launching a product is already complex as it is. So to go organic, can you do it 100%, right? You just need the capital, the commitment, the volume, like you want to commit to that quantity. And the answer ends up answering for itself once you get the facts. That's just the truth. And that's our approach, right? Like once you put it side to side, it's like, this is how much organic it's going to be and the volume and what's going to take to get us there. This is conventional. It's like, okay. Yeah, so it's essentially it's a trade-off, right? Once you see it side by side. Yeah, because anything is possible, right?

9:58That's true. That's what we like to say as food scientists, right? Anything is possible. You know, we can get anyone certified. I've done organic certification. I can get a manufacturer certified, but do you have the money to do it, right? I feel like we can really make magic. That's true. There are definitely projects like that. I love to kind of unearth this because I do think a lot of people just don't know this, right? Like have no idea like this. Oh, this is organic. That should be easy. You mentioned costs. I'd love to understand not only the ingredient costs that you mentioned, but also is there like fee or maintenance fee for getting certified?

10:32Yeah, specifically for organic certifications, but all certifications, there's an annual fee. and just the complexity of maintaining the records and the paperwork required to get and keep the certification. So you pay the certifier a fee annually. If there's an inspection required, which, for example, organic does require an inspection, you need to pay for the inspection as well. And then just keeping that, right, like maintaining it every year, the internal resources required for record keeping and documentation and just making sure that the programs are properly implemented. So there is always an additional cost.

11:17And if we look at, for example, other types of certifications or claims, maybe like non-GMO, many times what we advice brands is the FDA has a lot of voluntary approved claims like non-GMO. So sometimes as you're starting, you can start with a non-GMO claim. Properly substantiate it, and that's something we make emphasis. You still have all the records, test results, you know, if you're doing a high risk ingredient, maybe like corn, make sure that all the documents and test results you're getting comply with the requirements of, let's say, non-GMO project verified, but don't apply yet. You can make a non-GMO claim and then eventually apply for the certification, pay for it, and you already built the foundation and gathered the documents, which you need anyways, to substantiate your claim or to pursue certification, right?

12:20It's the same thing they're going to request for most. So that's the difference between, let's say a claim is written language that says like made with non-GMO ingredients versus like the butterfly. Is that right? Exactly. Got it, got it. The butterfly logo is a trademark. So if you want to use a butterfly logo, you need to pay for that certification. And then the last one you talked about is manufacturing, which I think a lot of people get tripped up about, right? So to find a manufacturer who also has to go through organic certification is harder than finding one who's not, right? Or any type of certification for that matter.

12:53Yeah. I think it depends on the category for sure because we work with a lot of organic manufacturers, but they're definitely not as many. But if you do have a category that maybe hasn't like such a high volume barrier of entry or then it might be more possible. but there are more scars that's just the truth so what one example is like juice right would sounds like at least like organic juice is more common because of the high moqs and the it feels like there's an industry history with like juice and organic right yeah i think juice i worked 10 years in juice and organic for me organic would be an easy one i think that's a doable project as organic definitely more expensive right like we keep coming back but definitely doable.

13:44I guess when you talk to a lot of brands and they talk about these certifications, do they mention like when the trade-off is worth it in a sense, generally, like, I don't know, whether it's like higher sales or it is just the right market to go to. I'd love to hear just, because I do think once you show that data of like the prices and the volumes, they might just say, oh, I want to do this because it will generate higher sales. Yeah, I think that's a hard question and it's very idealistic. And I feel like such a consultant because all my answer, it depends. And we've worked with founders that are very, I want organic, this is my way of living.

14:22And then you see that company two, three years and now they're doing non-organic. So even if you start organic, I find it interesting that even if you start organic, you have the product out there. It's just more expensive and you want to grow as a company. So they might even come out with non-organic. We had a company that wanted to do organic potato chips. So can you do organic potato chips? Yes. I think there's literally, I think, one brand that does it. Okay. Finding organic potatoes for potato chips, unless you're committed to buying like substantial volumes. And I'm talking like hundreds, you know, like.

15:04More than truckloads? Yeah. Of like potatoes. and the season of it, you know, organic. So the complexity of it, like, for example, in that case, it was like a no-brainer, right? Like I can't do organic right now. But if you had a founder that was truly committed, doing non-organic wasn't an option, had the capital, then you could do it. That's why I say it depends. It depends on like how much resources and capital do you have? How much patience do you have too? Because it's going to be longer path to launch, to even just plan the launch and the growth of it just to make sure that we have a consistent supply.

15:43This is a good point about like organic potatoes, right? Potato chips. And you think of it as such a simple product, right? Like potatoes and oil, right? But, you know, when you think about kind of the supply chain, you imagine seasonality, which, you know, if you can only grow like a quarter of the year, that cuts your supply chain by three-fourths, right? So I think this is something that, you know, we kind of take for granted in our food system, right? Like what is actually grown? The farmers also have their own kind of process of certifying that their raw material or their commodity crop is organic as well.

16:16And that's pretty tough from what I understand. So like, you know, there's just so many of these layering factors when it comes to these certifications, right? Yeah. And, you know, I feel like it looks so easy because it's like, oh, but we can find a farmer that can plant organic potatoes for me, you know? And I'm like, sure. Are we going to buy the output, you know, the harvest every week? Like they want consistency. Like, can we do that? A hundred percent. But you need to commit to the volume and to the recurrent harvest of it and so on. When you're starting, that's hard. Yeah. And to put like kind of screws on both ends, the potatoes can rot, right?

16:56Yes. I assume organic potatoes rot faster than conventional potatoes. I'm not sure, but, you know, if you're dealing with just so much volume that one, your raw joe can spoil, but also your finished good can spoil too from like oxidation or something, right? A hundred percent. You just have so many factors that are just really interesting just from this like two or three ingredient product, right? Exactly. Yeah. And no, I honestly think the simplest ingredient, like the projects that we think are going to be the simplest because they have like three ingredients are like the most complex, like this one.

17:27Yeah. You know, there's just so many details that you need to look out for, for sure. So no project is simple like ever. And like now I'm very aware. I'm like, OK, this one looks really simple. This is going to be challenging. Like it's not going to be as easy as it seems. Yeah, I guess. How do you convey that? I know you mentioned a few things like tradeoffs or showing them the difference specifically in price. But also, how do you generally bring that up to founders who, you know, do have a dream and do have like a conviction for healthier food? I guess how, and this is some advice I need, to be honest with you, how do you bring that tough conversation up?

18:07Yeah, it's tough, but I think I've gotten better. And founders and marketing teams, they, you know, we can talk for hours on what we want and the theoretical. call. So what I've learned and with my team, you know, Andrea, my partner is at some point, we're like, we just do the research, present the data, show you the costs, the availability, and the decision becomes so easy. Like we don't need to talk about it for hours and hours and strategize and theorize and put together made up scenarios of the cost. Like we go out there. You have to go out there. Yeah. Yeah. We get the actual quotes. This is how much it's going to get us, it's one pilot, four pilot.

18:50And the answer becomes easy because you have the, it's not theoretical anymore. So try not to spend too much time convincing in the theoretical. I present the data and that's what we do. And then we discuss the data and then we reach out a decision, you know, a informed decision. And that's just the best way. So. Yeah, I would say, you know, as scientists, we're good at that. We're good at presenting the data. Do we need some finessing explaining the data. I do think some scientists are better than others. But in general, I do think that the data really counts. And, you know, we use data to make informed decisions that won't be costly later down the line, right?

19:26It's likely. And then you refine it, right? It's like, can you get another quote? I'm like, yes, I can. But it's very unlikely it's going to be half. We understand. It might be 20 % better, like for sure. But like, this is directionally how this is going to look like. Like, are you okay? So you can definitely make a pretty informed decision at that point with that. As you mentioned, like early in the call, you can evolve your product, right? Essentially, like you can do the certification at a later stage in your business cycle. Yeah, we do that a lot. I think no brand that it's in retail right now started the way you're looking at it.

20:04And we, again, like we show the data to some of our founders. I think we did it once. We had a beverage, like a plant-based beverage project. And we were looking at Malk. And we found pictures of like how Malk started. And I swear like it was like this farmer's market. Nothing, like absolutely nothing. So once they see that, they're like, oh, you know. Because I feel like everyone right now, they just want to like launch with this perfect product. Super cost competitive, you know. We're doing like one pallet and then, but it has to be a dollar. It has to be in a custom bottle. So what we really try to do is to explain and show that nobody started like that.

20:49Unless we're doing truckloads of it, which, you know, I don't want to be involved for a new product. A bit risky. Yeah, yeah, yeah. Right? I don't support crazy decisions. No, no, but you know what I'm saying. I definitely know what you're saying for sure. I don't support crazy decisions sometimes, unfortunately, by the way. You know, you're like a person enough. No, but that's just the truth. This is an evolving process. It really is. It has to be. And that's why we chose Evolve Food as our name. Because food manufacturing, you're constantly evolving. Even trends and consumer taste test is changing.

21:32So like even your formulation will change over time, you know, you will refine it. It takes time. Yeah, it could take years, right? And it's an ever-growing process. And I also think your consumers like it when you grow. At least that's what I tell a lot of people. Yeah, I agree. They do. They do. And they appreciate sometimes like a lot of the pivoting is for the better. So plus nowadays you can use all of that in social media, right? Which is super cool. Like people can really connect with you and your brand. Yeah, love it. Let's shift over to kind of food trends that you see that you love to talk about.

22:10Food trends. I mean, I don't know. I think it's everyone wants fiber now. So it's to me it's a little boring. It's cool, but boring because I've been a fiber advocate since like 15 years ago. And I really thought the fiber trend, I remember I was in juice and we had a project about a prebiotic juice. And I was like, this is the year, this is the year that fiber is going to trend. And I'm telling you, this was like 10 years ago. And then it just never did. So I don't know if it's me that now I'm like over it. You know, I'm like, why? Why now? I've been waiting for this for so long. But definitely, and we're seeing a lot of really cool ideas and like upcycled fruit or vegetable fibers.

22:56So not the traditional inulin, which is cool. Like I think people maybe are a little, inulin is easy, right? So now we're looking into other really cool fibers for sure. So that's exciting and interesting. And I am learning a lot more about just more customized fibers and the story, the way they're done. Sustainability, I would say another trend just in general. And a lot of these fibers are very sustainable and upcycled because they're made from byproducts of the juice processing or, I don't know, peels of fruits or vegetables. Even like super cool. Yeah, I've been noticing there's some company that are trying to preanalyze their fiber, right?

23:41So they're trying to trademark it, they're trying to register it, they're trying to add more health studies to it, right? Like clinicals, which I think is a really interesting shift. So it's like they're trying to shift the commodity fiber into like a supplement, essentially, or some type of like unique ingredient that they can add to a food. I agree. And then also the prebiotic too. I feel like because I've been getting in conversations too about like, have you conducted studies? Is this, can we make a prebiotic claim? So I agree. I've seen companies like they're doing more internal research too on the different types of fibers and the types of claims you can make.

24:16because not, and this is good advice for founders, like not because you have fiber, you can make a prebiotic claim, right? Like it has to be properly substantiated. Another trend, probably transparency, I would say, just even on how consumers want ingredients declared. I feel like vanilla extract is not enough nowadays. It's like, it has to be something else, like it's pure, sub-ingredients. And so that transparency component definitely trending as well, I would say. Yeah, you mentioned about the claims for prebiotics. I recall reading a headline that Poppy got essentially sued for not hitting their prebiotic kind of what they're saying, right?

24:59You had to drink like five Poppies, which is like, what,$40 to get the actual fiber claim for what they have? Yeah, I think I read that like that was maybe a few years ago, but I saw that as well. I think also because they had even like very little fiber per serving. Yes. It's like, I believe it wasn't even, I don't know. I don't want to say something. Like two grams or, yeah, something like that. But yeah, we're recording. Sure, they did get sued and like it wasn't, it was misleading. Yeah, so very careful with claims in general, for sure. We try to make sure they're properly substantiated. And just because a brand is small doesn't mean anything.

25:39It actually makes you an easier target sometimes. Oh, really? Yeah. Okay. Yeah. I mean, I do think there are some people who do pick up products, ship them to a lab and send you a lawsuit, right? Yeah. There's a lot of like malicious plaintiff attorneys, unfortunately. And you don't see it on the news. Like I see it because we're working with companies. But these are things that are settled internally. So it's never even made public. That's true. Yeah. Yeah. So unfortunately, like it's pretty common even like for small brands. So you got to be careful, make sure it's substantiated, make sure you're doing your research and keeping everything pretty organized and on file.

26:20Yeah, it's definitely true. Unfortunately, I'm not a super organized person. It's not one of my skills. But that's why I don't do the work you do. But I agree that the certification stuff is really a testament of being organized. Right. And this goes throughout everything from not only certification, but also food safety and manufacturing and all things like that. Right. Yeah, organization is key in all of this, for sure. Like even just operations in general. So if you want to be efficient, you want to be organized. And that's something we try to teach when we work with companies too, like at least how we organize ourselves.