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Can The Natural Products Industry Help Reduce Medication Addiction?

Photo: Pexels

Photo: Pexels

For Presence Marketing Newsletter, February 2019
By Steven Hoffman

Originally appeared in the Feb. 2019 edition of Presence Marketing News and New Hope's IdeaXchange

Benzodiazepines can be as dangerous as opioids. The natural products industry offers alternative, non-addictive pain treatments such as CBD and herbs.

A new study, Patterns in Outpatient Benzodiazepine Prescribing in the United States, published in JAMA Network Open revealed that prescriptions for benzodiazepines—an addictive class of pharmaceutical drugs to treat anxiety and insomnia—doubled from 2003 to 2015. About half of those prescriptions came from primary care physicians. The report also found the largest increase in drug prescriptions during this time period was for back pain and other types of chronic pain.

This troubling trend indicates that a growing number of Americans are seeking medication and relief from stress, insomnia and chronic pain—conditions that are common to many of us in everyday life. Unfortunately, too many people are turning to addictive prescription drugs to get them through the day…and night.

Crisis, what crisis?
While many physicians consider the drugs comprising the focus of the study—benzodiazepines, better known by the brand names Valium, Xanax, Ativan, Klonopin and others—are best recommended for short-term use, the same study found that long-term use of these pharmaceuticals also is on the rise: Continuing prescriptions for such medications increased by 50 percent from 2005 to 2015. Healthcare providers have expressed concern that long-term use of such drugs can cause physical dependence, addiction and death from overdose.

Similarly, according to the National Institute on Drug Abuse, the opioid crisis in America is thought to have started in the late 1990s when pharmaceutical companies assured the medical community that patients would not become addicted to prescription opioid pain relievers and healthcare providers began to prescribe them at greater rates.

“I don't think people realize that benzodiazepines share many of the same characteristics of opioids,” said Dr. Sumit Agarwal, an internist, primary care physician and researcher at Brigham and Women's Hospital in Boston. He was a lead author of Patterns, which was conducted with Harvard Medical School and Beth Israel Deaconess Medical Center in Boston. “They are addictive. They cause you to have slower breathing; they cause you to be altered in terms of mental status. And then, eventually, [they] can cause overdose and deaths,” he told NPR this month.

“Side effects…are effects”
The opioid epidemic is not new. But now, another class of addictive pharmaceuticals containing benzodiazepine is being increasingly used—and abused—by a growing number of Americans seeking relief from chronic pain, stress, insomnia and other conditions.

So, how can the natural products industry and integrative healthcare providers help consumers find alternatives to addictive pharmaceuticals such as opioids and benzodiazepines, which often come with potentially damaging side effects? As my friend and colleague, Chris Kilham, the “Medicine Hunter” who travels the world in search of botanical remedies, has said, “The side effects often listed with pharmaceutical drugs are not just side effects…they’re effects!”

Since the opioid epidemic has come to light in recent years, several healthcare and government officials have highlighted holistic and integrative medicine therapies such as chiropractic medicine, acupuncture and massage therapy as powerful and effective treatments for chronic pain, according to the National University of Health Sciences (NUHS).

“These modalities have been part of National University's focus on conservative, evidence-based care for many years,” NUHS President Joseph Stiefel, a former chiropractor who holds a doctor of education degree, said in February 2018. “As more Americans discover the risks involved with opioid medication, natural medicine is quickly becoming a first line of treatment.”

Other major organizations that have advocated for complementary and alternative medicine as a potential solution to the addictive pharmaceuticals crisis include the American College of Physicians; the Journal of the American Medical Association; the National Academies of Sciences, Engineering and Medicine; the National Institutes of Health; and others, reported NUHS.

CBD for consumers, athletes, veterans and opioid addicts
With the legalization of industrial hemp in the U.S. and the emergence of full-spectrum hemp extract and cannabidiol products, the market is estimated to grow to $22 billion in sales by 2022, according to a cannabis-industry consultancy, Brightfield Group. Combined with turmeric (curcumin) and other herbal and natural remedies, dietary supplements and functional foods, the natural products industry has a unique opportunity to provide consumers with much-needed, non-addictive alternatives for helping with anxiety and stress, sleeplessness, inflammation and pain.

In addition, researchers at the University of Missouri and the Washington University School of Medicine concluded in a September study that cannabis, including cannabidiol or CBD, may play a role in ameliorating the impact of opioid use disorder. “Because CBD is neither intoxicating nor rewarding and has an extremely large therapeutic window and impressive safety profile, the use of CBD to inhibit opioid craving has great therapeutic potential,” the researchers said.

For amateur and professional athletes, CBD may provide a healthier alternative to the opioids often prescribed for pain management. “As a former college basketball player, I know well that many college athletes and former pro athletes rely on heavy, often daily dosing of anti-inflammatories and even opioids,” Nick Kovacevich wrote in Forbes in August. “CBD appears to provide natural pain relief and possibly even some anti-inflammatory benefits without getting anyone ‘high,’ he added.

Sports leagues, including the National Football League and National Basketball Association, frown upon the use of CBD. However, the BIG3—a professional 3-on-3 basketball league founded by rapper, writer and actor Ice Cube that features former NBA players—announced in June that it had become the first U.S. pro sports league to permit the use of CBD for pain management and recovery. “More than a dozen countries, including Canada and Israel, have approved CBD-based medications for both professional athletes and consumers,’’ the BIG3 said in a statement. “In the U.S., the shift is beginning to happen as the medication is not only used for pain management but preferred over the powerfully addictive opioids and pain-relief drugs that are often the only other option.’’

For veterans “tired of the standard VA cocktail of opiates and psychotropic medications,” a group advocating for natural treatments for PTSD and led by the founders of Colorado-based retailer Warfighter Hemp, is seeking to introduce a new bill “calling on the [Veterans Administration] to conduct scientific and medical research into the safety and efficacy of CBD derived from industrial hemp on veterans diagnosed with post-traumatic stress disorder, chronic pain and other illnesses and injuries.

“The VA Medicinal Hemp Research Act of 2019 is a pragmatic and bipartisan piece of legislation that would improve and, in many cases, save the lives of veterans across the country,” wrote Steve Danyluk and Boone Cutler, both veterans and founders of Warfighter Hemp, in The Hill earlier this month.

Addiction issues in older adults
While anti-anxiety medications can be prescribed as a temporary means of easing depression, improving sleep and reducing anxiety, research published in November in the JAMA Network found that prescribing benzodiazepines may lead to long-term use in older adults. At greatest risk of long-term use were white patients and those who received prescriptions for larger amounts of the medication, the study, Factors Associated With Long-term Benzodiazepine Use Among Older Adults, showed.

“Use of benzodiazepines by older adults [has] been associated with a host of potential risks including falls, fractures, motor vehicle accidents, and potentially, an increased risk of dementia. Additionally, when these types of medications are combined with other prescribed medications, such as opioids, they can increase the risk of unintentional overdoses and death,” Dr. Lauren Gerlach, lead author of Factors, told Healthline. Gerlach is an osteopathic doctor and geriatric psychiatrist at the University of Michigan.

Grace Cheng, who has a doctor of pharmacy and is a practicing pharmacist at the University of California Los Angeles, told Healthline in the same article, “Benzodiazepines can be a rapid solution for debilitating symptoms, such as the inability to fall asleep and resolution of an acute panic attack, which leads to patients’ satisfaction and perceived benefits of therapy. This may result in dependence and longer duration of use. However, they do not address the chronic management of insomnia, anxiety, and depression,” Cheng was not associated with Gerlach’s research.

There’s seemingly no end to the sources of stress and anxiety in today’s fast-paced society, but by no means are they strictly a modern-day problem. Independent natural products retailers can continue to serve health-conscious consumers and capitalize on long-term health issues such as aging, inflammation, stress, insomnia and pain with such products as turmeric, capsaicin, valerian, kava, passionflower and more…and now CBD to help provide natural alternatives to potentially addictive pharmaceuticals for anxiety and pain.

Farm Bill Legalizes Hemp Production in U.S.; Plus, Wins and Losses for Organic Farming, Nutritional Supplements and Animal Welfare

Photo: Agriculture.house.gov

Photo: Agriculture.house.gov

For Presence Marketing Newsletter, January 2019
By Steven Hoffman

Originally appeared in the Jan. 2019 edition of Presence Marketing News and New Hope's IdeaXchange.

President Donald Trump on December 20 signed the 2018 “Agriculture Improvement Act,” known to most Americans as the Farm Bill. There was strong bipartisan support for the $867-billion Farm Bill, the twice-a-decade omnibus legislation that funds projects under the purview of the U.S. Department of Agriculture (USDA) from nutrition and food stamps to soil conservation and agricultural trade. Trump’s signing of the bill into law just before Christmas was spurred in part by pressure from farmers battered by an ongoing trade war with China that has disproportionately affected U.S. producers of soy and other agricultural goods.

The Farm Bill scored some wins and losses for organic food and farming, nutritional supplements and animal welfare, while also for the first time in more than 80 years legalizing the commercial cultivation and sale of industrial hemp in the U.S., as summarized below.

Photo: Whitehouse.gov

Photo: Whitehouse.gov

Hemp, Hemp, Hooray!
For hemp producers across the U.S., the Farm Bill is nothing but historic. “The Farm Bill…both legalizes hemp as an agricultural commodity and removes it from the controlled substances list. It gives states the opportunity to be the primary overseers of hemp production. It also allows hemp researchers to apply for competitive federal grants from the U.S. Department of Agriculture, and makes hemp eligible for federal crop insurance. Together these features will encourage new opportunities for struggling farmers and their families, new products for use in construction, health care, and manufacturing, and new jobs in a broad range of fields," said Sen. Mitch McConnell (R-KY), sponsor of the hemp provision.

In an interview with Fox Business News, USDA Secretary Sonny Perdue welcomed the new hemp legalization. “This is an industrial-use product, medicinally as well as other products, and we look forward to developing markets for it if it’s a profitable crop. Agriculture needs new products,” he said. 

While the previous Farm Bill, passed in 2014, eased some federal regulations on CBD production, the new bill goes much further, reported Chris Chafin in Rolling Stone. “Most importantly, it removes hemp and any hemp derivative from the Controlled Substances Act, legally separating it from marijuana and putting its supervision under the Department of Agriculture. In the most basic sense, these plants serve three primary uses: fiber (paper and cloth), seeds (for hemp oil and food), and cannabinoid oils. It’s this last category that’s the most profitable and has the biggest potential for growth. The bill defines hemp as any part or derivative of cannabis with a THC level below 0.3 percent on a dry-weight basis,” Chafin reported.

U.S. hemp-based product sales grew 16% to reach $820 million in 2017 and is expected to surpass $1 billion in sales in 2018, led primarily by hemp-derived CBD, food, personal care and industrial products, according to the publication Hemp Business Journal. While "it’s still unclear how different federal agencies will interpret the new rules...it doesn’t matter — people in the CBD industry are calling the new [Farm Bill] legislation a game changer," Chafin added.

More Research Funding for Organic
While more money was dedicated to organic farming research – from $20 million annually to $50 million annually by 2023 – changes to the National Organic Standards Board (NOSB) may make it harder for small organic farmers to be fairly represented and to remove synthetic ingredients in organic production, says one organic industry observer.

Other organic industry wins in the Farm Bill included preserving the National Organic Certification Cost Share Program to help organic farmers pay for the costs of organic certification. According to Max Goldberg, editor and publisher of Organic Insider, between funds that were not used in the last Farm Bill and new funds in this Farm Bill, $40.5 million is available to help offset the costs of organic farmers obtaining organic certification. In addition, $5 million was earmarked for technology upgrades and data tracking for fraudulent organic imports, along with increased enforcement authority to crack down on fraudulent organic products from abroad. Also, $5 million was allocated for the Organic Production and Market Data Initiative, an important program for policymakers, researchers and industry participants to understand organic production and market data, track trends and create risk management tools, reported Goldberg.

According to Organic Insider, as a result of the Farm Bill executives of farm companies are now allowed to sit in farmer-designated seats on the 15-member NOSB. “This has the potential to dilute the voice of independent organic farmers while favoring the interests of large organic production companies. For example, an executive at a large farm company with zero first-hand knowledge of farming could now be holding a farmer-designated seat on the board,” cautioned Goldberg.

Also included in the Farm Bill is a new provision about NOSB voting procedures that govern decisions about which synthetic materials are allowed in organic production and processing, which could “make it easier for synthetic materials to stay on the National List for decades,” Goldberg observed.

SNAP Excludes Multivitamins
While some food assistance measures sought by retailers under the Supplemental Nutrition Assistance Program (SNAP) were secured in the 2018 Farm Bill, the SNAP Vitamin and Mineral Improvement Act was dropped from the bill. “An important step toward improving the nutrition status of low-income Americans, this provision would have allowed SNAP recipients to purchase a multivitamin-mineral dietary supplement with their program benefits, said Steve Mister, President and CEO of the Council for Responsible Nutrition. “We are saddened that low-income Americans will not be given access to this option to help improve nutrient gaps in their diet. CRN remains committed to expanding consumer access to multivitamins and will continue to support policies that ensure all Americans, regardless of socioeconomic status, have equal opportunity for good nutrition,” he added.

Also, while President Trump signed the Farm Bill without any proposed changes to SNAP work requirements, on the same day USDA announced in a proposal that it seeks to have all Able-Bodied Adults Without Dependents (ABAWDs) ages 18-49 on SNAP placed into work programs. Currently, ABAWDs must work or participate in an employment program for 20 hours a week to continue benefits for more than three months. State waivers, currently available in seven states, and partial waivers, currently available in 29 states, can allow them to receive benefits without working in times of bad economic conditions. The USDA proposal would limit the duration of such waivers. With unemployment currently at 3.7 percent, according to the Bureau of Labor Statistics, there’s no reason able people shouldn’t be working or seeking work, USDA argues. In 2017, SNAP was used by 42 million Americans, or about 1 in 8, according to the Center on Budget and Policy Priorities.

"This blanket solution might work — if institutionalized racism did not exist in the U.S.,” writes Beth Kaiserman in Forbes. “In 2017, 21.2% of Black Americans and 18.3% of Hispanics fell below the poverty line, compared with 8.7% of whites, according to Talk Poverty. In 14 states and Washington, D.C., black unemployment is twice as high as white unemployment, according to the Economic Policy Institute. Black and Hispanic workers also earn less than their white and Asian counterparts, according to the Bureau of Labor Statistics. The Trump Administration ignores the true struggles of people of color in this country. These systematic changes create further inadequacies, making it harder for people in poverty to build better lives,” Kaiserman said.

Animal Welfare – Dogs and Cats in Food Finally Illegal
While none of the animal welfare provisions in the 2018 Farm Bill address the large-scale problems caused by factory farming and Confined Animal Feeding Operations (CAFOs) in the U.S., a small handful of items in this year’s bill modestly address the inhumane treatment of animals. One such provision prohibits the import, export, and slaughter of dogs and cats for human consumption. Eating dogs and cats is uncommon in the U.S., but until now, it had been legal in 44 states.

In addition, included in the Farm Bill is the Pet and Women Safety (PAWS) Act, which strives to address a problem for both humans and companion animals: Victims of domestic violence are often afraid to leave because of concern their abusive partner may abuse or kill their pets in retribution. The PAWS Act commits more resources to housing domestic violence survivors with pets and changes law enforcement policy so these situations are more addressable in our current legal framework, which imposes only mild penalties for killing someone’s pet, reports Kelsey Piper in Vox.

Finally, the Farm Bill closes a loophole on animal fighting, such as cockfighting or dogfighting, currently illegal in all 50 states. The bill extends that prohibition to all U.S. territories, such as Puerto Rico and Guam, as well.

Of note is that an amendment sought by U.S. Representative Steve King (R-IA) to prohibit states from setting their own animal welfare standards was removed by Congress from the final Farm Bill. After important animal welfare measures for humane treatment of farm animals and race dogs passed in California and Florida, respectively, King’s amendment was designed to nullify states’ rights regarding animal welfare. The amendment could have interfered with “state restrictions on gestation crates for pigs, tail-docking of cattle, and horse slaughter, along with state bans on the sale of foie gras, eggs from hens kept in extremely small battery cages, and pets from puppy mills,” according to an analysis conducted by the Animal Welfare Institute.

Blockchain for Romaine?

Originally Appeared in New Hope Network’s Idea Xchange, December 2018

How an Emerging Technology Can Be Used in Food Safety, Supply Chain Transparency and More in the Natural, Organic and Nutritional Products Industry

By Steven Hoffman and Sam Kressler

If you were following the news over Thanksgiving, you’d have heard about romaine lettuce being pulled from grocery shelves nationwide due to an E. coli contamination warning issued on Nov. 21 by the U.S. Food and Drug Administration and the Centers for Disease Control. For those paying closer attention, you also would have heard about how the use of blockchain technology could be a food safety solution for the leafy greens and fresh food industry. Blockchain also has the potential to provide traceability and transparency and prevent fraud in the supply chain for food, beverage and nutritional products makers – and ensure consumers that a product is exactly what it claims to be. Originally invented for the Bitcoin cryptocurrency, blockchain is still an emerging technology. This primer takes a brief look at blockchain – what it is, and what it offers as a tool for the natural products industry.

What Is Blockchain Technology?
In order to explain blockchain’s potential applications, it is helpful to understand how the technology works. Despite foundations built on some pretty complex math, the concept of blockchain is surprisingly straightforward. Every blockchain implementation is at its core a giant, decentralized database that acts much like an accounting ledger. Transactions are debited or credited among users on the platform but unlike traditional ledgers, the transaction record doesn’t reside in a single location. Rather, as a “shared ledger,” there are copies of the ledger -- and each transaction -- simultaneously residing on potentially millions of computers, or “nodes,” around the network that are continuously updated in real time. Since the blockchain is a database, entries can never be erased, only updated, which means that even if someone attempted to falsify information, the previous records would always be available, residing on every machine across the network and therefore publicly accessible to everyone on the platform. As a result, data is immutable and inherently trustworthy, unable to be falsified or manipulated once it is in the system.

Photo: Pexels

Photo: Pexels

Food Safety
Because of the inherent immutability of any blockchain platform, the implications for improving response time to and transparency during recalls is substantial. Currently, Food Safety and Quality Assurance (FSQA) teams within the food industry work off of a “one-step up, one-step back” model; in every step of the supply chain, each link is responsible for knowing where they procured an item (one-step back) and where it goes after it leaves their hands (one-step up). Currently, while digital records often (but not always) exist, they are isolated from each other at each link in the chain, slowing down response time and obfuscating transparency. 

In a recent experiment, Walmart collapsed the time it took to determine the identity of the farm and farmer of a fresh, sliced mango sold in its stores from nearly seven days with existing technology down to 2.2 seconds using a blockchain implementation built by the IBM Food Trust. In light of the recent recall of romaine lettuce, let’s think about the implications; the tainted lettuce could be identified, recalled, and traced to its source almost instantaneously instead of what will most likely be a multi-day or multi-week search for the source of contamination. Instead of a national warning against eating any and all romaine, the affected pockets could be isolated and controlled discreetly, minimizing public health implications, as well as avoiding consumer fear, confusion, and lost revenue for growers, distributors, and retailers.

The fact that Walmart and IBM are working together is quite significant. In order for a FSQA blockchain implementation to be effective, every link in the supply chain needs to be involved. A system-wide rollout "will be led by the big guys because the infrastructure is so complicated," according to Bryan Armentrout, CEO of The Food Leadership Group, an FSQA consultancy based in Loveland, CO. The smaller players that dominate the natural products industry would be hard-pressed to gain the necessary traction with their production and distribution partners, or to corral the necessary level of funds required for implementation, for that matter. To that point, the IBM Food Trust has brought on the likes of Walmart, Kroger Co., Driscoll’s, Dole, Golden State Foods, McCormick and Co., Nestlé, Tyson Foods, Unilever, Carrefour, and Wakefern Food Corp. as partners. Beyond the sheer authority of their collective market-share, these producers and retailers control some of the planet’s most complex – and least transparent -- supply chains. 

On Sept. 24, 2018, Walmart released a letter to its leafy green suppliers mandating adoption of its new blockchain platform. This is all ultimately a boon to the natural products industry. With the potential for overlap at the procurement, co-packing, manufacturing and distribution levels, as well as a robust platform that already exists with the IBM system, future hurdles to adoption for smaller businesses will be lowered significantly.

Challenges remain, however. For example, how does the platform ensure that producers at the beginning of the supply chain (think: mango farmers in Ecuador or cacao growers in Madagascar) have access to the technology required to upload necessary data to the blockchain? Likewise, just because certificates and other FSQA data can’t be modified once inputted to the blockchain doesn’t mean that falsified information can’t be uploaded by unscrupulous actors from the get-go. “You can keep a trail of where goods are created," said Carlo Las Marias, COO of CoinAlpha, a blockchain-based financial products company, "[but] the downside is that you have to trust how the data gets onto the blockchain in the first place." Fortunately, the pilot programs being rolled out by the likes of Walmart and Unilever are small enough that these and other potential issues will intentionally be identified and addressed before any global roll-outs are enacted.

Traceability: Organics and Dietary Supplements
Organic is the most transparent, the most consumer driven and the most heavily regulated food system in the world, according to Gwendolyn Wyard, VP of Regulatory and Technical Affairs for the Organic Trade Association (OTA). Because of that, blockchain as a traceability tool in organic production and trade makes sense, she said at a seminar at Natural Products Expo West in March 2018. “OTA has a task force dedicated to preventing fraud in organic and is putting together a best practices guide for industry to adopt to ensure authenticity. Currently, we are working on a project looking at supply chain from farm to shelf and part of that is putting together a mitigation plan and strategy that would incorporate the implementation and use of blockchain,” she said.

Logan Peterman, Agricultural Research and Analytics Manager for Organic Valley, agreed that the organic industry is in the early stages with blockchain. “We are aware of some organic certifiers considering blockchain technology for international imports, particularly in terms of grain and other commodity markets where we have substantial issues with co-mingled products. They are looking at biological markers that they might be able to use to ensure integrity, but again, it’s all very early stage,” he said.

For dietary supplements, blockchain could present some unique advantages, said Trinanjan Gupta, CEO of the technology solutions company Dreamweaver, in a panel at Natural Products Expo West. “Ensuring transparency in the supplements industry requires capturing data with each supply chain partner and sharing it with your suppliers on one side and your customers on the other,” he said. “The supplements industry is interesting because it’s global in nature. With each transfer of ownership, we need to be sure that the ingredient and quality information is shared. From there, the certificate of analysis or any other ID document needs to be attached to each transfer of ownership as you share information in the supply chain,” Gupta added.

Challenges to transparency, according to Gupta, include “change management,” where companies need to insist on supply chain transparency, often with reluctant partners; attaching ingredient information to each transaction (“Easier said than done,” he said); data standards are not defined yet in dietary supplements; and “The first mile is always very complex,” Gupta said. “It’s happening at the farm somewhere in the world and it’s always difficult to get that first mile information. However, with smart phone technology, farmers in India and Africa are able to share data, he said.

“Now, in real time, we can send information to a cloud-based infrastructure – a farmer in the field in Africa can enter data into his mobile phone, and information can be captured instantaneously across the world. Ten years ago, a farmer could store the data but how could he share it? The cloud changes that. Blockchain now ties it all together and makes sure that this data is captured and shared between the farmer, processor, importer, manufacturer, distributor and ultimately the consumer. The end goal is to enable the consumer when they buy a product to be able to scan a bar code and at the click of a button instantly get all the information related to the product. That can only happen if you are able to link all these hubs in the supply chain,” Gupta said.

From a blockchain point of view, all this data now being captured at each transaction level is being saved and shared in what is called a distributed ledger. “This is a fantastic platform for supplements: the data is stored, immutable…and it is something which adds multiple levels of security. Additionally, blockchain makes fraudulent behavior very difficult to do,” claimed Gupta. “If there is data that has been stored as part of the blockchain platform, you cannot go back and change it; if someone changes it, it creates a new record and tells you that someone made a change there. So, there is an audit trail you cannot escape,” he said.

The opportunity for blockchain, he concluded, is that accurate information can be shared all the way back to the origination and that “each element in the chain can contribute to this full volume of information that can be transparent and contribute to your brand.”

Of course, even without blockchain, which can be a large investment for small businesses, supplement manufacturers can ensure full traceability using best practices and tools at hand, said Elena Lécué, EVP of Sales and Marketing for Gaia Herbs in Brevard, NC. Speaking of the company’s Meet Your Herbs™ consumer traceability program, “Our innovation is a unique code associated with every product batch, allowing us to have full traceability including certificates of quality without the need for blockchain,” she said. “Because we are committed to radical transparency, Gaia Herbs is certainly watching developments in blockchain technology, yet, we are a GMP certified business and fully FDA compliant. That requires lots of certification and we make test results for purity and potency of our products publicly available. You can make proof of quality and information about the provenance of the product available using current practices without relying on blockchain, if you are testing every batch.”

Blockchain, Fair Trade and Sustainability
Other players, including World Wildlife Fund (WWF) and Oxfam International, are exploring blockchain technology to ensure the protection of endangered seafood, and to ensure farmers in developing nations receive fair prices for their agricultural products.

Recently, WWF teamed up with blockchain technology and sustainable fisheries partners in the fresh and frozen tuna sectors of the Western and Central Pacific region to strengthen supply chain management and help stamp out illegal fishing and human rights abuses. In a report published in August 2018, WWF said, “More and more, experts view full supply chain traceability and transparency as the only way to ensure against the continued entry of illegally or unethically produced seafood products into the seafood supply chain. Blockchain can be a significant part of the solution. By providing this transparency and traceability, it can enable the market to both reward producers who engage in best practices, and exclude illegal and unethical producers.”

Oxfam, for its part, is working with small-scale organic rice farmers in Cambodia, and in November 2018 launched BlocRice, a project that “aims to test blockchain technology and its smart contracts, a digital three-way contract farming arrangement between primary producer, Cambodian rice exporter and retailer in Europe, to improve farmers’ livelihood and their supply conditions,” Oxfam said in a statement. The project will focus on introducing blockchain technology to the organic rice value chain by registering all chain actors with unique identification codes on blockchain; introduce smart (fair trade) contracts between farmers, agricultural cooperatives and exporters to ensure fair income and proper payments for farmers (women farmers, in particular); introduce cashless payment to farmers; and design a consumer communication component from Cambodian producers to consumers.

Learn More
What Can Block Chain Really Do for the Food Industry, Forbes, Sept. 30, 2018
https://www.forbes.com/sites/jennysplitter/2018/09/30/what-can-blockchain-really-do-for-the-food-industry/#1d6565ce488e

IBM Food Trust
https://www.ibm.com/blockchain/solutions/food-trust

Video: Blockchain and Food Safety with IBM and Walmart
https://www.youtube.com/watch?v=MMOF0G_2H0A

Provenance: Social Mission through Blockchain Technology
https://www.provenance.org

Note: This article was co-authored by Steven Hoffman and Sam Kressler, founder of Stir Consulting, an innovation strategy and product development firm serving the natural foods, culinary and food service industries. Visit www.stir-consulting.com.

Midterm Election Update: What’s Impacting the Natural Products Industry?

Photo:  Pexels

Photo: Pexels

For Presence Marketing Newsletter, November 2018
By Steven Hoffman

Originally appeared in the Nov. 2018 edition of Presence Marketing News and New Hope's IdeaXchange

As we approach the 2018 midterm elections, we asked a number of industry leaders, whose job it is in part to track and influence political, legislative and regulatory affairs that affect the natural, nutritional and organic products industry, to give us their views on the upcoming federal and state elections, as well as the issues we face in this election cycle. We were pleased to receive the comments and perspectives below from the following individuals:

  • Loren Israelsen, President, United Natural Products Alliance

  • Laura Batcha, CEO, Organic Trade Association

  • Corinne Shindelar, CEO, Independent Natural Products Association

  • Michael McGuffin, President, American Herbal Products Association

  • Todd Runestad, Senior Editor, Informa/New Hope Network

  • Michele Simon, Executive Director, Plant Based Foods Association

  • Morris Beegle, Producer, Let’s Talk Hemp

  • Bob Hoban, Hoban Law Group, a leading hemp-centric legal firm

Loren Israelsen, President, United Natural Products Alliance

Tariffs and Nutritional Products
Due to the trade imbalance with China, the current administration has decided to use tariffs as a primary tool in an attempt to balance the scales. The nutrition industry has largely escaped the first two rounds of tariffs imposed this year on Chinese goods entering the U.S. The next scheduled tariff round is Jan. 1, 2019, and as we are all hearing, they would essentially cover the rest of all Chinese goods coming into the U.S., suggesting that this time around we’ll be hit directly.

Virtually all dietary ingredients, as we would call them – they would also include food ingredients, food additives, cosmetic ingredients, pet food ingredients, etc. – this class of goods would likely be subject to 25% tariffs. That’s a big deal. We know that many nutrition and dietary supplements companies are trying to forecast if they should buy now to get ahead of the tariffs. However, forward buying skews the market. Also, if there is pushback of those January deadlines, then businesses could be holding on to a whole lot of inventory that won’t be moving as forecasted, so a lot of cash could get tied up in inventory.

Here are my concerns: If tariffs are imposed on dietary ingredients, it will be a price shock to the market, which potentially could lead to cheating and mislabeled, misbranded and possibly adulterated ingredients. Vigilance will be required at a whole new level. The brands that go into the health food retail market are already feeling stressed by Amazon and others; would they suffer more due to pricing pressures due to a possible tariff hike? They don’t have much room to spread the cost.

Yet, ultimately, we believe it is important to engage with China and we will keep the industry updated about our efforts. UNPA has been working with the China Chamber of Commerce for import/export of health products and the China Nutrition Health Food Association (CNHFA), plus the China International Import Expo, scheduled for November in Shanghai is a response to the feeling around the world that China is a closed market. This enormous, first-time international expo is a response to that criticism.

Hemp and CBD
The thing to consider is how important hemp/CBD has become to the independent health food retail channel, as the larger big box natural retailers have decided to stand off and not offer hemp and CBD products. They’re understandably concerned about risk and liability, but for smaller stores, this category has been a lifeline for them as they battle to maintain foot traffic in the stores as online sales continue to grow.

We’ve also been in active discussions with Greenwich Biosciences, the drug holder for Epidiolex, the approved CBD drug. The question is, because CBD hemp extracts currently are technically not lawfully sold ingredients – and that, of course, is subject to further discussion and debate – what position will Epidiolex take with regard to pushing or trying to force CBD hemp extract products off the market - or not?

We believe that Greenwich Biosciences doesn’t want to be the bad guy in all of this. There are an untold number of consumers who are currently using this class of product and many are satisfied with great benefits. This would certainly be an issue they would talk to Congress about, and Greenwich is not looking for a fight. The question is can they find a middle ground, and the same is true for FDA. The outcome of the farm bill will affect DEA’s position on hemp and CBD, but that does not resolve the FDA issue regarding CBD.

By the way, the approval of Epidiolex is significant in that it has full recognition as a drug by FDA – that’s a first. As far as DEA is concerned, CBD is Epidiolex and is now a schedule 5 drug. At the moment, that is how we should be thinking about it. Whether other products would be recognized as Schedule 5? I urge caution.

Depending on how the midterm elections go, the Farm Bill, which has provisions for legalizing hemp, could be passed as soon as December. However, depending on the election outcome, passage of the Farm Bill could be delayed and pushed into 2019, which affects the hemp market’s sense of risk.

Importance of the Independent Retailer
The midterm elections may lead to a change in control in government, and the tensions of this split in government could be more acute. How will that affect sales natural products, such as for sleep, anxiety and depression? Will people need community? We could see the health food retailer be a place of refuge, information exchange and gathering. Passage of the Farm Bill could open up the sales of hemp and CBD products, which are one of the fastest growing categories for independent natural food retailers. Another key Farm Bill provision important to independent health food retailers is the SNAP program, previously known as food stamps, which would allow recipients to purchase multivitamins. The program, added as an amendment to the House version of the Farm Bill, would make multivitamins available to millions of lower income Americans dependent on the SNAP program. Whether the multivitamin amendment will end up in a final bill passed by Congress remains to be seen, and UNPA will be tracking this important issue for its constituents.

Laura Batcha, CEO, Organic Trade Association

The midterm elections are hugely important. At OTA, we have a policy to provide time off for staff to vote. The House is likely to shift. When you look at divided government, some things it can do; some things it can’t. Overall, a lot of things won’t change quickly. What would change is the oversight mechanism. Divided government provides an opportunity for oversight. No matter what happens in terms of organic products trade, we see 2019 as the year of congressional oversight.

We are going to need a bipartisan coalition of champions to direct the USDA to follow the lead of the organic industry. The truth is that USDA’s view of its role in organic is very narrow right now. It is doing a decent job on oversight, but it is refusing to advance the standards for the organic industry, and that’s where we need the support of Congress in terms of oversight. The organic seal can’t be set in stone, which is what USDA feels. It needs to keep up with the consumer. USDA has been unwilling to hear from the industry on that, so we will be looking to Congress to support the organic industry.

Issues of concern to the organic industry include the Origin of Livestock rule in the National Organic Program, which allows conventional animals to be transitioned to organic, but is being taken advantage of. While the rule may have helped support transition in the early days, its time has passed.

Also, despite USDA’s objections, the U.S. District Court for the District of Columbia recently announced that it will hear OTA’s case against USDA’s failure to put into effect new organic animal welfare standards. We are also encouraged that the court will hear our challenge to the entire, year-long pattern of unlawful conduct by USDA. The Organic Trade Association believes that beginning with the first delay that was undertaken without an opportunity for public notice and comment shortly after the current administration took office, until the final withdrawal of the Organic Livestock and Poultry Production rule in March 2018, that USDA has engaged in a pattern of misconduct that can only be corrected by a federal court.

The organic industry also wants USDA to put out better guidance on continuous improvement in soil health. Also, we want more clear requirements on testing for residues of pesticides, GMOs and heavy metals. Methods need to be improved and laboratories need better direction on how and when to prevent fraud. We need Congress to remind USDA of the continuous improvement language in the original law governing organic production standards and that the agency should be responsive to the industry wanting to move forward with these things. 

Regarding the Farm Bill, the Senate bill and the House bill are friendly to organic. However, can committee leaders reach an agreement to sign into law before year end or will it defer to the next Congress, which means the process would start all over again? Getting the Farm Bill done allows funding to support organic. As long as the Farm Bill is delayed, there is no funding for organic research, data collection, certification cost-share support for small farmers to help defray the cost of organic certification, and other key programs.

Lastly, OTA has a small Political Action Committee (PAC), and it is fully supporting Montana Senator Jon Tester in his hotly contested reelection bid. We are very proud to have an organic farmer in the U.S. Senate and we don’t want that to change.

OTA has worked hard to build bipartisan relations in Congress. We have emerging champions and we will continue to engage with both parties. We see younger members of Congress understand the value of organic. We will carry on regardless of the outcome of the midterms to make the case that organic is worth supporting for any member of Congress.

Corinne Shindelar, CEO, Independent Natural Products Association

Farm Bill
The Mid Term elections have an impact on all of us, including the business landscape. The Farm bill is significant, as access to product is becoming a real issue for independent natural food retailers. What is allocated for subsidies and support of organic farming and faster conversion to sustainable agriculture practices will impact the natural products industry. Demand is outpacing supply, and the Farm Bill sets the future of the country’s position in supporting what consumers are really saying they want. 

Climate Change
Climate change aligns with the Farm Bill. The recognition of our leaders to understand that agricultural practices are one of the biggest contributors to climate change is huge. How one votes in November will give a voice to our elected leaders that we are retailers willing to work with our consumers to understand their everyday life choices and how this impacts climate. Yet, if we are not holding our large agricultural production practices accountable for their actions, individual consumers may feel pretty hopeless in “voting with their dollar,” which ultimately impacts independent retailers.  

Economic Inequality
Economic inequality is also a concern. We need legislation support that aligns with our values of a rightful living for all. Independently owned businesses tend to be closer to the people that work for them and value being able to pay a livable wage. Yet the playing field needs to be equal as higher wages (livable) drive up cost at shelf, and yet if all are not held accountable to provide this to those who stock our shelves then the competitive advantage can be lost. 

Net Neutrality
Net Neutrality is also something that we don’t talk about much and yet, as we enter into a more competitive digital environment, the loss of net neutrality can affect the ability of independent retailers to have a strong enough presence on the internet to compete in that space, as well as in their brick and mortar locations. So, does the midterm election impact our business reality? You bet it does!

Michael McGuffin, President, American Herbal Products Association

As we approach the midterm elections, the tariffs are already affecting trade – large companies and small that buy herbs and other ingredients from China have informed me of the financial burdens on their companies. But I can’t see the election having any influence on this as the president has stated he’s acting on his own discretion under the law.

And I think the impact of the issue of “health care” as the term is used in the political arena – it mostly means “health insurance” and barely strays into health care choices – is more on companies as employers than as marketers. In other words, when federal law supports more affordable programmatic health insurance options (and of course there are heated arguments about which model is, when all the costs are considered, more affordable) it’s probably more likely that companies that pay all or a portion of their employees’ insurance costs will continue to do so. This is not, however, an issue that affects the natural products industry in any special way and is true for all American employers. But I’m not aware of any product launches or marketing campaigns in our industry that have keyed on this political discussion.

Regarding the Farm Bill, we all want this to pass and it must pass, and the Congress knows that it must pass. Of particular relevance of course are the supports for organic agriculture (already in and non-controversial as far as I know); the potential for allowing purchase of multivitamins with SNAP benefits (in the House bill but not in the Senate version, and complicated by the fact that the SNAP provisions are, by several reports, the most charged detail before the Conference Committee); and the inclusion of the Hemp Farming Act (in the Senate but not the House version; we think this is largely non-controversial and strongly supported by the leadership). Will the election have any effect on this, though? I don’t see how it can, unless it becomes clear that one side just gained the advantage to break the SNAP work requirement logjam – but I don’t see the conference revisiting any of “our” issues whether or not this occurs. 

The most significant modifications to my attention (and I think to the other trade associations and the industry) will come about if the Democrats gain control of the House. The historical fact is that industry – not just our industry but many regulated industries – often face a greater challenge when the Democrats are in charge that legislation will be offered, and possibly passed, to create new regulations. For the first time since DSHEA amended the Food, Drug & Cosmetic Act (FDCA), our champions (Senators Hatch and Harkin) are gone, and our critics – notably CSPI – have already announced their intention to work to further amend the law to place greater restrictions on dietary supplements. So, we will need to be attentive and vigilant, and try to lead that conversation, or at least make sure we are part of it. We were able to do that in 2006 when AHPA initiated the discussion, and then gathered broad industry buy-in, to support a reasonable amendment to the FDCA to require submission to FDA of all serious adverse event reports associated with supplements. If anything, the industry is more united now than a decade ago, so I’m optimistic that we’ll work cooperatively for the good of the industry, which is ultimately to the good of consumers.

Todd Runestad, Senior Editor, Ingredients & Supplements, New Hope Network/Informa

Democrats seem to be pitching the most part of their political advertising on healthcare issues, specifically the Medicare-for-all concept. That does not seem to really have anything to do with the supplements market or better nutrition.

Part of the Farm Bill has the proviso to include specific multivitamin formulations as eligible for food stamps under the SNAP program. Another part of the Farm Bill will legislate the Hemp Farming Act. I don’t see how the election will change those two either way, frankly. Multis: no. Hemp: yes. Signed, the House Cynic.

For more on the subject:
https://www.newhope.com/news/multivitamins-cbd-chart-same-course-through-congress

Michele Simon, Executive Director, Plant Based Foods Association

Going into the midterm elections, the Plant Based Foods Association is concerned with FDA’s potential regulation of the term “milk” with regard to plant-based alternatives.

While grocery sales are generally flat, sales of plant-based foods have grown at double digits over the past year. American consumers are sophisticated and well informed. Consumers who purchase plant-based foods are keenly aware of why they are making these choices and do so for many reasons, including sustainability, health, allergies, variety and taste.

There is much discussion about the use of the word “milk” to identify plant-based alternatives. For our members, and as the data shows, for many consumers, the word describes the functionality of the product. Our research shows that 78% of cow’s-milk drinkers agree that the word “milk” is the most appropriate term for products such as soymilk and almondmilk.

Our use of the term is not meant to diminish the value of cow’s milk produced by dairy farmers, but rather to use terms that have been understood and accepted in the marketplace as the common and usual name for more than 30 years.

To help ensure a consistent approach among our members, last year, PBFA convened a Standards Committee to establish voluntary standards for the labeling of plant-based milks. We recently shared that finished document, along with the results of a consumer survey, with the FDA. The voluntary standard recommends that labels clearly identify the main ingredient as part of the word “milk” or be labeled as a “plant-based milk,” along with clear disclosure of the main ingredient. We also recommend that the principal display panel contain the words “dairy-free” or “non-dairy.”

Ultimately, the question is whether current regulatory definitions can keep up with innovation. We are living in a time of rapid innovation in food and America is leading the way. Consumers are entitled to the benefits of this innovative American spirit and the delicious new plant-based offerings in the marketplace, from both startups and established brands. We urge the FDA to adopt policies that encourage this innovation, not stifle it, and that will allow consumers to make informed choices. Plant-based food producers offer options that consumers want and recognize. If those foods are forced to be identified by obscure, contrived names that consumers are unfamiliar with, innovation will be stifled, and consumers will be deprived of the choices they deserve. The FDA has the unique opportunity to support this growing industry and the millions of American consumers who are voting with their dollars. 

(Adapted from Oral Remarks by PBFA at an FDA hearing in July 2018) 

Morris Beegle, Producer and Host, Let’s Talk Hemp

On the Colorado ballot in the midterm elections is Amendment X, meant to align Colorado’s definition of hemp to federal government definitions as the feds relax their own rules for growing hemp. The ballot question reads: “Shall there be an amendment to the Colorado constitution concerning changing the industrial hemp definition from a constitutional definition to a statutory definition?”

Regardless of whether Amendment X passes, in the end, this particular bill isn’t going to mean anything to where hemp stands federally or across the board in all states. It gives the state legislature the ability to update and modify the definition of industrial hemp to match the federal definition in terms of allowed percentages of THC. Currently, in Colorado, hemp is a cannabis plant with a THC level of no more than 0.3 percent. However, the U.S. Congress could take hemp off the Controlled Substances Act in this year’s pending Farm Bill and change its federal definition. If they do that and raise the allowed THC level higher than Colorado’s, it could put other states at a better advantage if Colorado’s definition remains the same because they could grow more without worrying about trying to keep the THC level as low.

Hence, the ballot measure asks voters to kick the current definition out of the state Constitution and give it to state lawmakers who could more quickly adjust it to react to federal changes. In Colorado, the only way to change the state Constitution is by asking voters to do so at the ballot box every four years. Amendment X gives us a tool to keep up with the federal definition, immediately allowing us to change our state definition to align with the feds. Otherwise, being stuck in the state constitution like it is, we couldn’t do anything until 2020.

A number of hemp industry leaders are saying they are voting yes on Amendment X. The upside is it would give us a tool to help strengthen the definition of hemp and not weaken it. However, there are others making valid arguments that it could risk constitutional protections for hemp. I see both sides, but in the end, it’s not going to matter because hemp products and hemp derived cannabinoid supplements are going to line the shelves of natural product stores across the country. 

Bob Hoban, CEO, Hoban Law Group, a Hemp-centric Legal Firm

The intention when we wrote the language for Amendment X for Colorado state Senator Vicky Marble was if we want to change the level of THC allowed in industrial hemp, for example, from the currently allowed 0.3 percent to 1 percent, we would now be able to do it in the statute and not in the constitution. If the federal government and/or Kentucky changes the allowed level of THC to 1%, Colorado farmers would be hamstrung.

The industry spoke and it wanted to consider higher THC percentages allowance for hemp. We heard that and responded and this is the first step toward that. Amendment X is good policy because it enables the state of Colorado to remain competitive in an ever-changing industrial hemp industry that has quickly established a global presence. It allows Colorado to remain competitive as the hemp industry evolves.

 

Twenty-five Years Later, Consumers Are “Grossed Out” by GMO Foods

Photo:  Pexels

Photo: Pexels

For Presence Marketing Newsletter, October 2018
By Steven Hoffman

After nearly 25 years since the introduction of genetically engineered foods into the American diet – and despite the fact that nearly half of all U.S. cropland is dedicated to GMO agriculture – consumers have largely remained skeptical, even to the point of being “grossed out” by the idea, says Sidney Scott, Assistant Professor of Marketing at Olin Business School at Washington University in St. Louis, MO. Scott is lead author of a research paper titled “An Overview of Attitudes Toward Genetically Engineered Foods,” published in the August 2018 Annual Review of Nutrition.  

“In some contexts, people view nature and naturalness as sacred and genetically engineered food as a violation of naturalness,” the authors wrote. What the research overview doesn’t address, however, is why some consumers seem to be fine with heavily processed foods — Hamburger Helper, frozen microwave dinners, or maple-flavored “pancake syrup” — but cannot abide genetically engineered foods such as weed-resistant soybeans, vitamin A-enriched rice, or fast-growing salmon, reports the University of Washington’s The Source. “Consumers seem to be saying it’s not OK to poke into the DNA. That’s yucky,” Scott said. “People are grossed out by that.”

According to the study’s authors, the U.S. tends to have a permissive approach to regulating genetically modified crops and “generally recognizes them as safe.” The European Union, on the other hand, is more restrictive, allowing only two genetically engineered crops to be grown commercially: potatoes and maize. A key aim of the research team’s work was to expose the gap between advocates of genetically engineered foods and opponents, writes Food Dive. “What we’re trying to figure out now is what will allow people to reach a better consensus," said Scott. "I don’t think it’s insurmountable.”

OTA Fires Back at Organic Critics with Full-page Ad in Wall Street Journal

For Presence Marketing Newsletter, October 2018
By Steven Hoffman

WSJ_OrganicTradeAssociation Ad 9-12-18.jpg

Responding to an Op-Ed titled “The Organic Industry is Lying to You,” written by anti-organic and pro-GMO provocateur Henry Miller and published in the Aug. 5, 2018, edition of the Wall Street Journal, the Organic Trade Association (OTA) said enough is enough. Adding insult to injury, on August 7, FDA Commissioner Scott Gottlieb followed up on Miller’s op-ed with a series of tweets essentially agreeing with the misinformation and pledging to review organic claims.

On September 12, OTA put its money where its mouth is, placing a full-page, black and white ad in the Journal’s Washington, D.C./Baltimore regional edition titled, “Here’s a long list of chemicals you should never have to read.” The advertisement, a push-back by OTA against what it calls misleading and disparaging attacks on organic food, calls out the hundreds of chemicals that are prohibited in organic farming, production and processing.

“We will not let these charges go unanswered,” OTA CEO Laura Batcha told Sustainable Food News, adding that its full-page ad is “an aggressive push-back against misleading and derogatory attacks on organic. It is the mission of the Organic Trade Association to protect and promote organic, and it is our responsibility to get the facts out. It’s critically important to push back against these attacks,” Batcha said in a statement.

“Consumers deserve to know the truth,” Batcha added. “Organic’s strength is its transparency, and organic farmers and businesses work hard every day to uphold the standards of organic and to honor the trust that we’ve earned from consumers everywhere. 

Henry Miller, formerly with the Hoover Institution and currently a Senior Fellow with the Pacific Research Group, has a history of arguing for deregulation of hazardous products and taking positions outside the scientific mainstream, reports Gary Ruskin, Director of U.S. Right to Know. “He has claimed nicotine ‘is not particularly bad for you,’ argued that low levels of radiation may be beneficial to health, and has repeatedly called for the re-introduction of the insecticide DDT. He is perhaps the most prolific and best-known promoter of genetically engineered foods,” writes Ruskin, who also reported that in August 2017, Forbes deleted all columns authored or co-authored by Miller in the wake of revelations that Monsanto ghostwrote a column that Miller published under his own name in Forbes.

Photo: Organic Trade Association

Photos From the 2018 Southern Hemp Expo, Nashville, TN

Compass Natural was pleased to serve as agency of record at the first annual Southern Hemp Expo, taking place September 28-29, 2018, in Nashville, TN. Every major affiliate television station, The Tennessean, and many other national and local news outlets attended the Expo and produced extensive media coverage. View some of the photos from the inaugural Southern Hemp Expo, and mark your calendar for the NoCo6 Hemp Expo, March 29-30, 2019, in Denver, CO.

Morris Beegle joins Nick Beres and NewsChannel 5 Nashville on their MorningLine Talk Show ahead of the Southern Hemp Expo.

Morris Beegle joins Nick Beres and NewsChannel 5 Nashville on their MorningLine Talk Show ahead of the Southern Hemp Expo.

Ari Sherman of Evo Hemp is interviewed by Linda Ong at ABC 2 News in one of the many buzzing exhibition halls.

Ari Sherman of Evo Hemp is interviewed by Linda Ong at ABC 2 News in one of the many buzzing exhibition halls.

Pioneering hemp farmer Joe Hickey and John Roulac, founder of Nutiva and Re: Botanicals, share a laugh on stage at the Southern Hemp Expo Business Conference.

Pioneering hemp farmer Joe Hickey and John Roulac, founder of Nutiva and Re: Botanicals, share a laugh on stage at the Southern Hemp Expo Business Conference.

GenCanna, a sponsor of Southern Hemp Expo, specializes in hemp genetics and working with farmers in Kentucky to select and cultivate premium CBD hemp cultivars.

GenCanna, a sponsor of Southern Hemp Expo, specializes in hemp genetics and working with farmers in Kentucky to select and cultivate premium CBD hemp cultivars.

The Southern Hemp Expo featured full-day Business Conference and Agriculture Symposiums and more than 150 exhibitors. The first-year event attracted more than 3,500 visitors and featured the latest innovations in hemp products, including CBDs and dietary supplements, hemp food, fiber and fashion, extraction technology, agricultural exhibitors and others.

The Southern Hemp Expo featured full-day Business Conference and Agriculture Symposiums and more than 150 exhibitors. The first-year event attracted more than 3,500 visitors and featured the latest innovations in hemp products, including CBDs and dietary supplements, hemp food, fiber and fashion, extraction technology, agricultural exhibitors and others.

Warfighter Hemp: Hemp products for veterans, by veterans. The company provides a holistic and natural alternative for recovering United States veterans.

Warfighter Hemp: Hemp products for veterans, by veterans. The company provides a holistic and natural alternative for recovering United States veterans.

Southern Hemp Expo Co-founder Morris Beegle (right) and hemp expert and author Doug Fine (center) present a Lifetime Achievement Award to Kentucky hemp producer Craig Lee (left).

Southern Hemp Expo Co-founder Morris Beegle (right) and hemp expert and author Doug Fine (center) present a Lifetime Achievement Award to Kentucky hemp producer Craig Lee (left).

Hemp enthusiasts walk the streets of downtown Nashville following the conclusion of the Southern Hemp Expo. Join us next year as the Expo will make a return to Nashville in 2019!

Hemp enthusiasts walk the streets of downtown Nashville following the conclusion of the Southern Hemp Expo. Join us next year as the Expo will make a return to Nashville in 2019!

Year of the Bird: Industrial Farming Causing Bird Populations to Plummet

Photo:  Pexels

Photo: Pexels

For Presence Marketing Newsletter, October 2018
By Steven Hoffman

Humanity may need to add another meaning to the story of the birds and the bees. As industrial-scale farming has come to dominate agricultural regions in the U.S. and the EU, the birds and the bees are disappearing. Since 1980, the number of birds that typically inhabit European farmlands has decreased by 55 percent, and in the past 17 years alone, bird counts in agricultural regions in France have dropped by 33 percent, a “level approaching an ecological catastrophe,” according to a September 2018 report in National Geographic.

According to National Geographic, intensive industrial agriculture, increasingly dependent on the use of toxic, synthetic pesticides and fertilizers, is driving the losses of European bird and insect populations. Habitats where birds once bred, nested, and wintered now bear crops, and pesticides have killed off birds’ prey. Even avian species adapted to humans have dwindled on farms, reports National Geographic, suggesting that the land is less able to sustain all kinds of birds. To curb the losses of farmland birds, avian researchers contend that agriculture must be remade in nature’s image, i.e., less dependent on the addition of toxic, synthetic chemicals, more diverse in its flora, and more hospitable to local fauna.

In North America, researchers reported in July 2018 in the Journal of Environmental Toxicology & Chemistry that hummingbirds and bumble bees are being exposed to neonicotinoid and other pesticides through “routes that are widespread and complex.”

Scientists studying blueberry fields in British Columbia detected pesticides and related compounds in cloacal fluid and fecal pellets of hummingbirds, revealing for the first time that hummingbirds are exposed to and accumulate pesticides of multiple types. In addition, bumble bees, their pollen, and blueberry flowers contained pesticides, with the highest concentration of the insecticide imidacloprid in pollen from organic farms, according to a release published in Science Daily.

"Hummingbirds and bumble bees are important pollinators of wild and agricultural plants and they survive each day on a razor's edge due to their high energy needs," said lead study author Dr. Christine Bishop, of Environment and Climate Change Canada. "Pesticide exposure in these animals may have impacts on their health and the ecosystem services they provide to humans and wildlife."

Among threatened birds living today, industrial agriculture poses the single biggest extinction threat, according to BirdLife International's 2018 State of the World's Birds Report, available as a free .pdf download. To spur a rebound, researchers say that farming practices must change radically to become more sustainable.

“It is estimated that of the roughly 672 million birds exposed annually to pesticides on U.S. agricultural lands, 10 percent, or 67 million, are killed as a result,” said Dr. Greg Harrison, DVM, a renowned avian health expert and founder of Wild Wings organic bird seed. “Ironically it is often the same sunflower and/or other grains intended to feed backyard birds that may have been sprayed with lethal pesticides to keep pests (often including birds) at bay. Just like in human health, birds and animals are affected by widespread usage of glyphosate and other toxic, synthetic pesticides,” he said.

National Geographic, has been reporting on the impact of agricultural pesticides on bird populations and declared 2018 the Year of the Bird to mark the centennial of the Migratory Bird Treaty Act, “the most powerful and important bird-protection law ever passed,” and encourages nature lovers to get involved.

Consumers are responding and realizing that, like their own health, animals also benefit from natural and organic food. Natural pet food sales reached $8.2 billion in 2016 and now make up 25 percent of the pet food market in the United States, according to Packaged Facts. Another report, The U.S. Market for Natural Pet Products, predicts the industry will grow by 11 percent to reach $14 billion by 2021. Packaged Facts found that 72 percent of pet owners buy natural and organic pet food because they believe the nutritional quality is better.

After Centuries, George Washington’s Mt. Vernon Farm Is Growing Hemp Again

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The father of our country, George Washington, grew hemp on his farm in Mt. Vernon, VA. In the 1760s, Washington predicted that hemp could be a more profitable crop than tobacco and he grew it in commercial quantities on his farm. More than 250 years later, horticulturists at Mt. Vernon and the University of Virginia planted an experimental hemp crop. Telling NPR he is a “hemp patriot,” Charlottesville, VA, farmer Brian Walden hopes growing the crop at Washington’s home farm again could give hemp a public image makeover and “get the message that this is an innocuous plant that has real benefits and our Founding Fathers knew that and they planted it,” Walden told NPR. According to NPR, hemp is still considered a controlled substance by the federal government, although 38 states considered industrial hemp legislation in 2018. According to a June report by the Congressional Research Service, "the global market for hemp consists of more than 25,000 products in nine submarkets." Hemp fibers can be made into yarns, paper, construction materials, even parts for automobiles. Hemp oil can be used in lotions and cosmetics, and full spectrum hemp extract is emerging as a popular dietary supplement. To learn more, attend the Southern Hemp Expo, Sept. 28-29, Nashville, TN, www.southernhempexpo.com.

Bye Bye By-Products: Pet Foods Go Upscale

Photo:  Pexels

Photo: Pexels

Pet care is an anchor to center store as the number two reason consumers leave the house to go to the store, and 75% of U.S. households shop the pet food section, Joe Toscano, VP at Nestle Purina, told Food Dive. And it is driving demand for higher quality, natural and organic pet food, said David Lummis, pet market analyst for Packaged Facts. While larger companies such as Quaker Oats, Mars and Nabisco sold pet foods as early as the 1950s and 1960s, “What is newer is the introduction of specialized ingredients, senior pet food and functional kinds of pet food,” said Lummis. Valued at $26.4 billion in 2016, Packaged Facts estimates the U.S. market for pet food will grow to $30 billion by 2022. According to Packaged Facts analysts, natural pet food sales reached $8.2 billion in 2016 and now make up 25% of the total U.S. pet food market. Natural pet food sales grew by a compound annual growth rate of 12.1% between 2012 and 2016.

Organic Personal Care Market to Grow to $25 Billion by 2025

Photo:  Pexels

Photo: Pexels

Growing demand for organic products is leading to an increase in their availability in natural foods stores, supermarkets, drugstores, convenience stores, online stores and elsewhere. The growth in e-commerce, in particular has provided consumers opportunity to access products that might not otherwise be available in local stores. This increased accessibility is credited for an expected growth rate in organic personal care products of 9.5% CAGR between now and 2025, when the market for organic personal care products is expected to reach $25.11 billion in sales, says research firm Grand View Research in a new report. North America was the largest market for organic personal care in 2017. Key findings include:

  • In terms of value, the global revenue for hair care is anticipated to reach $6.62 billion by 2025, rising at a CAGR of 9.8% from 2017 to 2025.

  • Skin care application dominated the market in terms of revenue in 2017, commanding over one third of the market, owing to ability of organic ingredients to impart antioxidation properties and improve skin health.

  • The U.S. organic personal care market is poised to exceed $7.7 billion by 2025 owing to presence of various manufacturers of organic personal care products in the country.

  • The market is highly competitive with presence of a number of multinational companies with wide product portfolios.

  • Major companies in the market lay high emphasis on expanding their presence in the global market, in an attempt to increase market shares and drive revenues. For instance, Estee Lauder acquired various companies such as BECCA Cosmetics, Too Faced, and Editions de Parfums Frédéric Malle, over the past few years in order to expand its product portfolio.

Source: Grand View Research

CPG Giants Enter Supplements Space

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Photo: Pexels

As consumers turn increasingly to natural health options, a number of CPG giants have entered or expanded into the dietary supplements space, beginning in the past year with Nestle’s acquisition of leading non-GMO and organic supplement brand Garden of Life in December 2017. In April 2018, Procter & Gamble announced the purchase of Merck KGaA’s consumer health unit, adding vitamin brands including Seven Seas, Femibion and Neurobion to its supplement subsidiaries portfolio, which includes Metamucil and leading natural brand New Chapter, which Procter & Gamble acquired in 2012 (in July 2018, New Chapter cofounders Barbi and Paul Schulick announced their departure from the company). Natural immune support supplement maker Zarbee’s Naturals was purchased in July 2018, marking Johnson & Johnson’s first foray into dietary supplements. In June 2018, General Mills led a $12 million investment round in Boulder, CO-based functional beverage maker GoodBelly. California-based Clorox Company, known around the world for its laundry bleach, purchased Nutranext in March 2018, adding such brands as NeoCell, Rainbow Light, Blessed Herbs and Stop Aging Now to its portfolio. To top off this most recent spate of investments and acquisitions, Japanese beer maker Kirin, together with multi-portfolio firm Mitsui, announced in July 2018 that each had purchased 30% of supplement maker Thorne Research’s stock. Thorne Research is a leading dietary supplement brand specializing in the healthcare practitioner market.

Supplements Market Research Highlights

Photo:  Pexels

Photo: Pexels

Overall sales of dietary supplements are slowing, but it’s also a bigger and more complicated marketplace, says Claire Morton, Nutrition Business Journal's senior industry analyst. Top takeaways from the 2018 Supplement Business Report include:

• Mass market retail dominates sales in the natural and organic products industry with more than half of total market share and over $120 billion in annual sales.

• E-commerce, while frequently discussed and rapidly growing in the double-digits, still represents only 4 percent of total market share.

• Consumers report frequenting mass, grocery and natural stores over other retail channels, including e-commerce.

• Manufacturers rate the top three challenges of online retail as driving awareness of product, navigating Amazon and standing out.

• Natural and specialty retail has lost market share consistently since 2006, with growth slowing exponentially since 2015.

Companies Could Save Up to $700 Billion Annually in Food Waste Costs

Annual food waste is expected to grow explosively between now and 2030, projected the Boston Consulting Group (BCG) in a new report. “Roughly one-third of the food produced around the world goes to waste,” says Esben Hegnsholt, a BCG partner and co-author of the report. “This represents a challenge so massive that it was included in the United Nations’ Sustainable Development Goals. But while it is a daunting problem, there are steps that can be taken today, actions that draw on currently available technology and know-how, to dramatically slash food loss and waste across the value chain.” While food waste and loss are expected to reach 2.1 billion tons, worth $1.5 trillion, by 2030, by taking assertive action, companies, agricultural players, governments and others can take steps that could save up to $700 billion in food waste annually. The report identified initiatives companies can take to address the issue, including:

  • Educating farmers, consumers, and company employees on the issue of food loss and waste and steps they can take to reduce it.

  • Improving supply chain infrastructure for the food industry, including investment in cold chain systems.

  • Adopting digital, big data, and other tools to slash loss and waste and developing company KPIs and processes to drive reductions.

  • Improving collaboration across the food value chain, including between agricultural producers and food processors.

  • Advocating for changes to regulations and tax policies that would reduce loss and waste and encourage the repurposing and recycling of food.  

A copy of the report can be downloaded here.

My Visit to Gaia Herbs Farm

Or the Tale of Rare White Squirrels, Ginkgo Groves, Fields of Echinacea to the Horizon, Dedicated People, and Organic Products that Care for Health and the Environment

Profile by Steven Hoffman, Compass Natural

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Asheville, NC (September 6, 2018) - Driving southwest on Highway 64 out of Asheville, North Carolina, on this early morning in late summer, in and out of thick fog and cool mountain air as my rental car navigates hills and valleys, I am struck by the lush, verdant, and primordial landscape of the Southern Appalachian Mountains.

I am headed to the legendary, certified organic Gaia Herbs Farm.

Located in its own little valley, protected from pesticide drift by mountains on all sides, and bordered by the French Broad River and the 530,000-acre Nantahala National Forest to the west, the farm is in a uniquely biodiverse, temperate rainforest region where the Blue Ridge Mountains meet the Great Smoky Mountains in Western North Carolina. In fact, nearly 80 percent of all plant species used in North American herbalism are native to this region – a key reason Gaia Herbs established itself here more than 32 years ago.

This was my first visit to the Asheville area, and for a guy from Boulder, Colorado, I felt right at home in this densely forested, rugged, mountainous region – an ancient geologic area left untouched by the glaciers of the last ice age that flattened much of the Northern Appalachians, with rock formations that are nearly half as old as Earth itself, and home to the highest peaks east of the Mississippi River. Plus, what they say about Asheville is true – it’s a mecca for nature lovers and outdoor enthusiasts, and a delightful, historic town full of restaurants, craft breweries, shops, music, unique architecture, art, culture and more.

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The good folks at Gaia Herbs, one of the nation’s leading herbal products brands – invited me to visit Gaia’s proprietary 350-acre organic herb farm where it grows up to 6.5 million plants a year to satisfy demand for pure, safe and efficacious herbal remedies.

The team hosted me for a full day of meetings and tours of the farm, as well as the analytical and quality assurance laboratories, and extraction and processing facilities located right on the property.

Offering more than 200 products and with a commitment to regenerative organic agriculture practices, Gaia Herbs is a truly vertically integrated herbal products manufacturer committed to health and the environment. With its farm, laboratories and processing facilities primarily in one location, the company ensures quality, integrity, potency, safety and efficacy from seed to shelf.

Discovering a Verdant Valley … and White Squirrels
More than 32 years ago, Massachusetts-based Medical Herbalist Ric Scalzo was searching for a location where he could grow the medicinal herbs he used in the formulas he developed for patients. Demand was growing for the products he created, and the farming season in New England was too short for the crops he had in mind. So, Ric headed south and stopped in his tracks when he discovered a fertile little valley tucked just outside of the rural town of Brevard, North Carolina, about 45 minutes south of Asheville. 

The property that caught his eye was an old dairy farm. Protected from other industrial agriculture and with pure mountain water from Cathey’s Creek, a designated Wild Trout stream running through the farm on its way to the French Broad River, Scalzo knew that this rich bottom land would soon be home to Gaia Herbs.

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(Now, here’s where the white squirrels come in: Brevard, founded in 1861 as the county seat in Transylvania County, is also known as home to a thriving, rare white squirrel population said to have descended from a pair of escaped carnival animals. The animals are unique to the area and so loved by the community that in 1986 the Brevard City Council voted unanimously to establish the town as a sanctuary for white squirrels.

After hearing numerous times from friendly staff about these elusive white squirrels, I finally got to see one hanging out in a Hawthorn tree grove near Gaia’s main farmhouse (the floral buds of the Hawthorn trees, too, are harvested for Gaia’s herbal product formulations). Not albinos, these cute critters – all white with a dark stripe running from the top of their head down their back – are a unique strain of the common gray squirrel that thrives in this particular area.)

Gaia Herbs – Next Generation
Today, Gaia Herbs employs more than 250 people and grows about a third of the plants it needs on the Brevard farm. The company also operates an organic farm in Costa Rica where it cultivates turmeric and other herbs, and plants are also sourced from certified organic farmers and ethical wildcrafters who sustainably harvest plants from nature. After completing a $5 million, state-of-the-art expansion in 2016 of its manufacturing facilities on the farm in Brevard and opening a 60,000 square-foot greenhouse in nearby Mills River, NC, Gaia Herbs is an internationally respected brand, known for its authenticity, purity, potency, efficacy, transparency, and commitment to health, organic agriculture and the environment.

With its Meet Your Herbs® transparency program from seed to shelf, and building on a platform of “Purity + Integrity = Potency,” Gaia Herbs is developing new products and herbal blends to serve an increasingly savvy and demanding natural health consumer. Under leadership of President Angela McElwee, a natural product industry veteran who started her career at age 16 helping customers in the aisles of Healthy Alternative, an independent natural foods retail chain based in Dayton, OH, the “Gaia Difference” is being well received, and Gaia Herbs continues to foster its position as an innovator and brand leader in the natural, organic, and herbal products market.

Meet Your Herbs® – Setting a New Standard for Traceability
For consumers, Gaia’s Meet Your Herbs® program raises the bar for transparency and traceability, says the company. For every Gaia Herbs product, a customer can enter a unique ID number located on the package to “virtually experience” how the botanical ingredients of a particular product were grown, cultivated and harvested, and then tested down to the DNA level in Gaia’s state-of-the-art analytical laboratories for quality and potency, efficacy and safety. Meet Your Herbs® also presents easy-to-understand science validating each step in Gaia’s process from seed to shelf, and anyone can explore the history, uses and function of each particular herb in their Gaia Herbs product formulation.  

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The company will showcase its new blends, including Calm A.S.A.P. and Mood Uplift, at the upcoming Natural Products Expo East in Baltimore, MD. Unlike many herbal products that claim to support emotional coping skills by recommending a maintenance dose, Calm A.S.A.P. was specifically formulated for relief in the moment.* Blended from herbs cultivated on the company’s organic farms and sourced from an “impeccably transparent supply chain,” Calm A.S.A.P. was recently recognized as a 2018 NEXTY AwardFinalist for Best Condition-Specific Supplement by New Hope Network, producer of Natural Products Expo and publisher of leading trade and consumer magazines in the natural, nutritional and organic products market.

Mood Uplift, a new Gaia Herbs product designed to support mental and emotional wellbeing, combines herbal extracts traditionally used to help the body cope with daily stress, nourish the nervous system, calm the mind, support a balanced mood and help foster a better outlook on life.*

These new products, along with other Gaia Herbs’ liquid extracts, are available in Vegan Liquid Phyto Caps™. Designed for rapid absorption, Gaia’s plant-based Phyto Caps™ are a unique patented delivery system developed exclusively by the company to deliver the concentrated potency of a liquid extract in the convenience of an easily digestible, fast-dissolving capsule.

Giving Back – A Team Effort
As a socially responsible, mission-driven company, Gaia Herbs cares for its employees first, along with the local community and organizations dedicated to food, agriculture and the environment. Each year, a portion of the farm’s acreage is dedicated to growing vegetables for the company’s employees; the Gaia Employee CSA (community supported agriculture) provides 20,000 pounds of farm-fresh organic vegetables to the staff each season. In addition, team members benefit from employee wellness programs, living wage certification, and a paid volunteer program. Outside the farm, Gaia supports mission-aligned organizations including the Bread of Life Free Community Kitchen in Transylvania County, the Pisgah Conservancy to support environmental preservation in the region, Golden Courage, an international organization with a mission to end child poverty, and more.

Learn More about Gaia Herb’s Traceability Program, Meet Your Herbs®, in Part 2 of My Visit to Gaia Herbs Farm, coming next month!

Learn more at www.GaiaHerbs.com, and visit Gaia Herbs at Booth #3163 at Natural Products Expo East, Sept. 13-15, 2018, at the Baltimore Convention Center, Baltimore, MD.

Steven Hoffman is Managing Director of Compass Natural, providing brand marketing, PR, social media, and strategic business development services to natural, organic and sustainable products businesses. Contact steve@compassnaturalmarketing.com.

Photos: Compass Natural, Wikimedia Commons, Gaia Herbs

*This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.

Judge Rules Case Can Proceed Against USDA’s Withdrawal of Organic Welfare Rule

Photo:  Pexels

Photo: Pexels

A judge for the federal court for the Northern District of California on August 21 concluded that a legal challenge filed by the Center for Food Safety (CFS) against the USDA’s decision to withdraw organic animal welfare regulations could move forward. In March, seven nonprofit organizations, led by CFS, sued the USDA and Agriculture Secretary Sonny Perdue, challenging its decision to withdraw the organic standards for animals on certified organic farms, called the “Organic Livestock and Poultry Practices” rule. The regulation, finalized by the USDA under the Obama administration in early 2017, strengthened the requirements for the care and wellbeing of animals on organic farms. “We are very gratified that the Court agrees we can challenge the unlawful withdrawal of these hard-won animal care protections in organic production,” said George Kimbrell, CFS legal director and counsel in the case. “The Trump administration unlawfully reversed 28 years of well-settled organic law and policy. We look forward to protecting the public’s right to a meaningful organic seal.”

Growth in Organic Market Represents Ongoing and Deep Cultural Shift

Photo: Compass Natural

Photo: Compass Natural

For the foreseeable future, organic products will remain for most consumers “the gold standard of a safer, higher-quality product,” says leading market research firm The Hartman Group. “Organic communicates freedom from chemicals (on the farm and during production) as well as a product that is seen as ‘better for the world.’ As such organic products will continue to play an important role in consumers' search for better food, said Hartman CEO Laurie Demeritt. Of U.S. consumers who use organic products, the majority (61%) is made up of Mid-level (Inner + Outer) organic consumers, with smaller segments at the two extremes: 24% are Core consumers, and 15% are Periphery consumers. The Outer Mid-level is the largest consumer segment (37%).

  • As described, Core organic buyers are the most intensely involved. As the trendsetters and early adopters, they are the most knowledgeable regarding issues surrounding organic products. By understanding the Core, we are able to examine potential upcoming important issues, which Mid-level consumers may come to espouse over time.
  • The Mid-levels represent the majority of organic consumers and thus the biggest opportunity for retailers, manufacturers and restaurant operators. Inner Mid-level consumers aspire to Core attitudes and behaviors but pragmatically apply them with less consistency and reach.
  • Outer Mid-level consumers engage with organic products as well, often motivated by fear of unknown consequences of conventional food as well as by status — “everyone is doing it.”
  • Periphery consumers prioritize other concerns. They still, however, know some general principles and occasionally incorporate organic products into their diet.

Hartman recommends that manufacturers, retailers and restaurant operators should:

  • Prioritize speaking to consumer values around organics; do not risk falling out of consumers’ consideration set.
  • Focus on communicating the benefits of organic and natural from a health and wellness perspective first. However, consumers do appreciate hearing about positive effects on the wider world: Communications that convey “better for you AND better for the world” are the most impactful.
  • Leverage the organic seal as a means of elevating quality perceptions, particularly in categories where pesticides are front of mind.

Source: The Hartman Group Organic and Natural Report 2018

Plant Based Food Sales Outpacing Overall Food Sales by 10X

For Presence Marketing Newsletter, September 2018
August 28, 2018
By Steven Hoffman

Plant-based food sales are growing like a weed. According to a new Nielsen study commissioned by the Plant Based Foods Association (PBFA), sales of plant-based foods grew a whopping 20% in the 52 weeks ending June 16, 2018. “The growth is significant, especially compared to the sales of all foods, which grew just 2%, so plant-based foods dollar sales are outpacing dollar sales of all retail foods by 10X,” says PBFA. Sales of plant-based milks grew 9% vs. -6% growth in cow’s milk; and sales of plant-based meat products grew 24% compared to 2% growth in animal meats. Other standout categories included plant-based creamers, which grew 131% over the same period last year; plant-based yogurts (55% growth) and plant-based cheeses (43% growth). Learn more here.

Glyphosate Found in 95% of Foods Containing Conventionally Grown Oats

For Presence Marketing Newsletter, September 2018
August 23, 2018
By Steven Hoffman

Glyphosate, the active ingredient in Monsanto’s Roundup weed killer and the most heavily used pesticide in the history of the world, has tested positive in 95% of oat-based foods, including popular breakfast cereals, oatmeal, granola and snack bars, according to independent laboratory testing commissioned by the Environmental Working Group (EWG). Of 45 conventional products tested, glyphosate residues were present in 43, and 31 of those products contained levels higher than what EWG scientists consider safe for children. The herbicide, also used as a pre-harvest desiccant on cereals and grains, is so pervasive it also showed up in 31% of food samples made with organic oats, although EWG reports the organic foods tested at levels “well below EWG’s health benchmark.” In August, a California jury ordered Monsanto to pay $289 million in damages to a former groundskeeper who claimed his cancer was caused by repeated exposure to glyphosate. To view EWG’s chart of oat-based foods tested, visit here.

Farmers to Trump on Tariffs: “Trade, Not Aid”

Photo by  Compass Natural

For Presence Marketing Newsletter, August 2018
July 26, 2018
By Steven Hoffman

In early July when President Donald Trump imposed trade tariffs on imports of commodities including steel and aluminum, the nations singled out by Trump, including China, Canada, Mexico and the EU, struck back, targeting food producers across the U.S. with stiff retaliatory tariffs on exports of corn, soybeans, wheat, cotton, sorghum, pork, poultry, fish and a number of nuts, fruits, vegetables and other agricultural products including bourbon, orange juice and dairy products. 

Asked to be patient in a speech to Iowa farmers on July 26, U.S. farmers are bearing a disproportionate brunt of Trump’s trade war. Feeling the financial pain, the patience of America’s heartland farmers – a bastion of support for President Trump – is wearing thin in a trade war Trump promised would be “easy to win.”

In an attempt to alleviate the economic impact to farmers as a result of his own trade policies, President Trump on July 24 promised $12 billion in emergency aid to farmers, using a depression-era assistance program to put a band aid on the immediate pain American farmers are feeling as a result of the U.S. imposed tariffs and subsequent trade retaliation by China, the EU and others.

But some Republicans and farmers are not buying it. Tennessee Republican Senator Bob Corker in a statement called Trump’s trade policy “incoherent” and the administration “was offering welfare to farmers to solve a problem they themselves created.”

Sen. Ben Sasse (R-NE) said in a statement, “This trade war is cutting the legs out from under farmers and the White House’s ‘plan’ is to spend $12 billion on gold crutches. . . .America’s farmers don’t want to be paid to lose — they want to win by feeding the world.”

Sen. John Kasich (R-OH) said that President Trump was resorting to “farm welfare” when what American farmers really want is the administration to stop imposing tariffs. American consumers will feel the pinch both ways under the proposed bailout strategy in the form of higher costs for foods due to the higher tariffs, and also the $12 billion emergency aid for farmers will end up coming from U.S. taxpayers.

Relief from an EU Deal
In a move that could provide some relief to U.S. soybean producers, President Trump on July 25 announced a deal with EU President Jean-Claude Juncker that would remove tariffs on a number of industrial goods in trade between the U.S. and the EU. In a hastily scheduled joint press conference on the White House lawn, Trump declared that European countries would be buying “a lot of soybeans” from American farmers. In a campaign-style speech on July 26 in Iowa, Trump told a group of farmers, “We just opened up Europe for you farmers. You’re not going to be too angry with Trump, I can tell you,” he said.

However, existing tariffs still remain in place and the U.S.-EU announcement did nothing to resolve Chinese sanctions on U.S. soy, pork and other farm products. In response to Trump’s trade tariffs, China in early July imposed a 25 percent tariff on U.S. soybean exports and also placed tariffs on U.S. corn, wheat, sorghum, pork, beef, nuts, fruit, vegetables and many other agricultural products. Mexico is also levying a 20 percent tariff on U.S. pork in response to Trump administration trade sanctions, as well, Agri-Pulse reported.

“If the price of soybeans goes down, farmers will have less to spend on new equipment. And equipment makers such as Caterpillar and John Deere will (eventually) have to raise the price of equipment due to steel tariffs,” Chicago trade attorney R. Kevin Williams said in the Chicago Tribune. “Eventually it will have an impact on the economy.”

“Patience is wearing thin on U.S. pork producers because the next six months of market prices – there’s a lot of red ink. We need the administration to come to these deals quickly,” Iowa hog farmer Gregg Hora told ABC News.

“We would prefer trade not aid,” said Dave Struthers, who grows corn and soybeans and raises hogs in Iowa, in a July 25, 2018, Bloomberg News report. “We’d like to see things figured out on these trade issues.”

According to Bloomberg, agriculture is the third-largest U.S. export industry. American farmers export approximately one-third of their annual production. According to Bloomberg, that generated an estimated $21 billion trade surplus this past year, however, that is now under threat after China imposed tariffs on U.S. soybeans and other agricultural products.

Impact on Natural and Organic Producers
But farmers are not the only ones affected by the administration’s trade wars. Packaged goods manufacturers, too, are beginning to feel negative effects. When the Trump administration placed tariffs on Chinese goods with an annual trade value of about $200 billion, roughly 1,300 products were impacted. The additional taxes will ripple through supply chains, reports CNN Money, compelling businesses in the U.S. and China to decide whether to absorb costs or raise consumer prices. 

CNN Money published a list of food products impacted by the trade tariffs here. Eater also published a list of foods subject to tariffs, by country, here.

Closer to home, Arnold Coombs, Director of Sales and Marketing for Bascom Maple Farms, the largest supplier of maple syrup and maple sugar in the U.S., and a seventh-generation Vermont maple sugar maker, puts it this way:

“While selling maple to Canada is like selling ice to Eskimos, we do sell some maple syrup and maple sugar to manufacturers there. We will lose a little under $1 million in sales. The bigger issue for us will be the U.S. withdrawal from the TPP. Unless this is reversed or another agreement completed, we will lose close to $9 million in sales. 

“One more trade issue for us is CETA, the EU-Canada Comprehensive Economic and Trade Agreement. The tariff on Canadian maple is gone while there is still an 8 percent tariff on U.S. maple. This has essentially taken us out of the EU market with a loss of $4-5 million in sales. I doubt that we will have an agreement with the EU in the near future.

It seems that just when we had a good grasp of developing new export markets, the U.S. government got in the way and threw up some roadblocks. Ultimately, this hurts the U.S. farmer, as we will have to buy less syrup from them. That’s not the direction we want to go.”

Leading organic dairy producer Organic Valley’s CEO George Siemon added:

“Our dairy business will be mainly affected by the conventional market being harmed. Our own sales will not be that affected, as we do not export that much to the countries with tariffs. No matter how well we manage an organic dairy pool you end up with some conventional sales; thus a lower conventional price due to tariffs will hurt our income from those sales.” 

Dietary Supplement Products “Ensnared” in U.S. – China Trade War
With many nutritional product manufacturers sourcing ingredients from China and the world over, supplement makers are feeling the pinch of a 10 percent to 25 percent import duty on a range of ingredients including minerals, animal and plant proteins, sweeteners, hemp seeds, phytosterols and other ingredients.

According to Natural Products Insider, online trading resource IngredientsOnline.com has complied a list of more than 180 ingredients that could be affected by the trade tariffs. "Keep in mind this is just the beginning; we're hearing the tariffs can range from 10 percent to 25 percent. It's obvious this will have a tremendous effect on not only the industry but on consumers as well,” said Peggy Jackson, VP of sales and marketing for IngredientsOnline.com.

Among a list released in July of Chinese goods facing tariffs of 10 percent or more were a number of specifically named herbs and botanicals, as well as what American Herbal Products Association President Michael McGuffin described as a “catch-all” category that could include a number of herbal ingredients and a separate designation that could impact certain forms of minerals used in dietary supplements.

In addition, importers may choose to buy up raw materials before tariffs take effect, and “all of a sudden the supply-demand equation is no longer balanced and the costs are going to go up,” McGuffin told New Hope Network.

Generational Effects…Or Patience?
Robert Leonard, News Director for Iowa radio stations KNIA and KRLS, claims in a New York Times Op-Ed that President Trump’s trade war will hurt farm business at a time when the rural population is aging, and that it could accelerate the hollowing out of farm communities. “Mr. Trump recklessly opened trade wars that will hit ‘Trump country’ – rural America – hardest and that have already brought an avalanche of losses. Indeed, the impact of his tariffs will probably be felt by family farms and the area for generations,” he wrote.

Yet, President Trump argues that his proposed emergency farm aid bailout is only temporary. Eventually, he argues, the trade war will pay off—farmers will no longer need taxpayer help. “The farmers will be the biggest beneficiary [sic]. Watch,” he said. “We’re opening up markets. You watch what’s going to happen. Just be a little patient.”

Steven Hoffman is Managing Director of Compass Natural, providing brand marketing, PR, social media, and strategic business development services to natural, organic and sustainable products businesses. Contact steve@compassnaturalmarketing.com.

Photo: Compass Natural
This article originally appeared in the August 2018 edition of Presence Marketing News.