An opportunity in organics

With global sales of organic food and drink approaching £20bn, manufacturers are well aware of the market's potential. This was clearly demonstrated by Cadbury's acquisition of organic confectioner Green & Blacks back in 2005.

However, a problem for organic processors and some dedicated organic retailers is the world shortage of organic ingredients. This is leading some bigger ingredients suppliers to acquire specialist organics firms.

In an example of this, Global ingredients firm Treatt has acquired half of Earthoil - a supplier of organic essential and pressed seed oils - in a £2.55M deal. As a result of the deal, Treatt will offer a range of organic products in addition to its existing portfolio of flavours and fragrances. Treatt has the option to acquire the remaining 50% of Earthoil in 2012.

Earthoil's Mischa Walter explains that the Staffordshire-based firm sources organic ingredients from the third world. "Just getting your hands on a [British] product is definitely an issue at the moment. I don't think farmers are willing to wait three years for organic conversion - they may be worried that the bottom will fall out of the market."

Her husband, Earthoil sales and marketing director Campbell Walter (pictured above left with director of global operations Wayne Barratt and Treatt md Hugo Bovill) will remain in the business and continue to run Earthoil's operations. These include a production base in Kenya, a co-ordinated organic mint growers' project in India and further grower projects in Eastern and Southern Africa.

Treatt chairman Edward Dawnay says: "This is an exciting new development for the group, taking us into the organic and fair trade markets. There is a large and increasing demand for organic ingredients from both the food and health and beauty sectors."

Bovill adds: "It will enable us to develop innovative products, for example 100% natural, organic isolates and the Treattarome range."