Ciranda navigates challenges in organic ingredients market

By Ken Roseboro

Published: July 12, 2022

Category: Organic and Non-GMO Company Profiles

Ingredient supplier builds on founders’ vision of clean, organic food for all

Organic ingredient suppliers often have to source products from far-flung regions of the world due to a shortage or unavailability of many ingredients in the U.S. Ciranda, is a good example. The Hudson, Wisconsin company supplies organic, non-GMO, and fair trade ingredients such as syrups, sweeteners, oils, fats, flours, starches, and other products worldwide to food companies.

Supplies more than 50 million pounds of ingredients

Ciranda was founded in 1994 by Hans and Joan Friese, who envisioned a world with clean, nourishing organic food for all and that valued the contributions of small farmers. Today, Ciranda sources ingredients from 17 countries worldwide, and supplies more than 50 million pounds of ingredients each year. Three-quarters of those ingredients are organic.

The organic market is seeing several trends, says Don Trouba, Ciranda’s director of go-to-market. The main trend being that the market continues to grow with sales nearing $60 billion, according to the latest data from the Organic Trade Association.

“People believe in foods made with organic ingredients,” Trouba says, “As an ingredient company, we need to be there to help our customers formulate new products, source ingredients, ensure that the farmers are getting good wages, and provide transparency.”

One factor driving organic’s growth, according to Trouba is that the market has become “omni-channel,” meaning there are multiple ways that people can buy organic foods, from big box retailers and “mom and pop” natural food stores to online purchasing.

“It’s about having that flexibility of deciding when, where, and how I’m going to make a purchase,” he says.

Challenges: Ukraine war, supply chain bottlenecks, inflation

Among ingredient trends, Trouba says his company is receiving more inquiries about palm oil, mainly because of restrictions on supply of sunflower oil due to the Ukraine war. Ukraine supplies an estimated three-fourths of the world’s organic sunflower oil.

“In the case of sunflower oil, which is affected by the war in Ukraine, we’re seeing palm oil as an item of interest,” Trouba says. “There are many companies and brands that want to keep their production going, and it’s about being able to source alternatives.”

Another ingredient that can be challenging to source is tapioca syrup, a sweetener. As a result, Ciranda is receiving more inquiries about rice syrup as an alternative.

“Companies are trying to figure out what is available and what they can access. And there are several different oil ingredients like coconut oil,” Trouba says.

Ciranda and other ingredient companies face other challenges besides the war in Ukraine. There have been ongoing supply chain bottlenecks since the COVID-19 pandemic hit. Ingredient suppliers like Ciranda ship their products in containers that are loaded onto steamships and transported to their destinations. Since the pandemic, it’s been difficult to obtain containers and shipping rates have skyrocketed. There have also been bottlenecks at global ports causing delays in products reaching their destinations.

“On a global scale, there are challenges,” Trouba says. “The industry needs containers; it’s not that we can’t produce ingredients, it’s how do we move them?”

Inflation presents a challenge to the organic industry and Ciranda’s business. Will consumers balk at the higher prices of organic food? That remains to be seen.

“Yes, the industry will continue to grow, but there’s always a risk that organic will be influenced by or impacted by inflation,” Trouba says.

Despite the challenges, Ciranda had a record year in 2021, supplying 15% more volume of ingredients to their customers than the year before.

“That was in large part due to our supplier and customer relationships. We were able to navigate our way through it and deliver some great increases,” Trouba says.

Farmer relationships

Ciranda works directly with farmers worldwide to source organic ingredients such as agave, tapioca/cassava, rice, cocoa, honey, palm, coconut, and others.

One of their farmer/suppliers is Audon Conchas Hernandez, who manages a 1786-acre organic agave plantation in Mexico’s west-central state of Nayarit. Hernandez’s agave is processed into syrup as a sweetener.

“With the organic field everything is better,” Hernandez says. “We pollute less and give less trouble to the environment. And most important is we have clean agave.”

These farmer relationships are essential to Ciranda’s success. “You’re paying that farmer directly and supporting them in their livelihood and helping them to pass on their family farm to the next generation,” Trouba says. “If you’re going to source these ingredients, it’s important to tell that story to your audience.”

When working with food company customers, Trouba says it’s important to work closely with them to understand their needs.

“It might sound obvious but it’s important for food companies to be able to share aspects of their demand with ingredient suppliers and to work on things collaboratively,” he says.

By working collaboratively, Ciranda can help food company customers make better decisions about the ingredients they purchase. For example, if an ingredient isn’t available, Ciranda can offer alternatives that could meet a company’s needs.

“There is an aspect of ingredient buying that is price driven, and I think that’s understandable, but there is still something to be said for having a strong relationship,” Trouba says.

Ciranda is also known for treating its employees well. The Friese’s established Ciranda as an ESOP or employee-owned business, and today, more than 50 employees share in ownership of the company. Ciranda’s Wisconsin “campus” features a garden and beehives.

In its work with its customers, farmer-suppliers, and employees, Ciranda continues the mission that Hans and Joan Friese began in 1994.

“It’s exciting to be at a company where our mission really is about connecting brands with ingredients that inspire change, promote wellbeing, and improve relationships with each other and the planet,” Trouba says.

© Copyright The Organic & Non-GMO Report, 2022

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