Organic Valley dishes up "grassmilk" to consumers in US West

(Reuters) - George Siemon has milk on his mind. "Grassmilk" to be specific.

As the co-founder and chief executive for Organic Valley, a La Farge, Wisconsin-based cooperative that is the largest provider of organic milk in the United States, Siemon is on the hunt for new offerings for a growing market.

The latest idea - milk from cows that primarily eat grasses, but never corn, soybeans or other supplemental grains commonly fed to dairy and beef cattle - was launched in April and is available in 200 stores in six western U.S. states. The milk has an earthy flavor that is a twist for the milk market.

Though it is too soon to tell how the new milk will be received, Siemon has high hopes. In the United States, most of the corn and soybeans fed to livestock are genetically modified, a fact that doesn't sit well with organic enthusiasts, particularly Siemon.

"Our co-op is very concerned about the development of biotechnology," he said in a recent interview. "We don't agree that is the right path."

Grassmilk, he said is still experimental, but adds to the organic industry arsenal. "It's a new thing we started in California," he said. It tastes different. But it's good." In addition to California, grassmilk is available in Colorado, Utah, Oregon, Washington and New Mexico.

Increasing consumer demand for new organic products has helped push the rapid growth of organics on U.S. grocery store shelves. The retail value of the entire U.S. organic industry grew almost 9.5 percent in 2011 to $31.4 billion, according to U.S. Department of Agriculture data.

Organic foods continue to gain market share, climbing to more than 4 percent of U.S. retail food sales, USDA data shows.

While the number of certified organic crop and livestock operations and acreage under organic management has grown rapidly over the past decade, consumer demand outstrips supply, according to the USDA.

Siemon sees that growth continuing as consumers increasingly embrace foods marketed as healthier and more environmentally sustainable than conventional offerings.

"We are seeing a lifestyle change as a new generation comes on," he said.

Siemon, 59, who raises cattle and sheep, partnered with a group of fellow Wisconsin farmers in 1988 to co-found the cooperative that became Organic Valley.

STRONG MARKETPLACE

The organization has been posting annual growth of 10 to 20 percent since its inception with the exception of a short slowdown in 2009 during the economic slide, Siemon said. The organization generated about $700 million in revenues last year.

"Organic is a very strong market place," Siemon said. "It is being driven by educated people."

The Natural Resources Defense Council honored Siemon on Wednesday, designating him a "food visionary" for his work in making "food systems healthier and more sustainable."

Organic Valley is now one of the largest organic brands in the United States producing dairy, soy and eggs, and marketing lines of beef, pork, turkey, and chicken products under a related brand. More than 1,700 farmer-owners in 33 states and four Canadian provinces make up the Organic Valley organization.

Siemon has turned his attention in recent years to fighting what he says is a threat not just to his industry, but to health and environmental wellness - genetically modified crops.

The farmer-turned-CEO is also part activist, wading into a contentious campaign to force the labeling of foods containing genetically modified (GMO) corn, soybeans, sugarbeets and other crops. Organic Valley has contributed nearly $100,000 to the labeling cause, and Siemon is an outspoken proponent of "Right to Know" actions pushing for labeling of GMO foods.

Initiatives are underway in California and several other states as well as a federal effort to petition the government for mandatory labeling of foods made with GMO crops.

Genetically engineered crops are genetically altered to resist pests and tolerate weed-killing treatments or provide other benefits. Backers say they are safe, environmentally friendly and help farmers to be more efficient.

But critics believe such crops, which have been on the market since 1996, are harmful to the environment and can contaminate non-biotech plants. Some critics fear health risks from biotech crops.

"We've actually stirred the water quite a bit," Siemon said of the efforts to label and ultimately limit biotech crops.

"We're up against a very well-oiled machine with active PR and buying support everywhere. It is not an easy fight. But I am passionate about it."

(Reporting by Carey Gillam; Editing by Cynthia Johnston and Eric Beech)

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