Key Takeaways from the Apeel Controversy and Where We Go From Here

(Image from the Apeel Sciences website)

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Apeel Sciences, which has raised $640M from investors such as Andreessen Horowitz and the Bill & Melinda Gates Foundation, produces an organic-approved coating called Organipeel for various fruits and vegetables, and based on the company’s website, it is being used on organic apples currently for sale in Idaho and in Germany.

Over the past month, misinformation and confusion about this coating spread like wildfire, as a similarly named product that contains toxic synthetic chemicals was widely misidentified as being approved for use in organic production.

Where we currently stand is that Apeel’s Organipeel coating, which has been registered with the EPA as a fungicide, is comprised of 0.66% citric acid and 99.34% of a formulation that is undisclosed.

Here are five key takeaways.

1) THE USDA NEEDS TO REMOVE AMBIGUITY

Even though the exact formulation of the 99.34% is not openly disclosed to the public, that is, in itself, not a violation of organic rules. The full formulation is considered proprietary information and a trade secret.

That being said, all of the formulation’s ingredients must be disclosed to any organic certifier who approved the use of this product, as well as any third-party materials review organization (MRO) that has been asked to confirm that the material is in compliance with USDA organic regulations, which, among other things, means no use of genetic engineering. The Organic Materials Review Institute (OMRI), the most well-known MRO in the organic industry, completed a review of Organipeel.

What we do know, based on publicly available FDA documents, is that monoglycerides — which are additives often used in processed foods — appear to comprise part of the 99.34%, something that OMRI would not confirm or deny.

According to Orsi Dézsi, executive director and CEO of OMRI, “OMRI reviewed and approved Apeel’s Organipeel as a fungicide for post-harvest use, not as a fruit coating for use in further processing of organic products. OMRI reviews products for the uses indicated by the manufacturers, not for every conceivable use. If an OMRI Listed® product is used in an application beyond those indicated in its OMRI listing, it could be out of USDA organic compliance. When it comes to the post-harvest handling of produce, OMRI bases its policy on NOP 5023, a guidance document from the National Organic Program (NOP) that intends to clarify what is permitted based on the USDA organic regulations.”

Apeel clearly markets its product to the public as a “coating” and explained it as such to the FDA in its GRAS application.

Where it gets confusing is that in NOP 5023 language, the USDA refers to “coatings” as “further processing,” but OMRI did not approve Organipeel as a “coating for use in further processing.”

OMRI approved Organipeel as a fungicide for “post-harvest handling,” whose definition in NOP 5023 includes “pest control practices” — which describes a fungicide.

All of this points to: is Organipeel a “coating” or a “fungicide?”

The apparent interchangeability of “coating” and “fungicide” is a source of confusion, and the USDA needs to eliminate this ambiguity to determine whether Apeel must also seek approval for Organipeel as a “coating for use in further processing” in order to be in compliance.

2) LACK OF USDA OVERSIGHT OF MATERIAL REVIEW ORGANIZATIONS 

MROs are third-party organizations that work closely with organic certifiers, providing technical expertise to review whether materials and processes are in compliance with organic regulations.

This is work that many certifiers may be unqualified to do or do not necessarily have the time to complete themselves. Many farmers transitioning to organic, as well as brands who have questions about organic-approved materials, rely heavily on MROs.

Without question, MROs play an extremely valuable role in the organic ecosystem, but it is important to make the distinction that MROs are not organic certifiers and are not regulated by the USDA.

As such, they can deem inputs to be in compliance with organic regulations, but they are not the final say. Organic certifiers are the final arbiters.

“The problem we have is that organic certifiers almost always rubber-stamp the decisions made by OMRI when it comes to deciding what materials and formulations are allowed in organic,” said Mark Kastel, executive director of OrganicEye, one of the industry’s most important watchdog groups. “So, 99.34% of the formulation of Organipeel is not only being kept hidden from the public, but we are forced to trust an unregulated, corporate-funded organization in OMRI to essentially interpret and enforce the USDA organic regulations. This creates a real lack of trust.”

In 2011, the National Organic Standards Board recommended to the USDA that it provide direct oversight of MROs. The agency declined to do so on the basis that it only had the statutory authority to regulate organic certifiers, not MROs.

3) THE MARKETPLACE WIELDS REAL INFLUENCE

Similar to how the organic community had an enormous impact in pressuring brands to remove carrageenan from their products — even though it was never deemed illegal by the USDA’s National Organic Program — the same is already taking place here with Apeel.

Natural Grocers, a grocery chain with 166 stores across the country, has already banned Apeel.

“We do not allow Apeel and have notified our produce supply chain partners that we would not accept any organic or non-organic produce that is treated with Apeel coatings. This is not something that we want in our food supply,” said Alan Lewis, the company’s vice president of regulatory affairs.

(Signs that appear in the produce section of all Natural Grocers stores. Photo credit: Sam Welsch of OneCert, Inc.)

“Organic consumers should not underestimate their power, and they need to tell the retailers where they shop to ban Apeel, as well as other questionable materials or practices. Their voices matter,” added OrganicEye’s Mark Kastel.

4) THERE ARE MUCH BIGGER, MORE IMPORTANT ISSUES

Excluding the GMO-labeling campaign a decade ago, Apeel may have garnered more attention than any other issue in the history of organic.

Yet, when we look at two of the other major controversies in organic — hydroponics being allowed in organic and the USDA turning a blind eye to organic factory dairy and egg farms — Apeel pales in comparison.

One could easily speculate that in terms of lost sales to both organic soil-grown produce farmers and dairy & egg farmers that are following the letter and spirit of the organic rules, the number is in the billions, not to mention all of the consumers who are paying premium prices on products that may not be meeting their expectations.

These two controversies are greatly deserving of the social media attention that Apeel received and are far more devastating to consumers and our industry.

5) EMPHASIS ON LOCAL ORGANIC AND GROWING YOUR OWN

What this Apeel controversy all comes back to is that consumers should prioritize purchasing organic from their local farmers, as these producers will be much less likely to use controversial ingredients and materials. After all, they’re not storing produce, like apples, for six months or longer. The same holds true for the importance of growing your own food as much as possible.

As the organic supply chain becomes more global and an increasing amount of investment dollars flows into the space, the pressure from lobbyists and brands to cut corners is sure to grow.

The USDA can and will only do so much, which means that consumers must be more vigilant than ever.

With gratitude, Max Goldberg, Founder