From Forbes Magazine - "Is Organic Fare Healthier For Your [restaurant] Bottom Line?

Restauranteur Roadblocks
Is Organic Fare Healthier For Your Bottom Line?
Miriam Marcus, 09.18.09, 03:11 PM EDT
The inventory costs more and the additional nutritional value is dubious. Serve it anyway.

Chemical-free food remains all the rage at restaurants. After locally grown produce and bite-sized desserts, organic fare is the third hottest trend at restaurants, according to the National Restaurant Association's survey of 1,600 professional chefs. Restaurants accounted for more than $917 million of organic-food sales last year, up from just $456 million in 2005. And the Organic Trade Association expects the industry to grow 18% each year through 2010.

How about profits? Customers tend to pay up for organic items, but not necessarily more than the incremental cost to serve it, says Vaughan Lazar, co-founder and president of Pizza Fusion, with 22 locations in 11 states. Lazar should know: About 75% of his raw materials are organically grown. "Margins are really no different with organic foods compared with non-organic foods," he avers.

Lazar is making two big assumptions: first, that his customers will keep paying the organic premium, and second, that he can turn inventory before it spoils.

The jury's out on number one. A recent study commissioned by U.K.-based Food Standards Agency, a government body, and carried out by the London School of Hygiene and Tropical Medicine, found "no important differences in the nutrition content, or any additional health benefits, of organic food when compared with conventionally produced food." Chief scientists at the Organic Center, a Boulder, Colo., nonprofit group that studies the merits of organic farming, countered by saying the study downplayed the benefits of organic foods, specifically the antioxidants that some contain.

As for the spoilage issue, many commercial foods are packed with preservatives and other additives to make them stay fresh longer. But those same chemicals can also speed the spoilage process under certain conditions, such as hot weather, reports An organic apple kept in a cool dry place may last longer than a chemically enhanced one stored in a warm, humid environment.

So while profit margins may be similar, if you can keep your expensive organic fare moving, then you might as well dish it out. Says Kevin Moll, president of National Restaurant Consultants, a Denver-based restaurant consultancy: "You don't take percentages to the bank, you take dollars to the bank."

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