O’Donnell, Texas
www.organicessentials.com

Recipient of 2003 USDA Value Added Producer grant.


As LaRhea and Terry Pepper looked out at their west Texas cotton farm, they knew they needed to diversify. For many farmers, diversification can come by growing other crops. But in this region, with limited rainfall, cotton is the only cash crop.

“So instead of going horizontally with other crops to diversify, we decided we’d explore other options going up the value chain,” LaRhea Pepper said.

The couple joined with several other families to create the Texas Organic Cotton Marketing Cooperative in 1993, as well as Cotton Plus, which met the mill minimums in order to sell fabrics to small and mid-sized manufacturers and to retail customers.

The cooperative has expanded from six or seven families in 1993 to include 40 families and 20,000 acres of organic cotton in west Texas.

Organic Essentials, founded in 1996 as a farmer-owned company to produce organic personal care products from the cooperative’s fiber, provided members with opportunities to participate in value-added agriculture.

“Both off those programs and projects have had stable and continued growth,” Pepper said.

Organic Essentials

 About 14 farmers contributed cotton in exchange for shares when the company was created, thereby becoming part owners. Additionally, there are about 40 families who are members of the Texas Organic Cotton Marketing Cooperative and participate indirectly in Organic Essentials, as the company purchases fiber from the cooperative.

Organic Essentials received a USDA Value Added Producer Grant in 2003 to build out the program. The grant was used in developing the company’s message and communication strategy, and to develop marketing materials, all of which were essential first steps in getting it off the ground.

Strategic Partnership

Her solution was to contact U.S. Cotton, which had done the company’s manufacturing work for more than 10 years, and entered into a strategic partnership with the company. The cotton farmers would stay involved and engaged, but U.S. Cotton would take the lead in the process, overseeing the company’s distribution and manufacturing.

Pepper has maintained that partnership over the past two years and said a major goal for Organic Essentials is to continue to maintain a strong alliance with U.S. Cotton.

Organic Essentials is at a disadvantage when it comes to competing against larger companies that are experienced in the marketplace. She believes its strategic partnership with U.S. Cotton helps to level the playing field.

“What we’ve come to is a strategic partnership with someone that is strong enough in that part of the supply chain, so it can be the best of both worlds,” she said.

Expansion

“The expansion that you’ve seen right now in the organic fiber communities – I think the Organic Essentials line had a role in planting seeds in consumers’ minds about issues surrounding organic fiber,” she said.

Organic Essentials recently reached the point at which it is growing so rapidly that it has outgrown Texas Organic Cotton Marketing Cooperative as its single source of fiber. The group will begin looking into ways to source fiber from other geographic areas while maintaining the company’s credibility. Pepper said the goal will be to work with farm groups that hold similar philosophies, and those that will stand to benefit from their participation in Organic Essentials. 

Organic Exchange

Organic Exchange was founded in 2002 by companies and organizations that were active in the organic cotton industry, including Patagonia, Nike, Parkdale, Organic Essentials and TOCMC. They had come to the conclusion that there needed to be greater collaboration and communication within the industry related to fiber reports, market reports, work on standards and reciprocities, and harmonization of industry standards, she said.

Cotton Plus and Organic Essentials are both members of Organic Exchange, along with more than 250 other companies and organizations from around the world. Pepper has served as its executive director for the past three years. The organization has 26 employees in 10 countries who work with numerous brands and more than 100 farming projects world wide. 

Playing the Game

And though they may have conceptual ideas about participating in value-added agriculture, they lack a full understanding of what it takes, from investments to marketing, to go value-added.

“There’s a real gap in the concept of participating in value-added agriculture, and then what it really takes to play the game,” Pepper said.

It is important for farmers to have opportunities to participate in value-added agriculture, and the challenge lies in education. She said that challenge has been met by a willingness on the part of farmers to learn.

“There’s not a lot of materials and information out there of what it takes to build that capacity and build that knowledge or share those experiences with other farmers of what it takes to build the bridges and the investment it takes,” Pepper said.

“The past eighteen years have been a great adventure in the development of a value-added business model with the other farmers in our cooperative,” she added. “Being a part of a dedicated group has been a wonderful experience, with rewarding accomplishments achieved and with lessons learned. It is my hope that other farm groups will be able to benefit from the knowledge and experience that we have had.”

For more Information:
LaRhea Pepper
806-428-3486

Prepared October 2008.