Organic Alliance Inc. (Pink Sheets: NBDL)

Dear Reader,

The U.S. organic food & beverage industry continued to show dramatic growth in 2007, reaching $18.9 billion in consumer sales.[1] As this dynamic growth continues, reliable sourcing of top quality, certified safe, and certified organic ingredients is a major problem for manufacturers.  While 2007 was another year of stellar expansion for the U.S. organic industry, with most organic product categories experiencing double-digit growth, the supply side of the industry has not kept up with the growing organic demand.

The primary business of Organic Alliance, Inc. (Pink Sheets: NBDL), our featured company today, is to source and sell various organic farm crops through arrangements with farmers, co-ops and other growers, to food processors, grocery stores and food retailers internationally. 

Organic Alliance is poised to become a leader in this massive, ultra-hot sector because of its commitment to deliver products that are certified top quality, safe tested, and certified organic at the source.  And they've done it before!  The company's CEO, Tom Morrison, was formerly the CEO of Superior Farming, the largest organic farming company in the world. 

Organic Alliance recently announced its merger with NB Design and Licensing, Inc. under which Organic Alliance, Inc. will be the surviving public company through a share exchange. (See news release below)

[1]Certified Organic Food Directory 2007-08

About Organic Alliance Inc.

"An alliance is an agreement between two or more parties,
made in order to advance common goals and to secure common interests."

Organic Alliance Inc., ("Organic Alliance""OA""NBDL") The primary business of Organic Alliance, Inc. is to arrange trades between farmers, co-ops and other growers of various organic crops to OA customers internationally.

The HALLMARK of Organic Alliance is top quality, safe tested and certified organic at the source.

Leading an exceptional management team is Tom Morrison, past CEO of Superior Farming, at one time the largest organic farming company in the world; Jim Haworth, CEO of China’s Lotus Super Centers, and recently, EVP at WalMart; and Alicia Kreise  an experienced international marketing executive and former partner of Austin-based GSD&M.  Additionally, Bill Gallagher, a seasoned senior business leader with a wealth of food experience has joined the company's advisory board.

OA-sourced products easily meet or exceed the recent European and Asian traceability and labeling regulations. Organic Alliance is dedicated to providing quality food essentials that are environmentally friendly and safe.
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Soybeans   Wheat and Grains    Edible Oils    Meals and Grits    Flours   Vegetables   Fruits   Livestock 

"Our philosophy at Organic Alliance is relatively simple," says Tom Morrison of OA. "We will only deliver to our customers organic foods that meet our high certification standards. We help ensure this by staying very involved in our suppliers’ soil care initiatives and post-harvest crop rotation strategy."

In addition to food safety and environmental responsibility, Organic Alliance and its affiliated growers and alliance members are dedicated to yield and cost control, helping educate farmers about market availability and bulk supply purchasing. OA is using a strict and formal selection process to ensure only the most experienced and capable suppliers will be part of their supply network. 

The Organic Market

Organic farmland is distributed across the globe, but the markets are strongest in North America and Europe, which as of 2001 are estimated to have $6 and $8 billion respectively of the $20 billion market. Austral-asia has 39% of the total organic farmland with Australia's 11.8 million hectares, but 97 percent of this land is sprawling range land, which results in total sales of approximately 5% of US sales. Europe has 23 percent of total organic farmland (6.9 million hectares), followed by Latin America with 19 percent (5.8 million hectares). Asia has 9.5 percent while North America has 7.2 percent. Africa has a mere 3 percent. 

Besides Australia, the countries with the most organic area include Argentina (3.1 million hectares), China (2.3 million hectares), and the United States (1.6 million hectares). Much of Argentina's organic farmland is pasture, like Australia. Italy, Spain, Germany, Brazil, Uruguay, and the UK follow the United States by the amount of land managed organically. As of 2001, the estimated total market value of certified organic products was estimated to be $20 billion. By 2002 this was $23 billion and by 2005 $33 billion, with Organic Monitor projecting sales of $40 billion in 2006. The change from 2001 to 2005 represents a compound growth of 10.6 percent.

In recent years, both Europe and North America have experienced strong growth in organic farmland. Each added half a million hectares from 2004 to 2007,  for the U.S. this is a 29 percent change. However, this growth has occurred under different conditions. While the European Union has shifted agricultural subsidies to organic farmers in recognition of its environmental benefits, the United States has taken a free market approach. As a result, as of 2001, 3 percent of European farmland was organically managed compared to just .3 percent of United States farmland. By 2005 Europe's organic land was 3.9 percent while the United States' had risen to 0.6 percent.

The World of Organic Agriculture: Statistics and Emerging Trends 2007 list the countries that added the most hectares and had the highest percentage growth in 2007. Among these, China is listed third in adding the most hectares behind the United States and Argentina, jumping from approximately 300,000 hectares of organic land in 2005 to approximately 3.5 million hectares in 2006, an increase of over a thousand percent. This rise can be attributed to the certification of China's Organic Food Development Center in 2002 by IFOAM (International Federation of Organic Agriculture Movements).

Organic foods are produced according to certain production standards, meaning they are grown without the use of conventional pesticides, artificial fertilizers, human waste, or sewage sludge. Further, these foods were processed without ionizing radiation or food additives. Livestock are reared without the routine use of antibiotics and without the use of growth hormones. In most countries, organic produce must not be genetically modified.

The U.S. organic food & beverage industry continued it's dramatic growth reaching $18.9 billion in consumer sales in 2007[2].  The Dairy catagory accounted for $3.1 billion of that total.  The term "organic" as defined by the Organic Trade Association is ‘commitment to agricultural (including processing) practices that strive for a balance with nature using methods and materials which are of low impact to the environment’. Organic is a labeling term that denotes products produced under the authority of the Organic Foods Protection Act. The principle guidelines for organic production are to use materials and practices that enhance the ecological balance of natural systems and integrate the parts of the farming system into the ecological whole. Organic agricultural practices cannot ensure that products are completely free of residues. However, methods are used to minimize pollution from air, soil and water. Organic food handlers, processors and retailers adhere to standards that maintain the integrity or organic agricultural products.  [2]Certified Organic Food Directory 2007-08

The primary goal of organic agriculture is to optimize the health and productivity of interdependent communities of soil life, plants, animals and people. All organic production is regulated by the USDA (United States Department of Agriculture) under the National Organic Program (Title 7 CFR205). The NOP went into effect in October 2002 and it leveled the playing field. It regulated organic producers and Organic handlers.

The Organic Certification agencies accredited by the USDA, 95 currently, are listed on the USDA web site (www.ams.usda.gov.nop). They must adhere to NOP regulations and must accept each other's certifications.

• Ground must be without synthetic pesticides and fertilizers for a 3-year period and be documented
• Ground is certified transitional in the interim
• Organic crops must be grown without the use of:
• Synthetic fertilizers
• Synthetic pesticides
• Sewage sludge
• GMO’s
• Treated seeds
• Any applied materials must be on the National List (OMRI)
• Must use organic seeds if commercially available
• Must be certified by a USDA accredited certifying organization as complying with NOP regulations

• - “100% Organic” - must be made with all organic ingredients
• - “Organic” - must contain minimum 95% organic ingredients
• - “Made with Organic ingredients” - must contain a minimum of 70% organic ingredients
• - “Some Organic Ingredients” - may contain less than 70% organic ingredients

Organic production is regulated while natural production is not. The USDA has a legal definition for "natural", but it applies only to meat and poultry. The National Organic Program (run by the USDA) is responsible for the legal definition of organic in the United States and handles organic certification. It administers the Organic Seal to products and producers that meet strict requirements.

Organic foods are the largest segment of organic products reaching $16.7 billion in consumer sales and making up over 95% of all organic product sales. Organic foods is one of the fastest growing market segments within the food industry, with sales growing at an annual rate of 20.9% in 2006. Organic food sales have enjoyed double-digit growth for the past 17 years. Fruits and Vegetables have grown 24% over the past year to $8 billion in sales, Dairy has grown 25% to sales of $3.2 billion and Bread and Grains have grown 23% to sales of $2 billion.

Organic food sales have grown to over 3% of total food sales in the U.S. marketplace. Although some of the larger packaged-goods companies may have been hesitant to enter the Organics arena in the past, most are now beginning to provide organic alternatives for their end customers. 

Packaged goods companies are introducing new items at a rapid pace to support demand, and the impacts are being felt. To quote a corporate ingredients buyer executive: 

U.S. sales of non-food organic products grew from $744 million in 2005 to $938 million in 2006, reflecting a 26% growth rate. Non-food categories include organic supplements, personal care products, household products and cleaners, pet food and flowers and fiber products such as linens and clothing. In comparison, the organic food category grew to near $20 billion by the end of 2007.  The Organic Trade Association’s 2007 Manufacturers Survey anticipates growth of approximately 18% annually through 2010 for organic food products. Non-food product sales are anticipated to grow on average from 16 % (organic flowers) to 40% (organic fiber and clothing) annually during this same period. 

Imported organic produce from Latin America (and elsewhere) is subject to the same certification standards and guidelines as those in the United States. Under the U.S. Organic Foods Production Act of 1990 (OFPA), the USDA is required to review the certifiers of imported organic produce in order to ensure that they meet the requirements of the U.S. National Organic Program (NOP). 

Foreign certification agencies may apply directly to the USDA for recognition and are evaluated on the same criteria as domestic agencies. Alternatively, foreign governments (many of which, like Chile and Argentina, have national organic standards in place) may apply to the USDA or the U.S. government for recognition of equivalency in their organic oversight program. Once accreditation or recognition is granted, organic products produced under the supervision of the certifying agent or foreign government will be eligible for import to the US as certified organic. 

When the NOP was implemented in 2000, certifying agencies in the US and abroad began working towards USDA accreditation. The deadline for accreditation was October 21, 2002. Today, all organic products sold in the US are certified by a third-party agency recognized by the USDA. 

Argentina’s national standards have been in place since 1995, and all Argentine organic products are admissible in the European Union and the US. Each organic certification agency must be registered with the SENASA (Servicio Nacional de Salud), a government agency under the Ministry of Agriculture. This body is in charge of guaranteeing that the rules and regulations are followed. Any certifying agencies that do not adhere to the guidelines are either penalized or have their license suspended indefinitely. The most well known certifiers in Argentina are Argencert and OIA (Organización Internacional Agropecuaria).

In Chile national standards went into effect in 1999 under the supervision SAG (Servicio Agrícola y Ganadero), which is the counterpart of the PPQ (Plant Protection and Quarantine) branch of USDA. There is at least one native Chilean certification agency in the country today CCO (Certificadora de Chile Organica). In addition to local certifiers, there are some American and European certifiers that have expanded their certification programs into Latin America. Companies like Oregon Tilth, IMO from Switzerland, and BCS Öko-Garantie from Germany certify growers in Central or South America. 

Beyond certifying the farms themselves, certifying agencies in the US and abroad scrutinize the packing, storage, and transportation of all organic and transition products. Boxes or other packaging must be clearly marked as containing organic products, and all shipments are carefully documented and tracked to help ensure against contamination while in route from the farm to the consumer. In the rare instance that accidental contamination does occur, the product is immediately stripped of its organic status and must be sold as conventional or is destroyed. 

The need for worldwide harmonization of organic certification and production standards has been a high priority for the international organic community. Increasingly, the trend is toward cooperation among the certifiers, both governmental and independent, with the goal of ensuring the integrity of organic products to the consumer. The implementation of the NOP in the U.S. was a valuable step in bringing consistency and legitimacy to the rapidly growing global organic market. For more information on International Organic Certification and the National Organic Program, visit the official USDA National Organic Program web site.

Universal Product Codes (UPCs) are used on products sold in fixed-weight or quantity packages, such as 3 lb. bags of apples or 1 lb. cherry clamshells. UPC’s are not used on bulk product, such as loose apples, which are instead labeled using PLU codes which are generally seen on small stickers affixed directly to the produce. UPC’s are usually printed on packaging in bar-code format.

UPC's for general fresh produce items are established by the Produce Electronic Identification Board (PEIB). Organic items must be identified by a different UPC than their non-organic counterpart. In recent years the PEIB has begun establishing UPC's for organic items, however the majority of organic items have not yet been assigned standard codes. 

The Strategy for Organic Alliance

Through OA’s established alliances in Mexico, and with the massive potential in the Canadian, South American, US, and Chinese markets, the company expects to generate  revenues in the near term.

Due to the food safety, quality, and organic certification concerns within the industry, OA will establish a Food Safety and Organic Certification division in each country before any products are shipped. This oversight process is already established in Mexico. 

Excellence in this area will be the hallmark of the Organic Alliance brand.  No company is providing this service today, and according to a buyer from Costco, “It's a disaster.” 

Sourcing of organic ingredients for large customers such as Lotus, Kroger, Safeway, Kraft, and Sara Lee will commence as OA fully mobilizes. The company has finalized an agreement with a Mexican/Canadian organic farming consortium that has shipping and organic certification in place. This group has been 
supplying both conventional and organic produce for the past 10 years. OA has also initialized negotiations to begin organic avocado shipments to a large US-based Mexican restaurant chain.

Due to the strong consumer demand for organic products, and because these  products are considered a staple for a new breed of consumers, the major food companies’ ingredient buyers are struggling to keep up.

Because of the tight restrictions placed on organic growers and farmers  a supply shortage has forced buyers to go global when souring for organic ingredients. Many produce suppliers in the U.S. are attempting to fill this gap, but it is fractionalized and, as a result, very frustrating for ingredient buyers to obtain a reliable and consistent supply network. 

Worldwide demand for organic products is expected to grow dramatically. Production is unlikely to meet demand for most products and is therefore causing major corporate logistical challenges. These challenges have created an opportunity for those entities that have secured sourcing for organic production. A trading company, like Organic Alliance, with reliable and certifiable sources of organic ingredient production can almost immediately enter the trading market and capture market share.
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Management at Organic Alliance Inc.

Tom Morrison, Chairman & CEO
Former CEO of Superior Farming, which in the 90’s was the largest organic farming company in the world.

Jim Haworth, Director
Current CEO of Lotus Supercenters, the #3 discount store chain in China. Prior to this position, he was EVP of Wal-Mart.

Alicia Kriese, Director
One of the top independent international marketing executives.  Her client’s include Coles Group, the #2 retailer in Australia with a 30% plus share of all retail spending in the market.
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Recent NEWS from Organic Alliance

Press Release Source: Organic Alliance, Inc.
Thursday May 22, 9:15 am ET

PRINCETON, N.J., May 22 /PRNewswire-FirstCall/ -- Today, Organic Alliance, Inc. (Pink Sheets: NBDL - News) is pleased to announce that the company is in discussions with a large operator of approximately 400 Mexican restaurants to become a supplier of organic avocados.

"Through our Mexican-Canadian Consortium supplier agreement covering organic tomatoes and avocados, we are able to quickly establish Organic Alliance in the food industry," said Tom Morrison, Organic Alliance CEO. "We look forward to being able to provide our prospective clients with organic products that are certified at the source," said Morrison.

As more consumers demand high quality organic food options from their favorite restaurant, Organic Alliance is positioning itself to serve not only major and private label food manufacturers, but also the grocery and restaurant industries. MORE

Press Release Source: Organic Alliance, Inc.
Tuesday May 13, 10:49 am ET

PRINCETON, N.J., May 13 /PRNewswire/ -- Organic Alliance, Inc. and NB Design and Licensing, Inc. (Pink Sheets: NBDL - News) announced today that they have closed a definitive merger and share exchange agreement under which Organic Alliance, Inc. will be the surviving public company through a share exchange.

The primary business of Organic Alliance Inc. is to source and market organic food products through arrangements with farmers, co-ops and other growers to major international food processors and grocery chains. "The hallmark for our company is certified top quality, safe tested and certified organic farm produce at the source -- prior to shipment to our customers," said Tom Morrison, Chairman and CEO of Organic Alliance Inc. The Company has finalized an agreement with a Mexican-Canadian Consortium for continuous supplies of organic tomatoes and avocados.

The company's Chairman and CEO, Tom Morrison, was formerly the CEO of Superior Farming, one of the largest corporate farming operations and in the 90's, the largest organic farming company in the world. MORE
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Financial Information for Organic Alliance

* In March 01, 2008, NBDL agreed to acquire all of the outstanding shares of the issued and outstanding common stock of Organic Alliance, INC. (“OAI”) for 9,299,972 shares of the Company’s common stock in exchange for all of the outstanding shares of OAI and $200,000 which will be paid to certain shareholders of NBDL. NBDL plans to subsequently change its name to Organic Alliance, Inc. (the “Company”). On February 15, 2008, OAI acquired the Organic Trading Partners assets including all contracts and agreements in place with Organic Trading Partners.
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Company Contact

Sarahjane G. Reil, Corporate Assistant
40 Birchwood Dr.
Princeton, NJ 08540

    Phone: (210) 826-8900 X225
Fax: (210) 826-8906
 

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