EUGENE, Ore. — A regenerative organic herb company wants to secure more domestic crops by encouraging growers to diversify into the niche market.

Mountain Rose Herbs is considering building a cooperative to ease barriers to entry.

A cooperative would provide drying and processing hubs operated by experts, so growers could dabble in herbs without purchasing expensive equipment.

“I don’t think enough farmers in the U.S. understand organic herbs could be a lucrative adjacent product,” said Cameron Stearns, chief executive officer for Mountain Rose Herbs.

“There’s definitely a real market,” she added.

Growth for herbs

According to the nonprofit American Botanical Council’s Herb Market Report, U.S. consumers spent $12.5 billion on herbal dietary supplements in 2023, a 4.4% increase in annual sales.

The Organic Trade Association listed organic supplement sales at $2.11 billion for the U.S. in 2023, up 4.2%, with promise for growth. Organic teas had $1.17 billion in U.S. sales and organic spices totaled $673 million.

Stearns said the herbal supplement market is expected to grow because more research is being conducted about the health benefits of ingredients.

Selling points, global markets

Mountain Rose Herbs wants to add domestic growers, particularly on the West Coast, to get a better quality crop and boost sustainability claims — both are major competitive advantages.

But the company also buys internationally, and signs point to herbs being diverted toward China and India due to rising incomes and increased demand for standardized products.

Supply chains in Eastern Europe also are crumbling due to residents abandoning farm life and other factors.

The developments mean potential shortages unless more herbs are grown domestically.

“We need to proactively develop this as a supply chain solution,” Stearns said.

Additional income

Mountain Rose Herbs works with about 25 U.S. farms, buying dried herbs and spices, milling them and repacking those for retail.

Its growers are typically on contracts for a year or even two.

Stearns said a farmer could dedicate a field to a perennial herb crop, harvest once a year and sell that throughout the winter, providing an additional source of income.

There’s also the opportunity to upcycle crops.

Mountain Rose Herbs sells organic kale, spinach and beet powders, for example.

At the end of the season, kale might be bolting to the point where it can’t be sold fresh. But that can be processed as an herb.

Developing a co-op

Stearns said she’s had conversations with other organizations and brands about developing a cooperative together.

“I don’t see us as being owners of the co-op. I see us as encouraging the growth,” Stearns said.

Mountain Rose Herbs and other firms would purchase equipment and help form the cooperative.

A co-op model might modify shipping containers and drop those on properties. Farmers from throughout the area could deliver crops there to be dried.

Since herbs are seasonal and harvest arrives earlier in warmer climates, the containers could travel north throughout the year.

While organic certification can be difficult for farmers, so can drying products.

Some herbs, such as blackberry leaf, which grows well in the Pacific Northwest, are notoriously tricky.

Stearns said her company wants dried herbs because they hold better and are easily reusable.

But if a herb isn’t dried properly, it can be burned to a crisp, or get rejected for too much water activity or microbial contamination, which would impact storage.

While the co-op model is meant to allow farmers to diversify, Stearns said some might pursue herbs on a larger scale.

Oshala Farm

One of Mountain Rose Herbs’ suppliers is Oshala Farm, a regenerative organic herb operation in Southern Oregon’s Applegate Valley.

Elise and Jeff Higley are in their 12th season growing herbs, and they also sell directly to consumers.

“We love it. We feel like there’s nothing else we’d rather be doing,” Elise Higley said.

Oshala started small, but now has 28 full-time employees, Jeff Higley said.

The Higleys grow about 90 different crops on their 290 acres, 120 of which are in cultivation.

“It’s hard to grow three or four crops within the herbal market and support a farm of our size,” Jeff Higley said.

There are several barriers to growing herbs, Jeff Higley said. For example, ag commodities often have industries to provide specialized equipment for growing and harvesting.

“Unfortunately, that doesn’t exist in the herb world,” he said.

For new growers, building relationships with product makers and distributors also is a critical step, he added.

The co-op model brings built-in sales.

Contract sales, pressure

The Higleys sell about half their herbs on contract.

“It’s a big pressure on us as farmers. We know these companies are relying on us. … If you told them you’re going to get 5 pounds or 5,000 pounds of a certain herb, you want to deliver,” Elise Higley said.

And with farming, so many things can go wrong.

Top herbs vary from year to year and without contracts, chasing fads can be dangerous. By the time a product is ready, the trend might have faded, Elise Higley said.

It’s also easy to saturate the market with certain herbs, which the Higleys learned early on.

“Sometimes you grow something, this herb’s amazing, we’ve got this one dialed in, then you look at the amount of herbs grown in the U.S. or worldwide. We actually are growing more than everyone is using. Suddenly, you see prices drop,” Elise Higley said.

The Higleys said it was important to strategize so there isn’t an oversupply and collapse.

Stearns said a cooperative could help coordinate efforts so herbs aren’t composted.

Sustainability, quality

Sustainability, including certifications, packaging and how far items travel to Oregon, creates value for Mountain Rose Herbs.

“Customers connect deeply with that,” Stearns said.

The company has a sustainability meter listed on its herbs and spices online and in 2010 achieved a zero waste certification.

Still, supplies of herbs lean heavily toward international imports, even for crops that grow well here, such as chamomile.

Stearns said the history of herbalism was broken in America, with the public turning away from natural remedies due to the success of pharmaceutical companies. Science trumped traditional knowledge.

In Europe, Asia and other areas of the world, however, herbal supplements coexisted with modern medicine.

About 90% of herbs sold in the U.S. are grown internationally, with China the biggest supplier.

“The problem with a lot of those herbs is they have a tendency to test higher in pesticides and heavy metals. That’s definitely created some demand for domestic product,” Jeff Higley said.

While cheap labor means imports appear less expensive, tariffs and shipping can add to costs and some products might fail inspections.

Quality has been the way to delineate American grown herbs.

Herb giant

Mountain Rose Herbs has 180 employees and revenue of about $30-50 million annually, Stearns said.

About 25% of sales revenue is from wholesale customers, but 75% are directly from retail customers.

The company does all of its own distribution, which gives them more flexibility and control over prices.

Mountain Rose Herb’s website and catalogs include about 1,600 parent products and most come in various sizes.

About a third of parent products are single ingredient herbs and spices and those are about 50% of sales.

Other offerings are teas, beeswax, infused and essential oils, tinctures and books so customers can learn what to do with herbs and other materials.

The company’s products also are sold in bulk containers in natural foods stores throughout the country, but without branding.

Moving on up

Mountain Rose Herbs was formed in 1987 in Northern California and the company built up a base of customers through mail orders across the U.S. and Canada.

The outfit stayed small for years, in part because founder Rosemary Gladstar was primarily interested in growing herbs and educating people about their uses.

With new leadership, the company moved closer to farms and wild harvesters, settling in Pleasant Hill, Ore., in 2001 with about five employees.

The timing was ripe for rapid growth thanks to recent legislation, changes in consumer preferences and new technology.

The Dietary Supplement Health and Education Act in the mid-1990s, created a clear path to market for herbal supplements, allowing them to be regulated and sold in supermarkets.

“People started becoming more conscious about their benefits and appeals,” Stearns said.

The USDA also created its organic certification.

Owner Shawn Donnille pushed the company to go organic and to become an early adopter of the Internet, establishing a beachhead in the marketplace.

The company transformed into an online herbal supplement giant, seeing double-digit annual growth every year for 15 years.

Industrial campus

Mountain Rose Herbs moved to bigger structures in Pleasant Hill, Ore., but there weren’t many commercial buildings in town.

“By 2010, there was no place in Pleasant Hill to hold us. So we found a building in west Eugene we thought was going to be our forever home. Within six months, we needed to add a warehouse,” Stearns said.

The 45,000 square-foot warehouse is off Highway 99 on a 12-acre industrial campus.

About 1 million pounds of herbs and spices sit in the facility, scents mingling.

Mountain Rose Herbs was able to purchase that campus and as tenants’ leases come up, the company moves its operations into spaces.

The property also holds a mill for processing, which helps ensure freshness, and labs for testing.

Storefronts

Though the company is firmly online, it has evolved, perhaps surprisingly, with a trio of storefronts so customers can see and smell products.

In Eugene, Mountain Rose Herbs runs a retail store, which opened in 2016, and Aroma Bar, which sells botanical oils and waters.

The company also unveiled a 3,900 square foot location in downtown Seattle in September.

California, at 12% of sales, and Oregon, with 10%, are the top states for Mountain Rose Herbs.

Washington is also a major market and Stearns expects sales to jump with the new shop.

Another way to succeed

Perhaps fittingly, Mountain Rose Herbs’ downtown Eugene store is housed in the former warehouse for the Farmers Union Cooperative, a grain processor and handler.

The century-old structure is a remnant from a simpler agrarian era, when small diversified farms were the norm.

Stearns thinks a new cooperative is another tool to help farms stay healthy with the challenges of this day and age.

“I think the domestic farmer — the smaller, traditional farmer — is getting left out in the cold,” she said.

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