The soap aisle at Whole Foods grocery
The soap aisle at Whole Foods grocery - 
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Tess Vigeland: Hear the word organic and you probably think, food. But every year Americans buy more than $750 million of personal care products that also carry the organic label. Like shaving creams and lip balms. But the rules around calling soaps and shampoos organic aren't nearly as strict as those for other grocery items. And this week, Whole Foods said it's raising the bar for those products, beyond what's required by law. Nathan Bernier reports from station KUT in Austin.

Nathan Bernier: Let's say you're in a natural foods store and you pick up a bottle of shampoo that says "organic" on the label. Pretty safe to assume it's all organic right? Wrong. Federal labeling standards have existed for organic food since the early 2000s. But when it comes to personal care products, those regulations don't exist. At the Whole Foods flagship store in Austin, quality standards coordinator Joe Dickson said his company will require anything labeled organic to meet those USDA standards.

Joe Dickson: Just like the national organic standards for food were an attempt to protect consumers, this is an extension of that same thinking to this aisle.

Personal care makes up a fraction of America's $26 billion organic industry. But it is a growing fraction. Sales increased by almost four percent last year. The people who make things like organic hair dye and make up are enthusiastic about getting imposters off the shelves. But they're less eager to meet USDA's National Organic Program standards -- because those guidelines were written for food products. Lafe Larson makes a line of organic deodorants and baby products called Lafe's Natural. He says he never intended for them to be eaten.

Lafe Larson: For example, we use a mineral salt in our deodorants because it's very effective and it's a natural anti-bacterial. It's the same stuff that's in the earth's crust. However, the USDA NOP program only allows table salt to be in a USDA NOP certified product, not mineral salts.

Larson says you can't find organic versions of some ingredients -- like glycerin, for example -- because no one makes it. And finding a way to give shampoo a two year shelf life is not easy when you can't use certain preservatives. Industry observers say it poses a huge challenge even to the legitimate players. Carlotta Mast is editor of the Nutrition Business Journal.

Carlotta Mast: It's a question, you know, what's going to happen to those products? I think it would be a large number of products. And Whole Foods has said they expect companies to fully comply with this new rule by June of next year, so it's not giving companies a lot of time.

And Whole Foods is such a big player in the organic market that this could act as a sort of de-facto regulation. Whole Foods' Joe Dickson says that's fine with them.

Dickson: Absolutely. I think we're seeing a lot of suppliers that are going to have to change their formulations or their labels for us will sell those in our opinion better products wherever else they're selling products. So we have an opportunity to have a really big influence on the market.

But that level of influence is shrinking as traditional grocers and retailers like Wal-Mart and Target jump into the organic market.

In Austin, Texas, I'm Nathan Bernier for Marketplace.