Making Waves In Natural And Organic

As the natural and organic category continues to gain clout with consumers, PG shines the spotlight on 10 grocery chains that are excelling at playing up its appeal.

Even in trying economic times, American consumers continue to see the value in natural and organic products — to a point. While we care about the health of our bodies and our planet, we’re also concerned about our wallets maintaining a healthy weight. Organic beets for $4.99 a bunch? Most folks likely have far greater priorities at the present time, like their mortgages.

That said, according to the Organic Trade Association’s (OTA) 2010 Organic Industry Survey, U.S. sales of organic food and beverages were up 5.1 percent in 2009 over 2008. The highest-growth category was organic fruits and vegetables, which grew a notable 11.4 percent last year over 2008 sales. The survey also found that organic nonfood sales grew 9.1 percent in 2009, to reach $1.8 billion. In all, total U.S. organic sales were $26.6 billion in 2009, up 5.3 percent from 2008.

Who’s selling the lion’s share of natural and organic? Last year, traditional supermarkets, club stores and mass merchandisers increased their share of organic food sales once again. According to the OTA survey, mass market retailers sold 54 percent of the organic food in 2009. Natural retailers came in second, responsible for 38 percent of total organic food sales. Mass market retailers also sold more organics in 2008, with 45 percent of organic sales, while natural food channels represented 43 percent that year.

One of the reasons for the success of traditional supermarkets, club stores and mass merchandisers in the natural/organic arena may be their reputation for price competitiveness in comparison with natural food stores.

Retailers on Our Organic/Natural Radar

Here are 10 retailers (in no particular order) that are on our radar for their efforts in natural/organic.

1. The Kroger Co.

The country’s strong and growing base of mommy bloggers is positively glowing over the quality and price of organic products at Kroger. “Kroger kicks booty!” writes blogger Jo Wehage on www. Healthyalterego.com. In May, Wehage went shopping at her local Kroger and compared its prices on 12 organic fruits and vegetables with prices at a variety of other retailers. “Our friends at Kroger had the best price of any store on six out of the 12 items,” she noted in her blog, adding, “Another really impressive thing about Kroger was how close their organic pricing is to their conventional.”

Cincinnati-based Kroger’s 2003 launch of its store brand of natural and organic foods marked one of the larger brand launches for the retailer in its more than 100-year history. Today, its Naturally Preferred line of premium-quality natural and organic products and Private Selection organic items continue to sell well. What’s more, Kroger has launched more than 80 Fresh Fare stores in recent years — locations that feature expanded organics departments and other upscale amenities.

2. Nugget Market

Since 1926, Woodland, Calif.-based Nugget Markets has been a family business founded on high-quality products and low prices. Today, Nugget does a great job of getting the word out about its prices and puts its money where its mouth is. The regional independent — which offers conventional items along with a host of natural and organic selections — has created a Price Survey that invites shoppers to compare a list of 25 regularly bought grocery store items at Nugget prices with the prices on identical items at other area stores. Shoppers who complete the survey can then enter to win a $1,000 Nugget gift card via monthly raffle drawings.

But Nugget Markets is about more than pretty prices. It’s also a place to learn about food and how it’s grown and made. Consider the retailer’s September newsletter, which focused on Fair Trade products offered at its stores.

3. Hannaford Supermarkets

For a traditional grocery store, Hannaford Supermarkets stocks a healthy selection of natural and organic products. According to the retailer, a Delhaize Group banner based in Scarborough, Maine, the average Hannaford store carries about 3,000 all-natural and certified organic products, which run the gamut from fresh meat to produce to bakery items, health and beauty care, natural cleaning products and more. Hannaford’s website notes, “We’re adding more organic & natural products to our shelves every day.” The retailer also guarantees that its customers will love its Nature’s Place store brand of natural and organic products, or “we’ll double your money.”

4. Whole Foods Market

After 30 years in business, Austin, Texas-based Whole Foods is the country’s undisputed leader in natural foods retailing. It regularly receives attention for its environmentally sound practices. The retailer is also incredibly successful — even in a down economy — reporting 2010 third-quarter sales of $2.16 billion dollars, up 15.2 percent over the same period last year. For the nine months ending July 4, 2010, the company reported $6.91 billion in sales, an increase of 11.3 percent over the previous year.

5. Publix Supermarkets

Like most conventional supermarkets in the past decade, Lakeland, Fla.-based Publix Supermarkets, introduced its own natural/organic store brand, but then the retailer did one better. In 2007, Publix turned its private label GreenWise brand into an entire market concept. Touted by the retailer as a “destination for all-natural, organic and earth-friendly shopping, and so much more,” Publix’s GreenWise Market first opened in Palm Beach Gardens, Fla. Today, the retailer has two other GreenWise stores, both in Florida: one in Boca Raton and the other in Tampa.

Additionally, Publix has made it easier for shoppers to identify natural and organic products in all of its stores by giving these products their own special label.

6. Safeway

With some 1,700 stores, Pleasanton, Calif.-based Safeway made a huge splash in the ever-growing ocean of natural/organic products when it launched its national “O Organics” line in 2005. Today, the O line includes more than 300 certified organic foods, most recently bowing items for kids, toddlers and babies. O Organics is essentially Safeway’s answer to affordable organic eating. It’s complemented by another Safeway private label brand, Eating Right, which emphasizes “better-for-you” foods, again at affordable prices.

What distinguishes Safeway is its relatively comprehensive approach to natural/ organic, promoting these products as part of a bigger-picture push to help customers achieve better nutritional health and wellness. With this in mind, Safeway in 2008 launched FoodFlex, a free online nutritional tool that allows shoppers to compare their purchases with USDA recommendations and design shopping lists to meet their nutrition goals.

7. Trader Joe’s

One key to Trader Joe’s success in natural/ organic is that the Monrovia, Calif.-based retailer has been known first and foremost for everyday gourmet at great prices from day one. Trader Joe’s also uses symbols on its store shelves to make it easier for shoppers looking for healthier options. Everything from no gluten to vegan to kosher has its own symbol. With estimated annual sales of $8 billion, Trader Joe’s has enjoyed phenomenal success in some 344 stores across 25 states.

8. Walmart

No retailer made bigger waves with its entry into organics than Walmart. Some scoffed. Others were scared. But few could have predicted the positive press and recognition that the megaretailer would receive just a few short years after its launch into the natural/organic arena.

Everyone knew that Walmart would make organics more affordable, but what about the quality? Writer Corby Kummer ate his previously skeptical opinion of organics from Walmart in the March issue of The Atlantic. After critical comparative taste tests, Kummer found that Walmart’s organic produce was as good as, and in some cases better than, that of the nation’s leading natural food stores.

What’s more, in the past five years, Bentonville, Ark.-based Walmart has set off a resurgence of smaller organic farms.

9. Costco

Costco began introducing organic products in its trademark caseload sizes more than five years ago, and quickly won the attention of Boulder, Colo.-based New Hope Natural Media for doing its homework and carefully choosing its products. Today, a review of the Costco website and store shelves reveals a bevy of organic products, from mushroom gift baskets to tea to bone-in kosher beef to cotton linens for babies.

With more than 500 stores, annual sales revenues of nearly $70 billion and one of the strongest reputations around for saving consumers money, Issaquah, Wash.-based Costco is one to watch in the world of organic retailing.

10. H-E-B

From its Central Market Organics to its “Say No to GMOs” campaign, H-E-B is a leader in the natural/organic arena, as it is in so many other areas of progressive retailing. You can read much more about why the San Antonio-based regional grocer is definitely on our radar this year in PG’s “Retailer of the Year” feature on page 24 of this issue.