Different Strategies for Different Retailers
Like Natural Grocers, MOM’s Organic Market is a regional chain that focuses solely on organic and natural products. Scott Nash, CEO of the 23-store chain, which is based in Rockville, Md., tells Progressive Grocer that shoppers appreciate the chain’s competitive pricing, especially amid the current economic environment. “We have seen inflation impact our shoppers, and while we’ve had to pass along some of the rising costs to them, we still aim to offer very competitive pricing,” maintains Nash, adding that the retailer has been doing a lot more to cut waste and operate as efficiently as possible, as today’s retailing environment requires.
Nash doesn’t see education as being quite as important for MOM’s Organic Market shoppers, because so many of them already buy into the organic/natural lifestyle. “People don’t go from Doritos and Coke to kale and kombucha overnight,” he asserts. “It’s a journey.” He credits Whole Foods with doing a great job of educating loyal organic and natural shoppers.
According to Nash, he feels very confident about the future of the industry, primarily because organic foods are better for the environment, and also because they’re perceived as being better quality and better for people’s health. He notes that shoppers in his stores are inveterate label readers, so manufacturers will continue to play an important role in making their products as “clean” as possible.
Of course, dedicated natural/organic retailers aren’t the only ones that can serve label-reading shoppers. Take The Kroger Co., for example. While the Cincinnati-based company is much more massive and mainstream in scale, it has served a growing niche by integrating natural and organic products alongside mainstream items, and by developing a private brand dedicated to natural and organic products. The retailer’s Simple Truth brand, which turns 10 this year, is now considered America’s No. 1 natural and organic brand, featuring more than 1,500 items that are free from 101 artificial colors, flavors, preservatives and sweeteners, and contain no artificial ingredients. To mark the anniversary, Kroger offered customers 10 fuel points with all Simple Truth purchases made using a digital coupon during Jan. 18-31.
Last summer, Kroger’s Holly Adrien and Alexandra Trott, of the grocer’s 84.51° division, shared on Progressivegrocer.com that more than 73% of Kroger’s shopping households had purchased an item in the natural/organic category over the past year. Meanwhile, 5 million omnichannel Kroger shoppers had bought natural and organic items online, and two-thirds of those were brand-new to the category. Among those shoppers, the price-sensitive ones spent more time considering cost while shopping online, from comparing prices to looking for coupons.
To highlight its organic and natural products in stores, Kroger uses signage such as green “plant-based” clings, and also runs special campaigns.
Label Readers on the Rise
Angela Jagiello, director of education and insights at the Washington, D.C.-based Organic Trade Association (OTA), points out that two-thirds of organic shoppers are new to the category at any given time, according to OTA research, so education is key.
“That fact, combined with the sheer complexity of the label, means that brands and retailers are constantly in the position of educating about what organic means,” she notes. “At the same time, food inflation is real, and the unbridled spending on grocery that we saw during the worst of the pandemic has come to an end. Shoppers have demonstrated they are willing to pay more for products that align with their values. They look to retailers to help them understand and prioritize.”
To help retailers in their outreach efforts, OTA offers a Good Organic Retail Practices Guide that includes tips on handling, display and marketing organic products, as well as an Organic Opportunity Communications Toolkit, which it describes as a science-backed information resource.
Sarah Christiansen, VP of shopper insights and category leadership at Campbell Snacks, a division of the Camden, N.J.-based Campbell Co., confirms that shoppers seem more eager than ever to learn about ingredients. “Since the pandemic, wellness remains top of mind for consumers, and we’re seeing nearly half of shoppers pay more attention to food labels and ingredients compared to pre-pandemic levels,” observes Christiansen, citing Kantar ShopperScape research.
SPINS’ Henkel stresses that the idea of value isn’t solely related to price for many shoppers. “Throughout the pandemic, we’ve seen shoppers rediscover the joys of better-for-you and small indulgences at home,” he notes. “Since health and wellness continues to be a central priority for shoppers, grocers need to address the ‘total basket’ — realizing premiums on truly unique products while ensuring commoditized offerings create an affordable foundation in the basket.”