Evolutionary Eruption

With the mainstreaming of organics, supermarkets have enormous opportunities to up their relevancy and expertise.

“Organic Shmorganic.”

So blared the headline of a Jan. 29 story on Slate.com by Melinda Wenner Moyer, who shared a controversial view that organic produce is wildly overrated, in a nearly 3,000-word story that deconstructed the debate about whether it’s worth buying organic produce for children because of fears that pesticides on conventional produce are harmful. (Moyer also pledged to tackle organic dairy products, meats and eggs in future columns.)

“Does giving my son organic food really make a difference to his health, considering that he’s been known to lick the bottom of his shoes?” Moyer candidly asked early on in her commentary, advocating that conventional fruits and vegetables are perfectly healthy — specifically for kids — a position she supported with considerable scientific research.

Needless to say, the provacative article by the Cold Spring, N.Y.-based science writer and Slate.com “DoubleX” parenting advice columnist triggered quite an uproar within the organic community. The Brattleboro, Vt.-based Organic Trade Association blasted the article for missing “some important points about the science behind the benefits of eating organic,” including “the many studies showing that these synthetic chemical cocktails can act synergistically to amplify health hazards. It also neglects to point out that while there are natural pest management materials that can be used by organic growers, these materials are used in combination with integrated management techniques that obviate the need for toxic controls.”

Having generated nearly 1,000 comments on Slate.com and countless more on social networks, Moyer’s advice to parents mirrors what the produce industry has long maintained: Instead of parents fruitlessly obsessing — as she admits she used to do — about whether an apple has trace synthetic pesticides, she argues that they should focus more on making sure their kids are eating fresh fruits and vegetables.

While it’s hardly surprising that Moyer’s polarizing position would spark rampant controversy, its central premise underscores an important reality for retailers: Organics are an entrenched part of the national discourse, and supermarkets are squarely on the hot seat when it comes to helping shoppers feel good about both sides of the coin in the bid to elevate organics alongside their conventionally grown and produced counterparts.

As articulated in a companion guest column appearing on page 64 by Laurie Demeritt, CEO of the Bellevue, Wash.-based Hartman Group, organics have decidedly migrated from niche to mainstream over the past decade, with an estimated 59 percent of shoppers now buying organic food at conventional grocery stores. Accordingly, supermarkets have enormous opportunities to become more relevant to consumers as “curators of products and docents of food and beverage information,” affirms Demeritt.

Volcanic Growth

The latest research from the U.S. Department of Agriculture finds that U.S. organic food sales tallied $28 billion in 2012, up 11 percent from 2011, a massive jump from a comparatively paltry $1 billion in 1990.

While price sensitivity in the category persists, ever more consumers are embracing the organic message and picking up at least a few products during routine shopping trips. Further, while concerns among U.S. adults continue to mount regarding transparency in labeling with genetically modified organisms (GMOs), the Harleysville, Pa.-based Natural Marketing Institute (NMI) expects the issue to remain a hot topic of conversation among advocacy groups, consumers, suppliers, retailers and brands for the indefinite future.

The 2013 MamboTrack Annual Natural and Organic Product Survey, conducted online by the Market LOHAS division of Market Dynamics and laz pr, both based in Massachusetts, revealed that today’s natural and organic shoppers are shifting from “What’s in it?” to Where did it come from?”

“Eco-shoppers have moved beyond ingredient lists and are now focused on tracing the source of their food supply from non-GMO to locally/regionally produced and Fair Trade,” says Karen Herther, co-founder of Market LOHAS and leader of the MamboTrack research. “Sustainable meat/poultry and seafood [are] gaining interest due to third-party certifications and heightened media coverage.”

In the meantime, organics remain the most viable answer for many shoppers.

“Organics represents roughly 5 percent of all produce consumption in the U.S., which is still relatively small when compared with conventional produce, but the more consumers hear and read about the benefits of organics, the more sales can and will increase,” notes Robert Schueller, director of public relations for Los Angeles-based Melissa’s Produce, a leading distributor of specialty and organic fresh produce and adjacent products.

Schueller says promoting organics as a category destination at retail works best, supported by consumer education, both of which are “key ingredients to success.” While supply and demand fluctuations continue as a prime consideration for trading partners, Melissa’s has worked tirelessly with its vast grower network “to bridge the gaps in production with crop rotations and seasonal growing regions,” which he says affords it “access to organic crops when the rest of the industry often struggles.”

What’s important to note in this scenario, he adds, is that some retailers “still want organic costs to be comparable to conventional, and that is a big challenge because of the many inherently costly factors involved in organic farming that the conventional farmers can avoid or do not struggle with.”

On a Roll

Nevertheless, there’s no denying the role price plays in retailers’ quest to stimulate consistent organic sales. Kansas City, Kan.-based Balls Food Stores, which operates 28 supermarkets under the Price Chopper and Hen House banners, has seen great success, to the tune of a 30 percent sales increase during the last year, by promoting organics more frequently with between six to 10 organic items in weekly ads, as well as between four and eight in-store specials at price points close to conventional products, according to comments shared by Balls COO Mike Beal at the recent National Grocers Association confab in Las Vegas.

In remarks during a panel discussion, Beal said Ball’s efforts to increase sales of organics —a selection of more than 175 items — dovetail well with the grocer’s longstanding “Buy Fresh, Buy Local” campaign, which includes extensive sampling.

Retailers have an opportunity to continue expanding store-brand organic product development from traditional areas such as produce and dairy to center store. To that end, NMI finds the use of store-brand organic foods and beverages appears to be growing at the same rate as all conventional brands of organic foods and beverages.

Beyond the Perimeter

David Hyland, director of global business development for Stamford, Conn.-based Daymon Worldwide, says organics continue to display strong growth across the entire store and across most categories: “For many consumers and retailers, organic has evolved from a message/product platform to an important health-and-wellness attribute.” Citing omnipresent GMOs in most conventional grocery products, Hyland says the dilemma “is solved by offering USDA Certified Organic food options, which cannot contain GMOs. This is one of many driving factors behind the growth of organic.”

In terms of specific strategies that are proving to be most successful in helping organics stand apart on shelves and in cases, Hyland points to the creation and marketing of lifestyle brands focusing on wellness, which he says plays an increasingly larger role in retailers’ private-brand development.

“Retailers are creating broader total wellness platforms” with wide appeal for both true believers and new adopters, Hyland says, citing the suite of products housed within Kroger’s Simple Truth and Ahold’s Nature’s Promise brands, which are often “shelved together in the health-and-wellness sections of the store, while other best-in-class retailers are creating dedicated sections.” He continues: “Most importantly, many top retailers are also integrating strong-moving organic and wellness items into mainstream category sets.”

Carl Jorgensen, business manager for Daymon, shares a companion observation. “In cases where retailers have integrated organic offerings into regular categories, they typically call it out at shelf level. Demos are also key to educating the shopper that organic tastes good,” he says. “If a shopper has been thinking about organic but hasn’t bought it yet, having the opportunity to make a spontaneous choice via a sample can make the first sale.” Further, while dedicated store-within-a-store schemes remain popular with many retailers, Jorgensen offers a cautionary note that “shoppers who are new to organic may never see them.”

When asked about the most important learnings pertaining to organic private brands’ continued evolution, Hyland echoes Schueller’s view of adequate supply sources for select categories, “which has become increasingly challenging as organic has gone mainstream.”

To perpetuate continued advancement, Daymon has leveraged its global scale “to locate reputable global sources of supply to fill those needs while deepening our knowledge of the organic consumer and the various segments within, all of which are looking for simplicity, transparency and fair prices.”

Jorgensen offers a final few pointers for the organically inclined grocer. “The products also need to be clearly differentiated from their ‘natural’ counterparts and must convey trustworthy, certified features such as no pesticides, no GMOs and no growth hormones,” he counsels. “Just like other shoppers, organic consumers also like convenience.”

Organics are an entrenched part of the national discourse, and supermarkets are squarely on the hot seat when it comes to helping shoppers feel good about both sides of the coin in the bid to elevate organics alongside their conventionally grown and produced counterparts.

“For many consumers and retailers, organic has evolved from a message/product platform to an important health-and-wellness attribute.”

“If a shopper has been thinking about organic but hasn’t bought it yet, having the opportunity to make a spontaneous choice via a sample can make the first sale”