Like a society based on the separation of church and state, supermarkets avoid mixing their "holy" natural health and beauty care products with the "secular" HBC products in the main aisles.
Although supermarkets often merchandise organic and non-organic products side by side in other parts of the store -- especially in the produce and dairy departments -- they tend to merchandise natural HBC products in separate areas, away from traditional items. (See additional coverage of natural foods merchandising starting on Pages 29 and 43.)
Some analysts, however, say that retailers could be missing out on the opportunity to attract more mainstream consumers into the natural category by keeping their products segregated.
"It all depends on who you talk to," said Mike Evans, manager, Nature's Harvest, Food Circus Supermarkets, Middletown, N.J. "You hear very different pros and cons about this concept of integrating or having it within its own section."
Evans said that at the Food Circus Foodtown stores that have the Nature's Harvest natural product departments, the natural health and beauty care products are merchandised alongside the natural and organic foods inside the store-within-a-store format.
"People know that's where the natural and organic products are, and the banners and the signs draw them to there," he said. "They can find anything they need right there if they are a natural food shopper."
However, one consumer researcher specializing in health and wellness product retailing said that while such a strategy is effective in attracting the small group of so-called "core shoppers," it could be alienating to more mainstream consumers.
"For consumers who haven't experimented with products in that category -- and that's a pretty large percentage when you're talking about natural health and beauty care -- it is very ostracizing for them to have to go to a new section if they want to experiment with those products," said Laurie Demeritt, president and chief operating officer, The Hartman Group, Bellevue, Wash.
There are really two different types of customers that buy natural products, according to Demeritt. The core consumers, who actively seek out products that are natural and organic, and the "mid-level consumers," who associate natural and organic products with higher quality but don't necessarily read ingredient labels thoroughly, and may or may not buy natural products on any given trip to the supermarket.
"If you are a large mainstream retailer, and you only target the core consumer, that's only 14% of the population," she said. "You're missing out on that larger opportunity there to bring those products to mainstream consumers."
A little over 60% of the consumer base could be considered in the "mid-level" range, she said. In addition to paying less attention to ingredient labels, she said these mainstream consumers also tend to be less environmentally conscious than the core consumers, who are often driven to the natural and organic departments by their concern for the environment.
The Hartman Group's research has found that mass merchandisers are the most popular place for consumers to purchase natural, personal care products, with supermarkets not far behind. A recent survey by the company found that 44% of consumers said they had purchased natural, personal care products at a mass merchandiser, vs. 41% who said they had purchased such products at a supermarket. Drug stores followed, with a 31% response rate, then natural food stores, 10%, and club stores, 9%.
The Hartman Group also researched what natural personal care products consumers are using, and found that natural soaps are the most popular products in the category. Following natural soaps in order of popularity were hair care, dental care, creams and lotions, deodorants, skin care and cosmetics. Demeritt pointed out, however, that consumers' definition of "natural" in responding to the survey could be nebulous and might include products that contain artificial ingredients.
Although segregation of natural HBC products seems to be most supermarkets' modus operandi, many supermarkets said they sometimes try to merchandise natural HBC products in the mainstream aisles on a limited basis to encourage trial.
At Lunds and Byerly's, for example, Bea James, whole health manager, said the stores will sometimes merchandise both natural and traditional personal care items together on certain fixtures.
"Occasionally we will try to merchandise some very unique items on an endcap," she said. "For example, if there is an end display that has traditional body care items on it like traditional Oil of Olay, maybe we will put some natural soaps there along with them."
In addition, although the company keeps its natural personal care items separate from the traditional products and sets them off with wooden shelving and special displays, the products are usually adjacent to the traditional HBC departments.
"They stand out separately from the other items, but it's still destination shopping for any [HBC] items," she said. "Anyone looking for those items is going to find them, whether they are natural or conventional, in the same area."
At Food Circus, Evans said the stores sometimes place shelf-talkers in the mainstream HBC aisles naming specific natural product alternatives that can be found in the Nature's Harvest section of the stores.
"That draws attention to the fact that we do have the product, and it is available in our Nature's Harvest section," he said.
Jan Daniel, director of consumer solutions, United Supermarkets, Lubbock, Texas, said the stores do very little merchandising of natural food products within the mainstream sections of the company's Market Street stores, which have a distinctive natural foods set. Natural beauty care products are merchandised within a "bath and body" section within the natural foods areas in those stores, she said.
She said she believes it is the customers who are shopping for natural foods that are most likely to want purchase the natural HBC products.
"We've had the most success with keeping it segregated within the natural food set," she said. "We feel it tends to get lost for our customers when we put it into the mainstream of the store."
She estimated that natural nonfood items probably take up about a fourth of the total area devoted to natural products, which measures about 144 linear feet.
The company currently operates three Market Street stores, two of which have a separate natural food set, although the third is being retrofitted with a natural product area.
In the Pacific Northwest, Demeritt said she has seen some variation in local stores among those who merchandise their natural HBC products separately and those who integrate them with the main sets.
She said Cincinnati-based Kroger's QFC division, for example, "has had a segregated section for quite a while" in its stores, while local chain Larry's Markets, Bellevue, Wash., tends to do more integration of its natural products.
Although some mainstream suppliers on the food side have come out with natural products that have earned them placement in the natural sections -- some General Mills' cereals, for example -- few mainstream HBC makers have products that pass muster, according to Evans.
"As far as HBC, there's not really a lot out there as far as natural products go," he said. "If you read the ingredients [on mainstream products claiming to be natural], there are dyes and colors that are not natural, so therefore we don't want them in our natural section."
In fact, retailers say one of the benefits of having a segregated section is that it allows them to select which products belong there, saving customers from having to spend time sorting through the more vast assortments in the mainstream departments looking for all-natural items.
James also pointed out the importance of having expert staff in the store, such as the "Living Wise" specialists at Lunds and Byerly's.
"They really help guide people to those sections, educate them, answer their questions," she said. "That's an important part of the success with having these HBC items in your stores, too -- having somebody that knows how to discuss these products with consumers."
James and other retailers also stressed the importance of keeping the natural products area stocked with the latest products, and using product demonstrations and special displays to encourage trial.
One former Albertson's executive, who also worked at beauty retailer Ulta Cosmetics, said he thinks that most mainstream retailers would be better served by pursuing a policy of integrating their natural health and beauty products with their mainstream assortments.
"I think there's a misconception that you're going to capture the hard-core consumers in mainstream supermarkets," said Terry Frome, vice president, sales and marketing, Cotton Buds, Placentia, Calif.
He said that at Ulta Cosmetics, the company merchandised natural products in separate sections.
"If I had to do it again, I would probably try to carve out little mini-sections within each section," he said. "I think the consumer looks for skin care in the skin care department and bath in the bath care department."
He also pointed out that the natural products market has evolved since he was involved in their introduction to Ulta Cosmetics five years ago. He said packaging has improved considerably, making the products more attractive to mainstream consumers.
Frome and others also pointed out that natural HBC products still tend to have higher prices than their traditional counterparts, which also could effect how they are merchandised.