CHICAGO -- Retailers need to jump on the organic bandwagon while the industry's appeal to the mainstream consumer continues to grow, according to food industry executives who spoke during the seminar "The Organic Craze: Getting Your Share!" at the recent Food Marketing Institute trade show, held here.
"This was just a movement 20 years ago; today it's a full-fledged industry. If you're not jumping on this bandwagon you're missing today's consumers. Mainstream consumers are driving the industry," said Sylvia Tawse, president of The Fresh Ideas Group, who acted as moderator to the panel. Tres Lund 3rd, president and CEO of Lund Food Holdings, Inc., acted as chair.
"What organic is about is seizing an opportunity and providing a choice," Tawse added.
Laurie Demeritt of the research firm The Hartman Group presented the overflowing audience with data on the organic industry, and panelists included Dave Wagner, category manager, Nature's Marketplace, Wegmans Food Markets Inc.; Kurt Krahn, deli/natural foods director, Copps Food Corp.; Tonya Pavich, vice president of organic sales, Natural Selection Foods; Joe Smilie, senior vice president, Quality Assurance International, and past-president of the Organic Trade Association; and Angela Sterns, executive director, Organic Alliance.
According to data collected by the Hartman group through 26,000 customer surveys, consumers that are choosing organic food products are doing so based on a desire to protect their own health, not so much for the environmental reasons that drove interest in the category a few decades ago.
"The industry is being driven by a lifestyle that consumers want to be a part of," Demeritt said.
For these reasons, retailers like Wegmans and Copps have taken the segregated approach to merchandising the category, building store-within-a-store sets for their organic merchandise.
"Retailers need to commit to being a destination for organic. Don't do it just to mirror the competition because then it won't work,"Krahn told the group.
Copps operates organic sets in 18 units and they average between 800 and 1,200 square feet in size. They are located adjacent to the retailer's produce department, Krahn said, and they feature a selection of dry, refrigerated and frozen items.
Similarly, the organic sets in Wegmans take up between 2,000 and 4,000 square feet and carry an array of products, including frozen foods and health and beauty care merchandise.
"Organics is a hot topic in customers' minds because they are concerned about their health," Wagner said.
"It provides a tremendous opportunity for retailers to get closer to the customers, who are looking for answers and solutions. The retailer will benefit because they're not going to find these products in mass channels."
According to Sterns, both segregated and integrated retail approaches will be successful as long as they are combined with appropriate, eye-catching signage and exciting promotions surrounding the category.
"Give it the visibility that it needs. If you are not signing them [organic products], you are missing out on a huge opportunity.
"Also, make an impression with your employees. Educate your staff and have things like employee tasting events," Sterns said.
She suggested planning marketing budgets in advance that feature heavy organic promotion and running full page ads in store circulars.