The time is at hand for conventional supermarkets to get natural and organic food products marching in the battle for shoppers' food dollars.
That fact is rendered with unmistakable clarity in the results of a large-scale consumer study commissioned by SN (Page 1).
The proprietary survey of more than 2,000 consumers shows that the migration of natural and organic product from the speciality trade to mainstream supermarkets is not only continuing apace, but that critical mass has been achieved with respect to customer expectations.
The survey shows that 61% of food shoppers say they purchase natural and organic items at conventional supermarkets. That's an impressive figure, but it also illustrates that there is a yawning opportunity gap of unfulfilled need that approaches 40%. That assumes, of course, that sales of organic and natural product would increase if more shoppers were exposed to them and better understood them. Many trade observers would find such assumptions valid.
Meanwhile, the survey shows, other channels of trade remain effective vendors of natural and organic food, as would be expected. Natural and health food stores still garner 43% of shoppers for such product; local outlets and fruit stands, 35%; independents and small stores, 29%; alternate formats, 20%; and others, 4%. (Multiple responses were permitted.) By the way, you'll find a news feature about one successful independent natural food retailer, New Leaf Community Markets, on Page 35.
Another significant finding of the survey underscores the value shoppers of natural and organic product attach to information. Here's the percentage of respondents who find these information sources to be extremely or very important: country-of-origin labeling (COOL) and the U.S. Department of Agriculture's organic logo, each at 38%; disease-prevention information, 29%; knowledgeable employees, 25%; and separate department, 24%.
Incidentally, concerning COOL, industry trade groups remain strongly opposed to having it mandated for retailers. As recently as last week, Grocery Manufacturers of America said in a statement that it remains opposed to COOL and that it had "detailed its concerns" about the issue to the USDA. These concerns include that "COOL will cost the food industry -- and ultimately consumers -- as much as $3.9 billion in the first year alone, with negligible consumer benefit." But trade groups are unopposed to voluntary labeling, which SN's survey shows is well worth retailers' and producers' consideration.
Finally, here is survey data on the percentage of consumers who agree with possible properties of natural and organic product. You'll notice that some of this is positive, some negative and much of it conflicting, which no doubt describes the reality of consumer attitudes: benefits unproven, 30%; higher risk of bacteria, 20%; better tasting, 24%; more nutritious, 37%; safer than conventional, 34%; and helpful in disease prevention, 30%. While we're on the topic of surveys, SN conducted a separate Internet-based survey of various industry segments that appeared in the Feb. 16, 2004, issue. Results shouldn't go unremarked for much longer because they were quite revealing of the industry's status. Findings suggest there's a growing dichotomy in the financial success of food retailers. Here's the crux of it: 35% said both net income and sales rose more than 5% last year. Conversely, 20% said both were plunged into negative territory.
