CHICAGO -- Retailers can capitalize on the current absence of brand loyalty in the natural and organic food market by developing private-label lines that promote personal health.
According to Laurie Demeritt, president, The Hartman Group, Bellevue, Wash., retailers can parlay the trust that is already associated with their reputable store name into a private-label line of natural and organic products.
Shoppers view natural and organic products, collectively, as a preventative measure and "are buying these products for personal health, not because of the environment," Demeritt said during her presentation, "Consumer Evolution in the World of Organic and Natural Foods," at the Food Marketing Institute's annual trade show, held here earlier this month.
Therefore, retailers should work to position themselves as a wellness destination, she told the crowd. Ways to do this include offering in-store videos and health-focused cooking classes, among other educational activities.
"Consumers are looking for answers, but they want to be told -- they don't want to have to seek the answers," she said.
Research conducted by The Hartman Group shows that awareness is the No. 1 reason consumers don't buy organic, and that purchases are more related to lifestyles than demographics. Having children, Demeritt said, is a "huge driver into the wellness market."
To that end, baby food products would be a good point of entry into the organic market, she said. Research also indicates that 65% of organic users use organic packaged goods and, after produce, cereal/grains and beverages are the most frequently purchased Center Store items.
However, 36% of grocery shoppers are going to other channels to buy organic products and, according to Demeritt, this is partly because "consumers don't even realize that organic food is even in their supermarket."
She cautioned retailers that take the store-within-a-store approach to merchandising the segment, as she said it can be very ostracizing and intimidating to consumers.
"From an operating level, the future is truly in integrating, with these products side by side" she said.
