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SPECIAL NEEDS: SERVING THE NICHE CONSUMER

MAINSTREAM SUPERMARKETS have traditionally strived to be all things to all people. In the age of health and wellness, however, it pays to specialize a little. The number of products catering to consumers with special dietary needs gluten-free foods for celiac disease, Glycemic Index items for diabetes, and dairy-free products for lactose intolerance, among others has grown significantly over the past

MAINSTREAM SUPERMARKETS have traditionally strived to be all things to all people. In the age of health and wellness, however, it pays to specialize a little.

The number of products catering to consumers with special dietary needs — gluten-free foods for celiac disease, Glycemic Index items for diabetes, and dairy-free products for lactose intolerance, among others — has grown significantly over the past few years. So has consumer demand for these products.

“We're hearing more about consumers interested in foods for all types of intolerances, sensitivities and medical conditions,” said Laurie Demeritt, president and chief operating officer of The Hartman Group, a consultant to the organic industry. Consumers who aren't diagnosed with particular conditions are also looking for special-needs items, since they diagnose themselves as being allergic or sensitive to certain ingredients and shop accordingly, she said. “Whatever the medical numbers say, a lot of consumers feel they need these customized meals.”

Most full-line natural/organic distributors carry a wide range of special-needs items. “We view the area of special dietary-needs products as a high-growth area,” said John Raiche, national vice president of marketing for United Natural Foods, a natural/organic distributor that carries hundreds of wheat- and gluten-free items, as well as dairy-free and low-sodium brands. Top-selling products include Amy's Kitchen low-sodium soups and frozen entrees, and wheat-free and dairy-free pizzas; Bob's Red Mill gluten-free baking mixes; Organic Valley lactose-free organic milk; Food for Life wheat- and gluten-free bread; Pacific Foods low-sodium broths; and Newman's Own Organics wheat-free and dairy-free fig bars.

Rick Moller, category director of natural and organic at St. Augustine, Fla.-based Tree of Life, a distributor of natural/organic and specialty foods whose customers include Roundy's Supermarkets, Minyard Food Stores and Safeway, said his company also carries a full line of special-needs products. He points out that most of the brands, which have a targeted customer base, don't turn fast enough for the average supermarket to keep them in their own warehouse; it's more efficient to turn to a distributor.

Supermarkets vary in how they merchandise special-needs products; some offer fairly extensive assortments while others limit their programs. The sector of most interest is gluten-free, for which several chains have installed 4- to 8-foot sets within their natural product area, Raiche said.

At Food Lion's Bloom banner, the Nature's Place section includes vegetarian, gluten-free and other special-needs products, according to spokeswoman Karen Peterson. Examples include Amy's entrees and pizzas, Bob's Red Mill baking products, Bionaturae pastas, Enjoy Life cookies, Lundberg rice cakes, Glutino cookies and cereals, Quino rice and soy beverages from Imagine, Edensoy, Silk and Pacific Chai.

Cub Foods, meanwhile, carries a range of special-needs items throughout its stores, according to Mike Witt, vice president of merchandising. Organic gluten-free items such as Envirokidz Crispy Rice bars and Let's Do Organics candy are available in the Naturally Cub store-within-a-store section, and lines such as snacks and side dishes are included in a Natural Gluten-Free section within Naturally Cub.

Rice and soy products for Cub's lactose-intolerant customers include Imagine organic beverages and Lundberg organic rice cakes and chips, as well as Amy's frozen rice and soy cheese pizzas. Diabetic-friendly items, including cereals, desserts, condiments and candy, are stocked in the Diet section within the main dry grocery area. Tree of Life's Moller pointed out that chains need to implement their strategies on a store-by-store basis.

“A lot of supermarkets are rushing to put in gluten-free sets, but it's not one-size-fits-all,” he noted. “I tell my customers that they need to hook up with one of the celiac groups that have local chapters to develop a customer base.”

Products intended for a narrowly targeted group require consumers who will come into the store and produce enough turns for the category to be worthwhile. “Not all stores can support it,” he added.

“You can't take a cookie-cutter approach,” agreed Demeritt, the consultant. She advises clients to conduct market research to figure out why consumers are shopping the store. Is it really to meet their special needs or simply for convenience?

“It's not just about the consumer, but about the occasion,” she said.

Of the various special-need categories, gluten-free has seen the biggest explosion in products and sales over the past 24 months, according to Moller, who reports double-digit growth in the category. In fact, many vendors are selling gluten-free products, even if that's not their primary target market. For example, a vendor of snack bars might make them gluten-free, if it has the capability, as a secondary benefit. “It's not making them for that reason, but it's a halo effect,” Moller said.

While the number of gluten-free products is rising fast, the opposite is true for Glycemic Index products targeting diabetics, who represent a much bigger market (20 million vs. 2 million who are believed to suffer from celiac disease). While sugar-free items are available, diabetics need to track not just the number of carbohydrates they consume, but also the type. Products marked with the Glycemic Index, which ranks carbohydrates by their impact on glucose levels, can help them do so.

“The number of [GI] products is small,” Moller said. “And it's gotten just enough press to confuse consumers.”

The Glycemic Index has been adopted by some retailers overseas; U.K.-based Tesco has an extensive GI program. Stateside, the number of people with diabetes is large and increasing quickly, making this almost a mainstream rather than a niche market.

“This is a growing, emerging epidemic,” said Steven Jennings, consulting director at Natural Pro Consulting Group. “It's a large popular base, and one that is out there, in stores. Supermarkets really have to address it. If not, they're leaving dollars on the table.”

Lactose-intolerant consumers are another significant special-needs market. They seek dairy-free or lactose-reduced products, such as soy and rice milk, in both fresh and in aseptic packaging. A number of products target these customers, as well as other shoppers seeking the more general health benefits of soy.

One key to reaching special-needs customers is to make sure they can find the products they want. United Natural Foods offers merchandising and display materials for some items. During October's Celiac Awareness Month, for instance, it offered gluten-free posters, shelf talkers and tags, resources and product listings.

“A number of our special-needs product suppliers also offer an array of marketing and merchandising tools,” Raiche said, adding that he's seen supermarkets set up separate special-needs sections or shelving, with unique shelf tags or above-set signage; create special consumer circulars or booklets dedicated to these products; and highlight special-needs items in their weekly ads.

Demeritt suggested supermarkets take a personal approach when it comes to education. She recommends starting a dialogue by making dietitians and nutritionists available on-site or sending out customized retail newsletters to applicable customers.

Special-Needs Consumers: Who Are They?

  • Diabetes: More than 20 million Americans have diabetes, and nearly a third don't realize it. In addition, 54 million have pre-diabetes, a condition where blood glucose levels are higher than normal but not high enough for a diabetes diagnosis. Type 1 diabetes, where the body fails to produce insulin, accounts for 5% to 10% of diabetes sufferers, while the remainder have Type 2, caused by the body's failure to properly use insulin, combined with an insulin deficiency. Treatment includes monitoring the diet, particularly sugars, to keep glucose levels within a healthy range. One effective tool is the Glycemic Index, which ranks carbohydrates according to their effect on glucose levels.

  • Lactose intolerance: An estimated 30 million to 50 million Americans are lactose-intolerant, which means they cannot digest significant amounts of lactose, the main sugar in milk. It is usually caused by a shortage of the enzyme lactase, which is produced in the lining of the small intestine. Symptoms, which include bloating, gas, cramps and diarrhea, usually can be controlled by choosing dairy products with reduced lactose content, or dairy alternatives such as soy milk.

  • Celiac disease: Two million Americans are estimated to have celiac disease, an autoimmune intestinal disorder that can be difficult to diagnose. Symptoms, which include diarrhea, weight loss and malnutrition, are triggered by gluten, a protein found in all forms of wheat, rye, barley and triticale. The only treatment is to avoid gluten entirely.
    — KR

GOOD ADVICE

  • Source products from full-line natural/organic distributors; they carry a wide range of items.
  • Tailor strategies to individual stores; not all locations can support a full program.
  • Merchandise items within their category — snacks for diabetics side-by-side with conventional snacks.
  • Call out special-needs items with shelf tags or other signage.
  • Provide educational materials to start a dialogue with customers.
  • Tie in with local chapters of groups catering to special conditions and dietary needs.