BOULDER, Colo. -- Wild Oats Community Markets here has launched a category management program in its grocery department and has appointed category captains.
In a somewhat controversial move, the natural-food chain is charging category captains a one-time-only fee of $15,000 in exchange for access to scanner data. In addition, captains are expected to help Wild Oats create well-managed sections with the right product mix. Wild Oats is the first natural foods chain to adopt the mainstream supermarket practice of appointing captains.
Currently, the grocery categories that have been captained are rice and soy, by the Hain Group/Westbrae; shelf-stable juices, by Smucker Quality Beverages (maker of Knudsen); and cereal, by Health Valley. Also newly captained are hair care (jointly by Jayson Natural Cosmetics and Shaman Beauty Products) and aloe vera (by Lily of the Desert).
When SN spoke with Jim Lee, president of Wild Oats, he stressed that the move was a strategy to "make sure we get it right and do a good job for our customers. Our primary mission is to serve our customers, and category management is a strategic umbrella to ensure we have proper expertise."
He said the final responsibility for the category will be with Wild Oats, but he expects that captains will use objectivity in helping stores create schematics, product assortment and product placement.
"We have the final say so," he said. "By taking a leadership role, the captains help move the natural-products industry at the retail level down the path to better serving customers and representing the category. The advantage for them is they will develop a closer relationship with us, and they will be able to develop expertise that they can share with other customers. [On our side,] we appreciate their time and support and their sharing of the expense."
Wild Oats will be resetting its stores after the first of the year and plans to add 20 categories -- mostly grocery -- over the next year.
"It is not our intent for every category to be under category management," Lee went on to say. "And we will not dictate everything for the entire category."
While the category plan will create a degree of desired uniformity throughout the chain, between 20% and 30% of items in a category will be left to store-level discretion. In this way, Wild Oats will continue to make room for locally produced items and the cottage-industry products natural-food stores are patronized for.
Lee expects other benefits of category management: out-of-stocks should drop; it will become easier to quickly weed out slow movers; and the chain will make room for its own products, which will get center-of-set positioning.
"One of the challenges we face is an incredible explosion of new products. This will help us discontinue items that are slow movers or that won't sell and introduce new items, as well as support our rapidly growing private-label program." Lee said the number of private-label stockkeeping units has tripled this year.
In conjunction with category management, Wild Oats is introducing a new line of private-label groceries: Down to Earth. This line will be priced below the premium Wild Oats line, which is mostly organic.
Nonetheless, Down to Earth items will not have artificial ingredients, preservatives or colors, said Lee, and will comply with the chain's "stringent product standards, but will be priced to represent the best value in the category on a daily basis."
Lee expects that the new line will attract more crossover customers, who perceive natural products as being too expensive. The store plans to launch about 25 items at the end of next month, but the real program rolls out next year.
"It will grow to a couple of hundred items by the end of 1999," Lee said. The company currently has 750 private-label SKUs in its Wild Oats line.
