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Topco and Wild Oats: A Theory

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Topco Associates’ pitch for the dormant Wild Oats brand name seems — at first blush — like an odd move. What would a company that already offers a pretty successful private-label natural/organic brand called Full Circle want with a retail name that hasn’t been seen on shelves for three years?

Or, more to the point: Why would Topco want it?

wild_oats.jpgFirst, the background: The Wild Oats brand name has been for sale since Whole Foods Market acquired Wild Oats in 2007. A messy antitrust battle with federal regulators ensued, and ended only after Whole Foods agreed to sell off 32 Wild Oats units, along with the brand (to date, three stores have actually been sold).

Fast forward three years. According to papers filed with the Federal Trade Commission, Topco and Luberski Inc., a Fullerton, Calif.-based food-product supplier, are both bidding for the Wild Oats rights. A source familiar with Topco tells me that Topco has been interested in the name since the acquisition.

Why? The current thinking is that Topco will position the Wild Oats name as a “better-for-you” brand that complements the existing Full Circle natural/organic line, similar to what Safeway has done with its “O” Organics and Eating Right brands.

Adding a lesser-evil tier will allow retailers who pull from Topco to offer an additional line, with different price points and product attributes, to mainstream customers who might otherwise simply buy conventional products if given only a natural/organic option.

For example, take ketchup. Conventional brands might use high fructose corn syrup as the first ingredient; organic ketchup might replace that with organic cane sugar. What about consumers looking for something with less sugar or HFCS?

That’s where a Wild Oats-tiered product would come in. It could claim the first ingredient as organic tomatoes, say, and bump the sweetener down the list of ingredients.

There are more synergies here. Topco, which launched the NuVal nutrition rating system in supermarkets in 2008 (Kroger Co. is the latest and largest to sign on), could conceivably offer tie-ins with the system, offering two distinct lines that garner different NuVal scores. That equals maximum choice and broader consumer appeal.

Could this be why Topco hired Glenn Backus this week? Mark Hamstra, our vigilant Retail editor at SN, pointed out that Backus was named senior vice president, innovation. It’s a curiously worded, new title at Topco, where he will be responsible for “overseeing all facets of innovation in product, packaging and branding.” He comes from H.E. Butt Grocery, where he was director of marketing and strategy, and spent 14 years at Trader Joe’s, that private-label emporium.

The Wild Oats brand does have a history outside of its namesake stores. Just months before the Whole Foods merger, the chain began distributing a wide selection of own-brand products to non-competing supermarket chains. But that deal ended 9 months later, when Whole Foods moved in.

This is all supposition. Topco has not commented on its plans for the Wild Oats name, and Luberski Inc. might eventually outbid it to win the rights, making all this a mute point. But it’s fun to pick apart the clues and wonder, What if?

(Photo credit: stlbites.com)

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