Will Private Label Follow?

KELLY GATES

There's been a lot of talk about a slowdown in natural/organic category sales. The decline is in large part due to the economy, as well as the maturation of the category. Experts are closely watching developments.

Tom Pirovano, director of Industry Insights at The Nielsen Co., is forecasting private-label natural/organic sales to fall as well.

“Every retailer wants to be out there saying, ‘We have organics,’” he said. “It's a smart strategy to promote their private labels, because it adds to loyalty. Yet in current months, [organic private-label] sales are flattening.”

This sudden shift comes after half a decade of skyrocketing sales. But this year, the usual bump during the back-to-school season didn't happen, said Pirovano.

“This year will continue to be OK, but next year will be tough,” he said. “I'm predicting that 2009 organic growth will be under 10% in private label.”

Eric Anderson, co-president of the Fresh Encounter group of stores, doesn't feel that the economy has had much of an impact so far. Even if it sinks further, he expects sales of organics and naturals — both private-label and national brands — to continue to attract shoppers.

“The organic consumer, I believe, has not backed off their almost religious approach to buying food,” he said. “Organic shoppers are particular and are accustomed to paying more, so the economy has probably not affected that demographic greatly.”