Supervalu Launches Organic Private Label

MARK HAMSTRA

MINNEAPOLIS — Just months after pulling the plug on its fledgling Sunflower Markets banner, Supervalu is rolling out a new organic private-label line — the first in what the company hopes will be a series of streamlined systemwide store brands.

The Wild Harvest private label, which took its name from the brand used by the Shaw's banners in New England, is launching with about 150 items, including many perishables offerings, and will be integrated with conventional product sets as much as possible, Adam Graham, Wild Harvest's brand manager, told SN last week.

“We think we will get the most impact from those consumers we call ‘lighter green’ shoppers, and we want to help them become more familiar with natural and organics,” he said. “We think one of the best ways to do that is to just make them easier to shop for.”

At some stores, especially in the Northeast and Northwest, where Supervalu already operates segregated natural and organic departments, the new line will go into those “stores within a store.” Wild Harvest is also the name of those departments in the company's Shaw's locations.

The new line represents a rethinking of the two organic private labels the company had after the Albertsons acquisition in 2006. The Wild Harvest line had about 30 SKUs, many of those in the perishables departments, at the time of the merger, while the Nature's Best line, which Supervalu had developed as it began rolling out the Sunflower banner, had about 100-plus items, primarily in Center Store, Graham estimated.

Wild Harvest, which features an orange-and-yellow sun logo and simple type, was created using a “small percentage” of the company's existing lines, but most of the products in the new line were developed using new specifications during the last 18 months, he said. Graham said one of the guidelines in creating the new Wild Harvest line was to achieve retail prices within 5% to 10% higher than conventional products, but 10% to 15% lower than branded natural and organic offerings.

The launch follows similar efforts by a handful of other conventional retailers, including Safeway, which has reported strong sales from its “O” line of organic products.

Jeff Noddle, Supervalu's chairman and chief executive officer, has told investors that he hopes to trim the 100 private-label offerings the company had in the wake of the merger down to 20-25, and boost their share to 20% of total sales, up from 15% currently.

Graham declined to disclose projected sales volumes for the Wild Harvest line.

Scott Van Winkle, an analyst with Canaccord Adams, Boston, said he believes the line will succeed at Supervalu stores.

“I think when you bring some better value perception to organic products, you are going to get better sales,” he told SN. “The No. 1 impediment to organic sales is the price premium, so if you can narrow that premium, we know demand is there.”

The new line in many cases will replace weaker-selling brand items on the shelves of Supervalu-owned chains around the country, Graham said.

“One of the side benefits of doing this work was that we had to dig into the assortments in a number of categories,” he explained. “We found categories where we had three-plus brands, and from my experience, that isn't necessary — you really only need two or so.”

He said the company hopes in the end to offer more total organic SKUs in the store. The line is expected to expand to 250-300 SKUs by this winter, 90% of which will be organic. The line will also include a selection of natural — but not organic — beef, pork and chicken products from animals that have been raised without antibiotics and are certified as being treated humanely.