AROMATHERAPY SNIFFING OUT A MARKET

CHAPIN CLARK

NEW YORK -- Exhibitors at Extracts, an aromatherapy and natural-products trade show held at the Jacob Javits Convention Center here, were curious, if skeptical, about the prospect of building wider distribution in the supermarket channel.

Representatives from some of the 200 or so manufacturers attending the show earlier this month cited as stumbling blocks the lack of an educated consumer base, incompatibly high price points and a desire to preserve an upscale image for their brands.

"The average food store is not the right place for us," said Sam Schwartz, owner and president of Masada, Chatsworth, Calif., which nonetheless markets its bath salts made with essential oils to Albertson's stores in Texas, among other outlets.

"If those chains that have devoted more space to their health and beauty aid departments pick up on [aromatherapy products], I think it could do pretty well. But a problem you have with a food chain is there's no one there to explain it to the consumer."

"Essential oils and aromatherapy require an educated customer," agreed John Grettenberger, president of Lorann Oils, Lansing, Mich., which makes essential oils, candles, incense and perfumes, as well as a line of natural flavorings for coffee and candy.

Lorann's oils and Global Notes personal care products are sold by Austin, Texas-based Whole Foods Market and its Bread & Circus and Fresh Fields stores, Grettenberger said. Because of the high quality of Lorann's aromatherapy ingredients, though, he stressed that "we wouldn't be able to compete on price points and make any money" in a larger, everyday-low-price chain.

Grettenberger said Lorann does have some supermarket distribution for its flavoring oils, selling to Kroger Co., Cincinnati, and Meijer, Grand Rapids, Mich.

"Getting in the door is a challenge," he said. "We're not paying slotting fees. If we can get in, great, but we're not going to pay you to get in."

Cynthia Reddrick, a sales representative for Ecco Bella Botanicals, Wayne, N.J., which also sells to Whole Foods, said supermarkets have the potential to develop a market for aromatherapy products among their shoppers, cross merchandising such items with natural-food sets.

"The customer is there. I'd like to see more supermarkets develop private-label programs for people interested in natural personal-care products."

William Varney, proprietor of Fredericksburg Herb Farm, Fredericksburg, Texas, said his company's products, including aromatherapy candles, a skin-care line and organic honey and vinegar, are sold in Whole Foods, some of San Antonio-based H.E. Butt Grocery Co.'s stores and in Dean & DeLuca here. But he said he was wary of expanding much further into the supermarket channel.

"I don't think some of our customers -- Neiman Marcus, for example -- would be too happy to see us in discount chains."

Lydia McClain, president of Gaithersburg, Md.-based Botanicus, said she saw an opportunity a few years ago to seek a broader market for her company's aromatherapy offerings, working with a larger manufacturer to produce greater quantities of a lower-priced line.

"I did NACDS years ago and I was just floored." She said she was approached at that show by a buyer for Kmart who was interested in cutting a deal with her -- if she would supply free product for 1,800 stores. "If it sells, we'll pick it up," the buyer said.

"[Supermarkets, mass merchants and drug chains] are looking for widgets and shelf space and advertising. They're interested in a category filler, not a high-quality product."

McClain said the manufacturer she was partnering with now produces a competing private-label line with retail price points as much as 50% less than Botanicus's.

The next Extracts show will be held here April 4 to 7, 1998. Grettenberger, for one, is not sure he will attend.

"Retailer traffic has not been great. There are some good buyers here, but they're few and far between."