CENTERS OF ATTENTION

STEPHANIE FAGNANI

The old adage that suggests "the more things change, the more they stay the same" offers a sound description of the activities that punctuated Center Store strategy for many retailers this year.

While the predominant trends, including further exploration into the organic and private-label arenas, as well as touting the medicinal attributes of products in the center aisles, were also responsible for much of last year's activity in the section, their evolution in 2000 reached new heights.

Organic:

Although the debate over mainstream integration vs. separate store placement continues, retailers wholeheartedly embraced the phenomenon that is organic this year, perhaps more than ever before.

Well-established, traditional manufacturers blatantly put their support behind the organic craze, and this year began with General Mills' acquisition of Small Planet Foods, a producer of organic food products. A move that "validated the integration of organics into the mainstream," according to Angela Sterns, executive director of the St. Paul, Minn.-based Organic Alliance, the acquisition followed on the heels of General Mills' introduction of its own first cereal made with certified organic ingredients.

Advice to retailers concerning the importance of organic merchandising was plentiful throughout the year, with speakers at the January Winter Fancy Food Show in San Francisco heralding the financial profitability offered up by organic lines. In March, the Natural Products Expo West in March recorded record attendance and, in terms of product displays, organic lines were the predominant theme. The Food Marketing Institute's annual show in May featured seminars like "The Organic Craze: Getting Your Share!", which strongly advised attendees to jump on the organics bandwagon while it's still hot. Retailers seemed to take note of these bountiful examples of the burgeoning organic industry and continued to add lines and step up marketing efforts associated with such products. Piggly Wiggly, Memphis, Tenn., took a cross-merchandising approach when it announced plans to merchandise canned organic vegetables in the produce department as a test in one of its stores in early January.

Just in time for back-to-school shoppers, Cub Foods joined forces with the Organic Alliance for a promotion that provided students with organic-focused activity books, which included coupons for goods available at Cub units in the St. Paul, Minn., region.

A new Wild by Nature store, which made its debut in Huntington, N.Y., this fall, offers consumers only organic alternatives in certain categories like cereal and pasta sauce, boldly dismissing high-profile branded products like Cheerios cereal and Ragu sauces.

And, a natural and organic products test in a Super Foodtown in Ocean, N.J., was so successful it prompted officials at Food Circus Supermarkets to consider expansion into its other 12 stores.

All the hard work and attention to organic detail this year seems to have paid off for retailers. According to a "Consumer Trends 2000" survey released by FMI in October, 68% of consumers buy natural and organic products in their primary supermarket, opposed to the 19% that seek them out in specialty markets.

Private Label:

Store brands are undoubtedly here to stay and nowhere in the supermarket industry are they more prominent than in Center Store.

With the consumer acceptance factor out of the way, retailers this year were clear to focus on supply chain efficiencies and maximizing profits, "thinking about clear-cut profitability of private label in the context of logistical savings," Brian Sharoff, president of the New York-based Private Label Manufacturers Association, told SN.

In the beginning of the year, Doug Murphy, director of grocery merchandising for Martin's Super Markets, South Bend, Ind., told SN his store had to increase the shelf space allotted to hot cereals due to increases in the category, mainly from the store's Roundy's private-label line, which was "increasing faster than brand names because people are gaining confidence in all the products produced under private labels," he said.

As retailers continued to process these facts, private-label lines grew rapidly, many entering Center Store categories for the first time this year.

Buehlers Foods, with stores in Indiana, Illinois and Kentucky, began work on its own line of frozen vegetables early in the year and wholesaler Spartan Stores, Grand Rapids, Mich., saw good movement on private-label paper products, like napkins and towels.

The promotion of store-brand goods continued to rely heavily on in-store sampling, with stores like Price Chopper, Schenectady, N.Y., and Piggly Wiggly offering customers a taste of their private brands. But, several retailers, the Montvale, N.J.-based A&P in particular, also waged high profile marketing campaigns, placing advertisements for its private-label lines in newspapers, on-line and on television to demonstrate that private label is becoming more like a national brand.

Private-label packaging also continued its evolution this year, and many chains, including IGA, Chicago, Ill., and Kroger, Cincinnati, altered the look of their labels to generate excitement at the store level and attempt to boost sales.

Perhaps the best proof of the power of the private label could be seen toward year's end. The annual PLMA trade show boasted record attendance and exhibitors, along with the introduction of several new private-label Center Store products, including green ketchup.

Functional foods:

With the plentiful medicinal attributes found in Center Store products like soups, sports drinks, energy bars and sauces being touted through studies by organizations including marketing research firm HealthFocus, retailers gained more leverage in their campaign to win more "better for you"-seeking consumers.

Many retailers tried to hook the health-conscious consumer by stressing health benefits in the center aisles throughout the year.

George's Market on Shelter Island, N.Y., began 2000 by tipping its hat to National Hot Tea Month and the antioxidant powers of tea by running sales each week in January. The healing powers of tea caused other retailers across the nation to up merchandising efforts, which in turn boosted sales at stores including Big Y Foods, Springfield, Mass., and the Northwest-based Rosauers.

In addition, many retailers agree that the market for another beverage category, namely new age, made tremendous strides this year, buoyed by promotional pushes by stores like Draeger's, Palo Alto, Calif., which ran regular advertisements for Red Bull Taurine energy drinks.

J.B. Pratt, chief executive officer of Pratt Foods Supermarkets, Shawnee, Okla., was the voice of many when he told SN, midyear, that all retailers would be wise to capitalize on the nutritional advantages of conventional products in the center aisles, through integrated merchandising.

Labeling of functional foods was employed by Farmer Jacks, Detroit, supermarkets to help guide consumers, especially those with prior heart or cholesterol issues, to healthier food choices.

Retailers and consumers alike also responded this year to word that polyphenol antioxidants, which may reduce the risk of cancer and heart disease, are found in chocolate.

Soy products increasingly appeared on Center Store shelves, especially after U.S. Food and Drug Administration rulings regarding advertisement messages. Soy beverages have been particularly well received by retailers and their customers this year, and Unified Western Grocers spoke with SN about the high demand for and the high attention given to promotion of soy drinks in its stores.

And, Chicago's Jewel-Osco chain made a very high profile move in early fall when it hired a registered dietitian to conduct store tours, during which she would tout the prevalence of healthy options among the center aisles.