TERMS FOR THE BIRDS

PAMELA BLAMEY

Natural and organic birds appear to have had their 15 minutes of fame in supermarkets, but in most parts of the country there will always be room for free-range poultry.

That's the meat case gospel among retailers, wholesalers and industry analysts interviewed by SN.

High price and a lack of understanding about the meaning of the terms "natural" and "organic" are the two reasons they gave for the specialty segment's floundering performance.

Most sources said that although consumers may purchase branded chickens that contain the word "natural" on their labels, few actually set out specifically to buy natural poultry, not to mention organic. Consequently, few are eager to pay the attendant premiums the specialty products carry.

"I would say organic is a passing phase," said David Lynch, corporate meat director at Harvest Foods, Little Rock, Ark. "We don't even carry it in our stores.

"In our area there's been very little regarding organic. As a matter of fact, we probably haven't had more than one or two requests for it. It's just not a big issue in Arkansas. Maybe in the rest of the country it might be, but not here."

However, more common commercial chickens labeled "natural" are a different story, Lynch told SN. "I think there was a demand for natural; customers asked for it, so all of our poultry is natural."

The stumbling block for organic and free-range in Harvest's marketing area is the cost, Lynch said.

"Price difference probably has a lot to do with it -- people are just not willing to pay extra. And you know Tyson is a major company in Arkansas, it's based here, and people feel real comfortable with it as natural."

While Arkansas is very much conventional poultry country, the segment apparently has similar problems in other markets as well.

"If a person is looking for a natural or organic chicken, they'll go to Alfalfa's or Wild Oats," said Russ Kates, co-owner of Steele's Markets, Fort Collins, Colo., referring to two specialized natural food chains in his marketing region.

"I never have anybody ask me for free-range. We sell a natural/organic bird called Red Bird, but we sell very few of them. We have certain people who look for them every time they shop."

But those people are few and far between, and Kates said a lot of the product ends up elsewhere in the store. "We use a lot of them in value-added once the dates close, like for fajitas or shish kebabs, and sometimes we'll send them over to the deli and they'll roast them and sell them ready-to-eat."

Kates suggested another reason for the fading of this particular niche.

"I think one of the reasons is that the business has gone to boneless/skinless product, [and] people perceive that as being just as healthy."

In any case, it's the cost that keeps customers away, Kates said. "If you could buy natural or free-range for the same as a commercially produced bird, it would be different, but price is just too much and people won't pay it -- the difference is not that important to them."

Keith Sipes, meat merchandiser at Thrifty Foods, Seattle, argued that for many of his customers, cost may not be the obstacle so much as an inability to grasp the concept of free-range chickens. The free-range birds in Thrifty's stores average about 30 cents a pound more than commercial chickens, he added.

"I don't think it's the price -- for most people who eat poultry, it just doesn't mean anything to them if it was raised out on the range or not," said Sipes.

For a certain number of consumers in the Northwest, however, it is a significant factor. "We have local suppliers here that have free-range chickens and they seem to be doing well with them. I don't know why," Sipes told SN. Free-range chickens get about equal time to register in a shopper's mind at Thrifty as does conventional poultry, Sipes added. "They get basically about the same display space, but we don't produce a full line of items for them; just whole birds, cut-ups and boneless breasts."

He said the segment hasn't grown at all since Thrifty began carrying the product about five months ago. "I don't see it increasing or taking over the regular chicken sales. It's more of a niche market."

What's more, organic chickens do not appear to be in the chain's immediate future, Sipes said. "I'm not real familiar with organic chickens. We're not doing anything with them right at this time."

Suppliers of specialty birds haven't exactly been scrambling to improve the stature of their niche products in supermarkets, according to Kates. "I don't see any effort on the part of chicken producers -- they think they have a pretty good product," he said.

In other parts of the country, however, producers are trying harder.

"Our turkey supplier has developed a reasonably good business with that type of turkey, and we can make more money on that than with commodity birds," said John Story, director of meat operations at Fairway Foods, Northfield, Minn. He agreed with other operators that price is a major inhibitor to the segment's growth. "I think fundamentally it's developed a high-priced connotation, and customers who have money to spend will be interested; those who don't won't. And I don't think that's what the intention was. The thinking was more in terms of providing a healthy and natural option."

Meanwhile, free-range chickens are new to some Fairway stores, Story added, having been put in at the request of some customers.

But overall, he expects the specialty niche to stay just that. "I'm not going to say it will never amount to anything. But we've had it within the last year, and it hasn't grown at all."

Also, suppliers have not

been beating down his door to get Fairway to buy from them. "We more or less had to go out and find it."

Wholesalers also have duly noted that organic poultry seems to have had its time in the sun.

"When we first introduced it we had great success -- a lot of our consumers and our people got real excited about it,"said Bob Simmons, meat department manager at Associated Food Stores, Boise, Idaho.