THIRSTY INVESTMENTS

Elliot Zwiebach

Staying on top of trends is good, but planning ahead is better -- just ask Thrifty Foods. The Victoria, British Columbia-based operator plans to convert 50% of its produce offerings to year-round organics by 2010.

"Thrifty Foods has led the way on organics in our market, and it's been a competitive advantage for us," said Malcolm Webster, the 18-store chain's director of marketing.

With a more upscale image than its name implies, Thrifty is using its niche in organics to enhance its market position. A long-term view is one of the smartest courses a retailer can take as health and wellness emerge from specialty to mainstream acceptance.

"Our thinking is, if we can bring an organic item in at close to the non-organic price range -- usually within 10% to 20% -- then we'll stock it," Michael Mockler, the chain's director of produce, said, before he stepped down.

The chain's organic assortment is currently approaching 20% -- approximately 100 out of 500 produce items stocked. It's already converted completely in some categories, including bananas and baby carrots. Broccoli and baking potatoes are available seasonally, and availability is moving in that direction in other categories.

In strawberries, for example, organics account for 15% of sales, compared with less than 1% five years ago, Mockler pointed out, "and it will be 25% to 30% within another year or two."

Pricing is critical to success, but the chain has found it's not the only component their customers use in making a purchase decision.

"We switched exclusively to organic mini-peeled baby carrots four years ago because that's what consumers were buying," Mockler said. "The price difference [with conventional varieties] is about 25%, but customers perceived the organic as a better value despite the higher price point."

Prices on packaged salads experienced similar treatment from shoppers, who opt most times to buy a premium-priced organic spring mix over a less-expensive, conventional counterpart.

"Both brands have the same number of facings and the labor costs are exactly the same, but the dollar returns per square foot on the organic are a lot higher," Mockler added.

Although the 50% goal involves produce, "we've also looked at organic meats," Webster said, "but we'd prefer they come down to a more decent pricing level."