NONFOOD IN BIT PART AT WILD OATS BRAND PREMIERE

CHAPIN CLARK

BOULDER, Colo. -- As Wild Oats Markets readies a full-scale launch of its secondary private-label line, the retailer's chief nonfood merchandiser has told SN the line's health and beauty care and general-merchandise component will be negligible.

Wild Oats, based here, had planned to introduce about 25 grocery items in the new, lower-priced store brand by the end of last month, to be followed by a rollout of "hundreds of products" beginning early next year, according to Jim Lee, president. But Karen Lewis, buyer for the chain's Natural Living nonfood departments, said there are only 30 Natural Living products in development for the line, called Down to Earth, with any future expansion to be minimal or nonexistent.

In an interview with SN, Lewis was asked how many Natural Living stockkeeping units the Down to Earth mix might eventually incorporate. "I feel comfortable right now saying 30," she said. "Most of our private-label development is still in our Wild Oats brand."

Like Austin, Texas-based Whole Foods Market, its primary competitor among natural-food supermarkets, Wild Oats, as it expands, is developing a secondary store brand to attract more mainstream consumers, who might otherwise be alienated by what they perceive as the relatively high prices of natural products. These secondary brands are cheaper to produce because, though nonartificial or "clean," they are not certified organic.

In a recent conference call with analysts, Wild Oats officials conceded the company had lagged in reaching out to crossover customers. Whole Foods' 365 line of low-priced commodity items, priced 20% below the Whole Foods brand, was launched last year, itself a response to the effective low-price strategy of Trader Joe's, South Pasadena, Calif.

"We've got a lot more crossover shoppers; it's to make certain that we can speak a strong competitive language to everyone who walks in our stores," Lewis said.

Whole Foods' 365 line has grown to 133 SKUs, including about two dozen nutritional-supplement SKUs alone -- almost as many as the entire Down to Earth nonfood offering. In contrast, Lewis said the Down to Earth line will include "possibly" 10 supplement formulations, like an immune-system supporter, a relaxation inducer, an energy builder and a blend of antioxidants.

Other nonfood Down to Earth products on the drawing board are cotton balls, nail implements and vitamin pillboxes, Lewis said. Price points and packaging have yet to be worked out, she added.

Regarding Down to Earth advertising, Lewis said, "It's a program that needs to be developed once it's cut in at store level." Lewis said Wild Oats will add at least 100 Natural Living SKUs to its main store brand in 1999, many of them in its Wild Essentials personal-care line. "Personal care is going to go through an explosion."

The retailer may also add to its private-label fragrance output, Lewis said. There are currently 10 Wild Oats-brand fragrances, which Lewis said are doing "very well," with more likely to hit shelves in the coming year. And the current 36 SKUs of Wild Oats-brand essential oils may be raised to 48.

In other Wild Oats news, Michael Gilliland, chief executive officer, announced the company is now looking for real estate to develop a new format, tentatively called the Natural Apothecary, which the chain envisions as an adjunct to its nascent Wellness Center concept. The idea would be for customers diagnosed by alternative-medicine practitioners at Wild Oats Wellness Centers to go next door to fill their "prescriptions" at the Natural Apothecaries, which would specialize in homeopathy, herbal remedies and the like.