EDUCATION IS CALLED ROOT OF ORGANICS FIELD GROWTH

JENNIFER BALJKO

OAKLAND, Calif. -- As grocery operators dedicate more shelf space to increasingly popular organic items, one of the biggest challenges they face is educating consumers and employees about the segment, retailers and industry observers said at a conference here.

Informing consumers about such products and training employees about proper handling procedures will become even more pressing as the proposed federal regulations come near to fruition and a glut of manufacturers enter the marketplace, said attendees at the Santa Cruz, Calif.-based Organic Farming Research Foundation's "Organic Rules! Are We Ready?" conference, held two weeks ago.

Some retailers are already making education a priority. Whole Foods, Austin, Texas, for example, helps customers identify products, their origin and the grower's background through detailed signs and point-of-sale materials, James Parker, regional produce merchandiser for northern California, said at the meeting.

"Whole Foods not only identifies the growing method, but also the origin of the product," Parker noted. "That has become increasingly important because organic products now come from around the world. We try to give as much information as possible to our customers and let them make the decision for themselves."

The company also has established standards for procuring and handling items to ensure

that the integrity of the product is not lost as its passes through the various levels of distribution, he said.

Along with natural-food stores, traditional supermarkets have embraced the natural/organic movement. Companies like Kroger, Publix and Albertson's have all made corporate commitments to the segment.

"Organics have a wide range of appeal," said conference attendee Walter D'Agostino, vice president of sales and merchandising at D'Agostino Supermarkets, Larchmont, N.Y. "There are some people concerned with the health image, and others worry about food safety. Some people just wanted to be trendy."

D'Agostino started selling organics about six years ago to accommodate customers who wanted such products but couldn't find them at conventional supermarkets.

The products initially didn't do well, in part, because they were lumped into one section away from similar items, he said. But once the 24-store chain started integrating organics, sales went up. The retailer combined this effort with weekly circular advertising, point-of-sale signs and manufacturer promotions.

Although many questions about the industry are likely to be addressed in soon-to-be-released, long-anticipated federal guidelines, the industry currently polices itself. As a result, certification and inspection rules vary from state to state. This lack of uniformity has paved the way for different marketing approaches, educational efforts and training tools among supermarket operators, retailers explained during the roundtable discussion.

Manufacturers and food producers said they too aren't quite sure how to label or promote their products so customers know what they are buying. At the same time, they also aren't convinced that store-level employees know enough about the industry to advise customers on certain organic selections.

"When I go to stores I find it frustrating when I arm my sales team with shelf talkers and I never see them posted," said Donna Maltz, president and chief executive officer of Ah!Laska, a Homer, Alaska-based company that makes organic cocoa, chocolate syrups and other products.

She said it would be beneficial if there were educational, merchandising and marketing programs in place.

State officials agreed that some of the violations in supermarkets could be avoided if the stores took the time to train employees about proper handling and signing.

California's organics inspection and enforcement program has found that some retailers are violating the program by signing products as organic when they are not.

"When we go on inspections, there seems to be a problem with the chain of custody and commingling of products," said Stacy K. Carlsen, agricultural commissioner for Marin County, Calif.

Carlsen told SN that once stores were told what they were doing wrong, they changed their approach. "Many of them want to be in compliance, they just don't know what that means," Carlsen added.