INTEGRATE NATURAL FOOD FOR SALES GROWTH: PANEL

LIZA B. ZIMMERMAN

NEW YORK -- Integrating natural food with other products is a central factor in selling to that market niche profitably, according to a panel of natural-food retailers.

"I think setting a separate natural-food section is a mistake. The most successful way to sell them is to integrate them. You need to make a real commitment to carrying natural as part of the product mix," said Shahid "Hass" Hassan, the founder of Alfalfa's, a natural-food chain that was acquired by the Boulder, Colo.-based Wild Oats Community Market in 1996.

Hassan and other natural-food marketing experts said the business is ripe with opportunity, if approached correctly.

Dale Kamibayashi, purchasing director of grocery at Wild Oats -- one of the largest natural-food supermarkets in the United States -- discussed how his operation's steady commitment to stocking natural food had helped it blossom from 11 to 50 stores in the three years he had been there.

Stan Thoren, president of S.A. Thoren Inc., a natural-products consulting firm based in Kenilworth, Ill., advised retailers to make an effort to more generally incorporate natural-food consumers into their marketing strategy by "carrying more natural foods, like local organic produce in season, imported fancy foods -- like olive oil -- and organic wines."

The panel shared a variety of other insights at the New York Fancy Food Show about how retailers can increase natural-food sales.

Wild Oats' Kamibayashi noted that a critical first step to entering the natural-food market was establishing objectives with a mission statement outlining the company's vision and values.

An essential second step, he said, is to consider priorities in terms of incorporating natural food into the product mix.

Proper staff training, Kamibayashi said, is also an important component of any natural-food operation.

"Training is the most difficult aspect," he commented in an interview after the seminar. "Retailers are so busy, but it's critical to understand how important it is.

"Your staff needs to know what they are selling because there is a trust involved [with natural food] that is so critical and it comes down to a good salesperson," Kamibayashi explained.

Misinformation can damage the customer base, he noted, and "hopefully the difference between regular and natural-food stores is that we want to be a partner with you." Kamibayashi explained retailers also need to depend on their staffs to communicate to customers what distinguishes natural food -- such as antibiotic-free meat and fish caught in deep water -- from their counterparts.

Once those elements are in place, Kamibayashi stressed, it is important to make sure natural food is well presented on the store floor. "We want everything you see and buy to look appealing. You can't have things that look wilted."

Kamibayashi suggested that a good way to grab consumers' attention is by "trying to position produce as the first thing. That creates magic off the bat."

Hassan, the founder of Alfalfa's, noted some of the crucial ways the natural-food industry had changed in the past 25 years that he had been in the business.

"I've seen it grow and develop from a niche to selling every conceivable product," he commented.

Hassan said in that period of time he had seen "natural food move from the back pages to the front pages of Time.

"Most of the growth isn't coming from tofu fanatics, it's coming from mainstream consumers crossing over and there's a great opportunity to take advantage of that."

He defined natural-food consumers as "affluent and choosy shoppers who are willing to pay for quality food," which he called a simple way of buying into living a healthier lifestyle. "They are looking for exciting visual merchandise, they want shopping to be fun. They are looking for freshness, wide selection, high efficiency. They want to feel like the people selling the product use it and believe in it. They want it all.

"The natural-food consumers want credibility and they are skeptical. You need to explain where your product is from and have certification."

Another important subject for the natural-food industry, according to Hassan, is price points.

"The biggest issue is what is going to happen with the pricing. Supermarkets have gone real slowly, saying 'we don't get the turns so we are going to mark it up.' You've got to be much more sophisticated in your pricing."

Thoren, the consultant, then presented some statistics on who buys natural food and why, which could help retailers tailor their marketing approaches to fit the needs of different consumers.

The statistics presented by Thoren, about an industry he said has experienced a 25% growth rate this year, were based on data from the Boulder, Colo.-based New Hope Communications' '97 annual survey on natural food, on private focus groups conducted for Thoren's clients and on research done by the National Association for the Specialty Food Trade here.

Thoren said that natural-food consumers index highest for having incomes over $40,000, living on the West Coast, residing in metro areas over 2.5 million and being in the 35 to 64 age group.

He added that the statistical data on both natural- and fancy-food consumers turn out to be surprisingly similar. "They are the same kinds of people, but fancy-food people tend to be a little younger," he explained, saying that they indexed highest in the 25 to 34 age group, with 35 to 44 as a close second.

The various age groups who buy natural food, according to Thoren, also regard their purchases differently. "Baby Boomers buy organic foods to avoid food contaminants. Gen-Xers are buying them to build a better world."

Thoren went on to make a series of suggestions to help retailers garner a larger percentage of the natural-food market.

"Provide information on the natural products you carry. Give out information on natural food and a healthy lifestyle, sell cookbooks and give cooking classes."