NATURALLY INCLINED

Corinee S. Bernstein

Health and beauty are two personal issues on which people rarely compromise.

Right now, the emphasis is on shedding preservatives, additives and artificial ingredients from foods and beverages -- an attitude being extended to the items consumers put on, and inside, their bodies.

"The health and wellness concept has evolved over the past several years," said Robert Keane, a spokesman for Ahold USA's Stop & Shop, Quincy, Mass. "The more educated consumer wants to learn more about alternatives for preventing illness and alleviating pain using more natural ingredients."

The supermarket industry is seeing better-educated shoppers wherever it looks. Regardless of ethnicity, income, geographic location or occupation, it seems Americans are wielding their know-how over purchases increasingly slanted in favor of anything with a perceived health and wellness benefit. For traditional supermarket operators, the challenge in HBC is communicating commitment to products and services beyond the food aisles.

"The concept of whole health continues to be important for positioning the store as a destination for a whole range of healthy products, including HBC and other nonfood areas and, of course, healthy food," said Roy White, vice president of education for the General Merchandise Distributors Council Educational Foundation, New York. "We think those stores are positioned to serve customers. Plus, there's been a lot of slippage in HBC sales, and focusing on whole health will help energize sales."

On the surface, many retailers blame the fallout of HBC sales on channel blurring. The more profound answer is that mainstream supermarkets have lost relevancy in a field that is rapidly undergoing specialization. In an age when consumers are hearing about aloe vera juice's ability to treat heartburn and ulcers, too many stores offer only the bottle of pink liquid.

Stop & Shop's Keane agreed, saying today's consumer is seeking non-prescription alternatives and nontraditional nutritional supplements and personal care products. "One of our more popular products, for example, is Airborne," an herbal cold remedy with antioxidants, electrolytes and amino acids.

Retailers' decisions on what to carry can set them apart. Adding more organic personal care products could help differentiate mainstream supermarkets, said Holly Givens, a spokeswoman for the Organic Trade Association, Greenfield, Mass. The OTA estimates that U.S. sales of organic personal care products reached $170 million in 2003 and will show 14.8% average annual growth through 2008.

Skin care, projected to be one of the fastest-growing areas, will see 16.5% average annual growth during that period, according to OTA projections.

"Skin care is becoming more of a concern. Natural products like Burt's Bees and Kiss My Face are becoming more mainstream," said Jim Wisner, president, Wisner Marketing Group, Libertyville, Ill. "Likewise, hair care hadn't had a lot of energy but has been revitalized by the advent of products like Garnier Fructis, and we're seeing more energy in long-standing brands like Suave, which has reinvented itself."

As Wisner and other observers point out, not everything in HBC has to be strictly organic. Rather, products should be sourced according to the needs they fulfill. A complete HBC portfolio can then be positioned as a destination, either within the large department or as a stand-alone section. Supermarkets are still finding their way in deciding whether to pull together related items into a central department.

More than five years ago, Bashas', Chandler, Ariz., began adopting a store-within-a-store concept to merchandise natural products. A large percentage of its stores have incorporated the retailer's own National Choice sections, which carry groceries, supplements, and health and beauty care items.

In another take on the store-within-a-store, specialty retailer Wild Oats Markets last spring set up its first branded boutique in Stop & Shop's newly refurbished Plymouth, Mass., store, and the retailer has plans to add four similar sites in other parts of Massachusetts and Connecticut. [See separate story, Page 44.]

The new boutique stocks nutritional vitamins and supplements, homeopathic remedies, and natural and organic body care products. It also has information kiosks and educational health brochures.

The store-within-a-store strategy may not work for everyone. Demand for health and wellness products varies by region and retailer. The bottom line for retailers: Know your customers and their demographics.

Take St. Louis-based Schnuck Markets, for example, where the retailer offers natural HBC items in a smaller footprint.

In its efforts to serve customers Schnucks has tapped into the healthy living market, but it's a challenge for the company to explore it in a big way, said Lori Willis, a company spokeswoman. There is not enough consumer interest at this time to sustain full product lines in grocery stores, particularly in the Midwest, she said.

Because there is not enough pedestrian traffic to support a large department, Schnucks offers smaller departments within its grocery stores to accommodate customers looking for whole health products. Store managers are willing to help source new products at customer request, Willis said.

Likewise, Food Lion stores offer very little in organic beauty and hygiene items, although nutritional supplements with natural ingredients have been popular for several years, according to Jeff Lowrance, a spokesman for the Salisbury, N.C.-based subsidiary of Delhaize America. "As new products are introduced, customers are generally willing to try them," he added.

No matter what products are offered, or how they are merchandised, traditional retailers bear the burden of creating an environment that's conducive to health and wellness-minded consumers. Staffing the areas with associates who are experienced in the category helps, since they can intercept wary consumers and navigate them through a thick cloud of sometimes questionable promises about natural products.

"You have to overcome all the hype to avoid losing consumer confidence," said Emil Faithe, holistic pharmacist practitioner for Bashas'. "Many customers have gone to natural practitioners in the past; some customers self-medicated themselves. Many are fed up by overhype."

Customer frustration resulting from excessive promises and empty rhetoric are partly responsible for a leveling off in demand for natural dietary supplements, he added. People have a tendency to go with what they know, so it's up to the retailer to broaden their horizons.

Faithe, who published "Natural Qs: A Guide to Healthy Living" late last year, gives discussions on the holistic health book both offsite and in Bashas' stores, in addition to writing a monthly column in Bashas' newsletter and appearing occasionally on television. He writes frequently about omega-3's benefits to the cardiovascular system and its anti-cancer potential, and he will "talk of them to whoever will listen."

"Bashas' takes an aggressive approach," Faithe added, "by putting faith in professional people to cut through the hype. Customers want this."

A number of retailers are taking advantage of technology to educate consumers. Stop & Shop has touchscreen kiosks at its Orleans and Somerset, Mass., sites, and expects to have more in Fairfield, Conn., and Plymouth, Mass. Customers can use the terminals to access information on nutrition, supplements, alternative medicine and vitamins.

Good Advice

- Staff should be well-versed in natural HBC, and know how products differ from conventional items.

- In-store classes, sampling and lectures are among the proactive ways supermarkets can attract HBC customers.

- USDA has just dropped its opposition to organic labeling of personal care products, which can again carry the green organic certification label.

- Know your customer base and its demographic mix to determine what types and class of natural HBC products to stock.

A Natural Retailer's HBC

PCC Natural Markets' nonfood customers are hungry -- for knowledge, that is.

"People are looking to participate in their own wellness now," said Marilyn Walls, acting merchandising manager at the Seattle-based chain of cooperative stores.

"People are looking up things on the Web all the time, and you can tell when things are written up in a magazine or newspaper because people come in and ask about it."

Employees at PCC attend training sessions every month and many have degrees in health and nutrition fields, Walls said. What's more, there's little turnover in HBC, which is the lead-off department in many of the chain's seven stores.

"Some [associates] have been there 10, 15 years and know their products. This helps build the customer's trust," she said. "I don't think people would go to Wal-Mart and go to an associate and say, 'My child has [attention deficit hyperactivity disorder]. What can we do for them?"'

Health and wellness data are available in many forms. The co-op provides education through classes and lectures given by speakers such as natural medicine author Michael Murray. Events are also popular, and provide an important forum for customer-expert interaction, as well as a chance for people who might be suffering from the same medical condition to meet one another. -- CORINNE S. BERNSTEIN