RETAILERS: SUPPORT NATURAL CATEGORY

Robert Vosburgh

WASHINGTON -- Retailers are missing potential sales increases of natural and organic products by not performing consumer outreach, according to an industry consultant who profiled marketing efforts during Natural Products Expo East.

Jay Jacobowitz, president of Retail Insights, Brattleboro, Vt., said mainstream supermarkets are "missing the boat" because their current merchandising strategies ignore the educational support the emerging category requires.

"Supermarkets are fairly consistent in pursuing natural foods," he said. "But they haven't gotten beyond the products and the shelves."

Jacobowitz pointed out that the natural and organic foods category is still a new option for many consumers, particularly with the implementation nearly a year ago of the National Organic Program, which sets new standards for such food products. The publicity surrounding the NOP and growing interest in general regarding healthier eating habits have tempted many conventional consumers to venture into the natural foods aisle. But here, they can become lost, he said.

"We need to understand the forces at work that make people act," he said, referring to seven "health values" that often compel shoppers to make natural or organic food purchases. "In order to generate action, there needs to be seven values in place to generate purchase behavior."

The values grow in importance as the issue under consideration becomes more personal. For example, the first value, the desire to avoid illness, is fairly general but can still prompt people to seek out and buy particular products that remedy that worry.

Then, the values drill down with the belief that a specific illness -- such as diabetes, hypertension or obesity -- is of particular danger to the consumer; they or family members or friends may have been diagnosed with a condition. The levels of concern grow increasingly personal, and become more powerful as people realize how vulnerable they are to a disease or chronic medical condition.

The last value is different, in that it reflects a sense of empowerment inherent in natural and organic food shoppers: The ability to make food choices that could minimize or help control the condition.

The retailer's goal here should be to link the new belief with their shopping behavior, Jacobowitz said.

"Most people will tell you they think organic food is better for you, but so what?" he asked. "Only 1% of food sales is organic. What they're saying isn't translating into sales."

While the desire may be present, the action is still lacking because many consumers aren't comfortable shopping for foods that require more than simple brand loyalty or sale pricing as purchase motivators. What's missing is information. And this is where retailers -- especially mainstream operators -- are failing, Jacobowitz believes.

"People in this situation will try to make sense of their behavior and try to fit it in with what they're doing in the natural foods aisle," he said. Retailers should be the conduit that "helps make sense of our behavior."

The "art of influence," as Jacobowitz put it, comes in many forms. There are ways to recognize potential natural and organic shoppers. Almost all new converts and trial users have passed through a defining life event, such as a wedding or the birth of a child. A food safety scare is another way consumers find natural and organic foods. In all the cases, consumers are looking for ways to protect themselves and loved ones from harm.

There is increasing awareness about the harmful side effects of drugs, as well. Jacobowitz noted that a study by Santa Monica, Calif.-based Rand Corp. found that only 55% of medical diagnoses and treatments were correct. The findings, published in the June 26, 2003, issue of the New England Journal of Medicine, called the shortcomings a "serious threat to the health care of the American public."

"The responsibility of retailers is to offer alternatives to harsh drugs that are prescribed that carry unwanted side effects," Jacobowitz suggested. But, even here, he urged retailers to take the initiative and not wait for studies of surveys.

Among the ideas he suggested were conducting pantry audits for consumers, a chance for shoppers to weigh the nutritional value of their usual purchases with those found in natural foods. The new controversy over childhood obesity provides a timely chance for retailers to step out and educate their customers about good nutrition.

"Become an authority on today's issues in your community," he said. In Arkansas, for instance, retailers should be aware of the proposal to begin weighing school children and grading them on their body mass index, as well as banning sales of soda in schools. It's an opportunity for them to go to parent-teacher organizations or to schools to talk about other, more nutritious products that are coming to market.

There are hidden gems in the new natural foods world, too. Citing a study by the Hartman Group, Jacobowitz noted researchers found that 50% of "self-described" heavy users of natural and organic foods had a household income of less than $30,000 a year. One theory behind this finding is that lower socio-economic groups have less access to adequate health care, and as a result, become more prevention-minded than their wealthier counterparts.

"We can't just sit in our stores waiting for the next fad wave to wash over consumers. The mass market channel is building out all the time," he said. "We've got to get out there because you can't outspend the [large chains]; you've got to get out there and educate."

Speaking to independent store operators, Jacobowitz warned that it's critical for smaller stores seeking insulation against the arrival of major retailers on the natural foods scene to maintain exacting, high standards for the foodstuffs they sell.

"Twenty years ago we were considered pioneers. We wouldn't even sell anything with added sugar in our stores," said Jacobowitz, himself an industry veteran of 26 years. He exhorted retailers to remain true to the higher standards that define the natural and organic foods category. Selling less-than-pure products "is not the road to success."