SUPERMARKETS PREFERRED FOR ORGANICS BY 80% IN STUDY

MARYELLEN LO BOSCO

BELLEVUE, Wash. -- A new study by Hartman & New Hope here found that 80% of consumers interested in buying organic products would prefer to buy them in mainstream supermarkets.

This is a great barrier to increasing sales, says the 100-page report, called "The Evolving Organic Marketplace," since few organic products are currently offered in the mainstream venue. The study will be officially released next week.

Ten percent of the U.S. population is identified as core consumers of organics, with an additional 22% labeled as "organics attracted," or shoppers who would buy more organics if prices came down.

Retailers SN polled said they recognize the need to expand organic selections in the supermarket, but noted hurdles that must be overcome.

John Crawford, grocery merchandiser for the Charlotte-Greenville division of Jacksonville, Fla.-based Winn-Dixie Stores, said while consumers are becoming more aware of organics, demand is still not strong.

One door of various Amy's natural/organic frozen-food items was recently added to 15 of his division's 180 stores in more upscale areas and college towns. Crawford explained the division got heavily involved in organic grocery products about six years ago, but that it was slightly ahead of the curve, and has since "scaled back to core items."

Another difficulty is alerting shoppers about the availability of natural/organic products.

"The biggest problem we have is getting the customer used to the idea that we have the product," said Pat Brooks, director of frozen food, dairy, deli and liquor at Save Mart Supermarkets, Modesto, Calif. SN spoke with Brooks and Crawford at the National Frozen Food Convention, held Oct. 20 to 23 in Las Vegas.

Another question that arises, said Brooks, is how to merchandise and market organics. Save Mart has tried different locations, but still is not selling volume, according to Brooks. Supermarkets must be willing to make a commitment to get behind organic products for a period of time, because results don't always occur immediately, he explained.

"We are undersized in the frozen-food department. If you don't have the space to carry items that are driving dollars, you tend to look dimly at the items you need to cultivate for the future," he noted.

Another problem for supermarkets is distribution channels, since the way organics have been provided to health-food stores is very different from the way products get to supermarkets. Still, Brooks advocates a retailer change in mind-set that would work to overcome problems and bring more organics into mainstream stores.

Another finding of the Hartman report was that one of the key errors many supermarkets make merchandising non-produce organic products is to put them in special sections.

"For all practical purposes, supermarket availability is not achieved until an organic item is visibly placed among the regular brands of its category," the report says. Further, it's a mistake to "excessively extrapolate" from experience with organic produce in marketing grocery products.

"We believe that the ultimate success or failure of non-produce organic products will rely more on the differentiated value-added benefits, branding, promotion, placement and pricing strategies than the produce category could ever hope to support," the report continues.