Safeway Sees Opportunity in ‘LOHAS’ Consumer Niche

MICHAEL GARRY

ARLINGTON, Va. — For Safeway, sustainability is not just about preserving the planet, but about addressing the health and wellness of the shoppers and employees who reside on that planet.

In particular, the retailer is focusing on shoppers who share its interest in both personal health and environmental issues, taking its lead from the Natural Marketing Institute. NMI has identified what it calls LOHAS (Lifestyles of Health and Sustainability) consumers — about one-fifth of the marketplace — who care about the intersection between health and the environment.

“That's where we see an opportunity,” said Christy Consler, vice president of sustainability for Safeway, Pleasanton, Calif., in a presentation last week at the Sustainability Summit here, sponsored jointly for the first time by the Food Marketing Institute and the Grocery Manufacturers Association. “We see a real interest in the intersection of personal sustainability and the broader planet.”

In a similar vein, Safeway has recognized a marketing opportunity in “in me, on me, around me” consumers who are sensitive to what they put in and on their bodies as well as to what goes on in their community. “As retailers, it is our responsibility to make it easy and affordable for consumers to make choices that fit at that intersection,” said Consler.

To that end, Safeway has emphasized locally grown produce, with 30% of its offerings from nearby farmers, she said. “We've made a commitment to increase that percentage every year.”

In addition, the company intends to expand its O Organics line, currently at more than 300 items, especially the O Baby segment, as well as increase the number of children's-oriented products in its Eating Right line. Two new lines include Open Nature natural food products and In-Kind natural beauty care products. “We have blown out that LOHAS brand portfolio and are committed to it,” said Consler.

Safeway is also seeking to boost adoption of foodflex, its online nutritional tool that allows consumers to get a nutritional snapshot of their purchases, benchmark that against U.S. Department of Agriculture guidelines and set health goals.

Consler also pointed out Safeway's proactive stance on improving its employees' health. “Two-thirds of Americans are overweight or obese with chronic health conditions that drive 75% of the costs in the health care system,” she said. “It's Safeway's responsibility to do something about it, and so we're bringing the market mechanism into health care to improve the health of our employees.”

Over the past five years, Safeway's efforts have enabled it to keep its health care costs flat, compared with 8.5% increases across the U.S.

In a program called “Healthy Measures,” Safeway offers employees free tests of blood pressure, cholesterol, blood glucose and body mass. The chain gives discounts to employees for being in healthy ranges for those measures — or support to get there. “We took 6% of people who were overweight or obese and shifted them to a healthy range,” said Consler. Employees at Safeway's headquarters have access to fitness centers and the chain offers exercise, smoking-cessation and weight-loss programs.

Over the past year, about 1,500 Safeway employees discovered through the health tests that they had “uncontrolled hypertension,” Consler noted. “They were coming to work not feeling very good or there may have been absenteeism,” Consler said. “But these were 1,500 people able to do something about it.”

In another effort to cut health care costs, Safeway has developed an online tool that employees can use to locate the least expensive health care facility for a particular medical procedure. “They can see what their costs will be in deductibles and copays and make a choice,” said Consler.