Where there’s demand, there’s money. And with the growth in interest in so-called natural foods, more and more mainstream grocery stores are selling private-label organic products.
Several chains have launched house-brand organics, including Kroger (Naturally Preferred), Shaw’s (Wild Harvest), Giant Food (Nature’s Promise), and Loblaws (PC Organics). According to the Food Marketing Institute, about 57 percent of supermarkets are now offering separate natural and organic food aisles or sections where private-label and national brands are stocked.
You are probably already familiar with the two major natural product retailers, Whole Foods and Wild Oats, who have led the way in bringing organic foods to the mass market. These retailers developed a loyal following by creating and responding to consumer desire for organic and natural products. Traditional supermarkets took notice of the growing sales of organic house brands such as Wild Oats Organic, Whole Kids Organic, and 365 Organic, and then began developing their own brands.
According to an ACNielsen Online Consumer Confidence Study, about three-fourths of U.S. consumers say private label brands are a good alternative to big brands, and the quality of most is at least as good. Plus, private label brands are usually an extremely good value for the money, say 81 percent of those polled.
In our “Today” show store brand vs. national brand on-air comparison last year, we found that for the non-organic products we analyzed, the average savings was at least 20 percent.
The Organic Trade Association projects that the U.S. organic food market will reach $31 billion by 2007, with sales expected to grow more than 20 percent a year. So look for more supermarkets to add their own brands of organic foods to meet the rising interest and demand. Besides just the sales potential, these retailers are also finding that selling organics helps develop shopper loyalty and provides higher margins than branded organics.
Phil Lempert is food editor of the “Today” show. He welcomes questions and comments, which can be sent to