EE.UU: orgánicos siguen ofreciendo oportunidad de crecimiento

Mark Carroll, director of produce and floral purchasing and merchandising for Southern California-based Gelson’s Markets, believes that organic continues to be a “good avenue of growth” for any retailer willing to make the commitment.

He was one of the panelists at a United Fresh Produce Association workshop that explored the “exploding organic category.” He was joined on the panel by Samantha Cabaluna, vice president of communications and marketing for Earthbound Farms in San Juan Bautista, CA, and Jason Hollinger, general manager of Four Seasons Produce Inc. in Ephrata, PA. All three painted a very bright picture for organic produce.

Carroll said Gelson’s experienced a 30-35 percent increase in organic produce sales in the first year when the retailer made a commitment to the category. That has been followed by annual increases in the 20-25 percent range. Today about 20 percent of the produce department’s total sales are organic produce.

He urged those getting into organics to “think of organics as less of a category and more as offering more variety within traditional categories.” He said it is not difficult to increase offerings slowly and gradually.

For example, Carroll said if a retailer typically offers two sizes of an orange, make one of them organic and one conventional. He said not only does this grow your section, it offers an excellent opportunity to track sales.

He indicated that much of Gelson’s merchandising philosophy of organic products is meant to appeal to the crossover shoppers. He said the diehard organic buyer often doesn’t care about price but the crossover buyer does. At a 20-25 percent price differential, he said there is not that much resistance in his stores, which by all accounts are upscale.

Giving the wholesaler perspective, Hollinger indicated that making a full commitment is necessary for success.

“Lesson number one — you have to be all in,” he said, adding that it is a philosophy not unique to organics but true with whatever produce niche a firm is trying to fill.

He also said it is important to have a very good relationship with suppliers.

In the organic grower-shipper category, Hollinger said options are often limited. “There might only be two green bean growers,” he said, and a good relationship will help you secure product when supplies are limited, as they often are.

The Four Seasons executive said it is equally important to intimately know your customers and their needs. Some retailers may have very small backrooms demanding different levels of service than a larger retailer with ample on-site cold storage.

From a distributor standpoint, he said there are also challenges in segregating the product in the warehouse, which is required by the National Organic Standard. Those are important rules that must be followed.

For example, in a distributor’s cold-storage facility, pallets of organic produce should also be on the top racks. They cannot be on lower racks with conventional produce above them potentially dripping on the organic product.

But like Carroll, Hollinger believes the rewards can be great. He said organics is a fast-growing category and gives a wholesaler an opportunity to register double-digit year over year growth.

Cabaluna documented that growth potential, sharing statistics that show 74 percent of Americans will buy an organic produce item over the next several months. And, she said, 58 percent of shoppers say they prefer organic. An equally impressive 52 percent of families say they bought more organic items this year than last year.

Of the Earthbound Farm products, Cabaluna said organics hold a 20 percent market share of fresh-cut salads and a 54 percent market share in the tender leaf category, which historically tends to have more food-safety concerns.

She said one of the major reasons organics have done so well in the value-added lettuce category is the price differential between organics and conventional is relatively slight.

“If you can minimize the financial sacrifice, they will go ahead and buy organics,” she said, speaking of a significant portion of consumers.

 

by Tim Linden | May 30, 2013

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