March 30, 2007
Go Organic! Gains Momentum
By Tom Ryan
Now in its third year, the Go Organic! for Earth Day promotional campaign seems intent on joining the ranks of National Frozen Food Month and Dairy Month as one of the perennial campaigns for the grocery industry.
For 2007, more than 3,500 grocery stores – including Kroger, Publix, Meijer, Food Lion, H-E-B and ShopRite – and 40 organic manufacturers are participating. Designed around Earth Day (April 22), the program encourages consumers to try organic products and raises awareness on how organics are produced. Many retailers are also finding the campaign educates store associates who don’t completely grasp the meaning of ‘organic’ and ‘natural.’
“We have many of the nation’s leading grocers participating,” Go Organic! retail manager Scott Silverman told Progressive Grocer. “They aren’t just passively using the point-of-sale materials and coupon books we provide – they’re using the campaign to jump-start an organic program and train their staff to make certain they understand the category.”
Participating retailers hold special in-store events and promotions, offer product sampling, and create special displays – all at virtually no cost since the campaign is sponsored by major vendors. Many regionals are using the campaign to position themselves around organics.
“We know that many of our customers view organics as important,” said Anderson Chung, D’Agostino’s director of marketing. “We want to remind them that their local D’Agostino has all the organic foods they need. Since we also carry non-organics, this just gives us an opportunity to push organics and remind them that they need not go elsewhere to get them.”
Brookshire Grocery Co., in Tyler, Texas, is using the campaign to call attention to new organic offerings. In honor of Earth Day, Brookshire is also selling cloth carryout bags at $1 each to encourage customers to help the environment.
For 2007, the campaign has added several new elements:
- A revamped website, www.OrganicEarthDay.org, enables consumers to use a
store finder to locate participating retailers. The site also includes organic
facts and figures, kitchen-tested organic recipes, a “Test Your Organic Smarts” quiz
and a kids’ section; - Consumers can sign up for a customized e-newsletter and enter contests,
including the chance to win a trip for two to a wellness spa; - Participating retailers will receive informational e-newsletters each month
containing campaign updates, new product news, shopper insights, and important
data about organics; - Healthnotes, the provider of health-and-wellness information, will feature
organic-focused content at its interactive in-store kiosks at retail during
the month of April.
The initiative is a project of the Organic Trade Association, Earth Day Network and MusicMatters.
Although data from the Natural Marketing Institute shows that awareness of organic products increased three percent nationally during last year’s campaign, retailers see Go Organic! as a special promotion tied to a category with long-term growth potential.
“We’ve seen a slight increase in our sales during the campaign,” admits D’Agostino’s Mr. Chung. “But we really take a long-term approach when it comes to organics.”
Discussion Questions: What do you think of the success of the Go Organic! program? Do you see participation important for all grocers, or just some?
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This presents a great opportunity to increase consumer (and associate) awareness of organic offerings in supermarkets. Many consumers want to know that their local supermarket carries these products as well as the specialty stores they may currently frequent. Go Organic! provides another avenue to showcase name brand as well as store brand organic products, and to feature them on sale and in store demos. Taste can make the difference.
The new features of the website as well as a retailer newsletter with campaign updates adds additional awareness and content. Organic Earth Day activities for kids could be another way for supermarkets to help them understand how food is grown, where foods come from and what makes organic products different from other products.
This program is a good idea for all–the consumer, the retailer and the retailer’s staff. Organics are here to stay. This will not be a fad category. After using and learning more about organics, I am a firm believer that it will continue to grow and the rest of us will catch on to what the folks who have been eating and living the organic lifestyle have known all along. That in many product segments, organics are better. Better for you, and many cases better tasting. Retailers will get behind this because it is a category they either learn more about, embrace and be involved with its growth,or lose consumers to the ones that do.
Organics need to be worked into the business models all year long for some grocery chains but not all. Simply put, if you are a mainstream supermarket chain, then you need to react alertly, and accordingly, but do not over-react and do not try to become Whole Foods and lose your basic mainstream consumers because you are no longer providing the right brand assortment and other specialty items for her selection and needs. Provide organic products in the most prevalent categories that currently and predictably appeal to your mainstream, not just on organic day but all year long. Your approach should not be radical but it should be geared to make sure you don’t lose an entire shopping basket on any given day because you are not yet stocking organic breakfast cereal. As you make your adjustments to provide your fair share of mainstream organics your standard suppliers will also be making the adjustment with the appropriate line extensions and replacements.
In Traditional Grocery Chains the reads of Sales Productivity of Organic Products are not that favorable. The segment is generating growth, but this is due to retailers adding more organic assortment across dozens of categories. When you look at sales in the segment on a sales per SKU basis, Organic sales are substantially lower than non-Organic. However as consumers become more educated, it is indeed possible that we may witness a trend reversal. Some very good retailers are investing heavily at the moment betting on this to be so. Also, a growing number of consumers (my household included) are migrating more to the idea of Organics.
The good news so far: sales appear to be largely incremental to the category in traditional grocery though in overall magnitude the effect is relative small. Grocery retailers need to make a careful assessment of whether the incremental investment in Organic inventory is worth the incremental sales generated. Perhaps this is an investment in the future more that an investment for today. Choosing the proper path here is not a “no-brainer.” While sales obviously vary significantly by retailer, as always, one might expect the retailer who executes best at this stage of the game to yield greater customer loyalty toward organics ongoing.
It is no secret that the natural and organic foods industry has emerged these past few years as an enormous growth opportunity for retail grocers. This is a great program that all grocery retailers need to observe. The Whole-Foods/Wild Oats merger is not a subject to be taken lightly. The combined company will have superior buying power in the organic segment, as well as provide consumers with better quality and selection. The greatest barrier for the organic food industry is the confusion among consumers about what organics really are. If high consumer awareness and product knowledge is achieved, organics will truly be ready to become “mainstream.” The demand is out there. It is a question of who wants to step up and provide consumers with what they really want from this segment through informing without being misleading.
The Go Organic! for Earth Day campaign gives no ad spending figures, no sales lift figures, no other figures except the number of stores participating. So it’s hard to analyze the impact.
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This presents a great opportunity to increase consumer (and associate) awareness of organic offerings in supermarkets. Many consumers want to know that their local supermarket carries these products as well as the specialty stores they may currently frequent. Go Organic! provides another avenue to showcase name brand as well as store brand organic products, and to feature them on sale and in store demos. Taste can make the difference.
The new features of the website as well as a retailer newsletter with campaign updates adds additional awareness and content. Organic Earth Day activities for kids could be another way for supermarkets to help them understand how food is grown, where foods come from and what makes organic products different from other products.
This program is a good idea for all–the consumer, the retailer and the retailer’s staff. Organics are here to stay. This will not be a fad category. After using and learning more about organics, I am a firm believer that it will continue to grow and the rest of us will catch on to what the folks who have been eating and living the organic lifestyle have known all along. That in many product segments, organics are better. Better for you, and many cases better tasting. Retailers will get behind this because it is a category they either learn more about, embrace and be involved with its growth,or lose consumers to the ones that do.
Organics need to be worked into the business models all year long for some grocery chains but not all. Simply put, if you are a mainstream supermarket chain, then you need to react alertly, and accordingly, but do not over-react and do not try to become Whole Foods and lose your basic mainstream consumers because you are no longer providing the right brand assortment and other specialty items for her selection and needs. Provide organic products in the most prevalent categories that currently and predictably appeal to your mainstream, not just on organic day but all year long. Your approach should not be radical but it should be geared to make sure you don’t lose an entire shopping basket on any given day because you are not yet stocking organic breakfast cereal. As you make your adjustments to provide your fair share of mainstream organics your standard suppliers will also be making the adjustment with the appropriate line extensions and replacements.
In Traditional Grocery Chains the reads of Sales Productivity of Organic Products are not that favorable. The segment is generating growth, but this is due to retailers adding more organic assortment across dozens of categories. When you look at sales in the segment on a sales per SKU basis, Organic sales are substantially lower than non-Organic. However as consumers become more educated, it is indeed possible that we may witness a trend reversal. Some very good retailers are investing heavily at the moment betting on this to be so. Also, a growing number of consumers (my household included) are migrating more to the idea of Organics.
The good news so far: sales appear to be largely incremental to the category in traditional grocery though in overall magnitude the effect is relative small. Grocery retailers need to make a careful assessment of whether the incremental investment in Organic inventory is worth the incremental sales generated. Perhaps this is an investment in the future more that an investment for today. Choosing the proper path here is not a “no-brainer.” While sales obviously vary significantly by retailer, as always, one might expect the retailer who executes best at this stage of the game to yield greater customer loyalty toward organics ongoing.
It is no secret that the natural and organic foods industry has emerged these past few years as an enormous growth opportunity for retail grocers. This is a great program that all grocery retailers need to observe. The Whole-Foods/Wild Oats merger is not a subject to be taken lightly. The combined company will have superior buying power in the organic segment, as well as provide consumers with better quality and selection. The greatest barrier for the organic food industry is the confusion among consumers about what organics really are. If high consumer awareness and product knowledge is achieved, organics will truly be ready to become “mainstream.” The demand is out there. It is a question of who wants to step up and provide consumers with what they really want from this segment through informing without being misleading.
The Go Organic! for Earth Day campaign gives no ad spending figures, no sales lift figures, no other figures except the number of stores participating. So it’s hard to analyze the impact.