Progressive Grocer - April 2009 - (Page 82)

Fresh Food GREEN ISSUE THE Opportunities At a time when shoppers are rethinking their food budgets, the value proposition of organic produce is coming under closer scrutiny but is holding its own, thanks in part to private label penetration. By Meg Major Organic fter years of dynamic double-digit growth for organic fruits and vegetables, it seems clear that the drop-off in demand for organic fresh produce — which can still be two to three times as expensive as their conventional counterparts in certain parts of the country — was only to be expected. A But in the present watershed period of tighter household budgets and changing consumer priorities, the dubious economy has undoubtedly cast a lingering shadow on the mature organic produce category, sales of which are nevertheless expected to level off and hold steady from here. Backing that up is recent consumer survey data from market researcher Mintel, which found the 36 percent of Americans claiming to almost always or regularly buy green products — including organic produce — remaining unchanged vs. a year ago (after tripling the previous year from 12 percent in 2007 to 36 percent in 2008). Yet, while many consumers tend to equate “organic” with “healthful,” the typical drivers of health and wellness have taken a backseat to affordability and value amid the present economic backdrop, which is aptly underscored by the dramatic growth of private label organics in recent years. Indeed, private label sales are on fire, according to Nielsen data that confirms a solid 10 percent growth rate in 2008 totaling a cool $80 billion. The actual 82 • Progressive Grocer • April 2009 sum is undoubtedly higher, though, given that Nielsen numbers exclude sales from some of the nation’s foremost house brand retailer leaders such as Costco, Trader Joe’s, Aldi and Whole Foods Market. “Subtle Changes” Ahead Despite the poor economy, mushroom sales continue to grow — even those of organic varieties — making mushrooms a key contributor to overall store sales. Private label fresh produce, meats, frozen foods, alcoholic beverages and dry grocery products have seen the fastest dollar sales growth in recent months, while Nielsen’s four-year overview of the category ending July 14, 2007, found UPC prepackaged organic private label dollar sales increasing over 600 percent, with fresh products comprising more than half of all house brand organics by mid-2007. And though economic uncertainty is shifting the organic food sales needle to greater and lesser degrees, Marcia Mogelonsky, senior analyst at Mintel, says, “We don’t expect people to completely A H E A D O F W H AT ’ S N E X T stop buying organics. We anticipate more subtle changes, such as the formerly all-organic shopper who returns to traditional cookie brands while sticking with organic produce.” With Colorado often referred to as the “birthplace of the Green Movement” because of locally based companies that long ago made a choice to advocate and run businesses that would promote healthier, more sustainable lifestyles, it seems only fitting to find out how organic produce sales are faring with a Centennial State independent grocery executive. www.progressivegrocer.com http://www.progressivegrocer.com

Table of Contents for the Digital Edition of Progressive Grocer - April 2009

Progressive Grocer - April 2009
Contents
Nielsen's Shelf Stoppers/Spotlight: Salty Snacks/Variety Snack Packs
Market Snapshot: Cleveland, Ohio
Independents Report: How Jax Markets' MacAloney Triumphed Over Adversity
Lempert Report: Consumers in Command
Nielsen Report: Keeping Up With the Economy: Insights and Opportunities in Uncertain Times
Store of the Month: Close to Home
Sustainability Best Practices: It's Not Easy Being Green
Give Green, Get Green
Store of the Month: The Collection
Household Cleaners: Green Clean Is Growing
Meat Conference: Annual Meat Conference Rustles Up Retailers, Vendors to Denver
Produce: Organic Opportunities
Meat: Premium Possibilities
Reusable Bags: Paper, Plastic or Yours?
Technology: Priced to Sell
Equipment: A Flash of Green
What's Next: Editors' Picks for Innovative Products

Progressive Grocer - April 2009