Once the sole domain of natural foods stores, organic certi?fication is increasingly becoming a sales and marketing tool for conventional grocers.
In July, Cincinnati-area retailer Bigg's received organic certification for the produce departments in all 12 of its stores. In May, Hannaford Bros., a 159-store chain in the Northeast, attained organic retailer certification for all of its stores. Lunds & Byerly's achieved certification for the produce departments in its 21 Midwestern stores in 2004.
Hannaford, which is certified by Quality Assurance International, saw the designation as a way to increase consumers' trust in the organic products the stores carry. So did Lunds & Byerly's.
"Proudly displaying the [U.S. Department of Agriculture] sign gives consumers that extra level of confidence and lets them know what they're buying in our store is truly organic and that the organic process has never been compromised … that our organic fruits and vegetables met that standard all the way from the field to their home," said Aaron Sorenson, a Lunds & Byerly's spokesman.
Because organic retailer certification is arduous, it's safe to say conventional grocers believe the marketing payback will be worth the up-front expenditure. A recent Hannaford survey showed 80 percent of its customers "sometimes" buy organic and natural items. Sales of organic and natural products companywide have increased 20 percent in the last year, according to a statement by spokeswoman Caren Epstein.
With organic retailer certification, shoppers no longer have to wonder if conventional produce has been commingled with organic and, more to the point, don't have to travel to a natural foods store to purchase their organic foods.
And naturals stores are paying attention to that shopping shift. "We're definitely watching it, and that's where the large competition has come from in the last few years," said Sonja Tuitele, spokeswoman for Boulder, Colo.-based Wild Oats. "Safeway is a great example with their lifestyle stores and their O Organics line. In our Denver stores, we saw our sales decline for a short period of time [after O was introduced in local Safeways]."
However, she added, "What will speak more to consumers, and what will be more of a threat to us is if [certified organic conventional stores] increase their selection of organic products."
That's just what Hannaford aims to do. In conjunction with becoming certified, the supermarket chain also announced it would expand its selection of natural and organic products. As of May, the store carried 3,500 natural SKUs, 40 percent of which were organic. "Our shoppers have told us definitively they want a greater selection of organic and natural products," Epstein said.
Tuitele doesn't think there's any need for Wild Oats to react by also becoming certified organic. "Because of the large percentage of organic product we carry … for us the criteria required for certification are criteria we're already meeting or exceeding," she said. "For us to do the actual certification would just be a marketing effort and wouldn't change our operations in any way, and wouldn't be worth the cost."
But for stores that don't already have the reputation of protecting the integrity of organics, certification may be worthwhile. According to Epstein, Hannaford's certification was stringent and exacting. "It was well worth the effort, however, so our customers can be confident that we uphold the highest organic standards, ensuring the organic integrity of our products."
Whatever conventional stores' motivations may be for certification, for naturals retailers, it's a trend worth watching.
Natural Foods Merchandiser volume XXVIII/number 8/p. 1