From The Fall 2004 Issue of Natural Grocery Buyer

The Natural Choice for Consumers

The good news is that shoppers buy more of their natural and organic foods and supplements at conventional supermarkets than they do at Whole Foods, Wild Oats or any other type of naturals store. The bad news is that supermarket naturals shoppers are promiscuous, lavishing their attention and money on an average of four different types of retail outlets.

“Naturals grocery buyers face a great deal of competition, both from retail outlets with similar formats and from retailers who operate quite differently,” said Sherwood Badger Smith, author of the Natural Grocery Buyer survey that drew the good news/bad news conclusions.

Although a whopping 67.3 percent of the survey respondents reported that they buy natural foods at conventional supermarkets, only 22.8 percent said those supermarkets were their primary source. “There are a lot potential sales being lost,” Smith said. “Grocery managers compete with [naturals supermarkets], mass merchandisers [such as Wal-Mart and Target] and specialty natural foods stores for sales of natural foods categories.”

Jean Foutch of Vancouver, Wash., is typical of the shoppers who divide their natural and organic food shopping dollars among several stores. She spends about 20 percent of her household budget on natural and organic products, but portions out that wallet share among four stores.

The majority of her natural and organic food purchases are divided between Zupan’s, a local, small health food store, and Kroger subsidiary Fred Meyer. Foutch visits both stores about once a week. She buys conventional, natural and organic foods such as grains, cereals, salads and organic produce at Fred Meyer, but chooses Zupan’s for specialty natural foods. The Fred Meyer store has the advantage of being five miles closer to Foutch’s home; if Zupan’s were as close, Foutch said she would shop there more.

On the other hand, Jennie Schultz of Rohnert Park, Ala., prefers her local conventional supermarket, Oliver’s, to Whole Foods and the smaller Community Market, although she shops at all three stores. She believes Oliver’s merchandise mix of 50 percent conventional foods and 50 percent natural and organic foods offers the best selection out of her trio of shopping choices.

While conventional supermarkets are strong contenders to be shoppers’ primary source for natural foods, placing second in the survey behind naturals supermarkets, the news is grim when the focus shifts to herbal products, vitamins, natural remedies and dietary supplements sales.

Safeway, Kroger and other supermarkets finished sixth in the survey of supplements customers’ loyalty, behind naturals supermarkets, mass merchandisers, pill stores, pharmacy and drugstores, and natural foods stores. Even the ubiquitous “other” beat out conventional supermarkets as a primary supplements source.

“Given the high margins and destination appeal of this product category, [vitamins, herbs and supplements sales] may be an area of significant lost opportunity” for conventional supermarkets, Smith said.

Survey respondents had varying reasons for choosing retailers other than conventional supermarkets for their supplements purchases.

Laurie Scriven of Beaverton, Ore., does her supplements shopping at New Season, a nearby small natural foods store, because she takes granulated vitamin C and yohimbe, which are hard to find elsewhere in her area.

Jill Emanoil of Indianapolis opts to buy supplements at her local Wild Oats store because she’s read that herbal remedies can be dangerous if used improperly, and she believes the Wild Oats staff is “well-educated so they can answer questions about enhancers or herbal supplements.” This is important to her because she wants to expand her supplements use beyond vitamins, echinacea, flaxseed oil, elderberry and arnica to herbs such as valerian, eyebright, St. John’s wort and kava, but she isn’t sure how such herbs will mix with her prescription medication. She also likes that Wild Oats displays laminated cards in the supplements section with “convenient, accessible information” about the herbs.

Sidebars:
Consumption Patterns by Sales Channel
Channels That Compete with Grocery for Natural Foods