Natural Foods Merchandiser

Natural Grocers: Reactions to new dairy standards have been 'very positive'

As Natural Grocers by Vitamin Cottage implements pasture-raised dairy standards, here's a look at who's in, who's out and how customers are reacting.

Last spring, Natural Grocers by Vitamin Cottage announced plans to pull all dairy products produced via confined dairy operations; by April 2015, it will sell only dairy from pasture-based animals. (That doesn’t mean they’re screening, say, the butter on every label in the cookie aisle; the policy applies to straight dairy products, meaning things like yogurt and ice cream.)

It’s a pretty significant step, considering how many brands rely on confined dairy operations for their milk—even brands marketed as natural. So we checked in with Heather Isely, Natural Grocers’ executive vice president and a driving force behind the policy, about what the change has meant for the company’s dairy business.

And, Isely says, things are going great. Only the yogurt offerings have been changed so far, as most of the final choices for other dairy categories have been made but not yet implemented on store shelves. But, Isely learned, people are pretty attached to their yogurt brands, so customers took notice of the yogurt selection shake-up. To adhere to its new standards, Natural Grocers removed Brown Cow, Liberte, Chobani and Fage from its shelves, and recently added Noosa to the list. (Noosa informed Natural Grocers that as the company grows, it will not be able to continue to source all of its milk from pasture-based dairies.)

Chobani may not have been a big surprise, but Brown Cow has been a “natural” brand for years, and because it has a distinct sweet taste with a uniquely-firm cream top, it was one of the more difficult voids for Natural Grocers to fill. But it wasn't impossible. “People have often come up and said that their new favorite is Maple Hill, which is a cream top,” says Isely, adding that there’s an added bonus: “It’s also 100 percent grass-fed—not just pasture-based.”

That’s already translating into good news for Maple Hill. “They’ve been able to expand the number of farmers that they’ve been buying from, so that has definitely been a boon for them—and for us,” she says. Likewise, a water buffalo-milk yogurt has proved a good substitute for Noosa, and although Isely concedes that some customers are probably just buying their favorite brands at other stores, she says that’s a small percentage.

Yogurt sales did dip slightly in the early days of these changes, but Isely attributes that to some hiccups in the supply chain and the logistics of the transition, rather than to consumer backlash. Now that staff has adjusted and inventory management is smoother, Isely says yogurt sales are back to pre-policy levels.

“For the most part, our customer reactions have been very, very positive. There’s been disappointments—people will say, ‘wow, it’s disappointing to hear that this brand that I like so much is a confinement dairy, but we really appreciate the stand that this company is taking.’”

That’s just regarding yogurt, of course. The cheese and ice cream selections, for example, have yet to be updated. Most of the sets have been finalized; Isely says it’s a question now of when to transition them.

Milk selection will not be affected very much because most of what Natural Grocers already sells is organic, and the organic standard by default meets the store’s new pasture-based standard. But cheese presented a different challenge because of the sheer quantity of varieties Natural Grocers’ has had to screen and, ultimately, replace.

But for all the challenges, the policy has introduced the retailer to new brands that it’s excited to carry, both from the U.S. and abroad. So it’s not all loss; it’s also allowing the store to showcase smaller brands that can use the opportunity and that, at least in the eyes of Natural Grocers and those who support the policy, deserve to be showcased.

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