Only a few years ago, organic options were hit and miss, with some categories having multiple organic choices and others none at all. Now there is an organic version of practically every product your natural foods store might care to stock. But when it comes to deciding what products to carry, how to let customers know about their organic options, and how to handle organic items in accordance with the National Organic Program, it may seem that sound advice is still in short supply. And as the whole idea of organics continues to make inroads in consumer consciousness, your customers are asking more questions.
Chances are your store is also stocking more organic products than ever before, so it's important to understand not only the best way to market these products, but also the best way to handle and package organic foods in accordance with the NOP's specifications.
For packaged items, including dairy, frozen and grocery, organic offerings can be handled in much the same way as conventional ones, since commingling and contamination aren't a problem. But helping your organic items sell is another issue. Retailer education efforts can make a big difference in the sell-through for organic SKUs. "From my experience, signage is really the key," says Chad Hagan, national sales manager for Newman's Own Organics fresh produce division. "A lot of retailers could benefit from clearer signage at a retail level." In addition, Hagan says, staff members need to be educated about what it means that a product is organic and how organic differs from natural in order to answer customer questions accurately.
While produce is still the largest organic category overall, animal products such as milk, cheese and packaged meats are the fastest growing, largely because of consumer concerns about the use of antibiotics and growth hormones in the conventional supply chain. These categories especially should be clearly marked and easy to find.
"Retailers need to be clear about what organic is," says Gay Timmons, president of Oh, Oh Organics, an organic raw materials supplier for personal care manufacturers and a state inspector for the California organic program. "The National Organic Program is a regulatory system, a law written by the U.S. Department of Agriculture, and its job is to support American farmers," Timmons says. Producers, suppliers and manufacturers of organic products must be certified by an approved certifying agency. Though retailers are not required to undergo certification (see "Organic certification for retailers" sidebar), they still must follow guidelines that maintain the integrity of the organic products.
This is especially true in departments such as produce and deli, which offer foods that are unpackaged or made to order for the customer. "Produce is still the No. 1 category in total organic sales, at about 43 percent, and is still growing at 20 percent a year," says Mark Mulcahy, founder of Organic Options, an education and consulting firm. "Produce is the gateway department, the first department people look in when they're becoming organic customers."
Commingling is one issue that poses problems for retailers. Mulcahy suggests that, with the exception of prepackaged produce, it's best to keep organic items in a separate display area, both to avoid commingling and to make organic foods easier for customers to find.
When offering fresh-cut, packaged organic options, there are other issues to be aware of. For example, if you slice an organic watermelon with a knife you've just used to slice a conventional watermelon, you've just contaminated your product. And guess what? It's no longer organic. Produce managers can either set up a separate prep area with dedicated utensils just for organic produce, or cut all organic produce first each day, before conventional produce, to avoid contamination.
Because demand for organic produce continues to outstrip supply, not all organic SKUs are available at all times. "Produce managers are used to getting what they want when they want, but it doesn't work that way with organics," Mulcahy says. "Instead of making this a negative, talk about the positives of organic seasonal availability."
Training is key to selling organic produce successfully. Produce employees need to be committed to keeping organic items in a separate section within the walk-in, for example, and know how to maintain the integrity of their organic offerings. Though this may seem like a challenge, Mulcahy says, "Most of the required organic practices are smart produce practices anyway."
Front-end employees also need education on organics; if cashiers can't identify which items are organic, stores lose money each time an organic apple is rung as a conventional one. Though packaging organic items can help avoid this problem, Mulcahy says this takes away all the sensory gratification of shopping for produce. "Do you want four peaches wrapped in cellophane, or do you want to smell the peaches and choose the four you want?" he asks.
Deli and prepared foods departments may offer the biggest challenge for retailers. As with produce, all deli items have to be handled in a way that avoids contamination by nonorganic items. In practice, this may mean that a deli needs to either go all-organic or set up separate prep areas with separate machinery, as there's no easy way to disassemble and clean a slicer, for example, every time a customer wants sliced organic deli meat. "A third option," Timmons says, "is simply to offer prepackaged organic items, such as sandwiches. Prepare them first thing in the morning, and once they're gone, you're out for the day. Again, if organic items are sliced on nonorganic equipment, they're not being processed in accordance with the law."
Personal care items are the odd man out in the organic movement because the organic rule applies specifically to agricultural products. Thus, organic label claims on personal care items are not subject to the organic regulations governing everything edible. Though a few personal care manufacturers have become certified to the food standard, personal care does not yet have its own organic standard, so natural items in this department may show wide variation in ingredients, such as the preservatives manufacturers use to keep products shelf-stable.
The organic phenomenon has entered the mainstream, and retailers are taking advantage, not only by stocking more organic products, but also—in the case of the larger chains—by offering private label organic lines. Even the conventional supermarket chains have gotten into the action. "A private label line gives stores the ability to specifically advertise their organic offerings," says Timmons. "For example, Safeway is a big chain, and they've done a good job at branding their O Organics line with the big blue O. It's quite visible within the store."
Though shoppers may be drawn to organic food because of its perceived purity and lack of chemicals, retailers have a strong financial incentive as well. In a business with small margins, organic food offers a huge opportunity for increased profits. By following common-sense guidelines for signage, marketing and handling of organic food, you might just discover that what's good for the earth is also good for the bottom line.
Mitchell Clute is a Fort Collins, Colo.-based freelance writer.