Store Brands Go Green
By Peter Berlinski

WFM’s 365 Organic bottled Italian Spritzer achieves store brand stardom by blending two organic super fruits-pomegranate and blueberry-each known as being high in antioxidants and phytonutrients.

Dollar sales of organic private label have jumped more than six-fold to $510.1 million in the four-year stretch ended July 14, 2007, according to ACNielsen research.

The year 2007 could very well be remembered as the tipping point when American retailers turned green in terms of their store brand products, services, and policies.

Consider these major developments:

• Kroger, Cincinnati, OH, expands its premium store brand line, Private Selections, to include initially more than 60 organic food products. The line is projected to grow to more than 130 items by the end of this year. These new store brand organic offerings are displayed next to the leading national brands in the conventional grocery aisles. This is a major departure from the way its merchandises its Naturally Preferred brand items–introduced in 2002–and generally located in the Nature’s Market section of the store along side the natural and organic offerings of the national brand manufacturers. There are currently about 300 items in the Naturally Preferred line. (See Kroger Organic Close-Up in this section.)
  
  
• Meijer, Grand Rapids, MI, introduces its new line of Meijer Organics range of food products that includes fruits and vegetables, pasta, snacks, teas and juices. The initial wave of products includes 150 items but is expected to grow to more than 200 different organic food items in its stores.
  
  
• Safeway, Pleasanton, CA, expands its O Organics store brand food line to include O Organics for Baby and for Toddler and promotes the new line with a nationwide photo contest. Also in 2007, Safeway opens the first of 23 planned Solar Stores in California. The solar panels installed atop newly renovated Safeway Lifestyle stores in California will provide 20 percent of the stores’ average power usage and up to 48 percent of power usage during the peak hours.
  
  
• This September Publix, Lakeland, FL, opened its first GreenWise Market in Palm Beach Gardens, FL. The company describes this new store format as its view of the future of what grocery shoppers will want in terms of smart food choices and to live a little wiser. “The 39,000 sq. ft. store offers customers an extensive selection of health, earth-friendly, all-natural and organic products combined with top-selling conventional items for customer convenience,” says the company.
  
  “Publix GreenWise Market was created to meet the needs of our customers who are seeking a healthier lifestyle for their families without sacrificing the occasional indulgence,” says Maria Brous, Publix director of media and community relations. “We recognize that our customers have become more food and environmentally savvy and want to explore these options in one convenient location
  
  To assist customers in distinguishing organic, all natural and conventional items, Publix GreenWise Market has introduced a color-coded shelf tag system.
  
  
• Brown tags without icon indicates an all-natural product.
  
  
• a brown tag with the USDA Organic icon indicates a 95-100 percent organic product.
  
  
• A brown tag with the phrase, “Made with Organic Ingredients,” indicates a product contains 70-94 percent organic ingredients.
  
  
• A white tag indicates a conventional supermarket item.

The Wal-Mart Way

• This September, at the Clinton Global Initiative in New York, CEO Lee Scott, Wal-Mart, Bentonville, AR announced several environmentally friendly initiatives. Among them is a pledge to sell only concentrated liquid detergent in order to significantly reduce the company’s consumption of water, plastic and cardboard and save “vast amounts of natural resources.” The program will include leading national brands as well as the retailer’s own Great Value brand. Wal-Mart also has introduced a line of compact fluorescent light bulbs to reduce energy consumption, and began marketing reusable shopping bags near checkout counters for $1 each in its stores. During an October 2007 meeting with suppliers, Scott told his audience that “sustainability is here to stay.” He also told the attendees that suppliers, for their part will be scored on how eco-friendly their packaging is starting next year. Wal-Mart’s environmental initiatives symbolize how U.S. retailing has gone green and how green is now mainstream.
  
  
• Tesco USA, El Segundo, CA–which plans to launch its first wave of Fresh & Easy Neighborhood Markets in Southern California this November–is going green inside and out with its new downscale store format.
  
  
• The store logo itself epitomizes the retailer’s green commitment. It features different shades of green including a green apple motif with the face of a clock to also signal convenience that its small 10,000 sq. ft. footprint represents. “Smaller than the usual supermarket, our 10,000 sq ft shops will be easily accessible and offer everything from everyday staples to gourmet items,” says the company. “Lots of fresh and delicious food choices, including pre-prepared and organic foods, will make healthy eating convenient and affordable. In particular, our own fresh & easy line of products will have no added trans fat and no artificial colors or flavors. The simple packaging and label on our private label will help you see exactly what you’re bringing home-great food you can trust.”

Besides being green” on the inside, the new stores will also be green on the outside. Outside signage and freezer lighting will rely on energy-efficient bulbs. Shipping and packaging materials will either be recycled or reused. The Riverside distribution center has 500,000 square feet of solar panels, costing $13 million, which the company claims is the largest roof-mounted solar installation in the world. The solar system is designed to supply 20 percent of the distribution center’s power supply and save 1,200 tons of carbon dioxide emission each year.

Indeed, Terry Leahy, Tesco’s CEO, in a speech on climate change given in the United Kingdom, the company’s home base, has vowed to lead a “revolution in sustainability.” To this end, the company has announced plans to label each store brand product it sells with a “carbon footprint.” This measures the amount of carbon dioxide generated during the item’s production and distribution.

Says Tesco USA chief executive Tim Mason: “Fresh & Easy Neighborhood Market is committed to tracking and reducing its carbon footprint. “We already designed our stores and trucks to be more efficient in order to save energy and reduce fuel consumption. It is a natural next step for us to measure our impact and look for ways to continually reduce our impact on the environment.”

Organic = Green.

The sales of natural and organic food, personal care products, and household goods are growing at a 13-14 percent annually, according to a recent research study by the Nutrition Business Journal.
In particular, the growth of organic food is driven by two consumer trends:

1. The perception that organic food products are healthier, more nutritious, and safer for you.
2. The understanding that organic agriculture is more earth-friendly than conventional agricultural practices that employ chemical fertilizers and pesticides.

Indeed, in the October 2007 issue of Facts, Figures, & the Future, a monthly e-publication sponsored by The Lempert Report, Food Marketing Institute, and ACNielsen, editor Phil Lempert discusses how consumers can reduce their carbon footprint. He recommends that people visit the web based carbon footprint calculator, www. zerofootprint.com, which allows visitors to calculate their footprint and then follow tips on ways to reduce it. “You can set goals to minimize your impact on the planet and also see specifically how you’re doing in different areas; for example how eating an organic diet and buying locally grown produce improve your rating,” says Lempert.

Indeed, according to ACNielsen research, published in the August 2007 edition of Facts, Figures, & the Future, dollar sales of organic private label have jumped more than six-fold to $510.1 million in the four-year stretch ended July 14, 2007 (based on Nielsen LabelTrends data for prepackaged UPC products in U.S. food stores–$2 million annual sales each.) At the end of this period, organic private label owned a 14.2 percent share of total organic sales in this channel. That share was only five percent four years earlier.

Leading Internet content provider, aol.com on its Money & Finance page advises consumers to always buy generic when buying organic foods.

Animal friendly store brand products are available at TJ’s with its Organic Free Range Chicken Broth, and at WFM with its Whole Dairy Organic Cage-Free Eggs, and Whole Pantry Canola Mayonnaise made with cage free eggs.

According to aol.com: “If you’re looking to trade up to healthier organic foods without inflating your monthly grocery bill, private store labels are your best bet to save, says Teri Gault, founder of the Grocery Game thegrocerygame.com...Certified organic is certified organic, she says. There’s no need to go for the brand name. Making things easier, most big chains have an organic line–Meijer has Meijer Organics, for example, while Publix has GreenWise Market and Safeway has O Organics. You’ll pay more than you would for conventional generics, but up to 50% less than brand-name organic products.”

Organic Consumers

According to an October 18th, 2007, article at mediapost.com, the West Coast is a stronghold for organics consumers. Of the more than 20 local markets identified as having an above-average percentage of organic consumers, more than half are in the Western census region.

Based on a study by Scarborough Research, the top five consumer markets for organic foods are:

1. San Francisco with 35 percent of adults using organic foods during the past month,
2. Seattle with 32 percent of adults using organic foods,
3. Portland, OR, with 27 percent,
4. Washington, DC, with 26 percent,
5. Denver also with 26 percent.

Consumer traits in common with these markets include: youth, higher than average annual household incomes, and a fitness mentality. Nationally, organics consumers spend an average of $127 on their weekly household grocery bill-that is 10 percent higher than the national average of $115. Organics consumers are 19 percent more likely than the national average to be ages 18-34 and 13 percent more likely to have two or more children at home.

Whole Foods Market has the highest concentration of organics consumers who are 272 percent more likely than the average consumer to have shopped Whole Foods during the past week. Other retailers that have a higher than average concentration of organics consumer include:

• Trader Joe’s with organics consumers 180 percent more likely than the average consumer to have shopped at TJ’s during the past week,
• Safeway with 72 percent more likely,
• Costco with 70 percent more likely,
• Super Target with 50 percent more likely.