Stores Embark on Organics 2.0
Trader Joe's banks on the shopping itself to keep customers happy. The chain's stores sport a Hawaiian décor and live cooking demonstrations with free samples, along with low-priced gourmet food. Alison Mochizuki, spokeswoman for Trader Joe's, says the store's "crew members," as employees are known, help create a "fun" shopping experience.
Demeritt says that kind of enjoyment may well be the key. "At a Kroger's, customers just want to get in and out as quickly as possible, but that same person may hire a baby sitter to explore at a Trader Joe's or specialty food store for hours." She likened a specialty food store visit to going to the theater or on a treasure hunt.
Even within organics, specialty stores offer a wider range of options than their mainstream competitors. While a conventional supermarket is likely to carry organic apples, bananas, and other basics, specialty stores often carry more exotic fare such as muscat grapes and passion fruit. "I've tried a lot of new fruits just by buying whatever they have out," says More, the law student.
"If someone is a strident believer in organics ... they go where they can buy the best selection, which is still a specialty store," says Marvin Batte, professor of farm management at Ohio State University.
Meanwhile, conventional supermarkets are trying to build their own organic sales. Ahold's Giant Food and Stop & Shop, for example, launched the company's own organic line, Nature's Promise, in 2004. The brand started with packaged goods and now includes meat, dairy, and bakery items. Food Lion, a chain with stores in the Southeast and the mid-Atlantic states, is remodeling some stores to include an organic and natural section, and its offshoot Bloom sells a variety of organic fruits and vegetables.
For the most part, mainstream stores try to attract customers through lower prices. "Most of these specialty stores are relatively expensive, so our plan is to provide our customers with a high-quality line of products that are also affordable," says Teena Massingill, spokeswoman for Safeway, a national supermarket chain. Last year, Safeway introduced its own line of about 150 organic products and is now expanding into organic baby food.
So far, industry experts say there's enough growth in the industry for everyone. The Organic Trade Association estimates that organic sales, which were $13.8 billion in 2005, have grown 285 percent since 1997. "Just because traditional grocers are adding the product, it doesn't create a meaningful threat [to specialty food stores] at this point," says Andrew Wolf, a food retail analyst at BB&T Capital Markets.
Gary Cha, owner of Yes! Organic Market, which operates four storefronts in Washington, D.C., says he has noticed an increase in customers as organics become more available in mainstream stores. "A lot more people are aware of organic. It used to be much more educated, higher-income people, but now it's average people who know a lot and are interested," he says.
Indeed, a survey by the Hartman Group found that half of consumers bought organic food at a specialty food store in 2005, up from fewer than a third in 2000. The survey also found that certain consumers prefer specialty stores for their knowledge and experience with organics.
Conventional grocers may not be that far behind. While Paulette Thompson, manager of health and wellness for Giant and Stop & Shop, acknowledges that the committed organic consumer will probably still want to also visit specialty stores, she says, "We could certainly enable them to not have to go to those markets as often." And in five to 10 years? "That customer will be able to shop at a store like Giant to fulfill all their needs."
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