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The Week in Whole Health

Archive for May, 2008

Enough Bloom for Organics?

If a couple recent news stories are to be believed, economic woes are driving shoppers to abandon organic and natural products in droves. One, which appeared in this week’s issue of Newsweek, declares “the bloom is going off organics”, citing data from The Hartman Group and a recent study by WSL Strategic Retail that show a declining interest amongst consumers. Also quoted are three shoppers who agree that, well, the price just isn’t right.

The story cites numerous cost examples to back this up: $7 for a gallon of organic milk, $4.50 for a loaf of organic bread, $50 for a liter of extra-virgin olive oil, and so on. Compare all this, notes the reporter, to $2.99 for a gallon of conventional milk at a Kroger store, and you get an idea of the price spread that’s crimping organic sales.

All of this is very easy to digest for readers. But the issue is more complex. For one, prices have gone up across the board, not just for organic. Conventional milk averages around $3.70 per gallon across the country right now (I don’t know where he got the $2.99 figure, but it’s definitely an anomaly). So consumers are in the habit of paying more in every aisle. Also, studies show that people are eating out less and eating at home more. Sure, most of these individuals are leaving Applebee’s and reaching for the Stove Top stuffing, but there are many who can still afford to pay the premium on certain wellness products, including organic.

One dividing point in all of this is loyalty. Shoppers who truly believe in the healthy, ethical qualities of organic and natural offerings will not abandon them in tighter times. The Newsweek story acknowledges this, highlighting that only a fifth of organic consumers hold this level of commitment. This is true, but according to the Natural Marketing Institute, that percentage is growing.

Will sales of natural and organic products ebb eventually? Sure — and we may be seeing a bit of that right now. The wellness industry is an ever-evolving one, and for one industry to sustain double-digit growth year after year is difficult. But I think it’s a stretch to imply that the category is losing its luster — or, er, going off bloom.

Eat Your Pet

Wait, don’t call the ASPCA just yet. I meant Chia Pet — you know, those terra cotta figures shaped like animals (or the heads of Homer Simpson or Scooby-Doo) that get slathered with wet seeds and eventually grow “hair.” Rarely does a Christmas go by without the ad popping up on television, blaring that timeless refrain, “Ch-ch-ch-chia!”

chia.jpgWell, those sprightly green tendrils that make up the hair are actually an ancient grain, one of several species making a comeback as health and wellness reintroduces consumers to traditional foods. Chia was once a dietary staple of the Aztecs. Today, food manufacturers are looking at its high omega-3, fiber and calcium content as an ideal addition to processed foods (it helps that chia is flavorless, unlike its more modern cousins, flax and hemp).

A new report from Datamonitor found that chia — along with quinoa, spelt, and amaranth — are increasingly being used to boost the nutritional profile of mass-produced foods and beverages. Productscan Online, the firm’s database of new product introductions, found that the number of products incorporating these old grains grew 50% worldwide, from 257 in 2005 to more than 500 last year.

Chia is going into all sorts of products, ranging from energy bars and even tortilla chips; others, like amaranth, are getting mixed into cold cereals. The vast majority of American consumers probably still isn’t familiar with these primitive grains, so there are few expectations the market for them will blossom anytime soon. But, people are searching for ways to reduce the amount of processed foods they eat. Datamonitor researchers found that 63% of Americans polled said it was at least “important” to cut down on their consumption of highly processed foods.

So, now you know what I mean when I say, “Eat you pet.” But mind the pottery. It might be a bit too much roughage.

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Smoothie Talk

Take a look at any refrigerated case in the produce department, and you’ll understand just how supermarkets feel about fresh juices and smoothies. It’s not uncommon these days for stores to merchandise up to 8, multi-tiered feet of these fruit and vegetable concoctions.

Labor-sensitive retailers like juice smoothies because they require no special knowledge to pack out and don’t require trimming and rotation like fresh produce. Smoothies have a longer shelf life, too.

wh12nsmooth.jpgSo, it’s no surprise to see fresh smoothie kiosks whipping up competition in the $2 billion category. Supermarkets like Safeway and Whole Foods Market have installed juice and smoothie stations in select stores over the past few years. Many are outlets of national chains like Jamba Juice and Smoothie King. Some are franchised, but the vast majority of these in-store units are leased to, and staffed by, the retailer.

Paul Clayton, CEO of Jamba Juice, told us a while back that a 250-square-foot kiosk produces about two-thirds the revenue of one of the company’s freestanding stores — not a bad return on a small footprint. They’re also much more efficient to run.

Smoothies offer a fantastic health and wellness profile, and are ideally suited for supermarkets. That’s why competition among makers of both bottled and fresh smoothies is growing intense. McDonald’s is making them, and Starbucks is planning to. This week, Jamba Juice partnered with Dole Food Company, to launch Jambafruit.com, an online portal where consumers can submit and share smoothie recipes. Dole has slapped millions of customized stickers on bunches of fresh bananas that read, “I Want to Jamba!” at thousands of grocery stores nationwide.

The co-branding effort gets Jamba’s name deeper into supermarket territory, and Dole gains brand-name access into foodservice. This is the kind of arrangement we’ll likely see more of in the category as consumer demand for healthful, indulgent beverages grows.

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Some Healthy Wellness Numbers

Fun as it is to fill this space with ramblings and irreverence, as a trade-oriented site we’re obligated to share good hard data when it presents itself. And that’s just what we have for you today, courtesy of a couple state-of-the-industry reports released by the Food Marketing Institute at its banner show in Las Vegas. Though broad in scope, each one contains interesting insights into health and wellness marketing.

I’ll cut straight to the highlights.

The vast majority of retailers are using health and wellness strategies to stay competitive, numbers show. Eighty-nine percent say they’re emphasizing natural and organic products, and 85% say they’re focusing on consumer and family health. Ninety-seven percent say they’re playing up perishables, to great effect.

Economic concerns linger, however, and that could change retailers’ game plans as consumers trade down to less expensive items. Low price is the number one determining factor for shoppers, with 37% saying as much. Other studies have supported these findings, with some even stating directly that sales of premium-priced natural and organic products will suffer. But the opportunity is still there for creative retailers, according to FMI. Indeed, consumers say they’re eating out less, cooking at home more often, and consuming more leftovers than previous years.

People are also maintaining healthy attitudes that could translate into sales. Sixty-two percent say they’d like to eat healthier than they do right now. Of those who would like to improve their diets, 70% fall into the $75,000 to $100,000 annual income category, according to one study.

Sustainability remains a prominent issue for shoppers, as well. Sixty-one percent say the presence of a recycling and sustainability program is at least somewhat important when choosing a retailer. That’s because, as one study shows, more than 60% of shoppers have made a habit of recycling cans, plastic and paper products.

Given these attitudes, it’s puzzling that only 51% of retailers report that they sell reusable shopping bags. Or that more retailers don’t implement and promote bag recycling programs.

As the numbers show, wellness is an important, sophisticated category. Retailers need to make sure that they’re up to speed.

State of the States

It’s reassuring to see the role government is playing in trying to get Americans to eat better, exercise and lose weight. The types of programs federal, state and even local governments are running these days are perfect ways for supermarkets to get involved in showcasing their own healthful products and services. Here are two examples of what I’m talking about:

Five months into their program, the 18,032 participants who’ve registered for the OKC Million have lost a total of nearly 73,000 pounds. The initiative, open to every single resident of Oklahoma City, Okla., was launched at the end of last year, under the leadership of the city’s cheery mayor, Mick Cornett (who has lost more than 35 pounds himself).

The program has several sponsors and partners, the most recent of which is Taco Bell (that’s right, home of Mexican fare with names like the Gordita Supreme and the Chalupa). The chain recently introduced its new lower-calorie and low-fat “Fresco” menu, and took advantage of the city-wide effort to promote the nine new items.

What’s notable here is that even a fast-food chain has the opportunity (and every right) to get in on the action here. Sure, these new items may not be the most healthful out there, but they represent a better-for-you option for hungry, on-the-go consumers.

Meanwhile, in California, the Network for a Healthy California is launching its 2nd annual Fruit & Veggie Fest throughout the state. The month-long promotion targets low-income families and touts the benefits of produce consumption.

Supermarkets are key players in the festival. One store in the Los Angeles area, Kroger-owned Food 4 Less, will sample fresh fruits and vegetables and conduct healthy shopping store tours. Local school district chefs will show participants different ways to incorporate more produce into their everyday meal plans.

These are the types of activities that can really improve the health of the food industry, too. Partnerships between government, private sector and the community need to be encouraged because they speak with one loud voice. And, these days, the message needs to be clear, since spending food dollars wisely is more important than ever.

Personal Care Scrubs In

Natural and organic personal care products are cleaning up right now, with sales having increased 17% from 2006 to more than $7 billion last year, according to Nutrition Business Journal. To further capitalize on this success and gain a leg up in the industry, many companies have begun jockeying for market position by addressing the issue of authenticity — why they’re the real deal, and why others aren’t.

hands.jpgJust today, for example, the Natural Products Association unveiled its own “natural” certification for personal care products during a press conference at New York City’s Mandarin Oriental hotel. Along with representatives from Burt’s Bees, Aubrey Organics and other participating companies, the association laid out details for what it claims is a higher standard that will allow consumers to identify products that are truly made of natural ingredients. Manufacturers that bear the new seal must meet a host of guidelines, including utilizing ingredients that are renewable, pose no human health risks, and are at least 95% natural. The seal should start showing up on products in stores within the next couple weeks, according to the NPA.

“Finally, we can end the confusion about what natural is and what natural isn’t,” said Mike Indursky, chief marketing officer with Burt’s Bees.

Running along the same lines, earlier this week Dr. Bronner’s Magic Soaps — an all-natural icon that’s been producing soaps for 60 years — filed a lawsuit in California Superior Court against several of its competitors, alleging that they’re falsely claiming to be organic. Jason, Estee Lauder, Avalon, Nature’s Gate and others will face litigation unless they commit to reformulate or drop their organic claims, according to Dr. Bronner’s.

Leaving no question about his sentiment on the issue, David Bronner, president of the Dr. Bronner’s brand, said in a statement that these companies have been “screwing over organic consumers”.

The ambiguity of “natural” has created headaches throughout the food industry, since outside of the meat industry there is no definition of the term. In the personal care category, neither natural nor organic claims are federally regulated. The Natural Products Association claims their new claim will end the confusion, but will consumers really be able to tell the difference at the retail level? In an industry that’s announcing and denouncing claims more and more, it could just be another addition to the clutter.

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