We’ve just had a chance to review some of the conclusions reached in the 2010 Market Overview from Natural Foods Merchandiser, a sister publication here at Penton Media that covers the independent operator channel. What struck us is the level of optimism these indy owners have, in spite of the recession and continued high unemployment. Among the top-line findings:

• Net profit margins fell to 5% last year, down from 8% in 2008.

• Revenues remained in the $1.2 million to $1.5 million range.

• Net sales grew almost 9% in 2009, but when adjusted for store closings, and weighted based on the number of stores per category, sales grew 3.4%.

This channel, comprised of natural products stores, health food stores and supplements stores, saw overall food sales drop along with margins — but it’s not all due to the economy. MORE…

The recession hasn’t been very kind to natural and organic retailers, but there have been a few bright spots — and the brightest one, many will agree, has been the bulk department.

Yes, bulk: Those rows of plastic bins stretching down the aisles that, at just the pull of a lever, dispense everything from trail mix to chocolate nibs to shampoo. Shoppers can save money by taking as much or as little as they want, and save packaging by using the thin produce bags that, at a growing number of stores, come in biodegradable varieties.

Bulk is cheap, and bulk is green. But bulk is also different, and that makes it a complicated opportunity for many of the retailers, especially the mainstream ones, that are jumping on the trend.

To figure out how to best manage the category, I turned to an expert: Doug Sanders, president of Sprouts Farmers Market. Sprouts now operates 50 stores throughout the Southwest, and at each one, bulk is the star.

“The dead center of our store is the bulk department,” said Sanders. “Produce and bulk combined probably take up 30% of our store.”

Inside the department, Sprouts customers can find time-honored favorites like nuts and granola, as well as more modern, gourmet fare like dark chocolate pieces and cranberry-infused trail mixes. The latter choices, Sanders noted, are doing particularly well right now, in light of consumer awareness of antioxidants. MORE…

Spartan Stores announced that it was expanding the Michigan’s Best program it started last year to support home state farmers, processors and manufacturers. The expanded program kicked off Fourth of July weekend in nearly 100 Spartan-owned stores under the Family Fare, D&W Fresh Market, Felpausch, Glen’s, Glen’s Fresh Marketplace, and VG’s banners, as well as 250 independent grocery stores it services in Michigan.

The fact that it’s Michigan we’re talking about means the program has definite economic undertones. This isn’t local for local’s sake – Spartan promotes Michigan’s Best as a significant booster to the state’s ailing economy (from April 2006 to May 2010, Michigan consistently reported the highest unemployment rate in the country; Nevada recently beat it out by 0.4%. Michigan’s most recent number stands at 13.6%).

“Buying local helps keep Michigan residents employed,” Alan Hartline, Spartan’s executive vice president of merchandising and marketing, stated in a news release. “It also benefits communities by boosting the local and state economy by creating more jobs.”

He goes on to say that local products such as fresh fruits and vegetables are healthier options because they can be on the shelves within hours of being picked.

“Local products also have lower food miles, meaning they are shipped shorter distances, which requires less gas and is better for the environment,” he added.

But make no mistake – in this case, “local” means jobs. The news release cites statistics from the Michigan Department of Agriculture showing that, if each family in Michigan started spending $10 per week of their grocery bill on Michigan products, “we would keep more than $37 million in Michigan, each week.” MORE…

The concept of “value” can be a tough sell in a natural and organics world known for premium prices and gourmet cache, and so retailers in this space have had to work hard to change consumer perceptions. Supervalu tried and failed with its Sunflower Market banner. Same with Bashas’-run Ike’s Farmers Market, which shuttered its last store in 2009. There’s success to be had, as companies like Trader Joe’s and Mike Gilliland’s Sunflower Farmers Market have proved, and now there’s one particularly precocious retailer stepping up to show how it’s done.

Sprouts Farmers Market has done a lot of growing in its seven years. Started back in 2003 in Chandler, Arizona — right in the heart of Bashas’ country — Sprouts has expanded across the southwest and California at a rate of about ten stores per year. Next week, the privately held company will hit a milestone with the opening of its 50th store.

What’s the secret behind this impressive run? The recession, which cut expansion plans for most retailers, appears to have worked in the favor of Sprouts, which banks its image on price and freshness. Its mission statement is, “Helping America eat healthier, live longer and spend less.”

Success has required the chain to master the “spend less” aspect of the business. It also actively courts its customers, plays up its ability to build jobs within communities, and serves as an effective counterpoint to Whole Foods.

“We were very fortunate in the way we were positioned,” said Doug Sanders, Sprouts’ president, in an interview with Supermarket News reporter Roseanne Harper. MORE…

Health-minded patrons are giving restaurants and other dining venues a second helping as the foodservice industry emerges from a recession that caused underperforming operators to close or, at the very least, seriously retool their menus.

A snapshot of the current situation comes from market research publisher Packaged Facts. The report, U.S. Foodservice Landscape 2010: Restaurant Industry and Consumer Trends, Momentum and Migration, examines recent and future consumer habits and attitudes surrounding dining out.

Healthy eaters were among the top three groups found to spend more than average per visit and bring more friends with them. While that’s good, the overall data suggests that even restaurant fans won’t be enough to get things going in earnest until next year. Researchers predict that sales at eating and drinking establishments will fall 2% in 2010, before increasing by 2% in 2011.

Looking deeper, full-service restaurants will have further to climb back, falling 4% this year before increasing 1% in 2011. Limited-service restaurant sales are expected to fall 1% in 2010 and then rise by 2% in 2011, Packaged Facts stated.

Where are sales going? Supermarket deli and meals, it would seem. The study found that sales in the supermarket channel during this period — already doing well — will likely continue to increase as consumers (including healthy eaters) keep making food-at-home purchases. MORE…

The latest organic sales figures are in and, no surprise, the industry slowed to single-digit growth during 2009. This after several years of through-the-roof gains in the teens and twenties. Organic, meet Earth. Earth, organic.

According to the Organic Trade Association, product sales in 2009 climbed 5.3% to reach $26.6 billion. That’s still a tiny percentage of the overall food industry, though embedded in the report are a few eye-catchers. Organic fruit and vegetable sales, for instance, grew by 11.4%, and now comprise 11.4% of all fruit and vegetable sales in the U.S., and 38% of the total organic food market. That’s pretty impressive, and it just goes to show how important fresh, perishable foods are to people who believe in the organic standard.

Unfortunately, that standard is under major scrutiny right now, and some consumers are losing confidence. An audit last month by the Office of the Inspector General found problems with import oversight, showing that reviews had not been conducted for some of the certifying agents abroad. This is a big deal since, to meet organic demand, companies have had to look to countries like China, Australia and Argentina for supplies. A recent poll by the OTA found that 41% of producers say “undependable supplies of organic raw materials limit their ability to generate sales.” MORE…

The annual convention of the nation’s independent supermarket operators is being held this week in Las Vegas, and the consumer survey released every year to mark the occasion has some interesting insights into the mind of the whole health shopper.

The poll, conducted by the National Grocers Association and SupermarketGuru.com, devotes an entire section to “Nutritional Concerns,” and that’s where you see just how many of the nearly 2,500 chief household, mostly female shoppers remain committed to eating healthy despite the tough times.

When asked what concerns them most about the foods they eat, the simple “Desire to be healthy/eat what’s good for us” came in first, at 22%, far outpacing the other choices (fat content received 13%).

That desire is apparently translating into action. A full 27% stated their diets are healthy enough. More important, the number of those who admit shortcomings is falling: “Compared with a year ago, when 68% were critical of the foods they eat at home and away from home, this figure improves markedly to 62%,” the report said.

Fruits and vegetables are the most popular ways of improving diet, according to the survey, with 84% of respondents saying so. Less junk food was second (64%) and fewer fried foods was third (63%). MORE…

Forget 2009. Really. I know it’s February, but the bad news — in the form of studies, annual reports and the like — just keep rolling in.

Case in point: The international product intelligence firm, Mintel, found that last year was dismal for new product introductions in the United States, down 30% from 2008.

“In the last decade, [Mintel] has only tracked occasional, small declines in new product introductions for the U.S. market, never a decline as strong as this,” notes Lynn Dornblaser, the firm’s leading new product expert.

The stats were just as grim in health and wellness. Natural and organic products, which saw large increases in 2008, took a few steps back in 2009 due to their higher price points. Food and drink introductions with an all-natural claim decreased from 15% of all launches in 2008 to 13% in 2009. Organic claims showed a similar decline of 12% to 10% in the same timeframe, according to Mintel.

Well, folks, I am happy to say that 2010 (and this is the part I want to write about) is already shaping up to be interesting, with large and small companies introducing new products or services in the wellness channel. If the first weeks of this year are any indication, I think we’re in pretty good shape.

FOOD: Snyder’s of Hanover, the snack food company, has introduced a line of whole grain, gluten-free, fiber-rich all-natural snacks that also promote the company’s contributions to The Nature Conservancy. There are seven products in the line, called Eatsmart. The products are also available in 100-calorie packs. MORE…

Of the various wellness formats opened by conventional retailers over the past few years, only GreenWise endures. The Publix banner is still above the entrance to three stores, all in Florida. Now we know why.

Fried chicken.

A real eye-opening article from the Tampa Tribune profiles the city’s GreenWise, where Maseratis and Mercedes in the parking lot are no big deal. The neighborhood’s per capita income is among the highest in Hillsborough county, and the store reflects the local affluence, selling eco-detergents, hand-picked olives for $9.99 a pound and $36 bottles of vitamins.

Yet customers have been asking for Tide. The HBC section still has vitamins, but also standard fare like Tylenol.

And finally, in the store’s fresh meals department, where quinoa salad and specially prepared tuna filets are the norm, there is now a fried chicken display, “Right there up front,” the store manager is quoted as saying.

What’s going on? This is supposed to be a store for natural, organic and green products. That’s why you want to go there, as opposed to a regular Publix, right? Several things about this report are revealing. MORE…

The new Health Starts Here program at Whole Foods Market launched at all of the chain’s 289 locations, and marks an interesting juncture in the evolution of the chain.

The retailer states the program is a “deepening of our commitment to healthy eating by providing education and support tools to inspire interest in foods that help improve and maintain health and vitality.”

Yours truly thinks it’s more a case of Whole Foods getting back to basics after a period of fast living; if nothing else, there were some bouts of binge eating that saw the chain more focused on growth than reinforcing its core values.

The recession has changed all of that. Profits dropped, shoppers sought cheaper options and the company’s fabled double-digit expansion ground to a halt. With the truck by the side of the road and the engine smoking, it seemed a good time to take stock of the situation.

To kickstart slumping sales, Whole Foods introduced a number of money-saving promotions and has given its 365 private label a higher profile. That kept enough shoppers coming back, but the chain must have also realized that over the past few years, as it made appeals to more mainstream, casual shoppers, it was alienating its core customer.

This latest initiative should please everyone, because the beauty is that it gives Whole Foods much-needed cache as a destination for weight management and healthy living, while providing a perfect excuse for culling the aisles of products, added during the high-living years, that don’t really — and never did — fit in with its core mission. MORE…