Animal welfare continues to be an emerging segment of the food business, and it’s one supermarket retailers are right to invest in. Consumer interest and activist efforts to expose some of the darker secrets on the processing side can have a big impact on the sales end — particularly when there are protesters outside stores, amendments introduced at annual stockholders meetings and other public awareness stunts.

Resist all you want. One look at those undercover videos made by activists in slaughterhouses and consumers start demanding change. The images are shocking because everyone has become so far removed from the ugly, but necessary, act of slaughtering an animal for food. Consumers just see esoteric, overwrapped packages of red steaks and pale chicken breasts. They’ve forgotten about the bloody processing these animals go through to become case ready.

Safeway this week made the important decision to change its policies regarding food animals. The nation’s third-largest supermarket chain had been in ongoing talks with People for the Ethical Treatment of Animals and the Humane Society of the United States to adopt more animal-friendly sourcing rules.

There are three significant changes: The chain is “actively looking” for ways to increase purchases from poultry processors using “controlled atmosphere stunning” techniques (we’ll let the link explain that one); pork suppliers who do not use sow-confining gestation crates; and egg vendors who offer cage-free eggs. Safeway is already offering products based on these policies in some regions, with more to be added as the policy phase-in continues.

These are important initiatives, not only because it’s what consumers want, but it’s just a better way of doing business.

Budweiser beer, Doritos, luxury cars and big-budget movies made their usual rounds during Sunday’s Superbowl, which drew 97.5 million viewers. So it goes with mainstream America. But for retailers there was also an interesting trend lumped in amidst the string of sometimes funny, often strained advertisements: value-added beverages proclaiming they’re ready for the bigtime.

Four spots, to be exact, touted bottled drinks infused with caffeine, vitamins, added flavor — or any combination of these. There was Diet Pepsi Max, which pledged to wake up a nation full of nod-offs. There was also G2, made by PepsiCo’s Gatorade sports drink franchise, positioned as an off the field “low calorie hydrator”. And then there were the flavored waters — one from Pepsi’s Sobe brand (dancing lizards?) and the other from Coke’s Glaceau and its Vitamin Water brand.

Like carbon credits and fad diets, enhanced water and other beverages offer a way to cut the guilt without curbing the habit. The actual health benefits are questionable. Vitamin Water contains almost as much sugar as soda does, even though it doesn’t contain high fructose corn syrup. There’s also been debate in the past over whether these beverages release as much vitamin-packed goodness as consumers think they do.

But we’ve covered the rise of this category in the past, and it appears there’s no stopping it. Energy drink sales are growing annually at around 40%; the flavored water industry could reach $800 million in sales by 2009, according to Beverage Marketing; and soda sales are gradually slacking off.

With numbers like these, it’s easy to rationalize $2.6 million for a 30-second spot during the Big Game.

A few entries back we wrote about an East Coast supermarket operator who made the tough, but correct, decision to stop selling tobacco in all its stores.

Well, another independent retailer has announced a similar ban. Andronico’s Markets in California will eliminate sales of all tobacco products after Feb. 4 — joining Rochester, N.Y.-based Wegmans Food Markets, which made an identical announcement last week.

Bill Andronico, the 8-store-chain’s president and CEO, sounds like he has quite a list of resolutions for 2008 (it’s still January, right?). “We are making some important changes this year and this is just the beginning,” he stated in a news release. He’s referring to environmental and health issues, and cited the Bay Area retailer’s recent switch to cage-free eggs as another example of its new emphasis on health and wellness.

“It’s all part of a rising consciousness at Andronico’s,” he added.

Cigarettes are profitable, there’s no doubt about it. Figures compiled by Information Resources Inc. and featured as part of our annual SN category review issue showed sales of cigarettes in the supermarket channel topped $4.9 billion last year, down 3.1% from the year before. Even taking into account the impact of state and federal excise taxes, tobaccco remains No. 1 in nonfoods sales in the supermarket channel.

So what about these two retailers? Maybe they’re onto something. Perhaps they are discovering that — as conventional supermarkets delve deeper into wellness marketing — they need to reconcile their business goals with the personal aspirations of their customers.

Well, congratulations to Whole Foods Market again for turning what could be interpreted by consumers as a big inconvenience into a Happening. I’m talking about the company’s plan to phase out plastic bags from all its stores and — this is pure genius — to do it by Earth Day 2008.

Perfect.

We’re truly impressed that WFM continues to demonstrate a deep willingness to change, and in this case, lead. We’re also in total awe of their marketing department and its ability to connect all the dots. Public awareness of plastic bags and plastic water bottles has grown tremendously over the past year, and the idea of taking this step and banning plastic from a store was an idea ripe for the picking (And it’s still a hot issue. We’ll have two bag-related stories in our next issue of SN Whole Health coming out in February).

But again, John Mackey and company have beaten conventional retailers to the tree. As a result, they get all the publicity, their reputation as a progressive, ethical retailer is reinforced and, well, they get to start saving big bucks by eliminating this line item from their annual budget.

This type of “message marketing” (my term) is yet another wake-up call to mainstream retailers. Health and wellness is an ideal vehicle for such initiatives because it makes people feel good. Let’s face it. It’s a lot easier to convince shoppers to sacrifice convenience when you tell them it’s for the sake of the environment.

This isn’t the first time WFM has trumped the conventional industry. Remember lobsters? The chain announced it was phasing out live sales in June 2006 because the whole process of catching them and getting them to the stores amounted to animal cruelty.

Here’s something I bet you did not remember: The month before, Safeway said it was phasing out its live lobster tanks. Why? Because… “business was in decline” (their words).

Same idea, different message. Who do you think got the press?

It seems everyone is getting into carbon offsets these days: Banks, colleges, restaurant chains, airlines — and supermarkets, to name a few. Even cultural institutions like the Academy Awards and the Super Bowl have joined in. Many claim to be “carbon neutral,” which means all emissions created by the entity have been met with an equal dose of earth-friendliness. And then there are some, like the Fiji bottled water company, that say they’re carbon negative. According to Fiji, this means implementing business practices and projects that will trap more greenhouse gases than the company pumps out.

It’s hard to argue with a goal that helps the environment. But as carbon-offset programs become more popular, there arises a concurrent opportunity to misrepresent claims. Part of the problem is the actual offsetting doesn’t get done in a company parking lot. Oftentimes it’s planting trees in South America, or subsidizing wind turbines hundreds of miles away. It’s something customers don’t see and that companies themselves cannot easily monitor. The actual business of administering offsets is outsourced to third-party firms.

The Federal Trade Commission is worried enough about the volume of carbon-free programs and the way the system currently works that it’s holding a series of fact-finding meetings. FTC rules on green marketing haven’t been updated in more than 15 years, and part of the strategy here is to warn businesses the agency is looking for abuses, and intends to follow the issue.

Retailers like Whole Food Market, which announced in 2006 the purchase of enough wind credits to offset 100% of the electricity use in all its stores, are right in the middle of the movement. Some retailers have even offered gift cards that bestow offsets upon the receiver. As both a participant in the practice, and a merchandiser of it, it’s important to note that retailers assume a double risk if their carbon offset programs are found to be less-than sterling.

In cases like these, it’s wise not just to follow where the wind blows. Study the organizations that sell credits and be sure they uphold their part of the agreement.

Advocates for water conservation have adapted a term being used by their carbon-reduction cohorts for a new campaign that invites Amerricans to measure their water “footprint.”
A new website, www.h2oconserve.org includes an H2O calculator that allows visitors to determine just how much water they’re using (which turns out to be, on average, just under 1,200 gallons a day).
After that cold splash of realization, consumers are invited to learn some tips for reducing water consumption and guided to sources of additional information.
One thing retailers should note is that a companion news release called on other organizations and government institutions to encourage consumption of public water supplies, rather than H2O sold in plastic bottles. So, it appears this anti-bottled water campaign is continuing. The organizations behind h2oconserve.org — Food & Water Watch, Interfaith Center on Corporate Responsibility, Johns Hopkins Center for a Livable Future and Grace — even sent us a reusable water bottle. It’ll replace the paper cups we get every morning from the water cooler.
If they haven’t already, supermarkets might want to review their bottled water sales and consider adding a selection of alternative containers, along with some educational literature promoting consumer choice, and see how the idea floats.

It’s one of the obvious ironies retailers need to resolve if they want to honestly project an image of authenticity. Why do stores offering health and wellness products also sell items that have a proven track record of killing people?

We’re talking about tobacco, and so was Wegmans Food Markets when it announced earlier this week that it will stop selling cigarettes and other tobacco products in all 71 stores as of Feb. 10. According to a brief in The Buffalo (N.Y.) News, the retailer will allow current inventory to sell out until then.

People can argue that the job of any retailer is to offer variety and choice — not to be a meddlesome entity that edits consumer choice. True enough. But in the case of tobacco, it’s time the supermarket industry caught up with public policy, which has been banning smoking in all sorts of venues over the past 20 years.

Category sales are falling anyway, and stores operate under the constant threat of sting operations testing prohibitions on sales to minors. Who needs the headache?

Del Monte is exposing everything it’s got starting today — everything about its fresh produce products, nutrition, recipe ideas and healthful lifestyle advice.

The Coral Gables, Fla.- based company today is launching www.fruits.com, a new consumer website that profiles the company’s products and shows how they can fit into a healthful lifestyle. Del Monte has been hanging onto the highly desirable domain name for quite some time now, and it’s the first time it’s being used to full advantage. The launch is actually part of a larger, multifaceted communications platform, but the consumer web program is among the first to be introduced.

The new site is divided into four sections: Products, Recipes, Nutrition and Fitness and a Kids Corner. The latter two are the most interactive. Nutrition and Fitness is overseen by Tracey Ryan, a registered dietician, and Bryan Fedor, a personal trainer; while Kids Corner includes games that carry a nutrition message.

Some might say it’s a bit late for Del Monte to be coming around with a consumer web site like this. But let’s face it: Consumers need all the help they can get, and with such a simple domain name to remember, www.fruits.com will become popular soon enough.

We thought this past summer’s debate over the environmental impact of bottled water containers had frozen over for the winter. But it appears that the controversy keeps thawing itself out.

Earlier this month, Canada’s Mountain Equipment Co-op removed from its shelves all water bottles and other containers made with bisphenol-a, a chemical used in the manufacturing process to strengthen plastic. What’s interesting here is that BPA, as it’s called, is not only found in disposable bottles, but many durable, reusable containers — ones that are supposed to be the eco-friendly alternative to the disposable alternatives, which are at the heart of the debate.

Mountain Equipment, which Toronto’s Globe and Mail cites as “the country’s largest specialty outdoor-goods retailer,” said the decision reflects skepticism about the safety of BPA, which studies have shown can mimic estrogen in the body and potentially disrupt the reproductive system. But most evidence up to now seems to indicate that the chemical is safe when used in small amounts.

Medical findings aside, the outcry against BPA has a ways to go before it reaches the full-blown campaigning of this year’s bottled water protests. Still, it’s something to watch, especially as more studies on BPA pour in. Health Canada, the country’s version of our Food and Drug Administration will release a more comprehensive report on the safety of BPA in May 2008.

Animal rights activists and vegans are applauding the decision by Morningstar Farms to use one million fewer eggs in 2008 in an effort to combat factory farms, and in the process promote cage-free operations.

The company should be pleased with itself as well. It did the right thing, got great press and perhaps most importantly — demonstrated how a big mainstream company can change with consumer demand and actually, truly, benefit from it.

Morningstar made the decision after it became the focus of a letter-writing campaign organized by two animal rights groups, Compassion Over Killing and Vegan Outreach. According to COK’s executive director, Erica Meier, Morningstar was chosen because it already had a reputation as a progressive manufacturer of vegetarian foods. Yet the company was using eggs from large farms prone to employing wire mesh battery cages that basically reduce the hens to egg-laying machines.

The press release notes that, by giving up the eggs, Morningstar Farms will reduce “factory farm” demand by 4,000 hens. It also notes there will be more egg-less products, which really cheered the vegans.

The company gets the most points, however, for realizing that consumer dynamics have changed. These days, healthfulness in a food product is a given. Shoppers are asking, “What else have you got?”

Humane treatment of animals is certainly one option that ranks near the top of the list, and Morningstar Farms was smart to acknowledge just how dearly many consumers feel about the matter.