Refresh

To be sure, the era of “one size fits all” in the beverage industry is long gone. Some recent product introductions aren’t even liquid. They’re energy-promoting mixes and tablets.

Among the newcomers: Jones Soda is in Whole Foods Market stores with 24c, a line of vitamin-enhanced powder drink mixes. Veteran mix companies are also present: 4C has introduced Totally Light 2Go Vitamin Stix; and Kraft’s Crystal Light has added three new varieties to its On The Go Enhanced line introduced last year.

“Traditionally people would buy powdered beverages for their value over ready-to-drink, because they provided the consumer with more beverage on a per-ounce basis at a much lower cost,” said Gary Hemphill, managing director of Beverage Marketing Corp., a New York-based consulting firm.

You know what? He right! It’s just not childhood without summers guzzling Kool-Aid and ice tea mixes. That’s why parents hate rainy days. All that sugar and nowhere to run it off…

Now, health and wellness is the single most important driver in terms of beverage choice. All these products share a functional aspect, and they also emphasize their convenience and portability. The tubes, tablets and powders are all designed to be carried in a pocket or knapsack until needed, and then added to bottled water.

What’s timely is that, given the ongoing debate over plastic bottle waste, the powder sachets reduce the need to repeatedly purchase ready-to-drink performance beverages, and therefore, reduce bottle trash. Pretty neat.

Well, sure. But maybe not for long, judging by what we’re seeing lately with this wily economy.

Right now the price of conventional milk is higher than it’s been in years, at around $20 per hundred weight, according to the U.S. Department of Agriculture. Compare that to this same time last year, when the payout was just over $13 per hundred weight. This is great news for a lot of farmers.

The benefits don’t extend to organic dairy, though. And the current situation has the potential to sour organic milk supplies in the not-too-distant future. Industry experts say that, with conventional prices this high, fewer and fewer farmers want to undertake the onerous three-year conversion process required to get herds certified organic by the Department of Agriculture. To many, it’s just not worth the headache.

Ed Maltby, executive director of the Northeast Dairy Producers Alliance, says the problem is actually twofold: Conventional prices are too high, and organic prices are too low. He estimates that organic milk payouts in the northeast average $28 per hundred weight right now.

As a result, organic supply is stagnant.

“There’s nobody out there looking to transition,” said Maltby, in an interview. “And there won’t be until the price goes up or, alternatively, the conventional price drops back to where it was a year ago.”

Farmers who have made the conversion are being hit hard with the lower organic prices, he added. Many have had to run through lines of credit or dip into their savings to purchase supplies (including expensive organic feed, which is also affected as grain farmers decide to raise in-demand, ethanol crops). They’ve started working longer hours and are trying to grow their own forage to save costs.

Maltby and others have appealed to manufacturers like organic yogurt maker Stonyfield Farm to raise prices. And companies have responded — though not to the extent that many organic dairy farmers would like to see.

A supply shortage hasn’t hit supermarkets yet. But it very well could by as early as fall. Retailers should take note of Maltby’s warning: “I think by September or October there will be signs up in grocery stores saying that there’s a shortage of organic milk,” he said.

We received some interesting numbers this week from the Food Marketing Institute, the organization representing retailers in food industry matters. The group’s annual study on store development shows a strong trend towards operators embracing sustainability in their building and remodeling plans.

The report, Facts About Store Development 2007, shows that upwards of 34% of the respondents stated they’re pursuing sustainability initiatives related to new buildings or remodels, while another 40% plan to do so in the next five years. A lot of the focus right now seems to be on reducing the store’s environmental impact by adding refrigeration management programs and “making changes in store design, landscaping or transportation,” according to FMI.

As you can imagine, right now, the emphasis is on energy conservation and reduction. Retailers have joined the U.S. Environmental Protection Agency’s GreenChill program like crazy in an effort to minimize leaks in refrigeration systems. They’re decreasing energy use with LED lighting, skylights, light-motion detectors and energy-efficient HVAC systems. Some of them are going so far as to install systems that reclaim heat output, and adjusting schedules in an effort to drive energy use to off-peak hours.

Customers might not see all the effort that’s going on behind the scenes. But they should be told. Retailers should be sure to publicize their efforts, using bag stuffers, in-store signage or an article in their custom publication.

April is finally here, and I’m thinking ahead to sunshine, hiking and baseball season. As a business reporter covering whole health issues, I’m also thinking about Earth Day.

This year, it’s no wonder. Whole Foods announced back in January its plans to do away with plastic bags on April 22. Doing this gave them a lot of good press and put them ahead of other retailers on the issue — many of whom have crafted their own Earth Day promotions.

In terms of sheer size and focus, however, the award has to go to Wal-Mart. Yesterday the Bentonville retailer announced plans to offer a host of sustainable products at reduced prices for not just one day, but the entire month of April. Calling it their “Earth Month” promotion, Wal-Mart officials have positioned the campaign as a way to bring green into the mainstream, so to speak.

Part of the plan involves introducing new items like 20-pound bags of recyclable rubber mulch, $7.50 T-shirts made from recycled plastic bottles, as well as cotton T-shirts whose proceeds benefit transitioning organic farmers. It also involves cutting prices on items already in stores, like Clorox Green Works detergent, as well as introducing a new line of Sam’s Choice private label Fair Trade coffees.

It’s a pretty bold statement. Indeed, the promotions Whole Foods and Wal-Mart are offering show just how much progress sustainability issues have made on both ends of the retail spectrum. They’ll also, undoubtedly, guide other companies towards similar initiatives.

But why wait for one or the other to get ahead? Many mainstream grocers know their consumers and follow the trends. They should use this information to stick their necks out a little and provide something unique.

Let’s see…. can you name any state agencies and what they’re famous for? Florida’s office of Secretary of State comes to mind, but this is a food industry blog, so we’ll skip over the 2000 U.S. presidential election and move right onto something more appropriate.

How about the N.J. Department of Agriculture? That’s more on-point. It was 1984 when then-Secretary Art Brown unveiled the “Jersey Fresh” campaign. Sure, it got a lot of laughs at first. New Jersey? Everyone focuses on the northern reaches of the state, and forgets that New Jersey farms generate about $924 million per year and employ about 562,000 people — that’s about 12% of the state’s jobs. Currently there are about 10,000 farms working 790,000 acres, or 17% percent of the state’s land.

The irrepressible Brown (his personal advocacy of the budding program was key to its eventual success) kicked off what’s become a credible source of promotional assistance for retailers. Numerous states copied N.J.’s program with their own slogans and logos. Through these departments of agriculture, supermarket chains are today able to connect with farmers, take advantage of promotional materials and plan events. Say what you want about the Garden State, but biting into an in-season, Jersey-grown tomato still sends shivers down your back (that’s a Ramapo, a local favorite, pictured above. courtesy of Rutgers University).

This week, farmers are going to gather in the state capital to protest the plan to get rid of the Department of Agriculture. It’s a budget move expected to save $4 million. Instead, the areas the agency is responsible for — including soil conservation, food safety and commodity promotions — will be transferred to others that oversee health and environmental protection.

Two other states do not have Departments of Agriculture: Rhode Island and Alaska. New Jersey would become the third. Officials point out that eliminating the department does not mean they’re taking away support for the state’s agricultural heritage and current needs.

But it sure seems like it. I don’t think there’s one retailer operating in the state who doesn’t participate to some degree in the annual Jersey Fresh campaign. Let’s hope that, no matter what the outcome, supermarkets keep the program popular and profitable.

My colleague, Jeff Wells, is our go-to guy for coverage of the locavore market, but something crossed my desk that got me thinking. Maybe it’s spring, and everyone is getting excited about the coming season, but local food news is really taking the headlines this week.

The National Cooperative Grocers Association is putting the final touches on its first-ever “Eat Local Challenge” which calls on consumers to eat 80% of their diets (or four out of every 5 meals) from locally grown foods. The promotion runs during the height of the growing season, from mid-June to mid-September.

More specifically, the challenge is actually divided up into three periods, based on peak times. Since we’re in the Northeast, our challenge time will be Aug. 15 to Sept. 15. California, the Southwest and South go first, with their season peaking from June 15 to July 15. It’s OK. I don’t mind waiting for corn and tomatoes.

Robynn Shrader, the NCGA’s chief executive, says the idea goes beyond simple taste, to the heart of the “Go Local” movement that’s captured the imagination of so many shoppers.

“It’s good for economy, because money from each transaction stays in the region. It connects community members to the people who grow or produce our food, while helping to support endangered family farms,” says Shrader. “It also helps protect the environment because food doesn’t travel as far, reducing carbon dioxide emissions.”

Now, I know there are studies out there questioning the effectiveness of local buying, research examining the true benefit of food miles, and things of that nature. I’ll just say this. Last June I went cherry picking at an orchard in upstate New York, not far from my hometown. We had a blast running around the sunny orchard with these huge baskets, tasting the different varieties, listening to the farmer describe what a great year it was as he exhorted us to sample all we wanted. “Better you folks than the birds” was my memory of his exact words.

The science and economics and realities of “local” faded fast before the sheer joy of being right at the source, picking our own. We resolved then and there to go apple picking in the fall (just as fun, but apples are a lot heavier to lug around than cherries, and eventually I was forced to hail a tractor).

So, retailers, please have some local produce available this year. Bring the farmers in, let them talk and invite the kids. Not everyone has the luxury or the ability to get away to the fields and orchards. But you have the power to bring it all to them.

In our November SN Whole Health cover story, we reported on the growing demand for locally sourced products, and supermarkets’ efforts to meet that demand. Fast-forward a couple months, and the trend is as hot as ever. According to a recent study from The Hartman Group, 73% of consumers are buying products they see as locally made or produced.

Retailers like Price Chopper get the picture. This week the Schenectady, N.Y.-based chain announced it would start offering more local products throughout the store. Ukrop’s also gets it. Each year the Richmond, Va.-based chain partners with local groups like Appalachian Sustainable Development to provide fresh regional produce.

Supermarkets aren’t the only ones taking advantage. Chipotle is now serving pork from Polyface Farm (made famous by Michael Pollan’s book, The Omnivore’s Dilemma) at its Charlottesville, Va. location. And food service operators like Sodexo and Bon Appetite are ramping up their local sourcing efforts at hospitals, college campuses and other places.

So how much bigger can this thing get? Well, before looking to the next horizon, retailers should first focus on marketing and sourcing the local offerings they already have.

Sourcing local products efficiently requires some creative thinking, since it runs counterintuitive to the centralized model that most supermarket supply chains adhere to. Smart companies will go out of their way to streamline the process and help give area farmers a hand.

There’s also the question of how to position these items once they reach the store. Supermarkets are currently the most shopped channel for the category, according to the Hartman study, claiming 62% of shoppers who buy local goods. That number could be higher, however, especially if more retailers take time to connect their customers with the people and stories behind the local products they supply.

“There’s an emotional connection that consumers make with local,” said Laurie Demeritt, president of the The Hartman Group. “They really want to connect with that narrative behind the product.”

An outdoor event, such as a farmer’s market or a meet-and-greet, is a perfect way to accomplish this. With warm weather just around the corner, now’s the time to get cracking.

A number of economic reports coming out this past week reflect the grim mood shared by U.S. consumers. Most of the stories were pretty general in nature, but at least one examined the outlook for the supermarket industry.

First, we have to note that most Americans are not in dire financial straits. A relative few are burdened by job loss or a sub-prime mortgage. But read the newspapers and listen to the talking heads on television and you start wondering if it’s time to bury your life savings in the potato field out back.

Consumer confidence sank to a five-year low this month, the result of tight credit, rising prices and stalled employment. Some economists are quoted as saying the economy is already in recession, and the earliest we’ll drag ourselves out of it may be later this year, after taxpayers have had a chance to play with the money provided as part of the the government’s economic stimulus program.

Meanwhile, home prices fell almost 11.5% in January, the steepest drop since records first started being kept in 1987. Although sales of new homes were up, average prices nationwide have been growing more slowly or outright declining for 19 consecutive months.

So… let’s eat! An analyst from Banc of America Securities predicts supermarkets will get a boost from more people eating at home. “Clearly, with income growth stalling, consumers are finding it necessary to spend more of their nominal dollars on food, and particularly food at home,” he said in a note.

Scott Mushkin, vice president and a senior equity research analyst, was writing for investors, telling them large chains like Safeway and Kroger could very easily outperform the market during this period of instability, with same-store sales liable to reach as high as 7%. Each chain is actively involved in capital projects, store planning, and merchandising and pricing initiatives — all of which appeal to tight-fisted consumers.

With net profits hovering around 2%, the supermarket industry doesn’t have a lot of wiggle room. But this is a good time for them to show off and strut their stuff. Let’s show everyone what we’re capable of. It’s time to tout self-reliance and empowerment. Host more health fairs, get staff dietitians out into the stores, promote private label organics and keep stores themselves clean and accessible. That’ll give consumers something to feel good about.

We last visited the issue of hormone-free milk labeling in January, when Pennsylvania officials backed off a ruling that would have banned the use of “rBST-free” labels. It was a win for consumers, who protested that they have the right to know what is (or isn’t) in the dairy products they buy.

The battle is far from over. Last week, Wal-Mart announced that it would source all of its Great Value private label milk from cows not treated with artificial growth hormones. Given the retailer’s size, this is a big move for the industry. But don’t expect Monsanto, which developed the growth hormone, to go down without a fight. The ag-tech company — a lumbering giant in its own right — is going toe-to-toe right now with Kroger in Ohio, where early last month governor Ted Strickland issued an emergency rule that banned unverified hormone-free claims. Kroger sources its own brand of milk from cows not given rBST, and wants to tell its customers as much.

Kroger, Wal-Mart and others say that they’re responding to consumer concerns about supplementing the development of food-producing animals. “We are getting a lot of calls on this,” Kroger spokeswoman Meghan Glynn told the Cincinnati Enquirer. Monsanto, on the other hand, argues that adding hormone-free labels implies that the product is unsafe, when in fact the FDA okayed the use of these hormones back in 1993.

No matter what the FDA says, consumers are becoming increasingly wary of biotech encroaching on their food. Nine out of 10 of them want genetically modified food to be labeled. And who can forget the outcry against the FDA’s decision to allow cloned animals into the food chain?

So far, federal regulators have declined Monsanto’s request to get involved in the controversy. The one thing the company forgets — and retailers (to their great credit) remember — is that this is not about milk labels, or even hormones. It’s about the customer.

Remember Max Headroom? If you’re a child of the 80’s like me, you certainly know the stuttering media character voiced by Matt Frewer. Or, maybe you were a fan of New Coke (Go ahead. After all these years, it’s OK to admit it). Max was the spokes-entity who continued hawking the reformulated beverage after a public outcry compelled the company to re-introduce Classic Coke. “C-C-C-Catch the wave!”

Indeed. Forgive the stroll down memory lane. It’s just that I was reminded of good old Max when Ahold-owned Peapod announced this week that it was introducing the “first ever virtual nutritionist,” capable of sifting through all the products sold by the online grocer and highlighting the ones that meet a customer’s dietary needs.

Subscribers can use one of five pre-set diet plans offered (gluten-free, peanut-free, high-fiber, low-fat and low-sodium) or they can create their own customized plan using a blank Nutrition Facts panel. Here they enter the maximum desired for calories, fat, carbohydrates, fat, etc. and then activate the filter prior to building their shopping list. Peapod will only display available products meeting that criteria.

The “NutriFilter” service also takes away the challenge of trying to determine how much to eat of any nutrient. The press release uses fiber as an example. Users click on the “fiber” icon while compiling their shopping list, and enter the amount of fiber they want products to contain, and the program will highlight the approved products.

The idea has merit because we all know just how difficult it’s become to decipher the various Nutrition Facts panels, on-pack claims and health logos clogging packages. Services like this allow users to shop without being experts; as long as they have some idea of their dietary needs, then they’re good candidates to take advantage of Peapod’s NutriFilter.

Nutrifilter is certainly not the wisecracking, surreal Max. But the ability of an artificial intelligence to help us navigate today’s world — whether politics or nutrition — is something I think he would have found worthy of comment.