R&FF Retailer: ‘The Oogidie-Boogidie People’
Commentary by Warren Thayer, Editorial Director, Refrigerated & Frozen Foods Retailer
Why don’t more of you guys integrate your organic and natural foods into your mainstream shelf sets? I just don’t see why this is still even debated.
“Well, let’s see. Natural dairy products were up 3.3 percent last year, and natural organics were up 17.9 percent, while the department as a whole was down. Over in frozen, total sales were up 2.5 percent, but natural sales were up 23.6 percent and organics were up 42.5 percent. Hmm, I guess we better put this organic and natural stuff off in a corner somewhere by itself.”
Hello? As tennis ace John McEnroe used to say when perturbed by a linesman’s call, “You simply cannot be serious!”
I’ve actually felt this way for a long time, but held back from saying anything because older and wiser people with “gravitas” (something I’ve never had) were forever saying things like “Well, you should just do what works best in your stores. It can go either way.”
Yeah, and if the house is on fire, you can either run outside, or take a nap on the sofa until the fire department comes. “It can go either way.” This battle should be over. Things have changed, but too many retailers are still acting on old information.
Back in the last century, when my wife was the editor of Vegetarian Times, a dinosaur at her company used to refer to vegetarians as “The Oogidie-Boogidie People.” No, he didn’t “get it,” but I bet you laughed when you read that.
You laughed because about 20 or so years ago, it seemed quite appropriate to think of vegetarians and organic/natural food eaters as argumentative folk wearing turbans, Birkenstocks, and perpetually pained expressions. Once, when my wife wrote in a column that she was married to a meat eater, she got hate mail.
Now, if I’d had a store back then, I would have given the Oogidie-Boogidie people their own section off in a corner, too. Maybe I’d have put a secret little trap door in the floor. But it’s 2007 now, and organic and natural foods are mainstream. Shouldn’t shoppers find them with the “mainstream” foods? And for shoppers on the edge, wouldn’t it be wise to expose them to these products instead of ceding the ground to Whole Foods?
Yet a lot of retailers who do everything else right still segregate their natural and organics. The magnificent Price Chopper I adore, off in the woods of Lebanon, N.H., still makes me commute back and forth between the mainstream and the organic ghetto.
I know some folk fear they’ll lose “mainstream” business if they give up “mainstream” SKUs and add more organic and natural items into their regular shelf set. Hey, I’ve rarely seen a store without need for SKU rationalization, and besides, you actually stand to lose “mainstream” business by not giving natural and organic foods their due space. Unless, of course, you still believe in the Oogidie-Boogidie man.
Discussion Questions: Is it time to integrate organics into mainstream sets throughout grocery stores? Has keeping them separate in stores become an inconvenience (source of annoyance) for the many mainstream consumers who buy both organic and conventional foods and other products?
Organic foods should of course be integrated into the overall merchandise mix but I suspect that the reason grocery retailers continue to segregate and feature organic foods are the impressive sales growth percentages quoted by Warren Thayer! Grocery retailers are grocery merchants first and retailers second and as such believe that these featured sections help their customers.
But wait! Let’s not forget about the customer! By integrating organic products, which are sold at a premium over their nonorganic equals, the undiscerning customer may unknowingly pay $1.99 per pound for organic bananas instead of $.49. What will that do for customer experience and loyalty?
I am in the “don’t integrate” corner, (even if it is quiet in this corner). Being able to go directly to the organic products and get what I am looking for makes my shopping easier. I don’t want to spend time sorting through the labels. I don’t want to police my produce. And when I am in the “Organic Section” often I easily find additional products that tempt me that would not have presented themselves otherwise.
I shop both organic and non-organic and I try to shop quickly. (Although if you spoke with my husband he’d tell a different story.) Shopping is difficult enough; don’t make shopping a hunting routine. And do feature organics! Non-oogidie-boogidie people may enjoy what us organic shoppers have come to enjoy.
As an oogidie-boogidie person (I do eat meat, but only oogidie-boogidie meat), I thank you!
There is nothing worse than walking around the grocery store for 20 minutes trying to read the minds of whoever planogrammed the place, to find a satiety smoothie made by a client. Was it in the milk cooler, the dairy case, the “natural” dairy case, the specialty beverages aisle, the natural specialty beverages aisle, the shelf-stable milk set, the natural shelf-stable milk set, or in the “Abandon All Hope O Ye Who Enter Here” diet food section with the Slim-Fast and Ensure?
Answer: natural dairy case, two single-serve facings wide. If I’m spending my hard-earned oogidie-boogidie bucks for bogus overpriced food, why are you making me work so hard?
Grocers in many parts of the country can’t completely integrate Organics into the standard shelf because, like other SLOW moving items, these products are serviced by specialty distributors and it is necessary to have all their products in one section for efficiency of merchandising efforts. Of course, if the grocer wants to add another 400 SKUs to the warehouse and have his “help” merchandise and rotate the stock, then have at it. While organic food has grown dramatically, let’s remember that a 100% increase in 1 is still only 2. What matters here is satisfying the consumer and in many regions, the consumer is conditioned to shop for organics in a “specialty” section.
Well, first off I’d like to start off by saying thank you to the author for advocating for us hippie vegetarians. Haha. We appreciate it. I was thinking about it, and while it would be nice to have more incorporation of natural organics in the mainstream grocery aisles, sometimes it’s nice to have our own section or store; even for those who buy both. I usually will buy both too, but with so many food items that the stores already have, it may be difficult to add the huge variety of natural organics. For example, when I go to Safeway I can usually find a good variety of vegan/organic/natural foods along with the regular food they have. If I’m looking for a more extensive variety or something very specific I know that I can always go to my local natural food store and find what I’m looking for, and then some. It is true, however, that some stores may not be as organically aware as Safeway, so perhaps they could make more of an effort to have a little more variety of organic foods, but I don’t think it’s necessary to have as big of a variety as the “mainstream” food.
Many of us went through this same exercise with “lite” foods and “sugar-free” as well as other product innovations.
The key question becomes, “Is it a lifestyle or is it a mainstream segment?” Phrased differently, are organic foods now considered options within their respective categories or are they a broader definition of a type of shopper?
Based on that question, does a retailer serve the customer better by having a defined section of organics or integrating them within their respective categories? Also, once you start to integrate them, the lines and definitions will inevitably become blurred, which may lead to dissatisfaction of both camps.
It would seem to depend greatly on the retailer’s shopper base and how they can best serve them.
Can’t resist just noting here that there is in fact some evidence that integrating mainstream and organic/natural works. It’s called Whole Foods. Their stores are justifiably known as upscale, but they also work in quite a variety of demographic neighborhoods. They just figured “people” want to eat healthier and set about being the consumer advocate, filling a void–selling what the shoppers wanted instead of selling what the manufacturers wanted to push. Maybe they should have a section just for “unhealthy food” to attract that segment that doesn’t want to eat healthy. (Um, I’m being sarcastic, but I think you know where I am coming from.) This is a whole mindset (paradigm?) shift. Whole Foods set everybody scrambling, but it wasn’t all that complicated to begin with. Some of the leading retailers “get it” now in the wake of Whole Foods’ success, but too many are still out there wringing their hands. IMHO.
Wow, this was a much needed column topic. I agree that it can go both ways but some brands are indeed trying to meet in the middle. I’m going to be a pain and bring up Publix again because they have a clearly identifiable “Greenwise” brand that marks all organic & natural foods/products with the beacon branding. Although there are some specific Greenwise sections, the Greenwise products are also interspersed throughout the store–all instantly identifiable by the signage and product packaging. As a natural foods advocate, I can can scan every aisle quickly and easily to find what I’m looking for and get out of the store in record time.
This is a segmentation approach to marketing that is just plain bad. It is long overdue to integrate organic, natural foods with all of the rest of the products on the grocery shelves. This is already being done in some sections (like cereal and milk) and could easily be done throughout the entire store. Stores that have recognized that the same consumer often “shops” for both (or at least considers them as part of their purchasing decision) have made great advances in their store merchandising and will see the rewards at the cash register since these items tend to have a larger margin!
Several disingenuous possibilities occur to me on this one. First, by segregating organics, retailers may possibly be hoping that customers won’t price compare them to non-organics and will be more likely to pay premium prices. Alternatively, segregating them may be due to perceived pressure from manufacturers of non-organics who think that their products would suffer even more by comparison when customers take time to stand and read all about it. Oh yes, one more thing–segregating products may make it easier to target customers and see who is buying what. After all, while retailers believe(d) that organically oriented customers were the minority, they may have felt justified in protecting their more mainstream customers from these cranks.
The answer partly depends on the definition of integration. Putting organic and natural products, both name brand and private label, in the same aisle as their non-organic counterparts makes the most sense for the consumer. Convenience is paramount these days. Consumers just don’t want to take the time to go to two or more sections of the store looking for an item, if they can more easily go to one section and make comparative choices there. Those who want organic, want organic and will pay for it. Those who aren’t sure will see a greater variety of choices than they thought existed. By putting organics on sale regularly, retailers may increase sales to the category and increase customer satisfaction as well. Consumers who primarily shop stores like Whole Foods may be surprised at the greater choices now available at today’s supermarkets.
Make it easy for consumers to shop your store, and you will be rewarded.
(Warren, you forgot Earth Shoes. Shame on you.)
Safeway has integrated (i.e. “jammed”) their “O” brand onto shelves along with their other private labels. Their checkout clerks are required to ask, “Did you find everything you wanted?,” and then everyone has a good laugh.
Decades ago we contemplated our navels (not oranges) while wondering if we should integrate Generics into the main shelf-set. The issue was shoppers embarrassed being seen in the Generics section. Wow, is that old-school or what? Now, shoppers in Organic or Natural Foods sections are seen as totally cool and upscale while contemplating their navels (oranges this time). Until, of course, they cart their purchases out to their SUVs….
So here’s my rant: Organics and Natural Foods are bogus, bogus, bogus! The requirements for these labels are so loosey-goosey that any industrial farmer/protein processor can qualify. Hasn’t anyone out there read Michael Pollan’s “The Omnivore’s Dilemma?”
Now I’m calm again, contemplating my navel (not oranges). What were the most recent attempts at segregating/integrating “stuff” in a grocery store? Low-Carbs, No Trans-Fats, and Olestra? And now it’s Organic and Natural.
I’m off to the carnival. It’s almost as much fun as the supermarket and a heck of a lot cheaper.
Thanks to Warren for a good chuckle this morning. It seems painfully obvious to many that segregation of organics/natural food products is simply the perpetuation of a bad idea.
As Seth Godin has written, bad ideas stick around for a long, long time.
I was amused by the comments made on this subject. I have no hard evidence, nor have I been shown any…that substantiates that we should integrate. There has been much speculation and rhetoric–but nothing else–to jump into it seems less then prudent.
When looked at this issue from a manufacturing return on investment, once we take these items “mainstream,” the pressure will begin to get the retail prices down to an acceptable (for the masses) price point.
Retail price down means list price reduced…which logically means reduced return for the manufacturer.
These items also have additional costs of manufacturing. The Natural/Organic Channel consumer is happy to pay more for something healthy that they feel fits their needs. Retail pricess stay up, list price remains steady…return remains steady.
I will continue to argue against the Wal-Mart syndrome…”sell more for less.” It can work with mainstream items, but those “Wal-Mart consumers” faced with retail rings that exceed $5.00 on the same things they can get from “mainstream” for $2.99 end up not buying and the answer for the manufacturer from the Chain is “lower your price or we’ll be forced to discontinue your items.”
Lower volume for now, with high return–a proven concept at this point in the Natural/Organic Channel–works for me ’til somebody explains the virtue of making less money on more sales. Oh yes…I understand; 1000 dimes may be better then 300 quarters…but only if getting to the 1000 is beyond the world of speculation.
This is a lot like the plus-size segregation that happens in apparel, and I’m not too fond of that, either.
I will tell you that it never would have occurred to me to try Wolfgang Puck’s organic soups if they hadn’t been in an extremely prominent end-of-aisle display at my local Dierbergs.
At that point, my experience walking the NNFA show some years back kicked in–that natural foods tended either to taste way better than the mainstream alternative or else like particulate-infused motor oil mixed with driveway gravel. I figured Wolfgang would probably not end up on the motor-oil side of things, so here I am, the proud owner of four cans of organic Puck soups, when the special was for three at a time.
Based on that highly scientific survey of one distracted shopper, I think the answer is definitely to mainstream the organic SKUs. (I also am afraid to shop that aisle–not for fear of looking like a nutcase–but for fear of coming home with a bunch of food that tastes of sand and gravel; mainstream placement and trusted brands go a long way toward allaying those fears.)
I do see a problem with pricing–there’s gotta be a way to flag the organics as such and justify the price. Otherwise, a less observant shopper could inadvertently throw an organic in the cart and then, at the checkout, conclude that the whole store has suddenly gone on a price-gouging binge.
It seems to me to be a research issue, whether in-store or using virtual reality shopping (sorry for the commercial). I don’t think we can intuit the answer–too many arguments for either side.
Yes, the house is on fire.
Isn’t the shelf all about trading up? Natural and organic products are a “natural” trade-up even if there aren’t enough organaphanatics to support them in their own corner.
Given the choice (key phrase) people do choose better all the time. Why would it be any different on the shelf?
A very big supermarket shopper complaint: stop moving the displays around. In spite of that issue, wouldn’t it pay for a chain store to take a few locations and test organic and natural foods display integration versus segregation? One possible exception: it may pay to keep the segregation in the produce area, since it’s easier for the organic to get confused with the conventional produce.
And being customer-driven, why not test integration in the areas that are traditionally brand-shelved? Just because it’s easier for the DSD route people to do their replenishment by keeping each brand separate doesn’t mean it’s preferred by the customers. And how many stores keep their private label brands segregated? Is that customer-driven?
A “natural section,” which is typically off to the side or back of the store somewhere, is only there for the “vegetarians and organic/natural food eaters who are argumentative folk wearing turbans, Birkenstocks, and perpetually pained expressions” (by the way Warren, I love that description). This layout doesn’t work for either the “non-organic” or “organic” consumers.
For those “non-organic” consumers who believe that you have to wear Birkenstocks to shop the section, how does it entice them to even enter that area? It doesn’t–in fact, it probably scares them to death! And for the “organic” consumer, they have to decide what to buy in the natural foods section, and then they have to shop the rest of the store to fill in what they couldn’t buy in the “Birkenstocks only” section.
Retailers owe it to their consumers to offer them choices. By putting some of the category offerings in a different part of the store, they are not encouraging consumers to make different purchase decisions (which typically are a higher dollar ring). They should even flag the “certified organic” products, so that health conscious consumers can quickly identify these products.
Integrating organic/green products into regular sections is a huge opportunity for retailers. Trade consumers up to higher dollar rings, offer all consumers healthier food choices, and increase overall consumer satisfaction!
This is a great, fun article turned into a good discussion…and a case where it seems one may have a rather different conclusion on product placement if the commenter is coming from a grocer/profit/marketing perspective versus a customer/convenience/buying perspective. How unfortunate that this is so.
The placement dilemma re: “different” versions of a single product goes at least as far back as the introduction of “generic” grocery goods in the 1970s. Some of you may be old enough to recall the plain wrapped cans of generic fruit cocktail and green beans and the plain boxes of macaroni that sat sadly, colorlessly, and unappetizingly enmasse in a “generic no man’s land” aisle far from the well known brands and signature store labels. As with some of today’s organics some generic offerings were not so tasty, but others were delicious and were simply repackaged versions of the same traditional brands that sat a few aisles away at twice the price. Generics worked fine for many purposes, and it was aggravating to have to wander around trying to find the generics section. It made no sense that ALL the creamed corn wasn’t together in one place. I always guessed that the store just wanted to make it hard to compare prices.
Fast forward to the height of the low-carb consciousness. Once again there were “different” offerings of essential products ranging from ice cream to pasta to salad dressings and once again most were segregated. Unlike the generics, though, all the low carb stuff was not even displayed together and therefore required the customer to go on a scavenger hunt. Once in frustration I enlisted the Jewel store manager’s assistance in a search to find the “La Tortilla Factory” low carb wraps that were now in a different place than they had been just two weeks before (and most definitely NOT with the rest of the tortilla offerings in any event). I patiently explained to him that when making tacos or breakfast burritos for my family we mostly used regular flour tortillas but that two of us preferred to place the “innards” in high fiber low carb fare. I told him that for customer convenience how wonderful it would be to find both versions placed together. He apologized but said that the price of the low carb wraps ($2.79) was so much greater than the regular tortillas (99 cents) that they felt that no one would buy the low carb ones if they were all together. I was almost speechless but assured him that everyone already knew that low carb products were more costly to produce and reminded him that the “La Tortilla Factory” ones were STILL $2.79 no matter where they were placed. I now knew for a fact that stores wanted to make it hard to compare prices. I should have mentioned to him also that few of us are in the mood to pick up those high profit “impulse” items while we are testily wandering around on a search for a singular particular item.
And today, with the increased organic offerings, we seem once again to be going down the same road. More and more folks, including me, are eager to experiment with organic products and we fully understand that the additional costs of production make organics more expensive to purchase. Not everyone can afford organics exclusively, but most customers are capable of making personal cost/benefit calculations on certain products. Now, in the spirit of the Wolfgang Puck organic soups can we PLEASE have all the peanut butters together on one shelf?!!
Pricing and presentation dilemmas will soon be solved as SuperValu’s Sunflower Market and other U.S. players make affordability moot. Then, on to multiple international players that have (Famima et al) and will (Tesco et al) hit our shores any month now, bringing highly shopable formats, edited organic assortments and grab-and-go convenience. Hand-wringing will cease as everyone looks over their shoulder and “Whole Paycheck” will make the full price-justifying shift from natural to natural and er…gourmet.
Thanks Warren for saying what many of us have been thinking. There was a time when the organics were best merchandised in one location in the store. However, the time has come to integrate and merchandise them with the other products in their categories. This will reduce the confusion and ultimately lead to an increase in sales, thus making it a win-win for both the consumer and end user.
Hi Warren, good points as usual. What SKU rationalization means to some retail chains is to simply carry the top “X” ranked UPCs right off the category scan report almost regardless of what niche choices are omitted from the assortment. I guess that’s why I can’t find my favorite no-fat ice cream anymore at my regional grocery chain. But at least I have an excuse for being overweight. Umm, the “Highly Advertised Brand of Chocolate Chip Brownie Extra Creamy Brownie Delight with Critical Mass” is delicious! Good thing it was already ranked one tenth of a point ahead of the healthy brand. Otherwise, my regional chain might have carried at least one SKU of the healthy stuff and I might have purchased it instead of choosing one of the 17 choices they offered on the fattening stuff.
One size does not fit all. Segregating is better for the consumer who only shops organic/natural. Integrating is better for the customer that shops both conventional and organic/natural. You can’t please everyone. Get used to it. The bottom line is you do your market research, you make a decision, and you run with it. Peace.