Solana Gold Organics

Why Organic Private Label?

With annual sales nearing $20 billion, retailers with a vision for entering the organics market want a brand of their own.

Store brand organics is a fact that must be addressed, in todays marketplace, when you consider the following:

  • The average consumer of organic foods is educated, affluent and well traveled (an adequate description many of those who purchase private label products.)

  • Sales of organic food products have expanded at a rate of about 20 percent annually over the past several years.

  • Sales of organic food products are expected to reach $20 billion by 2005.

Though still only a small percent of total U.S. food sales, the market growth of this category has prompted a handful of forward-thinking retailers and wholesalers to introduce the industry's first private label organics.

Create Customer Loyalty through Branding

As a growing number of consumers, concerned over pesticides and chemicals in their food, begin searching the aisles for organic alternatives, industry insiders think it's likely they'll reach for that familiar store brand rather than an unknown national brand. According to a recent study, 81 percent of organic food buyers couldn't name a single organic food "brand." But, it's guaranteed that every shopper in your store(s) will be familiar with your store brand!

Looking for a single entity that can supply all of their organic product needs, rather than looking for the best manufacturers of individual products, is the biggest mistake a private label buyer can make. Consumers of organic products are very knowledgeable, and they're willing to pay the higher prices, but they expect higher quality in return. They certainly don't want to feel they're getting ripped off.

Collaboration: Success for the Manufacturer and Retailer

To create a win-win situation, there is an opportunity for the manufacturer and retailer to collaborate. In an effort to help jumpstart sales, the manufacturer may offer a special entry-pricing program. Later, as the product begins to be established, the manufacturer may offer an 'accrual' program. The 'accrual program', based on quantity of product sold each year, enables the retailer to build up credit that will be applied to annual sales specials.

Isolating Your Branded Organics is a Remedy for Failure

Proper product placement is important. There is the assumption that people who buy organic aren't just part organic, they're totally organic. So, the question is, "Why should they have to go all over the store to find the stuff they want when it could be all in one place?" But what about the potential organic food buyer? Separate departments are too easy to avoid, to walk right past. By integrating organic foods with their non-organic counterparts, you allow consumers to make a buying decision with all of the alternatives in front of them. If you put the organic alternative in another part of the store, consumers can't compare ingredients, nutritional values.

Create a 'New Look' for your Branded Organics

You don't want your product in a dark corner of the store. You want your product to be visible when it is sitting next to the other products. As a result, we recommend creating a new brand or sub-brand for private label organics. You definitely want a different look for store brand organics. You don't want the same old label with just the word organic on it because it'll get lost. You need a different look so there's no confusion between regular and organic private label.

 

©Copyright 2001 - Solana Gold Organics - All rights reserved.

Many retailers are attempting to win back customers lost to specialty food outlets, such as the Whole Foods/Wild Oats shopper, while others are focusing on the mainstream shoppers.

Consumers buy the relatively cheap, conventional stuff at traditional grocery stores, and then go to Whole Foods or Wild Oats to buy food for their kids' lunches.

Supermarkets, already reeling from the loss of bath and body products, hardware, party supplies, and a myriad of other categories to specialty stores, are unwilling to part with organic food dollars, and have been forced to fight back with sections of their own.

To drive demand, you must educate consumers. At the very least, customers need to understand the difference between natural and organic.