Organic OpportunityNovember 8, 2017
Store Brands | November 8, 2017 – When asked if adding an organic tier to their private brands would be worth retailers’ time, effort and money, Daymon’s Carl Jorgensen didn’t have to think long before replying – answering the question faster than you can say Peter Piper picked a peck of pesticide-free peppers.
“You would be investing in the fastest-growing part of private brands,” said Jorgensen, Daymon’s director of global thought leadership/wellness. “Sure there is a cost in starting a new store brand, but look at the opportunity.”
Organic private brands represent a small but growing segment among supermarket chains and regional grocers. While organic represents only 6 percent of share of sales across private label food and beverage, it gains a half share point in 2016 at the expense of value and mainstream segments, according to “The Power of Private Brands,” a recent report from the Food Marketing Institute, Daymon and IRI. Private Brands represent about 20 percent of overall food and beverage sales, but 3percent among all organic items, the report stated.
Several retailers have seized the own-brand organic opportunity with success. Among large supermarket chains, The Kroger Co. has one of the top private brand organic programs going. Kroger debuted its Simple Truth Organic line in 212 and it has grown to be one of the largest-selling organic brands in the country.
Publix Super Markets debuted its organic and free-from store brand, Publix Green Wise, in 2003. Publix is growing the line carefully and strategically. In 2016, Publix introduced about 50 new products to the line, and about 100 new products were added this year.
Karen Hall, Publix’s director of emerging business and private brands said there is a “concerted effort” to expand the line.
Jorgensen said organic growth hasn’t come close to hitting its growth ceiling his reason being that organic only has a 5 percent penetration rate among all retailers, which includes national brands and store brands.
“That gives you an idea of how much white space there is,” he adds.