Natural selection

Food retailers big and small take notice as demand for organic products skyrockets

Friday, March 24, 2006

Click here to enlarge this photo dean geiser⁄The Gazette ‘‘The majority of our customers are women ... in their 30s, 40s, 50s, 60s,” says Valerie Deptula (center), who bought The Good Earth, anatural foods store in Leonardtown, in 1999. ‘‘But we also see a lot of kids from [St. Mary’s] college.” Deptula is flanked by employees Danielle Cackowski (left) and Maria Fallon. U.S. organic sales are projected to reach $30.7 billion by next year, up from $10.3 billion in 2004. Click here to enlarge this photo Gary Smith⁄The Gazette Christina Spoltore, co-owner and manager of Country Nutrition, stocks shelves at the Waldorf health-food store. Independent natural product and health food stores and natural grocery chains accounted for 47 percent of organic food sales in 2003, according to the Organic Trade Organization of Greenfield, Mass.

In fact, she even sent her children out the door for school every morning with homemade granola that she made fresh that very morning.

‘‘I’d get up in the morning to make the bread and punch the dough every once in a while when I walked past,” said Armentrout, owner of the Country Nutrition store in Waldorf. ‘‘By dinner time, we had fresh bread.”

Food stores — from supermarket mega-chains to small local markets — are offering more organically grown and natural foods, making it easier for Americans, even busy commuters, to eat more healthful meals and snacks.

It may have taken decades for the organic movement to grow from a tiny fringe market to a strong toehold in the grocery industry, but now that it has, it’s making significant inroads.

Organic food sales account for about 2 percent of U.S. food sales, according to according a manufacturer survey by the Organic Trade Organization of Greenfield, Mass., a membership-based business association for the organic industry in North America.

That may not sound like much in relative terms, but by next year, U.S. organic sales are projected to reach $30.7 billion, according to the group. That’s up from $10.38 billion in 2004, when sales grew 20.4 percent from the prior year.

U.S. organic food sales have grown between 17 percent and 21 percent annually since 1997, versus overall food sales growth of 2 percent to 4 percent, the survey indicated.

Currently, 39 percent of the country’s population uses organic products, according to the group.

The survey also indicated that, in 2003, 44 percent of total organic food sales were made in supermarkets and grocery stores, mass merchandisers and club stores. Independent natural product and health food stores and natural grocery chains accounted for 47 percent of sales. Direct sales through farmers markets, co-ops, food service operations, and exports represent the remaining 9 percent.

Armentrout and other natural- and health-food store owners say they are seeing more mainstream customers coming through their doors.

‘‘More young professionals are geared to looking at their body and don’t want to put garbage in it,” said Armentrout, who opened Country Nutrition in 1976.

The health-food industry is usually on the cutting edge of trends, although Armentrout doesn’t think of herself as trendy — just informed.

‘‘When I opened this store 25 years ago, back then people thought it was for hippies. People would come in and snicker,” Armentrout said. ‘‘But now it’s changed. Younger people are now into this type of food. It’s whatever the media says. Our industry started with the low-carb diets ... it is good for diabetics. But then big industry took it over and it became a fad. Most of my customers are not fad-oriented. They are into this type of lifestyle because it’s best.”

At The Good Earth in Leonardtown, owner Valerie Deptula also sees an increasingly diverse customer base.

‘‘The majority of our customers are women ... in their 30s, 40s, 50s, 60s,” said Deptula, who bought the market in 1999. ‘‘But we also see a lot of kids from [St. Mary’s] college.”

Big stores go natural, too

The 800-pound industry gorilla is Whole Foods Market of Austin, Texas, which had sales of $4.7 billion in 2005, up 21.6 percent from the previous year. The world’s top natural and organic foods retailer, Whole Foods has 181 stores in North America and England, including seven in Maryland.

Large conventional grocery chains have taken notice and are cashing in on the market’s growth.

Earlier this month, Wal-Mart Stores Inc., the nation’s top grocer and already No. 1 in organic milk sales, announced it plans to double its organic offerings this month, according to published reports.

And, in an indication of the growing appeal of organic and natural foods, many supermarkets now stock them on shelves alongside their other products, not in a separate section.

Safeway has introduced the line of ‘‘O” Organics within the past couple of months, said Gregory TenEyck, Safeway spokesman.

‘‘They are integrated in with our other products,” TenEyck said.

For example, in many Safeway stores shoppers now have the option of selecting organically grown canned tomatoes from the shelf right next to other brands.

Safeway is in the process of refurbishing older stores to include the revised floor plan. Traditional Safeway stores might have a natural-food store section, complete with different flooring and signage. Those stores have only a small amount of organic produce. In the newer and remodeled stores, organic produce takes center stage, TenEyck said.

The introduction of more organic or natural foods on the shelves comes from the customers themselves. Surveys are constantly conducted to see what the consumer wants and needs.

‘‘We want to be a one-stop shop for our customers,” TenEyck said. ‘‘All these things — a bank, a cleaners, Starbucks — we provide under one roof as a convenience for our customers. And there is a growing appetite for organic and natural foods.”

For example, organic juices are making big inroads among mainstream retailers in North America, according to a 2005 report by Organic Monitor, a London consulting company that tracks the industry.

Last year, natural food stores accounted for 59 percent of organic juice sales; conventional grocery retailers are expected to overtake them next year, according to the report. That’s partly because more conventional manufacturers are offering organic juices.

Dietician Paulette Thompson, the health and wellness manager for Giant Food, agreed that consumers want the option of eating natural and organic foods.

Giant introduced its brand of organic foods last year with Nature’s Promise, which it expects to eventually comprise up to 200 products.

‘‘We have seen that natural and organic products were a growing category,” Thompson said.

Giant also recognized that consumers wanted more of that category at affordable prices.

While the organic and natural products in Giant range from non-perishable items to produce and dairy, the chain is hoping to introduce meat to the selections in coming months, Thompson said.

‘‘If there is a choice of natural or organic foods,” Thompson asked, ‘‘why not buy it?

‘‘Natural and organic foods are perceived as being healthier. There isn’t any research out there showing they are necessarily healthier than conventional foods, but more and more people are concerned about additives added to their food and the pesticides used,” Thompson said. ‘‘Conventional foods are certainly safe, but more and more people want food that is closer to the farm.”