Northwest’s large chains get further into organics

10/14/2008 12:00:00 AM
Angie Hanson

(Oct. 14, 1:18 p.m.) SEATTLE — Conventional retailers continue to enhance their organic produce selection, and as their offerings escalate, many wonder whether the large chains will sway customers from the natural food stores and co-ops that already have a devoted following among the organic-favoring Northwest.

Cincinnati-based Kroger Co.’s Fred Meyer and QFC (Quality Food Centers) banners, Pleasanton, Calif.-based Safeway Inc. and Boise, Idaho-based Albertson’s LLC — four dominant chains in the Pacific Northwest — have recently increased their green presence in produce departments, providing stores like PCC Natural Markets, Portland-based New Seasons Markets and Austin, Texas-based Whole Foods Markets Inc. competition.

“We’ve heard a lot of different things from people,” said David Lively, marketing director for Eugene, Ore.-based Organically Grown Co. “Some are in the opinion that conventionals are a gateway. They might start shopping at a Safeway and Kroger, and if they like it, they might walk off to a natural food store to find a broader line, and with some, 10 items is all they’re going to care about.

“I think, ultimately, both markets are going to continue to exist.”

Safeway now offers its O private-label organic brand and is in the process of converting all stores to its new Lifestyle format, which can carry up to or more than 100 organic produce Stock-Keeping Units.

Fred Meyer and QFC also are strengthening their organic selection, and Albertson’s is hoping to become an organic destination for its customers, with between 75 and 100 organic produce items in stock at any given store, said Donna Eggers, public affairs manager for Albertson’s Intermountain West Division.

“In regard to our natural/organic offerings, we strive to become a single solution for our consumers and make shopping for natural/organics easier and less time consuming,” Eggers said.

Maureen Royal, director of sales and marketing for CF Fresh, a Sedro-Woolley, Wash.-based organic distributor, said the conventionals’ entrance into the organic segment provides healthy competition for all Northwest retailers.

“I think it’s good competition — it has just made everyone more aware of what’s going on in the organic marketplace,” Royal said. “It has encouraged everyone to be more insightful about what they’re bringing in and running organic ads. If anything, it’s just encouraged the organic independents to be on their toes, and they’re doing a good job, from what I can see.”

PCC Natural Markets, an independent co-op with eight certified organic stores in and around Seattle, is not overly concerned with its newfound competition and will continue to use its service as leverage against larger stores, said Diana Crane, PCC’s communications manager.

“They’re raising the bar, but not their customer service,” said Crane, whose stores are 90% organic and carry about 350 produce items.

Chris McNamee, vice president of Botsford & Goodfellow Inc., Clackamas, Ore., agreed with Crane that customer interaction is a key component for the independents and should allow them to maintain their market share.

Ray Bowen, president of Charlie’s Produce, a Seattle-based wholesaler, said the chains’ organic success is dependent upon the attention they dedicate to organic produce, which can be time consuming.

“They can compete if they want to prioritize,” Bowen said. “They have a certain amount of time that they want to give to work their departments.”

While not conventional, Whole Foods is one example of a commercial organic operation that hasn’t generated the type of interest in the Northwest that it’s garnered in other parts of the U.S., said Jeff Fairchild, produce buyer for New Seasons Markets, which has nine stores in Portland that are between 75% and 80% organic.

There are four Whole Foods stores in the Seattle area, and six in the Portland area, according to the retailer’s Web site.

“It’s a challenging market for Whole Foods,” Fairchild said. “It’s a very regionally-centered supportive part of the country. They can’t waltz in here with their high-end format and wow people.”

Whole Foods has caused a shake up for some, like Organically Grown, whom Whole Foods pulled business from in January 2007, after opening a distribution facility in Washington, Lively said.

To make up for the loss, Organically Grown found new business with Safeway and PCC, and even began working a little with Seattle-based Amazon.com Inc., which recently began selling and delivering produce in the Seattle area, Lively said.

Wholesale organics

CF Fresh offers organic apples, pears, onions, potatoes, cherries, asparagus, plums, peaches, apricots and nectarines under its Viva Tierra label and private-label programs, Royal said, and United Salad Co., Portland, also has an extensive organic array, offering around 200 items, said Ernie Spada Jr., United Salad’s vice president.

Charlie’s Produce has its own group of 20 organic farmers in Oregon and Washington — Farmer’s Own — who grow potatoes, onions and several other vegetables. On the commercial side, the wholesaler sources a full line of organics from various regions, Bowen said.

Charlie’s supplies mainly retailers with organics, but the foodservice division is showing increased intrigue in the category, Bowen said.

“The foodservice segment is looking harder at it, as technology and pricing gets better and price is narrowing,” Bowen said of organics, which represents about 15% of Charlie’s business.

Botsford & Goodfellow is capable of carrying any organic product, McNamee said, while Seattle-based F.C. Bloxom Co. offers select organic items, said vice-president William Bloxom.

Coastal Inc., Portland, however, hasn’t hopped on the organic bandwagon just yet, said Dennis Baird, vice president and general manager.

“It’s a real hotbed here for organics and, ‘the green revolution,’” Baird said. “But it all came from the earth. I just kind of chuckle about it.”



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