Retailers tout the power of organics during OPN webinar
It has been well reported that the produce department has done very well during the pandemic, and the organic sector is also registering solid gains.
That was the major takeaway from a “Retailer Insights” virtual event held by the Organic Produce Network on Wednesday, Nov. 11. A pair of retailers — Scott Schuette, vice president of produce and floral for the Midwest-based chain Fresh Thyme Market, and Stew Leonard Jr., president and CEO of the New York area chain that carries his name – relayed their experiences over this eventful year focusing on the role organic produce has played.
Fresh Thyme Market is a six-year-old chain of 70 stores that was founded on the goal of bringing real food at affordable prices to the center of the country. Schuette agreed that the Midwest was “late to the game” regarding organics, but Fresh Thyme is making up for lost time. The company’s top produce executive said the retailer is increasing its natural and organic produce offerings on a daily basis. In fact, he said the chain has tied its wagon to the organic horse. “We win 2021 by winning organics,” he said.
He said that Fresh Thyme has learned by watching the organic surge on the coasts and the efforts of competitors entering the organic marketplace. He noted that mobile consumers are bringing food trends to the Midwest from other parts of the country.
Specifically talking about organic successes during this coronavirus-impacted year, Schuette said packaged items and packaged herbs have seen significant year-over-year sales gains. “We found that everything from packaged herbs, packaged salads, the new pouch bag of organic apples, and some of the different packaged organic items really resonated well with this new customer” who has changed his or her buying habits because of safety concerns.
Schuette revealed that Fresh Thyme’s herb lineup is all organic and that it is the organic category registering the largest sales gains in 2020. Interviewer Tonya Antle, who is OPN’s co-founder and executive vice president, noted that consumers are cooking more at home and asked Schutte if he expects that trend to continue. “I think this trend is here to stay, especially during the rebuilding process of the foodservice and the restaurant industry,” he said, adding that Fresh Thyme customers are looking for unique items and new recipes to try at home. The chain encourages this behavioral change through its marketing and merchandising programs.
Though Thanksgiving meals are expected to include fewer guests at each gathering, Schuette said Fresh Thyme expects organic herb sales to increase as more home cooks will be preparing that traditional meal, which relies heavily on fresh herbs, including the one featured in the chain’s name. In fact, he called fresh organic herbs “the hero of this Thanksgiving and most likely Christmas.”
Fresh Thyme is preparing for a 90 percent increase in sales of fresh herbs during the Thanksgiving pull. Likewise, Schuette said the chain is reducing the number of large turkeys it carries in favor of smaller ones.
Schuette expects the bump in produce sales to continue into Q1 of 2021, noting that the first quarter is always a strong one for healthy eating as consumers embark on New Year’s resolutions. He expects shoppers will be “hyper-focused on their health” next year. “They’ve been focused on their health before, but I don’t believe that they’re going to be anywhere near the area of focus that they’ve had in the past. It’s going to be ramped up considerably.”
Antle explored opportunities the supplier community might have with Fresh Thyme and Schuette was ready with several suggestions. In the first place, he said identifying a product as organic at the checkout stand is always challenging so he encouraged organic suppliers to clearly identify the “organic” nature of the product with their packaging, including twist ties, labels and overwraps. For its part, Fresh Thyme has set up both its self-service and clerk-serviced checkout stands to double-check if the shopper has organic items in the basket.
Fresh Thyme is also very interested in expanding its organic footprint. Schuette revealed that the chain’s website includes a “vendor portal” and he encouraged suppliers to reach out to him directly ([email protected]) to tout their products. He said he loves to support organic farms and personally interacting with suppliers to explore their offerings.
The second half of the webinar featured Stew Leonard Jr. being interviewed by Kevin Coupe of the supermarket-focused, online Morning News Beat website. Stew Leonard’s is an East Coast supermarket chain with seven locations in Connecticut, New York, and New Jersey. Leonard covered a variety of subjects including the cost of the pandemic to his operation and the increasing popularity of organics. He also commented on some general retailing practices in these times as well as touching on some of the same Thanksgiving sales expectations articulated by Schuette.
With regard to the pandemic, Leonard estimated that the cost of altering practices and equipment within the store to better safeguard employees and customers works out to about $1 per customer per visit.
The company’s director of produce, Charles Yeh, chimed in during the webinar to reveal that organic produce sales have more than doubled since the onset of COVID-19, jumping to $6 million from $2.5 million during the same timeframe in 2019. Organic berries have led that growth with almost a 200 percent sales gain in 2020. Yeh said the company altered its buying model during the pandemic by buying directly from grower-shippers rather than using third parties.
Leonard believes his great relationship with his suppliers through the years served him well during the panic buying in Q2 of 2020 as he was able to secure product. His father, he said, always told him that he must treat his suppliers as well as his customers.
The longtime retailer also expressed optimism in the growth of organics noting that people are more concerned about how things are grown and what they consume.
Easter holiday sales informed Stew Leonard’s plan for Thanksgiving. The company’s CEO said consumers wanted smaller party platters of fruits and vegetables and other pre-made items. The retailer is going to reduce those platter sizes for Thanksgiving and is also stocking smaller turkeys, just like Fresh Thyme.
Leonard was thoughtful, but non-committal about 2021. “Anybody who thinks they can predict next year is really throwing darts,” he said, noting that retailing is not going to return to normal anytime soon. “It’s going to take a little while. I think the sugar high is going to come down, but it’s going to last through 2021.”