Pennsylvania retailer in test program of merchandising methods for organics
Pennsylvania retailer in test program of merchandising methods for organics
LANGHORNE, PA -- Redner's Warehouse Markets, here, is in a test program to see if organic produce sales increase if they are merchandised in a separate section in the produce department.
In cooperation with Earthbound Farm in San Juan Bautista, CA, Redner's set up a large organic display in its store in Langhorne, an upscale town north of Philadelphia on the Delaware River.
Gary O'Brien, who heads the produce merchandising program for Redner's, said of the new display, "A lot of stores integrate [organics] like commodities. Here we create a destination point."
He expects that by the end of 2005, this store will increase its organic sales by 75 percent over the same period last year. "As the sales increase, we will find a way to increase the liner footage. The Earthbound display in May included 16-feet of dry and refrigerated space, with the racks set four high.
The Langhorne store is one of Redner's better Philadelphia-area sellers of organics, Mr. O'Brien added. "We have affluent customers from the middle and upper class. They have an understanding of the principles of organics.
Mr. O'Brien said that the organic and conventional produce prices have a decreasing differential, which is building organic sales.
Working shoulder-to-shoulder with Mr. O'Brien on this project is Earthbound Farm's eastern region senior director, Rick Dacey, who works from Duxbury, MA. Mr. Dacey indicated that there are two key demographic groups who consume organics. Thirty-seven percent of national organic sales are to consumers from households earning more than $75,000 per year. Thirty-four percent of sales are in stores near colleges, where annual income is less than $19,000 per year. These would be financially struggling students who still have an interest in paying for organics, Mr. Dacey explained.
The Langhorne store has a 5,000-square-foot produce department within a 53,000-square-foot store.
Mr. O'Brien said that 75 percent of his the organic sales of his 37-store chain involve the "Earthbound Farm label. "Earthbound has brought consistency to the procurement side, he said. "We need that support. In our relationship with Earthbound, we're about guaranteed the consistency we need.
He said that organic customers want reliable supplies, just like consumers of any other produce.
Mr. Dacey said that Earthbound's 27,000 acres of organic farms in California and Arizona generate over 100 SKUs for the "Earthbound Farm label, with at least 40 of these SKUs on display for the Redner's promotion. He said that there is no point in having a traditional store trying to merchandise the most exotic of organic items. The customers who are so interested in organic foods will be shopping at other stores, where they can also buy products like organic beef. Organic produce in chains like Redner's is to serve mainstream consumers with organic staples to provide a service. In such a setting, "We get the impulse sales.
Mr. O'Brien said that organic sales are more common among upscale consumers, but he noted that organic produce still must offer taste and value, just like any other food. He said that customer confidence in organics has risen a great deal since the creation of federal guidelines for labeling products "organic.
Mr. O'Brien said that Redner's has merchandised some organics for perhaps as long as a decade. "We've never had a formal marketing program until the last three to six months to include signage for the store to market organics.
Mr. Dacey said that the cooperative promotion with Earthbound Farm "is one of the most exciting things we've done in a while. He said the segregation test will be supported by good SKU information to properly track the organic sales.
In cooperation with Earthbound Farm in San Juan Bautista, CA, Redner's set up a large organic display in its store in Langhorne, an upscale town north of Philadelphia on the Delaware River.
Gary O'Brien, who heads the produce merchandising program for Redner's, said of the new display, "A lot of stores integrate [organics] like commodities. Here we create a destination point."
He expects that by the end of 2005, this store will increase its organic sales by 75 percent over the same period last year. "As the sales increase, we will find a way to increase the liner footage. The Earthbound display in May included 16-feet of dry and refrigerated space, with the racks set four high.
The Langhorne store is one of Redner's better Philadelphia-area sellers of organics, Mr. O'Brien added. "We have affluent customers from the middle and upper class. They have an understanding of the principles of organics.
Mr. O'Brien said that the organic and conventional produce prices have a decreasing differential, which is building organic sales.
Working shoulder-to-shoulder with Mr. O'Brien on this project is Earthbound Farm's eastern region senior director, Rick Dacey, who works from Duxbury, MA. Mr. Dacey indicated that there are two key demographic groups who consume organics. Thirty-seven percent of national organic sales are to consumers from households earning more than $75,000 per year. Thirty-four percent of sales are in stores near colleges, where annual income is less than $19,000 per year. These would be financially struggling students who still have an interest in paying for organics, Mr. Dacey explained.
The Langhorne store has a 5,000-square-foot produce department within a 53,000-square-foot store.
Mr. O'Brien said that 75 percent of his the organic sales of his 37-store chain involve the "Earthbound Farm label. "Earthbound has brought consistency to the procurement side, he said. "We need that support. In our relationship with Earthbound, we're about guaranteed the consistency we need.
He said that organic customers want reliable supplies, just like consumers of any other produce.
Mr. Dacey said that Earthbound's 27,000 acres of organic farms in California and Arizona generate over 100 SKUs for the "Earthbound Farm label, with at least 40 of these SKUs on display for the Redner's promotion. He said that there is no point in having a traditional store trying to merchandise the most exotic of organic items. The customers who are so interested in organic foods will be shopping at other stores, where they can also buy products like organic beef. Organic produce in chains like Redner's is to serve mainstream consumers with organic staples to provide a service. In such a setting, "We get the impulse sales.
Mr. O'Brien said that organic sales are more common among upscale consumers, but he noted that organic produce still must offer taste and value, just like any other food. He said that customer confidence in organics has risen a great deal since the creation of federal guidelines for labeling products "organic.
Mr. O'Brien said that Redner's has merchandised some organics for perhaps as long as a decade. "We've never had a formal marketing program until the last three to six months to include signage for the store to market organics.
Mr. Dacey said that the cooperative promotion with Earthbound Farm "is one of the most exciting things we've done in a while. He said the segregation test will be supported by good SKU information to properly track the organic sales.
