Kroger's new push: mainstream organics

CINCINNATI — The nation's largest traditional grocer is expanding organic-food offerings and targeting a broader range of customers for the fast-growing segment.

The new push by Kroger was launched Wednesday and features the company's own brand of organic foods — from pasta to peanut butter — displayed throughout the store, outside their usual home in natural-foods sections. Starting with 65 items, Kroger expects to double its Private Selection brand organics by the end of the year.

Kroger operates nearly 2,500 stores across 31 states, including QFC and Fred Meyer stores, which also will carry the organic brand.

Linda Severin, vice president for corporate brands, said marketing under the slogan "Organics for Everyone" will appeal to consumers who don't focus their shopping on organic foods but are interested in trying them. The private brand line generally will be priced lower than other organics Kroger sells.

"This responds to customers who just want to make a smarter food choice and start opening their lives to organic," Severin said. "It's a way for people to sort of put their toe in the water."

Kroger's line will carry the U.S. Department of Agriculture seal for organic foods, which are free of pesticides and hormones.

Kroger, Wal-Mart Stores and other major grocery sellers have been increasing selections of organic and natural foods in response to rising demand and the growth of chains such as Whole Foods Market and Wild Oats Markets.

The Organic Trade Association says that while organic foods comprised less than 3 percent of total food sales in 2006, annual percentage sales growth in the past decade has been in the high teens into the 20s, up to $16.7 billion.

"Organics is probably the hottest thing going in the food market right now," said Ted Taft, managing director of Meridian Consulting Group. "The conventional grocery channel has seen that growth and seen that as something they need to have."

He said Kroger and other large chains can offer lower prices than specialty stores and appeal to shoppers who are worried about organics for only certain items, such as milk.

"There are very few consumers that everything they have has to be organic," Taft said. "If you go to a Kroger, you have options."

Bruce Silverman, global vice president of private label for Austin, Texas-based Whole Foods, said organics have always been a Whole Foods cornerstone.

"When new competitors begin experimenting with offering organic foods, they are helping Whole Foods Market further our mission for the world to enjoy more organic and natural foods," he said in a statement.

Ronnie Cummins, national director of the Organic Consumers Association, said that while Pleasanton-Calif.-based Safeway and some regional supermarket chains have had success with organic offerings, organic advocates are wary of giant, bottom-line companies in the market.

"They're more concerned about their quarterly profits than their sustainability," Cummins said. "The organic-market segment is the wave of the future, and it's not just people looking for an organic label and saying, 'Where can I get it the cheapest?' "

Cummins noted approvingly that Kroger last week announced plans to begin selling milk that is certified as free of synthetic hormones.

The company also is offering gluten-free items such as crackers in its private brand, for those who want to avoid the wheat protein, and recently launched a milk brand that can help reduce cholesterol.

Kroger five years ago introduced Naturally Preferred foods, which include some organic foods and contain no artificial colors, preservatives or flavors, and many of its stores have a special section called Nature's Market.

"Customers are telling us they want more of these products," said Nancy Moon-Eilers, vice president for natural-foods procurement and merchandising. "Organic growth has been really strong, and I don't see that easing up any time soon."