How healthy products can help grow centre store: Column

Most of us grew up believing that healthy products could only be found along the perimeter of the store. We were taught that any of the products in the centre of the store were highly processed, chemically enhanced or contained artificially fortified ingredients. Centre store products have been unfairly maligned as a result.

Centre store plays a critical role at retail. It supports all of the outlying perimeter categories and provides the key ingredients for every meal solution. Just as a salad requires salad dressings and toppings, no outdoor barbecue is complete without snacks and drinks. To some, a hot dog isn’t a meal without their favourite condiment.

Retail is changing, and retailers need to change with the times if they want to survive. Consumers are demanding more from the products retailers sell. They want healthy products that not only taste good, but also can be trusted.

Until recently, healthy products were overlooked as a sustainable strategy to grow sales in centre store. Selection for healthy products was poor, and they lacked flavour and variety. In some cases, it seemed as though the packaging was more palatable then the product inside. That’s not the case today: Better-for-you products taste great – some even taste better than mainstream products.

Committed natural consumers are responsible for sustainable growth across every category. They are distinct from the average consumer, something that most retailers and brands overlook. They’re responsible for driving all of the better-for-you trends. In their absence, almost every mainstream category is either flat or declining. The foundation for any effective retail strategy must be focused on meeting the needs of committed natural shoppers. Don't encourage them to shop your competition by minimizing their importance to your survival.

Mainstream brands are working on cleaning up their ingredient labels, reducing artificial ingredients, and providing healthier, more nutritious products. The brands driving these trends are the smaller natural organic brands. They already have clean labels with easy-to-understand ingredients that can be trusted.

Retailers need to leverage the strengths of natural organic brands to drive sales in centre store. The section needs to be a key part of every retailer’s and brand’s overall strategy.

5 WAYS TO BUILD CENTRE STORE SALES

1. Integration. Allow shoppers to easily choose the products that meet their needs and the nutritional needs of their families. For example, place organic mac and cheese directly next to the mainstream brands. This gives shoppers the opportunity to compare the ingredients in both mainstream and organic products, allowing them to choose the product that's right for them. This also allows consumers to trade up to the premium organic product, which helps increase shopper market basket. Put another way, organic shoppers are more likely to buy other organic products across other categories, leading to a higher market basket. Organic bread shoppers tend to buy organic butter, organic jelly and the like. Shoppers don’t want to go on a scavenger hunt every time they enter a store. Instead, they want shopping to be easy, convenient and friendly. They appreciate product recommendations that complement the items on their lists. Focusing on this helps retailers upsell and increase shopper loyalty.


2. Education. Help educate consumers on the importance of natural healthy products. For example, there’s a lot of confusion around the benefits of organic versus non-GMO and other claims. Organic is the ultimate in clean label. Clean label includes transparency, authenticity and trust – the focus of the committed natural shopper. Organic ingredients need to be regularly certified for a brand to use the USDA organic seal. Organic products are automatically non-GMO. Organic products are expected to grow 5.3% CAGR in the U.S. from 2016 to 2021, according to research from Euromonitor. That’s much higher than mainstream category growth, especially in the absence of organic products.


3. Leverage perimeter categories to drive sales in centre store. Produce and dairy are the entry point for most consumers to learn about organic. Thirty-seven per cent of shoppers look for organic products when going to the supermarket, Euromonitor reports, noting that organic dairy represents 19% of total organic sales in the U.S. Leverage of these core categories to drive sales in centre store through creative merchandising tied to complementary centre store products. For example, merchandise cereal next to the dairy case.


4. Champion natural organic brands. Lower the barriers to entry for small health-focused natural and organic brands. Small brands can’t afford the exorbitant slotting and promotional fees paid by their larger mainstream competitors, but they’re the ones driving category growth. Make it easier for small healthy brands to help drive shopper foot traffic and market basket growth in your stores.


5. Develop healthy collaborative relationships with healthy brands. Natural organic brands understand their core shoppers far better than their mainstream counterparts. Encourage natural organic brands to play a bigger role in their categories.

Retailers that are committed to natural organic products across every category will continue to grow sales and thrive. Centre store is a critical component of meeting the needs and the wants of the committed natural shopper.

Daniel Lohman is a strategic advisor in the CPG and organic industry, whose mission is "Empowering Brands and Raising the Bar." Lohman's weekly newsletter, educational podcast and training courses are resources for brands and retailers seeking a competitive advantage.

This article appeared at ProgressiveGrocer.com.