The Loblaws store near Valerie Leloup’s Ottawa home has a sizeable bulk section, which you might think spells trouble for a small business owner whose nearly one-year-old bulk store is still trying to find its footing.
But Leloup says by embracing bulk, major grocers such as Loblaw are actually bringing more credibility to the category. “I always say that the worst thing that could happen to us is for bulk to remain niche,” she says. “The more big chains actually grow their bulk sections, the better it is for us, because it brings us into the mainstream.”
Sales at Leloup’s zero-waste store, Nu Grocery, have continued to rise since it opened last summer, and now total around $60,000 a month. “It’s not an explosion, but steady growth month after month,” says Leloup, who notes that her eventual goal is to grow Nu Grocery’s product assortment to around 600 to 700 SKUs with annual sales of $1.2 million.
READ: A ‘Nu’ way of looking at grocery retail
Several grocers contacted for this story, including Metro, Farm Boy and Bulk Barn (which has grown to 265 locations across Canada, up from 190 in 2013) did not respond to interview requests; however, Diana Sheehan, director of retail insights at Kantar Retail in Chicago, says bulk is indeed gaining traction among traditional grocers. In the United States, for example, chains including Giant Eagle’s Market District, as well as Kroger and Wegmans, have all “bulked up” in recent years, adding sections like make-your-own trail mix and bulk candy.
Sheehan says growth of bulk foods is being fuelled by three key factors: Growing consumer demand for natural and organic products, an increased emphasis on sustainability, and the desire to offer customers a superior in-store experience. “When people walk into a store, they walk into something that’s truly different, that they can’t get from the convenience of shopping online,” she explains.
Sheehan says bulk has evolved to become more sophisticated. “You’re not just saying to customers, ‘Here’s a bunch of bins with bulk products’—it’s build your own granola or build your own trail mix. It’s not just the products themselves, but the solutions they provide,” she says. “It’s the ultimate personalization. If you think of shoppers wanting things that are very specific and catered to them, bulk products allow you to create the mixes that really get at what they want to eat.”
Dry foods like nuts are among Nu Grocery’s best-selling items, which Leloup attributes to shoppers’ familiarity with those types of products from traditional bulk stores. However, she says cleaning products such as dish soaps are also popular at her zero-waste store. “People love to come with their plastic bottle and refill their dish soap,” says Leloup. “It’s very easy for them to do because the plastic bottle doesn’t weigh much.”
Vince’s Market partner Giancarlo Trimarchi first started noticing growing customer interest in bulk about four years ago. While the company’s stores in Sharon, Uxbridge and Newmarket, Ont. have offered repackaged bulk for several years, it decided to install 58 loose bins—plus another 60 repackaged SKUs—at its newest location in Tottenham, Ont. “So far it’s justifying its place in the store,” says Trimarchi.
While bulk feeds into growing consumer demand for healthy eating, Trimarchi says bulk candy has also emerged as a customer favourite. A “fill-a-cup” program at Vince's Market's Newmarket location, which enables customers to choose from among 16 varieties of loose candy, is currently doing between $1,500 and $1,600 in sales each week.
Trimarchi says its popularity reflects changing consumer attitudes towards foods like sweets, which have become a permissible indulgence. “They’re not scared of a little candy every once in a while,” he says. “Now they say, ‘I work hard and take care of my body, and on the weekend I’m going to have a little candy.’”
While Kantar’s Sheehan predicts bulk foods will continue to gain in popularity, it also adds a layer of complication for retailers, who must work to protect the bulk section from children—and some adults—who may be tempted to sneak a few treats while shopping. “If you don’t have personnel able to keep a good eye on that department, what you have is shoppers who see an open bin and just grab a handful of the stuff,” she says. “You run into shrink issues and food safety issues.”
It’s a legitimate concern, but what can grocers do? Sometimes customers feel like a nut, sometimes they don’t.
This article appeared in Canadian Grocer‘s February 2018 issue.