Organics hits in a big way at PLMA

Walking through the Private Label Manufacturers Association’s Annual Conference hall in a chilly Chicago, there were two very noticeable trends – organics and gluten-free.

There were at least 20 gluten-free vendors – nearly double last year’s number. But when it came to organics, not only were there dozens of new companies exhibiting, veteran suppliers were also showcasing their new organic lines.

During one of the educational sessions Bob Vosburgh, news director of PLMA, stated in 1998 the organic space accounted for about $6 billion, and 25% of sales were done through traditional supermarkets. A mere 16 years later, the organics market is worth well over $50 billion and more that 55% of sales are through traditional supermarkets.

Safeway has sales of more than $400 million in store brand organics and Kroger's organic private label program is a billion dollar segment for the U.S.’s largest supermarket chain. Walmart has more than 100 store brand products available in organics that are all priced to be competitive with the national brands.

But it isn’t always easy for retailers implementing organic store brand programs. Companies are facing issues like unavailable supplies, high order minimums, certification problems and shelf placement.

Greg Oldright, director of specialty foods at Associated Wholesale Grocers, reported the company’s Clearly Organic product line has grown beyond what management expected in its first year of deployment. Launching in April with 40 items, Clearly Organic is now up to 100 SKUs and is expected to add dozens more in the prepared foods, rice & grains produce, meat and dairy categories in 2015.

“The program is doing very well and our retailer’s customers are starting to seek out the brand. It's designed to give our retailers a competitive advantage in the marketplace and we provide them with point-of-sale marketing support and other promotional programs to keep everything fresh and constantly engage the customer,” Oldright explained.

While Canadian retailer attendance was light at the conference – there were Sobey’s, Overwaitea and Metro-Richelieu badges on the show floor – Canadian suppliers were out in full force. Upwards of 70 marketers from practically all of the provinces were represented out of a total of nearly 2,300 booths.

Erin Dalton director of sales and marketing at A&M Gourmet Foods of Toronto, was pleased with both the volume and quality of the attendees.

“There has been a great flow of interested retailers by the booth, where we’re showing tour new yogurt spreads, which are frozen and set to be merchandised next to Eggo waffles and other breakfast pastries,” she explained. “It’s really a new category, so we're excited to have Loblaw selling them and we’re using the PLMA show to get the product line placed in the United States.”