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Sales strong as supers shed slow-movers.

The American fixation with fitness and health has not abated, and dollar sales of natural foods (and non-foods) in supers--up a healthy 35% or more last year--bear this out. Underlining the category's growing appeal is the fact that the number of supermarkets offering special health foods sections has doubled to 2,200 in two year's time.

Supermarket nutrition centers traditionally consisted of natural bulk grocery items; packaged dry grocery items; vitamins; other natural HBA items; books and magazines; and, in some cases, frozen and refrigerated products. While this is still often the case at stores with full-fledged centers--most notably industry leaders Kroger and Safeway--some operators have eliminated boutique- type sections in favor of smaller, in-line departments, and others have even begun to feature some natural items alongside their mainline counterparts.

The natural items most successful in supers are those which shoppers are used to seeing there, such as snacks. The more esoteric foods generally don't move fast enough, and have caused "a settling out in supers," according to Bob White, publisher of Natural Foods Merchandiser, a leading health food trade publication. "When supermarkets began to get involved with natural foods several years ago, they often selected a product mix that would do well in a natural food store, and those items wouldn't get the inventory turns that were necessary." Now, says White, there's a greater awareness of what will move and more attention is being paid to the demographics of the area in determining the natural foods mix. It should also be noted that with natural foods carrying an average gross profit margin of 33.5%, supermarketers are able to offer consumers more appetizing prices than their health store counterparts.

"You have to be selective about where you put in nutrition centers," cautions the natural foods buyer of a leading West Coast chain that does so well with natural chips, cookies and confection-type items that it has set up separate snack sections within its packaged grocery health sets.

"Our top seller in supers is our crackers, in terms of cases," says Robert Luke of Los Angeles-based Hain Pure Food Co., manufacturer of the Hain Naturals line of packaged grocery items. "The other key categories are snacks, soups and condiments and no-salt versions of these. "While he says that a few of the Hain products can be positioned in the regular grocery aisle, he does not recommend that for most of the line.

Nor does Dave Mayer, sales manager of the central division for Health Valley Natural Foods in Montebello, Calif., which also produces packaged grocery items. "it's more beneficial to have the items separated and properly merchandised. They can be lost on the shelves when they are integrated." One of Health Valley's new products is Buenitos tortilla chips in nacho cheese and chili, no-salt and salted varieties. This year's entries include boxed Honey Jumbo cookes; Amaranth graham crackers; single-serving Jumbo cookies; and natural sandwich cookies.

At El Sobrant, Calif.-based Fry's Food stores--and many other chains across the country--natural rice cakes are the hottest natural grocery item.

"At times there's not a rice cake to be had," says Marty Martin of Consolidated Naturals, a natural foods distributor based in North Little rock, Ark.

"We can't keep up with the demand for rice cakes. They have really taken off," says Bob Kennedy, president of Chico-San, the Chico, calif.-based market share leader. The company's eight-item line underwent a package redesign late last year. Chico-San also added Rice Only, sodium Free and Rice Only, Low-Sodium varieties.

Larc Lindsey, marketing director at Arden Inc., the other major market factor, says, "Rice cakes are sold in all different sections of the store--the natural food aisle, the deli, the cookie section, the bread section, and the produce department. We prefer the product to be positioned near the bread since it is a bread substitute." Among Arden's new product intros last year were a barley and oat flavored rice cake and a five-grain, no-salt variety.

A new cookie item also hit the natural foods section last April. Called "The Best Cookie Around," the crunchy-type product is marketed by a St. Augustine, Fla., firm called The Cookie Company. It is sold to supers through natural foods distributors such as St. Augustine's Tree of Life, and comes packaged in attractive 5- and 1-1/2-ounce sacks.

another packaged natural line is the tofu-based single-serving entrees by Montville, N.J.-based Legume Inc. Six new varieties offered early this year include Vegetable Lasagna, Cannelloni Florentine, Stuffed Shells Provencale, Tofu Bourguignon, Tofu Tetrazzini and Sesame Ginger Stir-Fry. Bulk foods--not always a natural

It's ironic that bulk foods, which gave most supers their start in the health food business, are no longer limited to natural items or to special nutrition centers. While the enthusiasm for bulk has not dwindled, even in the face of newly developed FDA sanitation guidelines, many grocers have been positioning bulk as an economy section these days.

"We had bulk foods set in some nutrition centers and are taking them out," says the buyer/merchandiser of a West Coast chain. "when we put bulk in the middle of the nutrition center, it doesn't sell. It's a clash from the consumer standpoint." However, this same chain has extensive bulk sections offering from 120 to 250 items in six of its stores. While the majority of these are natural products, many are regular candy items and conventional cookies sold in bulk form.

"Some stores offer bulk natural snacks in one section, while others lump them all into one section under the heading of 'Bulk,'" explains Robert Lynch, president of Santa Cruz, Calif.-based Harmony Foods, producer of bulk and packaged snack items. He adds that the natural food section and the produce department are still popular spots for bulk.

Lynch, who is happiest with the produce department position for both his bulk and packaged line, says the company's yogurt-covered raisins have been quite successful in supers. a new yogurt-covered pretzel variety and some other exotic new snack mixes such as Oriental Party Mix have also recently been added.

Natural vitamins represent approximately 40% of the total vitamin, nutrient and hematinic preparations market, which approached $2.3 billion at retail last year, according to the market research firm of Business Trends Analysts. In supers, high-margin natural vitamins account for the bulk of the dollar volume in the packaged health section and are often called the "kingpin" of the department.

the items were traditionally offered in the natural foods section, while their synthetic counterparts were merchandised in the regular HBA area or the pharmacy. But, as with natural grocery items, there are now some exceptions to this rule.

"A lot of our vitamins are in the HBA aisle now," says President Al Rodriguez of Los Angeles' Golden Sun Company. "What I see happening is that items become legitimate and they go back to being in-line. Supermarket accounts of ours that have put our product in HBA have generated more turns. Sales have gone up 25% yo 33%." Given the choice, he will always opt to be in-line or cross-merchandised.

Ted Megrin, president of Los Angeles-based Prime Health Labs also prefers the HBA section for his vitamin line, "because it has more action." Among the vitamin products his company has recently introduced are an Ultra B-1000 and Ultra 2000 Mega Vitamin & Mineral as well as a Natural Diuretic with Potassium and a product called Calcium 600.

At the Irvine, Calif.-based Plus Products division of Richardson-Vicks, New Products director Shirley Platzer says a new line of Fast-Acting Vitamins was introduced last year. The company has also developed a diet plan called Vita-Thin.

Vitamin packs--featuring separate envelopes containing 5-6 different daily tablets--are a major new trend in the natural vitamin market, and a number of leading manufacturers are getting in on the action. Torrance, Calif.-based P. Leiner has a line of six vitamin packs, says Marketing Manager Victoria Christopher. The company has just added a Fifty-Plus Pack, a Natural Daily Pack and a Stress Pack.

Golden Sun's Daily Packets are good supermarket sellers, Rodriguez says, adding that the firm offers a "For Women Only" packet as well as one for men.

Amidst all the natural vitamin intros last year, there was also at least one important line discontinuation. The Healthgard line, which had been put into test market by Elkhart Ind.-based Miles Laboratories in 1982, was dropped lated last year. a spokesperson for Miles, the maker of One-A-Day and Flintstones vitamins, says, "The line didn't meet strategic objectives." Other natural HBA

Healthy margins also make other natural HBA items attractive prospects for supers, although margins have dropped considerably from a few years back, as stores get more competitive.

"We're finding a lot of success in supers, and some failure," says Stan Meckler of Golden California Inc., the Valencia-based manufacturer of the Country Road line of natural HBA items. "It depends on the commitment of the chain. when people like Kroger, Safeway and Smith's Food King make a total commitment to it, it works." among the latest Country Road intros are Bakuhaan Shampoo, Deep Heat Rub, Aloe Vera Gel, Aloe Vera Cream and Super Moisturizer & Rejuvenating Cream.

At Prime Natural Health Labs, a new line of natural HBA products called Nina's Naturals was developed late last year. It includes creams, lotions, shampoo, Conditioner, freshener and soap.

Los Angeles-based Jason Natural Products also unveiled its Evening Primrose line containing essential fatty acids. According to President Jeff Light, all of the firm's products--except Apricot Scrubble face scrub--are positioned in the health set, but he'd like that to change. "Our line is priced to be competitive. We would fare better in the regular HBA section where we are capable of competing with other brands."
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Title Annotation:natural foods and non-foods
Publication:Progressive Grocer
Date:Jul 1, 1984
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