While Whole Foods gets all the headlines and recognition as the gold standard for organic food in the United States and Costco continues to make its own case as the top organic grocer, the country’s largest grocery chain is proving that it is possible to make organic mainstream after all, with the right planning of course.
The Ohio-based Kroger Co. recently made a major announcement that has the organic world buzzing: organic product sales now total more than $11 billion per year, and its Simple Truth line of natural groceries is believed to be the number one brand of its kind. Young people are believed to be the driving force behind the surging organic food sales.
“We’re delivering on millennials’ needs,” said Stuart Aitken, CEO of Kroger’s data analytics unit.
The figures were revealed at the annual Kroger investor’s conference recently and represent a remarkable surge in sales that shows no signs of slowing down.
In total organic food at Kroger now makes up about 10 percent of the company’s annual sales of $108 billion, and they’re expecting sales to continue rising as more people go organic, rejecting foods made with genetically modified and artificial ingredients.
It’s been a long and winding road for Kroger to get to this point, but as the numbers show, the payoff has certainly been worth it. Kroger has even
Kroger Helping Suppliers Shift to Organic
It didn’t always used to be this way for Kroger, a former member of the pro-GMO Grocery Manufacturers Association, which has since left the organization and doubled down on organics.
While its Simple Truth brand is far from perfect (and may still contain a few GMO ingredients in some cases), shoppers are rewarding Kroger for attending to their needs and commitment to customers who demand natural ingredients. The natural foods section is beginning to look like a mini Whole Foods inside of a regular supermarket and customers are spending an awful lot of time there.
The company’s CFO Mike Schlotman said his niece’s cupboard is filled with 80 percent organic and Simple Truth products, and she likes the way Kroger is making it easier for her to shop for natural and organic foods without having to spend as much time reading labels.
As mentioned earlier the company is far from perfect. But much like Chipotle Mexican Grill and other big name companies like Nature’s Path, they are fully invested in catering to fans of organic and natural foods and making progress with each passing month, even helping non-organic farms to change their ways.
In order to shore up their supply line, Kroger is putting their money where their mouth is by helping farms and farmers to switch to organic. According to BizJournal.com, Kroger is making commitments to buying an entire crop if farmers agree to switch to organic, CEO Rodney McMullen said.
“Then they’re comfortable switching a field over because it takes time to do that,” he said.
The article added that Kroger recently was able to convince a major dairy farm to go organic thanks to this commitment, which reassured the farm’s concerns (since making the transition to organic takes time and comes with its own set of risks).
With its investment in organic foods solidified, Kroger is excited for the future — and greatly enjoying the present, for that matter. The company is reportedly “pummeling” Wal-Mart in sales growth thanks to two areas in particular: its customer service and its commitment to organic foods.
It’s just more evidence that the “customer is always right,” especially when it comes to demanding healthier foods at the supermarket.