Grocery giant Supervalu
Inc., seeking to address
a competitive
shortcoming, is creating
a line of organic and
natural foods called
Wild Harvest.
Supervalu, the
third-largest U.S. food
retailer by sales after
Wal-Mart Stores Inc. and
Kroger Co., announced
the brand's launch
Wednesday.
It will initially
carry about 150 items,
including milk, eggs,
fresh produce, pasta and
cereal. Supervalu
eventually plans to sell
250 to 300 items under
the Wild Harvest label.
The Eden Prairie,
Minn., retailer, which
owns chains such as
Acme, Jewel-Osco, Lucky
and Shaw's, said the new
products will cost about
15% less than similar
name-brand organic
items. Products will hit
store shelves across the
U.S. next week.
Supervalu aims to
meet the growing
consumer demand for
organic foods and to
keep shoppers from
turning elsewhere for
such goods. Company
surveys showed that
shoppers in several
markets, including
Chicago and Boston,
often did the bulk of
their shopping at a
Supervalu-owned store
but visited a Whole
Foods Market or Trader
Joe's for organic and
natural items. "We want
to keep them in our
stores and get those
additional dollars,"
said Adam Graham, brand
manager for Wild
Harvest.
The company trails
other conventional
grocers in launching an
organics line, but its
selection will be among
the largest. Safeway
Inc. has had success
with its O Organics
brand, begun in late
2005, while Kroger last
August introduced an
expanded array of
organic products under
its Private Selection
label.
The grocers' moves
are in part a response
to the rapid growth of
Whole Foods Market Inc.,
the nation's largest
natural-foods grocer.
Supervalu, with
annual sales of about
$44 billion, is rolling
out Wild Harvest as part
of a broader strategy by
Chief Executive Jeff
Noddle to make the
company's stores more
contemporary. The
strategy, which includes
remodeling hundreds of
locations, follows
Supervalu's acquisition
in June 2006 of 1,100
outlets formerly owned
by Albertson's Inc.
Mr. Noddle's plans
include boosting sales
of store brands. Such
brands, which generate
higher profit margins
for grocers, account for
about 15% of the
company's retail sales,
compared with as much as
25% at other traditional
chains.
Supervalu wants to
increase its figure to
17% during the fiscal
year that starts next
March, and eventually to
20%, Mr. Noddle said
recently.
So-called
private-label groceries
are an attractive option
for U.S. consumers at a
time of rising food
prices and a slumping
economy. Last year, 19%
of all sales of food and
non-alcoholic beverages
in U.S. food, drug and
mass-merchandise outlets
were of house brands, up
from 18.2% in 2006,
according to research
firm Nielsen Co.
Mr. Graham said
Supervalu intends to
distinguish Wild Harvest
from other grocers'
store brands by offering
a greater variety of
goods that are on the
"perimeter" of the
store, including organic
produce. Packaged goods
include wheat crackers
and banana walnut
granola.
Sales of food and
non-alcoholic beverage
products with labels
claiming they're organic
or natural -- both store
and name brands -- rose
26% last year to $4.1
billion at U.S. food,
drug and mass-merchant
outlets, excluding
Wal-Mart, according to
Nielsen.
Supervalu plans to
begin an advertising
campaign for the new
brand Sunday, with the
tagline "organify your
world."