Ahold USA hopes that waiting to launch its Nature's Promise natural and organic store brand will cause a bigger impact with a larger line of products than its faster-moving peers.
Having a "second-mover advantage has enabled us to get into more purely organic products," said Graham Mitchell, director of product development for Braintree, Mass.- based Ahold.
Nature's Promise was set to start appearing Oct. 2 in both Giant Food, Landover, Md., and Stop & Shop Supermarkets of Quincy, Mass., followed in January 2005 by Giant Food Stores, Carlisle, Pa., and Tops Markets, Buffalo, N.Y. The line will total 200 dairy and grocery products by the new year, about 60% of them organic; the rest, natural, Mitchell said.
The potential for private-label organic products appears to have reached critical mass: Harris Teeter, Matthews, N.C., introduced its Naturals line in 2002 with 30 stockkeeping units; Kroger, Cincinnati, launched its Naturally Preferred line in 2003 with 140 SKUs.
"I think the company wants to take a long-term approach to health and wellness, giving consumers the right information about food choices," Mitchell said. The percentage of Americans buying organics grew to 44% in 2004, with adults age 18 to 24 the most likely organics shoppers, from 37% in 2002.
In considering how to win consumer acceptance, Ahold looked at Whole Foods Market's 7-year-old 365 Every Day Value line as a model. Ahold put the products, which are made by about 25 natural and organic manufacturers, through strict judging, Mitchell said.
In addition, Ahold is planning educational efforts for consumers and staffers in conjunction with the Nature's Promise launch. In-store brochures with a coupon for 50 cents off a Nature's Promise item, store banners, shelf-talkers and company Web sites will inform shoppers about the line as it rolls out throughout the company.
Packaging will bear icons identifying products' health benefits, such as gluten- or lactose-free. Products will be merchandised in stores' naturals departments when possible, or in the regular planograms, consistent with how naturals are merchandised now. In some cases, existing store-brand products will be rebranded Nature's Promise, and slow-selling national brands may be pruned to make room for the store brand, Mitchell said.
Items will be priced 20% to 25% lower than the comparable national brand, which is in line with the price difference between Ahold's existing store brands and their comparable national brands, he said.