BASKET CASE

From the retailer's point of view, the benefits of gift basket sales are fairly straightforward. "You can take $40 worth of merchandise, spend 10 minutes putting it together, and then sell it for more than $40," said Ron Tanner, vice president of communications for New York-based National Association for the Spec-ialty Food Trade.Yet as cooking shows and travel have broadened the culinary horizons

From the retailer's point of view, the benefits of gift basket sales are fairly straightforward. "You can take $40 worth of merchandise, spend 10 minutes putting it together, and then sell it for more than $40," said Ron Tanner, vice president of communications for New York-based National Association for the Spec-ialty Food Trade.

Yet as cooking shows and travel have broadened the culinary horizons of many Americans, several super-market retailers are finding themselves positioned as the perfect holiday resource for a new wave of gift-buying foodies.

It's a lucrative business. Tanner estimated that gift baskets can represent 15% to 20% of total sales at many specialty and gourmet food stores, and new trends, such as themed baskets, are an easy way for independent retailers to generate excitement around the holidays with hand-picked signature items.

Of course, the perfect basket begins with the perfect mix of products, and selecting that mix can pose a formidable challenge in a store the size of Jungle Jim's International Market, Fairfield, Ohio.

"Our taste team went through hundreds of products -- cheeses, fruits, cookies, candies, nuts -- to decide what ended up in our baskets," said Sarah Baumann, director of creative services for Jungle Jim's, a single-store independent that sprawls beyond 200,000 square feet of space. "The baskets we offer now were developed through years of listening to what people would call in and request, and products that we would suggest back."

The store's baskets are primarily a mix of fresh foods, such as fruits and cheeses, combined with wines and upscale chocolates, nuts and cookies. Prices, listed in the company's online catalog, range from $15 for its simplest fruit basket, "up to however much customers want to spend," said Baumann. Allowing substitutions keeps customers happy, she explained. At Jungle Jim's, the store's vast selection of international foods as well as expensive vintages in the store's wine department, can quickly increase the sales ring.

"People can switch in and switch out different champagnes and wines, for example," she said. "We've sold baskets for up to $600 based on products people have transferred in and out."

Although Christmas is the best time of year for gift basket sales, Jungle Jim's, like an increasing number of gourmet markets and specialty stores, offers its selection of baskets year-round. Thanksgiving is another big holiday, when people send baskets to friends or relatives they are unable to visit, Baumann said. On other holidays, such as Valentine's Day, appropriate accents are added to the baskets to boost interest and sales.

Due to the hurricanes that devastated Florida's produce industry, Baumann said the selection of produce for the store's baskets will be more limited and more expensive. However, she added the company did not plan to raise the retail prices on its baskets as a result.

For other retailers, that very damage makes this year's fruit basket season more crucial. "We just really need to promote produce this season, and it's going to be a challenge this year," said Annette Egan, floral and produce buyer, Associated Food Stores, Salt Lake City. "Apples aren't cheap, oranges aren't cheap, and grapefruit isn't cheap right now. It's all weather-related.

"Grapefruit especially is a big portion of the bigger baskets, and prices of grapefruit have more than doubled this year compared with last year," she added. "That will have an impact on the retail price, but customers still consider fruit baskets a good gift. They're great for add-on sales."

Associated Food Stores makes baskets for its members centrally, although some of its stores also make additional baskets on their own, Egan said. "The reason that we like to do them here is because they're very labor-intensive," she said. For member companies, "this saves labor at the store during a time of the year when they don't have people to spare."

Other chains, such as Pittsburgh-based Giant Eagle, offer gift baskets primarily as made-to-order items through holiday catalogs, offered each year beginning the week of Thanksgiving.

"The catalogs are designed to communicate a nice sample of our total supermarket product offering to our customers," explained company spokesman Brian Frey, noting that many of the gift baskets were made by each department. The produce department, for example, offers fruit baskets, while health and beauty care offers Bath and Body Gift Sets. Snack Baskets featuring products such as almonds, and mixed nuts are also available, as well as artisan bread baskets from the bakery. Although most of the baskets are made-to-order, Frey said that some are pre-made and used for merchandising displays.

Tanner suggested that regardless of the items used in the baskets, a central display in a high-traffic area could help generate interest during the holidays.

"Even if customers aren't necessarily going to purchase one the first time they see them, a few baskets don't take a lot of space, and they'll attract attention that way."

At Associated Foods, "we have our merchandisers go around and help [member stores], and a lot of the stores have their own ideas as well," said Egan. "Floral department people are usually good with fruit baskets because they're used to merchandising and displaying odd-shaped things in small spaces. Some stores use A-frame racks shaped like Christmas trees, others merchandise the baskets on top of produce racks, but the most important thing is that retailers get information about the baskets out to their customers through fliers and circulars so that they know they're available."

Egan said she encouraged Associated Foods to market the baskets through pre-orders and merchandise additional baskets as impulse items in high-traffic areas. Frequent turns are critical "because fruit baskets are, by nature, very perishable."

Specialty and gourmet stores -- along with several leading regional supermarket chains -- have also found that themed baskets can lend local flair to gift baskets and help draw customer interest throughout the year. Larry's Markets, Spokane, Wash., offers a variety of regionally themed baskets. Featuring items like Pacific smoked salmon and specialty coffees from local roasters, the company has shipped baskets to customers as far away as England, according to spokeswoman April Matson.

"Since Larry's is one of Northwest's premier grocery and retail operations, the focus of the company's baskets is showcasing great local products," said Matson, adding that the baskets, available year-round, change seasonally based on what is available and what is new. "Those who travel to the Northwest and are looking to bring a bit of it back with them love the array of products that are included in the baskets."

In addition, Wegmans Food Markets, based in Rochester, N.Y., and the Central Market division of H.E. Butt Grocery Co., based in San Antonio, have embraced themed baskets with a variety of upscale, cooking-oriented gift collections catering to foodies.