It’s been a busy year for anyone involved in whole health. Sales of organic food surpassed $31 billion last year; surging demand for yogurt, energy bars, nut and seed butters propelled sales of specialty foods to $75 billion; and companies looking to enhance their corporate social responsibility reports now have a set of standard metrics from which to measure their progress.
Retailers and food companies have been a central part of the action. Some reported record profits, as Whole Foods Market did earlier this month when co-CEO John Mackey stated the period had produced “the best quarter in our company’s 32-year history.” Other companies went public. The first day of trading in March for Annie’s Homegrown saw shares soar 89% to close at $35.92. There were a number of notable acquisitions as well: Sprouts Farmers Market’s buyout of Sunflower Farmers Market; Dole Food Co. and snack-maker Mrs. May’s Naturals; General Mills and chip-specialist Food Should Taste Good; and Pfizer and supplement manufacturer Alacer.
There was more activity on the sustainability front. Retailers implemented programs promoting safe seafood purchases. There were more announcements detailing plans to install farms on top of store roofs. Fewer plastic bags entered the waste stream — all of these efforts, and more, undertaken by supermarkets over the past year benefit the communities they serve.
The 2012 WH Fit List acknowledges those supermarket operators who have helped guide this progress. As health, wellness and sustainability become a larger part of consumers’ lives, these are the leaders the industry will look to for inspiration.
Wal-Mart Stores and H.E. Butt Grocery
Why: Its ‘Great For You’ nutrition labeling program
Any day now, shoppers at Wal-Mart stores will begin seeing a new green icon on some of the chain’s private-label products and in the produce department.
The logo — a figure with outstretched arms and the words “Great For You” — will initially appear on Wal-Mart’s Great Value and Marketside store brands that meet criteria based on the 2010 Dietary Guidelines for Americans, as well as guidance from the Food and Drug Administration, Department of Agriculture and Institute of Medicine.
“The goal is to make it easier for our customers to make healthier choices,” said Lorenzo Lopez, a Wal-Mart spokesman. “For instance, in produce, they’re going to be able to see, similar to a shelf tag where the price is, the icon along with any attributes the product has.”
Even critics of nutrition labeling programs have warmed to the system and concede it can help consumers.
“Wal-Mart’s criteria are pretty strict,” said Marion Nestle, professor and author, adding that “they exclude 80% of Great Value products.”
Great For You is the most visible component of the ambitious, five-point healthier food initiative announced last year by the world’s largest retailer. Any manufacturer can use the fee-free logo provided the products they make meet the standards.
“The focus is on lean cuts of meat, whole grains, produce, nuts, seeds and oils,” said Lopez.
The icon is being introduced in tandem with another pillar of the five-point initiative. Wal-Mart has pledged to reformulate thousands of everyday packaged food items, involving both its own brands and those of national manufacturers. By 2015, the retailer aims to reduce sodium 25% and added sugars 10%, and remove all remaining industrially produced trans fats.
“In developing all this we made sure we talked to food and nutrition experts, and had conversations with USDA and FDA just to make sure that we were taking everything necessary into account in developing the program,” Lopez said, noting that Great For You is meant to be a flexible and adaptable as new science emerges.
“We did it in a way that’s complementary to other programs in the industry and information that might be displayed on packages in the future,” he said.
Building stores in food deserts and increasing charitable contributions to community nutrition programs are also part of the overall initiative, as is keeping healthful foods affordable. The last point is a key pillar that resonates deeply within a company catering to a class of shoppers for whom price is a differentiator.
“Whole wheat pasta shouldn’t have to cost more than regular pasta,” Lopez said.
Why: Its innovative and growing employee health program
Healthy employees is a priority for any retailer, but reaching that goal can be harder than the most grueling workout.
For San Antonio-based H.E. Butt Grocery Co., the key is to have fun and offer some irresistible incentives. Earlier this year the company announced the winners of its second annual Slim Down Showdown, a competition that pitted a handful of employees against one another to see who could lose the most weight over a three-month period. The 12 contestants each had access to a nutritionist, life coach, therapist and gym membership, as well as friends and family members — designated as “buddies” — to cheer them on. The winner, Chris Sonnier, a shelf edge process manager at H-E-B’s corporate headquarters, shed 53 pounds and received the $10,000 grand prize.
“It sounds like a cliche, but if I can do it, anybody can do it,” said Jessica Flores, a contestant from last year’s competition, which saw employees lose a combined 550 pounds.
H-E-B certainly believes everyone can complete the program. The company tracked each contestant’s progress on its intranet site, allowing employees throughout the company to follow along and even participate remotely if they wanted to. More than 4,500 did just that and lost a combined 23,000 pounds.
Now the company is expanding the competition to its shoppers. This month, H-E-B announced 25 individuals who will compete over a 16-week period. They’ll travel to San Antonio for a three-day boot camp introducing them to various fitness and nutrition principles. Back home, contestants will have weekly coaching sessions and record their progress online for others to follow. The winner will be announced in October.
“We know that if we figure out a tool for our 77,000 employees, chances are it will have a powerful impact on our communities as well,” said Suzanne Parker, corporate wellness coach at H-E-B.
The Slim Down Showdown is the latest evolution of H-E-B’s umbrella wellness initiative, Healthy at H-E-B, which started in 2004. The overall program also includes a $20 million investment aimed at lowering the price of produce and healthy prepared foods, as well as recipes and nutrition education programs centered on the U.S. Department of Agriculture’s MyPlate logo.
Kroger Co. and Whole Foods Market
Why: Creating the chain’s first-ever director of sustainability position
Sustainability is a full-time job at Kroger. The nation’s second-largest food retailer — with more than 2,400 supermarkets — published its first sustainability report five years ago. Since then, public awareness of green technology, waste reduction and energy conservation has increased to the point where Kroger created the position of director of sustainability. Suzanne Lindsay was chosen to fill the role.
Lindsay (left) came to the supermarket chain from PetSmart, where she created and managed a number of sustainability initiatives. Her responsibilities at Kroger focus on four primary concerns: Environment, food/products, people and community outreach, all of them areas where notable progress has already been made. In April 2011, Kroger announced a goal to sell only certified sustainable seafood by 2015. Several months later, the grocer installed its first rooftop solar systems on two of its Smith’s Food & Drug stores in Albuquerque, N.M.
While Lindsay wasn’t available for comment, the retailer’s 2011 Sustainability Report points out the company’s more recent achievements, including a reduction of overall energy consumption by 30% since 2000; keeping 159 million additional plastic bags from entering the community; improving fleet efficiency by 8%; and eliminating 22 million pounds in solid waste.
“Suzanne will help us accelerate our progress and identify new opportunities to improve our environmental stewardship,” said Lynn Marmer, Kroger’s chief spokesperson.
Part of Lindsay’s efforts will be directed at elements far back in the supply chain. Kroger’s own manufacturing plants have taken steps to reduce energy consumption. One dairy plant in Ohio recorded a 22% reduction in energy usage, the biggest decrease of any of the retailer’s six dairy facilities.
Kroger’s annual report also notes that customers can purchase “thousands of natural, organic and eco-friendly products”; more than 4,000 items qualify for the 1,300 Nature’s Market sections, where many of the brands are merchandised.
Even with such progress, David Dillon, Kroger’s president and CEO, cited the need to keep on improving in introducing the annual report.
“While we are pleased with our progress to date we know there is more we can do,” he wrote.
Why: Its record-setting Living Social voucher promotion
Whole Foods Market regularly attracts attention for leadership on issues like sustainable seafood and health education. But outright marketing? Nah.
The nation’s leading chain of natural health food stores changed that perception in a big way on Sept. 12, 2012. On that Tuesday, it offered a voucher deal through the Living Social discount website. The half-off bargain quickly developed into a perfect storm of brand recognition, social media buzz and wellness marketing.
“It was an extremely popular deal and arguably the most popular deal that’s ever run,” recalled Mitch Spolan, senior vice president of national sales for Living Social. “It’s certainly the fastest-selling deal to date.”
The final numbers were staggering. More than a million vouchers were sold in just under 14 hours. At its peak, volume topped 80 deals a second. Spolan notes that this wasn’t even a nationwide sale, but was offered only in those markets covered by Living Social and where Whole Foods had stores.
Customers found the actual offer — $10 for $20 worth of products — compelling. Spolan still has a screen shot of his desktop that day that reflects the tidal wave of interest the deal created.
“It shows the top 10 trending terms across the U.S. One was Whole Foods, the other was Living Social,” he said. “People were looking for the deal. They were talking about it.”
The value for shoppers was $10 savings, but what it created for the retailer went well beyond driving a million people into Whole Foods Market with 20 bucks in their pocket. One only had to look at social media sites like Twitter and Facebook to see the payoff.
“People weren’t just talking about Whole Foods. They were talking about what they loved about Whole Foods,” said Spolan. “That’s amazingly powerful for the brand.”
Whole Foods used the event as an opportunity to conduct a shopper census. According to Spolan, nearly 90% of shoppers who redeemed their vouchers reported spending more than the voucher amount at checkout, and 60% stated they used the voucher as a reason to shop at Whole Foods instead of another supermarket.
The sale helped push the retailer’s earnings to record-setting highs for the recently-closed quarter, and stirred up such a frenzy inside the company that even the normally cool-headed and unflappable Walter Robb, Whole Foods’ co-CEO, took notice on his official blog.
“For a veteran apron-wearing, bricks-and-mortar retailer like me, this sale was eye-popping testimony to the speed and power of the Internet and digital world,” he wrote.
Safeway and Wegmans Food Markets
Why: The appointment of the chain’s first-ever chief medical officer
At Safeway good health is a mission. Perhaps that explains why the chain called on a retired Army colonel and medical doctor to become its first-ever chief medical officer.
“Safeway has always been a leader in health initiatives,” said Dr. Kent Bradley, who is finishing his seventh month on this latest tour of duty after joining the retailer last September. “We have a strong commitment and a culture of health.”
In his role, Bradley (right) oversees developing and guiding the company’s efforts in three main areas: Employee health care, consumer wellness programs and community outreach.
“My top-of-mind has been continuing the innovation around health and wellness within the organization,” he said.
Employee health has also been a priority for Safeway’s chairman and CEO, Steve Burd, who’s long been a vocal advocate for health care reform. Creating the position of chief medical officer and appointing Bradley is the latest push by Safeway to shake up the status quo. Burd’s tenure has also seen the establishment of Safeway Health, a subsidiary that exports the retailer’s best practices and programs to other organizations. Burd also founded the Coalition to Advance Healthcare Reform, a partnership of 60 companies lobbying for change.
Yet Bradley also has a more customer-facing role. Some are more public than others. Just last month he represented the Safeway Foundation, the retailer’s philanthropic arm, in launching a $2 million grant opportunity for innovative ideas around combating childhood obesity through public-private partnerships in Oakland, Calif.
Similarly, he oversees the chain’s growing investment in delivering direct health care services inside the store.
“We’re expanding our on-site health clinics’ capabilities and looking at getting a little more into clinical care,” said Bradley.
At the shelf level, there’s been an emphasis on making it easier for shoppers to make the right food choices. Safeway’s Simple Nutrition labeling program, introduced early last year, highlights products with any one of 22 different health attributes, such as low-sodium or gluten-free. It is here, in the aisles, that Bradley thinks supermarkets like Safeway can have the biggest impact.
“There are very few touch points left just by the nature of the way we live today,” he said. “But the one place you physically go, and go quite often, is the grocery store.”
Why: The transparent, thorough health review of its private-label products
It takes more than just slick packaging to maintain demand for private-label products. Sometimes a retailer needs to get under the hood and tinker around, too.
That’s exactly what Wegmans did in a big way. The Rochester, N.Y.-based supermarket chain conducted a health-focused review of its entire Wegmans brand portfolio, flagging hundreds of products for updates. It lowered sodium counts in its beef and chicken broths, added fiber to its raisin bran cereal, reformulated its potato chips to make them gluten free, and more.
In all, 245 items have been updated — and the company is just getting started.
“We wanted to step back and conduct a methodical review of products, category by category,” wrote Mary Ellen Burris, Wegmans head of consumer affairs, in a blog post.
Wegmans decided to focus on ingredients that have made headlines lately. Taming high levels of sodium was one priority. To accomplish this, Burris noted, the company’s quality assurance team followed benchmarks set forth by the National Salt Reduction Initiative, established by the New York City Health Department in 2008. The team also added whole grains to numerous products while making others gluten free. High fructose corn syrup was also targeted.
Due diligence like this isn’t rare at a time when private label’s popularity is surging. But going about it in such a methodical manner is something many retailers don’t have the time or resources to do.
“[Wegmans] has crossed over a threshold to where they’re not just a retailer anymore,” said Jim Hertel, managing partner at consulting firm Willard Bishop. “They’ve become a brand marketer in their own right.”
Among the revamped products hitting Wegmans’ shelves in the coming months are 15 lower-sodium salad dressings, instant oatmeal packets with less sugar, and gluten-free corn squares. The effort is ongoing, according to Burris, as the company looks to meet its shoppers’ health needs without hurting their wallets.
Supervalu and Weis Markets
Why: Its commitment of 250 food desert stores
When First Lady Michelle Obama called on the nation’s supermarkets last summer to aid in her healthy food initiatives, Supervalu was one of the retailers to step to the front of the line. The multi-banner chain committed itself to opening 250 supermarkets in neighborhoods where fresh food options are limited.
Supervalu wasted no time in siting units in those so-called food deserts.
“Fifty-two stores were added to our network in our fiscal year, which ended Feb. 26,” said Mike Siemienas, a Supervalu spokesman, citing the company’s annual report. “That includes 47 that serve food deserts and demonstrate strong progress to our commitment to the Partnership for a Healthier America.”
PHA, along with Let’s Move!, was created as a public-private effort to address the childhood obesity crisis. While Let’s Move! emphasizes exercise and physical activity, PHA focuses on access to those foods that make up a healthy diet. It’s estimated that more than 23 million people, including 6 million children, reside in food deserts where there is scant access to fresh produce, dairy or meat.
Supervalu’s contribution to the solution is being made through its Save-A-Lot banner. There are currently some 1,300 Save-A-Lot stores around the country, primarily east of the Mississippi. Another 50 stores are expected to open in the coming year. The chain caters to households making less than $45,000 a year, which is nearly half of all U.S. households.
“At present we now have a total of 740 Save-A-Lot stores serving food deserts, representing nearly 56% of the entire network,” said Siemienas, adding that the 250 stores that are part of Supervalu’s commitment have the potential to create up to 6,000 jobs in those areas.
A typical Save-A-Lot measures 15,000 square feet; roughly 80% of the shelves are filled with affordable private labels, which lowers prices up to 40% compared with traditional retail.
Regardless of the size, however, each unit carries products in every category that customers need, Siemienas said.
“It’s definitely value-priced. But more importantly it has a dairy section, a fresh meat section and produce section,” he said. “It’s bringing key items that people need in order to have a healthy diet into many communities that don’t have access to fresh foods.”
Why: Its humorous but informative local produce campaign
Sourcing local foods is a recent trend for most supermarkets, but at Weis Markets the practice runs deep enough to be called tradition.
“We like to say we were local before local was cool,” said Dennis Curtin, spokesman for the regional grocer, based in Sunbury, Pa. “We’re marking our 100-year anniversary this year, and we’ve been buying local almost since the first day we opened.”
To show its appreciation for the farmers who supply its stores, Weis put these hard-working individuals front and center in a customer-facing ad campaign. “Your Neighbors, Our Farmers” debuted last fall and features black-and-white photos of the people behind 13 of the approximately 150 farms that supply Weis.
The ads are a slice of Americana with a modern twist. Accompanying each portrait is a pithy statement along with a lighthearted description of that farm’s contribution. “Cool as a Cucumber,” reads the ad featuring Titus Hoover, who’s been supplying that vegetable to Weis for 30 years. “Chicks Dig My Farmer’s Tan,” reads another, showing vegetable farmer Dave Rogers leaning against a barn.
Weis placed the ads alongside corresponding products in produce sections chainwide, as well as in store circulars and on billboards throughout its marketing region.
“Conveying who they are and their commitment to quality is extremely helpful to our business,” said Curtin. “It’s information [customers] are interested in, and it helps us.”
Last year Weis purchased 24 million pounds of local produce, including sweet corn, green beans, nectarines, cantaloupes and blueberries. The company also buys locally produced eggs, pork, chicken and beef.
To qualify as local, a farm can be no further than three hours from the stores it serves. Many, said Curtin, are even closer than that. Indeed, Weis has contracts with farmers in four of the five states it operates in, including more than 100 in it home state of Pennsylvania.
So successful was the “Your Neighbors, Our Farmers” at building sales and awareness for local foods that Weis plans to expand the campaign this year, Curtin explained.
“It was helpful to our sales and reinforced our commitment to being a locally relevant retailer,” he said.
Aldi and United Supermarkets
Why: Utilizing MyPlate to promote healthy diets
Aldi is a company that doesn’t make a lot of noise. Since coming to the U.S. in 1976, it’s maintained a no-frills, private-label-focused shopping experience that features some of the lowest prices in the industry. Quietly, it’s grown to more than 1,200 stores in 32 states.
When it comes to health and nutrition, though, Aldi isn’t afraid to speak up. Last year it built a nutrition platform around the U.S. Department of Agriculture’s MyPlate logo, which stresses the importance of consuming fresh produce and whole grains.
In-store signage highlighted items that fit into the different categories, while weekly “Produce Picks” offered additional savings on fruits and vegetables. Store dietitians centered their advice on MyPlate recommendations, and the test kitchen staff featured recipes that followed the new guidelines.
The initiative is part of Aldi’s mission to deliver not just nutritious foods, but the education and marketing tools needed to make them part of a healthy lifestyle, as well. In 2004 the company introduced its Fit & Active line of products containing lower amounts of cholesterol, fat and sodium than its traditional offerings. Aldi complemented that effort a few years later with Fit Facts, a front-of-pack labeling scheme that highlights notable ingredients in Fit & Active products.
These days, Fit & Active packages are a model of transparency, displaying supplemental claims such as “no artificial flavors” as well as beneficial nutrients like protein. Many of the claims supplement a recent reformulation of Aldi’s Fit & Active products that rooted out high fructose corn syrup, preservatives, MSG and other artificial ingredients.
“As consumer conversations have shifted to wanting fewer artificial colors, preservatives and flavors in their food and beverage products, Aldi has worked with our buyers and manufacturers to address that consumer demand,” said Jennifer Cotton, director of corporate responsibility and quality assurance for Aldi.
Why: A comprehensive, ambitious million-dollar wellness program
How should supermarkets integrate health and wellness into their stores? That’s the million-dollar question these days.
United Supermarkets has a million-dollar answer.
In March the Lubbock, Texas-based chain announced it would invest that very amount into an ambitious wellness update touching on every aspect of company operations, from marketing to staff training to the product mix on its shelves.
“When people go to the doctor or the hospital, they might get five minutes of health education right before they’re dismissed,” said Robin Hawkins, United’s director of health and wellness. “We want to bridge that gap, expand upon that information and show them how to shop.”
One way United hopes to accomplish this is by expanding its educational resources. It hired two new dietitians recently, bringing its total to four. They’re also at the center of promotions like the new “Dietitians Picks,” a special shelf tag identifying nutritious foods that score high on the company’s NuVal rating system.
Adding more store tours to help special-needs shoppers is also on the agenda. There’s a “Healthy Heart Cart” tour for customers with cardiac concerns and a “Hunt for Good Nutrition” for kids. Tours for gluten-free shoppers, those with allergies and those just looking to learn the basics of healthy living are in the mix, too.
“We want to make the store as applicable as possible for all of our guests,” said Hawkins.
On the product side, United plans to expand its Living Well store sections, which include an array of healthy packaged and prepared foods, as well as its selection of gluten-free options. Pharmacists have been recruited to interact with customers and recommend products.
“We want to team up with our pharmacists to make sure they’re providing shoppers with as much information as possible,” said Hawkins.