The past year has seen big changes in the whole health category. The economy is less of a threat to sales, but still an important factor that consumers consider in purchasing. Supermarkets have largely integrated their wellness offerings into their conventional aisles. Sustainability is no longer a cause but a mandatory part of doing business, in no small part because it’s smart and profitable to do so.
Throughout the recession, retailers were forced to think ahead, to review their business models and update their strategies. Natural and organic foods performed admirably well, considering their higher pricepoints. Private label took some of the sting out, but now brands are poised for a comeback. Throughout it all, supermarkets have been the one constant: Ready with products, with answers, with options.
Those who demonstrated unique leadership qualities are profiled in the Fit List, SN Whole Health’s annual roll call of supermarkets and other formats that forged ahead with fresh thinking and creativity despite the tight times. There are 10 categories this year, covering the main themes that define whole health today: Merchandising, outreach and green operations. Each candidate was chosen not necessarily because they were the best, but because of the level of dedication shown, the depth of their offering and the impact they’ve had on other stakeholders in the food industry. These are the companies helping to make sure that health and wellness moves forward. — ROBERT VOSBURGH
Green Leader: Wal-Mart Stores
Wal-Mart is many things to many people. To competitors, it’s the price to beat; to shoppers, it’s a haven of selection and value.
But almost everyone agrees that when it comes to environmental stewardship, Wal-Mart has demonstrated true leadership. The world’s largest retailer has ongoing projects that touch almost every aspect of how it operates. From logistical efficiencies and energy conservation, to product packaging and store design, Wal-Mart continues to challenge the rest of the industry to keep up.
“Whether people know about it or not, or believe it or not, you have to take your hat off and give them credit for the simple fact that they mean what they say and they’re committed to doing it,” said Joe Bona, retail division president of CBX, New York, a brand and design consulting firm.
Wal-Mart’s corporate website devotes an entire section to sustainability, which is condensed into three priorities: To be entirely supplied by renewable energy; to create zero waste; and to sell products that sustain people and the environment.
On the food side, the retailer has created the Food, Agriculture and Seafood Sustainable Value Network, a wonky title that oversees initiatives to develop a supply-chain network that sources sustainable (and local) fresh foods and seafood.
Nonfoods have guidelines, too. In 2007, all stores began transitioning to selling only concentrated liquid laundry detergent.
“You’re using less product, so you buy it less frequently and it costs them less to get it into stores,” said Bona. “It’s better for the environment and better for your wallet.”
Skeptics might point out that sustainability has evolved to the point where going green is, in and of itself, profitable. Yet the size and scope of Wal-Mart’s efforts go beyond simple profit motives. For example, in 2008, Wal-Mart introduced the Love, Earth jewelry line, produced in partnership with Conservation International, to ensure that the materials used in each piece are 100% traceable; the line also requires fair trade practices throughout the entire supply chain.
It’s this kind of action that Bona believes could add a deeper layer to Wal-Mart’s peppy slogan, “Save Money. Live Better.”
“How do you interpret ‘Live Better’?” he asked. “Just that very tagline could be used more in in-store communication as it applies to sustainability.” — RV
New Media: Safeway
Many supermarkets have a presence on Facebook, Twitter and the blogosphere, but it’s mostly a one-way street. Retailers use these tools to promote their circulars, offer coupons or advertise sales. Customers with comments, complaints or special requests are still directed to contact customer service through the company website. Few open up their online forums for direct, public feedback, and none are as responsive as Safeway.
The nation’s fifth-largest supermarket chain is open to everyone. Last month, several customers in Ketchikan, Alaska, wrote on the company’s Facebook page that area teens were stealing over-the-counter cough medication from the local store and using it to get high. “Please put the cough meds up!” pleaded one user. “Help us in our battle to save our kids!” wrote another.
That same day, Safeway wrote to say it was in the process of pulling the medication from shelves.
“They’re very responsive,” said Heather Smith, founder of social media consulting firm Lady Luxe. “They comment on almost every post, which is important to do from a customer service standpoint.”
Of course, the chain does employ its social media platforms for promotion. Each of its banner stores has a Twitter account, which representatives update regularly with in-store deals and promotions. The company’s Facebook page, which currently has 67,000 fans, offers exclusive printable coupons under a special “savings” tab. Another tab links to promotional videos, and still another link takes visitors to interactive polls that ask questions such as, “What’s the best way to save at Safeway?”
“We believe that engaging with consumers in their communities, on their terms, is an important part of building loyalty,” said Teena Massingill, spokeswoman for Safeway.
Not to be outdone, of course, is the company’s blog page, which features daily posts from employees covering all areas of the store. There’s Kristina, who blogs about the floral department; Bob, who writes about bakery; Tony from produce; and several others. Topics range from recipes to personal stories, and the posts are rarely more than a couple hundred words.
“You don’t have to reinvent the wheel with any of this stuff,” said Smith. — JEFF WELLS
Nutrition Programs: Whole Foods Market
Whole Foods Market learned a lot during the recession. Faced with defecting customers and sinking sales, it developed sales strategies to protect margins. It reviewed the product mix and bolstered the profile of its private label. It revisited its expansion plans and, in some cases, cut back on growth.
It also did some soul-searching. Last summer, Chief Executive Officer John Mackey famously proclaimed, “We sell a bunch of junk.”
Since then, the nation’s largest natural-foods retailer has been working on its identity, and taking steps to get back to the fundamentals that critics say were cast aside as the chain plied shoppers with gourmet products and specialty indulgences. To kick off the new year, Whole Foods announced a series of programs designed to make it a destination for health education — and action. A centerpiece of the effort is Health Starts Here, a wide-ranging health education program.
“They’re reestablishing their authority,” said Al Meyers, senior vice president with consulting firm Kantar Retail.
Health Starts Here includes nutrition labeling akin to what many other retailers have implemented, with colorful shelf tags indicating a product’s nutrient density, ranging from 1 to 1,000.
What sets Health Starts Here apart from the competition, though, is that it expands upon those ratings with in-depth education and customer service. Stores will host support groups for dieters, and stage lecture series.
Customers who want to follow a more structured format can undertake a 28-day “getting started” program from one of two healthy eating partners the retailer has joined with — Eat Right America and The Engine 2 Diet, both of which emphasize a plant-based, low-calorie diet in concert with good exercise.
“Their shoppers look to them to provide that kind of assurance, that guidance,” said Meyers. “You assume you’re going to find healthy products there, and this just helps you find them more efficiently, and it defines what ‘healthy’ really is.”
To bring everything full circle, the company has extended additional benefits to its employees. Educational programs and retreats, including a full-immersion “boot camp,” are available to those interested. And employees who practice healthy living by not smoking and meeting certain biometric requirements will receive an additional 10% discount atop the 20% they already receive on all store products. — JW
Community Outreach: Peapod
A lot has been written lately about “food deserts,” areas as large as a county or as small as a neighborhood, where supermarkets are absent. Peapod, the Ahold-owned home-delivery service, is using its unique operating model to bring nutritious food to desert-bound ZIP codes around its Chicago headquarters as part of Healthy Families, a joint project between Peapod, community researcher Mari Gallagher and Neighbor Capital, a special outreach and consumer service.
For the Internet grocer, serving these neglected areas isn’t new.
“Some might be surprised that Peapod is already serving the food desert and that some of our drivers, for example, are food desert residents,” said company spokeswoman Elana Margolis. “As Peapod already has food desert customers and employees, we know the community and want to serve it.”
The project was announced in March, soon after first lady Michelle Obama unveiled her national anti-obesity campaign, “Let’s Move!” Healthy Families shares similar goals of reducing diabetes and nourishing children.
But, rather than having residents travel to stores, Peapod’s flexibility and reach almost seem tailor-made for addressing the problem by bringing the food to those who are unable to afford transportation. Though progress has been made during the few short months the program has been in operation, more than half a million Chicagoans still don’t have ready access to reliable brick-and-mortar food stores.
“Many grocers are now lobbying for or have already received incentives to enter the food desert,” said Gallagher, the researcher. “Some of these grocers are the same entities that previously abandoned it.”
Peapod’s participation extends beyond food deliveries. The project encourages Internet and computer usage and skill-building, Margolis noted.
“Peapod is now working with Neighbor Capital on a customized food delivery pilot that will attempt to overcome these Internet access barriers and allow us to sell fresh, healthy produce at a discounted price and through a culturally appropriate venue,” she said. — RV
Ethics: Wegmans Food Markets
Razor-thin margins and extreme competitiveness can make food retailing a notoriously secretive business. That’s what makes Wegmans Food Markets such a refreshing operation. The privately held chain of 75 stores, headquartered in Rochester, N.Y., may not talk to the trade press, but with consumers it has developed strong ties based on information and trust.
One of the most recent examples of Wegmans’ transparency in action asked customers visiting its website, “Have you ever wondered what goes on behind the scenes at Wegmans Food Markets when an item is recalled, and what happens before it is returned to shelves?”
Wegmans uses the same approach with sustainable seafood choices. Last year, the retailer notified shoppers that the seafood-buying office would be making some changes in the way it purchases product.
“We have nothing to hide — in fact we’re very proud of what we’re doing — so we decided to make the sustainability details of our program more available to our customers,” said Carl Salamone, Wegmans’ vice president of seafood, in a statement.
Other supermarkets have adopted similar policies, but Wegmans is one of the few chains that go to such great lengths to communicate and explain the decision-making process in an open and frank manner.
For example, a whole section of the retailer’s website is devoted to food safety issues. A discussion of ground beef suppliers specifies: “Most of our ground beef comes from a Cargill plant (Taylor) in Wyalusing, Pa.”
There are also explanations of Wegmans’ policy regarding bisphenol A, farmed shrimp from Belize and country-of-origin labeling.
Not all of the information is online. Department managers and other associates undergo training often so they can better answer face-to-face questions that come directly from customers.
“We don’t think you should ever think you’re a phenomenon,” Danny Wegman said in an interview with the Baltimore Sun. “We never want to become complacent in what we do.” — RV
Cause Marketing: Balls Food Stores
Every supermarket stocks local products, but sourcing can be notoriously spotty and distribution a headache. The challenges multiply as the chains get larger and the distances grow.
That’s why the partnership between Balls Food Stores and Good Natured Family Farms is held up as a model of operational efficiency. The cooperative supplies Balls’ 29 Hen House Market and Price Chopper locations with everything from meat and eggs to honey and salsa.
“The grocery side needs to grow, the farmers need to grow, and so we ask how do we make that a win-win for both sides?” said Diana Endicott, director of the farming network based in Bronson, Kan.
Started in 2004, the collaboration today functions smoothly, garnering local products and selling them with a sophistication that rivals mainstream branding. Farmers — there are 150 in all — take what they’ve produced to Balls’ central warehouse in Kansas City, Kan., and from there the retailer distributes the products. Once in stores, products are supported by banners and signage bearing the cooperative’s seal, along with slogans such as “Buy Fresh. Buy Local.” Balls’ locations also host “Farmer’s Table” promotions that bring the growers into stores to share their stories with customers.
“They continue to educate the consumer about who we are, what we do and why we do it,” said Endicott.
The scope and depth of the partnership has attracted national attention. Endicott said that Balls Food President David Ball regularly consults with retailers in non-competing markets on how to source and sell local products. And earlier this year, U.S. Department of Agriculture Deputy Secretary Kathleen Merrigan paid a visit to the area to learn more about how Balls and Good Natured Family Farms go to market. Merrigan has stated that she wants the USDA to enhance local food systems across the country.
“Since we’re in conventional supermarkets, they see us as a good model for integrating small and medium-sized family farm into the modern food system,” said Endicott. — JW
Merchandising: Publix Super Markets
Selling whole health to the masses is a tricky proposition for most mainstream supermarkets, since they primarily cater to the casual wellness consumer. Retailers have tried different strategies in an attempt to maximize sales by integrating natural/organic with conventional products, or building in-store boutique sections that act as a destination for these shoppers.
Publix Super Markets, Lakeland, Fla., has taken a different tack, slowly building a natural/organic/green store brand that, in recent years, has evolved into a stand-alone store format. Both are called GreenWise, and both demonstrate a level of dedication not often found in large-scale retail environments.
In a presentation last December to the Florida Public Relations Association, Publix spokeswoman Shannon Patton said sales of the GreenWise brand have exceeded $1 billion, a significant contribution that’s taken years to build: Toilet paper was the very first GreenWise product to appear, way back in 1996.
“They start small and take a while to grow and do this for a reason,” Patton stated in her presentation. “It helps ensure that they are putting the right products in the right stores.”
Such tactics have allowed privately held Publix to invest in the brand without outside pressure.
“I see it as a bet on the long term, and a learning opportunity for them about potential directions that things might go,” agreed Jim Hertel, managing partner at consulting firm Willard Bishop. “Companies that are public or cash-strapped don’t have this kind of time to experiment with.”
The first GreenWise store opened in September 2007, and three are currently in operation. Though the format focuses on wellness and sustainability, Patton notes that the GreenWise customer “still purchased conventional items as well.”
To that end, the retailer recently related how the GreenWise unit in ultra-wealthy South Tampa has started stocking fried chicken and sugary birthday cakes at customers’ requests.
“This is still very much a pilot project,” the store’s manager told the Tampa Tribune.
Yet there are no indications Publix plans to dismantle its wellness format, as other retailers with less patience have had to do. — RV
Private Label: Fresh & Easy
ONEHOPE nourishes a lot of trees — more than 3,200 saplings, to be exact. Half of the profits from each $9.99 bottle of the wine, a sauvignon blanc created by Tesco-owned Fresh & Easy, goes to American Forests, a nonprofit organization that plants trees in areas impacted by wildfires.
“This is a simple extension of what we try to do as a company,” said Brendan Wonnacott, spokesman for the retailer. “We’re very focused on giving our customers the opportunity to give back.”
The 146-store chain, headquartered in El Segundo, Calif., worked with Sonoma Wine Co. to create the exclusive wine, which was introduced last Earth Day.
The 5,000-case promotion, called “One Bottle, One Planet,” has been built around environmental awareness. Sonoma Wine Co. engages in sustainable growing practices, and is a member of the Sonoma County Green Business Program, as well as the Wine Institute’s Sustainable Winegrowing Program.
“These types of things are a great opportunity for customers to make a difference while doing what they regularly do, in this case, grocery shop,” said Wonnacott.
As supplies dwindle and the last bottles are sold for this promotion, the retailer is looking ahead. This summer, Fresh & Easy is prepared to offer an exclusive, late-harvest riesling wine that will benefit a breast cancer charity.
“We’ve been soliciting feedback from customers on Facebook, Twitter and our email list to find out what charity they would like to see us partner with on this line,” said Wonnacott. — RV
Employee Wellness: Meijer
Meijer might be 75 years old, but it’s in great shape, judging by the many accolades and honors the Grand Rapids, Mich.-based chain received this past year for its associate wellness programs. The chain of supercenters — which also won the SN Whole Health Enterprise Award in 2007 — has been honored by the American Heart Association and several healthcare groups, including the National Business Group on Health, which cited Meijer as one of its “Best Employers for Healthy Lifestyles.”
“Meijer believes the health and well-being of its team members and their families are an integral part of the company’s success,” the judges stated. “This belief is demonstrated with the combined offering of Meijer’s company-wide health plan coverage and the Be Healthy wellness program. The guiding mission is to support and empower team members and their families to achieve a healthy life balance with a focus on mind, body, spirit and heart.”
The retailer’s “Be Healthy” initiative is the centerpiece of its employee benefits program, and provides premium discounts for participating associates and family members. The program works by bringing on-site health assessments in-house, where they are conducted by Meijer’s own pharmacists. Screenings result in personalized plans that focus on disease prevention and health maintenance using an employee’s own healthcare providers. Meijer provides ongoing support in the form of health coaches and online education.
“It’s an honor to be acknowledged for achieving one of our most important goals,” said Karen Morris, senior vice president of human resources for Meijer. “Helping our team members and their families achieve good health and well-being is key to being a successful company.”
It helps that Meijer has so many resources at its disposal. As a supercenter, the retailer offers walking shoes, yoga mats, exercise equipment and everything in between.
“Many of the disease mangement states that we work with have a fitness component,” corporate dietitian Shari Steinbach said during a 2007 store tour. What’s true then remains just as valid today, whether they’re talking about customers, or team members. — RV
Alternate Format: Compass Group
Compass Group knows the direction its customers are heading.
Such foresight most recently led to a landmark “flexitarian” eating initiative that expands the variety of meat-free dining options throughout its 8,500 business and academic cafeteria accounts.
“We knew it was coming. It was just a function of timing,” said Deanne Brandstetter, vice president of nutrition and wellness for the giant foodservice and support services company, which had 2009 revenues of $2.9 billion. “We started to see a convergence of health concerns and environment concerns, and the idea that you don’t need to become a diehard vegetarian or vegan to make a difference in your health and environmental sustainability.”
The first hints became apparent several years ago, when the company began tracking the increasing popularity of meat-free meals being served at its college campus accounts. The result was “Be A Flexitarian,” a program introduced early this year that’s already been endorsed by the Humane Society of the United States.
While the concept was sound, operational execution presented many challenges, according to Brandstetter.
“We saw very quickly that if we have to bring in a lot of unusual, hard-to-obtain protein sources, things that people were not necessarily familiar with, it might not work,” she recalled.
The company instead pursued a “world cuisine” menu that simply highlights dishes that are vegetarian or vegan to begin with. No tofu or seitan, but red beans and rice, lentil stew, pasta fagioli soup and eggplant parmesan.
The biggest surprise for Brandstetter so far has been the online response to the initiative — the first time Compass has used social media to this extent.
“We’ll post a new recipe each week and folks will write in about them,” she said of the Be A Flexitarian’s page on Facebook, which currently has more than 4,000 members. “We have a very robust conversation going on.” — RV