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Uh-O Organics: The Double-Edged Sword of Sustainable Food Gone Mainstream

Ali Hart
Ali Hart | Friday January 21st, 2011 | 7 Comments


While much of the conversation at the Sustainable Food Summit focused on tools, resources, information-sharing and partnerships to help companies bolster their sustainability efforts, the old David vs. Goliath scenario inevitably reared its ugly – but organic! – head.

Safeway, the national grocery chain, continues to develop its own brands to compete in the organic and health and wellness categories. The recognizable O Organics line contains over 300 products and Eating Right (“nutritional”) and Bright Green (home care products) are also part of the healthier mix. In the last 90 days, the retailer has introduced two new green-minded product lines: In-Kind (+90% natural personal care products) and Open Nature (100% natural meats and poultry). Although the term “100% natural” is not a true certification (and, frankly, doesn’t carry any weight with the converted), many consumers don’t know any better. It is these less savvy shoppers to whom the store caters, as Safeway learned through research that 90% of consumers acknowledge a link between diet and health. And so it continues to pursue market share.

The company’s strategy “to make high quality organics affordable and accessible to everyone, everywhere” is having an impact on more than just the consumer. Safeway claims that consumers find the organic market cluttered and confusing, with a multitude of niche brands. Moreover, they think it’s too expensive. So the grocer is addressing these concerns by limiting choice and lowering price. How does it limit choice? Well, if the O Organics line is next to a comparable organic product that costs more, consumers primarily concerned with price will likely by the O Organics line. As this continues to happen, the retailer will determine that people don’t want to buy the other organic product and drop it from its inventory, thereby effectively forcing out smaller organic brands; while Safeway is increasing access to organics, it’s also decreasing access to the larger organic market. And let’s not forget that the more products they introduce into limited shelf real estate, the more products they have to remove.

While it’s easy to hate on the big guys in favor of the small guys, this situation does present a conundrum. Yes, it is good for the planet if more people have access to organic, healthier products. In-Kind products don’t contain parabens, pthalates or petroleum based products, to name a few. It’s incredible to see how many high-end brands can’t say as much. The problem is that by making it about price, Safeway is undercutting small brands much like subsidies undercut small farmers and, according to the presenter from Organic Valley, only less than 5% of US farmers (or under 100,000) are not subsidized. (Moreover, it’s these very subsidies that make organic products seem “expensive” to consumers when really their prices reflect the true cost of production.) This sad fate of the American farmer does not bode well for the small organic players who have paved this path from niche to mainstream with innovative approaches; they created the demand that Safeway is now intent on meeting.

We’re finally at the tipping point, but now what do we do? How can we increase access to organic and sustainable products without repeating a tragic history that already plagues our food system?

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Ali Hart is a sustainable communications and engagement strategist with a passion for life’s essentials: food, water and storytelling. Her background in the Entertainment industry, penchant for humor and MBA in Sustainable Management from Presidio Graduate School are Ali’s secret weapons in her quest to master the art of behavior change and to make sustainability inconveniently fun.


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  • Deverie

    Great article, Ali.

  • Rick Kendall

    Nice statement of the problem. I think that part of the dilemma arises from focusing just on “organic”. Because organic can lend itself to “industrialization”, the small farmer will always be at a disadvantage. Perhaps one answer is to move beyond the organic message to a focus on local sourcing and the myriad of ways that it benefits the consumer as well as the environment. There are models (e.g., Costco) and local sourcing is much less susceptible to “industrialization”.

  • MitchB

    Safeway’s growing of its O’ Organics brand is not a negative issue for the organic and natural products industry for a number of reasons.

    First, O’ Organics products really aren’t that much cheaper than like manufacturer brand items. Safeway actually makes sure of that because it wants to squeeze every percent of margin it can out of O’ Organics.

    Second, O’ Organics is actually expanding the organic foods category overall. This is good news for those of us in the industry. Why? think of it this way: 2% of a huge pie is much better than 10% of a tiny slice of pie. There are plenty of shoppers who prefer brands other than O’ Organics. Of course the brand takes share – but if it wasn’t there another brand would do the same.

    Third, Safeway sources all of the items in the O’ Organics brand from organic procuts manufacturers. These are called co-packers. Safeway doesn’t manufacture it’s own products. As the brand grows, so does the business for these co-packers, which include companies that make organic food products/brands that you see in stores daily. There are certainly pitfalls in co-packing, and Safeway like toehr huge grocers can beat down a supplier on price, but the fact is: Without these organic foods companies, Safeway’s O’ Organics would not exist. There is some leverage in that for the packers.

    Lastly,the limit choice argument just isn’t correct. There are so many outlets to purchase organic and natural foods in the U.S. today – from Walmart and Target to supermarket chains, drug stores, natural foods stores, co-ops, online, farmers markets, specialty stores – on and on – that about the only place such a choice is limited is inside a Safeway store – and that’s not even true because Safeway carries a large selection of branded natural and organic products.

    It does try to weed them out in favor of O’ Organics, for example, but Safeway has found it can only do so in a limited way, as consumers are brand loyal in many categories and will take therir business to Whole Foods or elsewhere.

    Bottom line: Not to worry. It’s a challenge but it isn’t one that is a biggie, either for consumers who, except in food deserts, have many places to shop for groceries, or to the industry, which is adapting well to the Safeway play.

  • http://www.realfoodbrand.org Don Fosher

    Until there is a universal Seal for what all are attempting to define, there will be a blurring in consumer’s minds. We’re trying to help in that regard with one that’s a true clarification.

  • Denise Stickel

    Too many times, the average person’s argument against organics is, “I can’t afford it.” So I think it’s better to have more affordable organics on the market. And I don’t agree that they’re not that much less — for some staples, the cost is a dollar or more less than other organic brands. So, since I have to drive almost 50 miles to find “real” organic markets, I’ll continue to shop Safeway in a pinch. But the Safeway in my town (unlike some others that I’ve been to) will lose the bulk of my business because they don’t keep much organic produce at all. And I’ve discovered a raw goat dairy just down the way, so they’re about to lose my business in the dairy market, too, which is where I buy the most O Organics right now. I’ll be making my own yogurt, kefir, and cheese, so…um, yeah…guess those O Organics aren’t really making that much dent with those in the know.

  • Truckngirl

    Here in Hawaii it is “about price”. I can buy their organic choices for really not that much more than the non organic type. I’d love to be able to afford to shop at Whole Foods. Sorry, rent for 3 bedrooms here is over $2k. Most of us have to save when we can. When more local businesses produce what I use, I’ll give them my money. Until then, it’s Safeway.

  • drdewey

    What a load of crap! Sure “how DARE Safeway carve out a more affordable price tag for Organic foods! How dare they take away from the little guy!” Ya know what– we have big clothing corporations and people who are interested in “vegan” clothing or Organic Farmer Markets run by a small business are still buying where they choose. How is it Safeway’s problem that they have the ability to make USDA certified organic food more accessible? Why is this article not also attacking the Organic Kirkland Signature brand from Costco? Someones got a bug up their butt!

    I wanna eat Organic and sustainable foods. I also want to afford a roof over my head!