Target Puts Bullseye on Your Organic Food Dollar

Are you walking on the organic side of your local grocery aisle yet? If you count yourself among the growing number of consumers who are making an effort to bring healthier food choices into their diet, Target has its sights set on your business. The big-box retailer recently introduced Simply Balanced, their new organic line, that it likely hopes may convince some consumers to skip a trip to their local farmers’ market or Trader Joe’s. According to Target, the Simply Balanced collection, that is scheduled for a full rollout next month, will have an assortment of about 250 products, from snacks to frozen seafood. Nearly half of the line is organic, and three-quarters of it is GMO-free. Simply Balanced also has food labels that are easy to decipher, and affordable price points.

Following the current national trend pushing GMO labeling legislation and eradication, such as Whole Foods’ commitment to labeling GMOs in all their stores’ products by 2018, Target took a stand against GMOs in their new natural store brand by pledging to eliminate them from the entire line by the close of 2014. Additionally, the retailer plans a 25 percent increase in their organic food selections by the end of fiscal year 2017.

Simply Balanced joins Archer Farms and Market Pantry, which were introduced in 1995 and 2001 respectively, as Target’s third house brand. Yet, grocery sales and pet supply sales only accounted for 20 percent of Target’s overall sales last year, a figure that the mega-merchant is undoubtedly hoping to boost. How will Target compete with Walmart, where organic and natural grocery sales grew twice as much as their traditional food sales in 2012, or Whole Foods, who recently initiated a new strategy to beat their competition by promoting sales of less expensive products?

It’s too early to determine if Target’s Simply Balanced line will succeed at capturing a high market share of organic food sales. On the plus side, the tide is definitely turning for store brands. Blind taste tests conducted by Consumer Reports indicate that a number of store brands top national brands. In addition, according to the Deloitte 2013 American Pantry Study, store brands are gaining acceptance among consumers, but there's ample room for growth. They currently represent only 18 percent of packaged foods in the United States, contrasted with 36 percent in the United Kingdom and 44 percent in the Netherlands.

Sales of Simply Balanced may also be boosted by the fact that consumers are shopping for more organic food. The Organic Trade Association reports that the organic food and beverage sector was valued at $29.22 billion in 2011. Furthermore, prospects for 2013 show that organic food sales will continue to maintain growth levels of nine percent or higher.

Target’s foray into natural and organic food is no doubt welcome news for shoppers pursuing additional buying options. Yet, winds of change are blowing in the supermarket industry. Prepare yourself, the battle for your organic food dollar has just begun!

[Image Credit: Kevin Dooley]