Sunday, December 23, 2007

Safeway's O' Organics Brand: Part Duex

Safeway's O' Organics in Asia: More on the brand's being on sale at Carrefour-Taiwan. The brand also is being sold by Jason's Marketplace on the Island of Taipei in Taiwan. From Taiwan its on to Japan--and elsewhere in the Asia-Pacific region--for the organic foods brand. Finally, closer to home, Central America, where Carrefour just happens to have 366 food stores, is up next for O' Organics' brand marketing travels.

On Friday, we reported that Safeway Stores, Inc. is currently selling a number of items in its popular O' Organics organic grocery products line at a Carrefour Hypermarket in Taiwan. As we wrote Friday, the international business and grocery trade press had reported last week that Safeway "plans" on selling items from the line in Asia and South America beginning next year. (read our Friday story here.) We're the only publication to date to report that O' Organics brand items are already being sold in Asia.

We've learned a few more facts: First, the Carrefour store (pictured at left) where the O' Organics items are being sold is on the island of Taipei, in Taiwan. It's a huge Hypermarket.

Additionally, Rachel Lanning who lives and works on Taipei, told us the Carrefour store is adding new O' Organics brand items regularly. "Just yesterday, I spotted O' Organics macaroni and cheese," she told us. A clerk at the store told us via telephone that the items are doing well thus far, and that the store is indeed adding new skus on a regular basis as shelf-space is made available.

All Taiwan-region Carrefour stores to sell O' Organics brand

Carrefour has about 48 stores in and around Tawian. We've learned that all of these stores are either currently selling--or will be doing so shortly--O' Organics brand grocery products. The stores' are adding additional skus as space (and merchandising plans) permit.

Carrefour Asia is a great international brand launching pad for O' Organics

Carrefour, Europe's largest retailer, and the second largest retailer in the world after Wal-Mart, currently has about 223 Hypermarkets (huge stores that sell food along with hard and soft goods) in Asia. The French retailer has 100 stores in China, 48 in Taiwan, 30 in Indonesia, 25 in Thailand, 11 in Malaysia, 7 in Japan, and 2 in Singapore. Asia is a fast-track grow region for Carrefour as well.

This base of 223 Hypermarts in Asia provides the O' Organics brand with a huge Asian launching pad. Include Japan, and eventually China, the worlds most populated nation, and fasting growing economically, and it's apparent the Asian continent offers great opportunities internationally to grow brand sales.

Wellcome's Jason's Marketplace on Taipei also selling O' Organics brand items

Ms. Lanning also told us Jason's Marketplace, which is an upscale format from Hong Kong-based Wellcome, is currently selling O' Organics brand grocery products in it's Taipei store. We verified this, and the store is merchandising a number of items from the organic brand. Among the items in the O' Organics line Jason's Marketplace is selling include cereals, juices, peanut butter, noodles and other packaged goods.

Wellcome is Hong Kong's largest and oldest supermarket and hard goods chain. The chain currently has 235 stores in the island region. Jason's Marketplace is the grocer's newest format, and is designed to appeal to the specialty and natural foods consumer in the region. As in the West, natural, organic and specialty foods are chief among the many food product demands for a increasing number of consumers in Asia, especially in developed and generally prosperous countries like Taiwan, as well as in Hong Kong, Japan, South Korea and increasingly in China.

Japan next on-tap for O' Organics brand

We've also learned from a source, an international grocery products trader, that the O' Organics brand will be introduced in retail foods stores in Japan soon. American grocery product brands do well in Japan, and the country has a huge network of supermarkets and convenience stores like 7-Eleven Japan and Lawson.

In fact, Lawson, which is the second largest Japanese convenience chain after 7-Eleven-Japan, has a format called Natural Lawson, which features an extensive selection of natural and organic foods and grocery products. (Think of it as a mini Whole Foods.) Natural Lawson is positioning itself to the growing number of Japanese consumers who want natural and organic foods. (Read our recent piece about Natural Lawson here.) The upscale, convenience-oriented chain currently has about 20 stores--and is growing. It would be a "natural" retail outlet for the O' Organics brand. In addition to the 20 Natural Lawson stores, Lawson operates 8,400 traditional-style cobini (convenience stores) in Japan.

Carrefour and the Central American leg for the O' Organics brand

In it's announcement last week about taking the O' Organics brand international, and selling the line to other retailers, Safeway CEO Steve Burd mentioned two regions: Asia and Central America. Carrefour just happens to operate about 366 stores that sell food and grocery products in Central and Latin America. The retailer has 237 Hypermarkets and 129 supermarkets in the region. All but 36 of these stores are in Brazil and Argentina, countries with enough consumers with good incomes to provide a nice market for the brand. The remaining 36 stores are in Columbia (35) the Dominican Republic (1 store.)

Obviously, with a deal done with Carrefour in Asia, it's a logical conclusion there just might be a similar deal for Central and Latin America with the mega-French retailer.

Smart marketing to take O' Organics to Asia and Central America first

Lastly, we believe it's extremely smart marketing to introduce the O' Organics brand internationally first in Asia and Central America. Most organic product's brand marketers looking internationally for sales, tend to usually look--and go--first to Europe because of the region's strong base of natural and organic foods consumers. However, European food retailers are expert at creating store brand natural, organic and specialty foods brands, and going head-to-head against their brands makes little sense for O' Organics at this point in time, if ever.

Rather, Asia and Central America offer a market where their aren't many full-line organic grocery brands. Although it's nothing like Europe in terms of overall sales potential, it's an emerging and growing organic foods market--and those who get their first will have an advantage.

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