Retail Memo: Washington D.C's Famous Georgetown Neighborhood Could Finally Get its Long-Desired 'Social Safeway' Supermarket

From the Natural~Specialty Foods Editor's Desk: Nearly three years ago Pleasanton, California USA-based Safeway Stores, Inc. embarked on the huge task of converting what are now about 1,755 supermarkets under numerous retail banners in the United States into what it calls its "Lifestyle" format.

Safeway's "Lifestyle" format is a fairly upscale store design package which features soft colors inside the store, hardwood flooring in departments like produce and wine, and spot lighting instead of bright lights, along with numerous other attractive design elements.

The "Lifestyle" format combines Safeway's traditional value-oriented style of food and grocery retailing with a greater focus on natural, organic, premium and specialty products merchandising across all store categories.

This merchandising emphasis includes expanded selections of natural, healthy and organic food and grocery products like Safeway's own popular O' Organics and Eating Right store brands, along with manufacturers' brands.

The "Lifestyle" merchandising focus also includes store branding of Safeway's fresh, prepared foods offerings, including its premium Signature Cafe brand of ready-to-eat and ready-to-heat items. Additionally, under the "Lifestyle" format Safeway has dramatically expanded the number of premium, specialty, ethnic and gourmet food and grocery items it carries in its supermarkets.

Perhaps the most interesting and important aspect of the "Lifestyle" format is that with it Safeway has tried to create a much more social supermarket. The retailer has used design features like outdoor patios and terraces in some cases, farmers market-style produce departments, wine cellars and old fashion butcher shop-style meat departments in both its new and remodeled supermarkets as ways to create a more social and enjoyable shopping experience for customers.

By and large the "Lifestyle" format has been a big success for Safeway, which has thus far converted about 70% of its U.S. supermarkets--which operate under such banners as Safeway (Northern California, Oregon, Washington state, Arizona, Colorado, Washington D.C., Maryland and Virginia); Vons (Southern California and Nevada); Carrs (Alaska); Dominicks (Illinios and Indiana) and others--into the "Lifestyle" format, according to CEO Steve Burd. Plans call for all of the supermarket chain's stores (except the handful of Pak-N-Sav warehouse stores it operates in Northern California) to be converted to the "Lifestyle" format by the end of 2009, Burd told Natural~Specialty Foods Memo earlier this year.

One strategy Safeway has been using during its three year "Lifestyle" conversion format is to expand the size of certain stores and upscale them considerably in neighborhoods in which the shopper demographics are strong for food stores offering a lifestyle experience along with expanded selections of natural, organic, premium and specialty foods.

The supermarket chain has a number of stores that were opened long ago that sit in such premium demographic neighborhoods. Many of those stores, such a one currently being proposed (a remodel) in Oakland, California's upscale College neighborhood, another in Berkeley, California and yet another in the upscale Georgetown district in Washington D.C., are older, small supermarkets that once fit well in these neighborhoods but have long outgrown the gentrification and upscaling that's gone on in them. These stores and others present a huge sales opportunity (at least a doubling of annual gross sales) if expanded and remodeled based on the respective neighborhoods' demographic profiles.

Washington D.C's Georgetown, home to Senators, lobbyists and the well known Georgetown University, has long wanted Safeway to grow and upscale the Safeway supermarket that's been in the neighborhood for decades.

This has particularly been the desire of Georgetown University students and faculty who like most university communities are on the cutting edge of the natural and organic foods trend. Additionally, the wealthy political and business movers and shakers of Washington D.C., many who reside in Georgetown, have wanted a Safeway supermarket in the neighborhood like the ones ("Lifestyle" format) in nearby Alexandria, Virginia, which is one of the more wealthier suburbs of the nation's capital city.

This desire for a more "social" Safeway has been discussed in the Washington Post newspaper, on numerous area online food forums, and in the pages of the Hoya, the student newspaper of Georgetown University.

Well, it looks like Georgetown University students and the Georgetown neighborhood's who's who of political and corporate residents and their frequently entertaining spouses are going to get their long-desired "social Safeway", according to a story in today's edition of the Hoya, the Georgetown University student newspaper that was founded in 1920.

And, according to the article reprinted below, it looks like Safeway plans to serve up a "Lifestyle" format supermarket for Washington D.C.'s Georgetown neighborhood (where former President John F. Kennedy lived before being elected to office) befitting the areas demographics, love of food and desire for a more social grocery shopping experience.

Perhaps the new Georgetown "Social Safeway" will be ready for the new U.S. President and his family when he--either Barack Obama or John McCain--takes office next year?

Safeway to Get a Little More 'Social'
The Hoya--Georgetown University
By Kaitlyn Gallagher Sep 01 2008

Who would have thought that a mundane trip to Safeway could turn into a social event?

In an effort to create a more welcoming atmosphere, owners of the Wisconsin Avenue Safeway are planning extensive renovations to turn the current grocery store into a “Social Safeway” shopping center almost 50 percent larger.

The new establishment is envisioned as a curbside, two-level shopping complex complete with an outdoor terrace and two parking levels.

Craig Muckle, a Safeway public affairs manager, said the renovation plans are still in the developmental stages. “We are still working with the Advisory Neighborhood Committee and the District government, so the start date hasn’t been identified yet,” Muckle said.

The building would be moved curbside to make it more accessible and inviting than its current spot behind a large parking lot. It would also be turned into a two-level complex, with the lower level occupied by separate businesses and the grocery store on the top. Safeway administrators are currently unsure which businesses would occupy the downstairs level, according to Muckle.

Muckle also said the terrace would be added to give weary shoppers a place to rest. “It essentially will be like an indoor/outdoor café setup where you can purchase food, sit and overlook the store.”

The enormous parking lot will be scaled down, but according to the renovations, parking won’t become scarce: There will be two levels of parking behind and below the store. As a result, there will also be two entrances.

The Georgetown store’s redevelopment is part of Safeway’s long-term rebranding strategy announced in 2004 in which existing stores in North America will get hardwood floors, muted lighting and improved produce, delicatessen, bakery and floral sections.

The renovations specific to the Wisconsin Avenue Safeway, though, such as the shopping area and outdoor terrace, were designed to suit the Georgetown community.

“Every store is different in and of itself, but this plan is strictly for Georgetown,” he said.

The square footage of the new store would be approximately 65,000 square feet, which will be nearly 45 percent larger than the existing store.

“I definitely think it will make the shopping experience more enjoyable, and it will definitely be a way for more people to meet,” said local resident and frequent Safeway customer Elizabeth Williams. “This already is considered the ‘social Safeway’ in D.C., but these changes will only make it that much more social.”

The closure of the current store during construction is projected to be an issue for local customers, but Muckle said he hopes customers will remain loyal to Safeway and use its home delivery service or visit nearby grocery stores in the interim.

Marketing Memo: Store Brands 2.0: Better Store Brands and Brand and Shopper-Marketing Changing How Food Retailers Sell Their Own Brands

From the Natural~Specialty Foods Memo Editor's Desk: On August 6 we wrote about Safeway Stores, Inc.'s plans and initial strategy to market its O' Organics and Eating Right organic and healthy food and grocery (store) brands to competing retailers in the U.S. and to retailers throughout the world: Marketing Memo: Safeway's Challenge: Going From Store Brand Marketer to Consumer Brand Marketer With its O' Organics and Eating Right Brands.

Both brands have been so successful for Safeway that it is that success (above expectations) which provided the idea for the grocery chain to take the brands beyond the walls of the retailer's own stores and market them to its U.S. competitors and to food and grocery retailers throughout the globe.

Safeway is part of a growing trend among food retailers to go from being "private label" sellers to "store brand" marketers with their own-brand food and grocery products.

Traditionally, especially among American supermarket chains and mass merchandisers, private label was viewed primarily as a retailer's price and value store brand. The product quality was generally good but not outstanding, the packaging utilitarian, and the marketing focus strictly price and shelf placement. More sales promotion really rather than marketing.

This private label emphasis started to change slightly in the late 1980's when supermarkets like Loblaws introduced its more upscale Presidents Choice brand, which the Canadian food retailer eventually marketed to supermarket chains in the United states, as well as using it as its higher end store brand in its Canadian stores.

By the mid -to- late 1990's numerous other supermarket chains were starting to create better quality and looking store brands, along with using beginning to use some classical brand marketing strategies to create different levels (and brand names) of store branded products: super value, value, premium, natural, organic and the like.

About five years ago retailer branding started getting kicked up a notch with Safeway Stores, Inc. creating O' Organics, Kroger improving its store brands and developing its own natural and organic store brands, regional supermarket chains like Wegmans and Publix doing the same, as well as mass merchants target and Wal-Mart greatly upscaling their store brands.

Natural foods retailers Whole Foods Market and Wild Oats (now part of Whole Foods), along with specialty grocer Trader Joe's and the Costco and B.J's Wholesale club chains, were a major influence on these supermarket chains in terms of developing the higher quality and more niche oriented store brands like O' Organics. All of these retailers were leaders in the creation and marketing of these store brand 2.0 lines.

Along with this development, food and grocery retailers started putting much more emphasis on store or shopper-marketing of their store brands, developing and using numerous marketing-oriented ways to build the brands besides the past reliance and traditional emphasis on price and display building in-store only.

The marriage of higher quality store brands and shopper marketing is in full bloom today. Food and grocery and discount chains led by Safeway, Kroger, Wal-Mart (which right now is developing an upscale food and grocery store brand), Target, Trader Joe's, Whole Foods, Costco, BJ's (and others) and numerous regional players, are beginning to view their store branding operations in more classical brand marketing terms rather than as merely an extension of the procurement department, which is how private label was handled for decades.

Jim Lucas, who is the executive vice president of the shopper marketing division for DraftFCB, a marketing and advertising agency in Chicago, writes about what we call store brands 2.0 and shopper marketing in an article in tomorrow's (August 25, 2008) Advertising Age. Mr. Lucas' piece is informative theoretically but also extremely applicable and hands on. That's why we wanted to bring it to Natural~Specialty Foods Memo readers. Below is the piece and by Jim Lucas.

The Newest Brands? Open for Business
Retailers Have Switched Gears, Marketing Their Stores and Labels and Strengthening Bonds With Shoppers
By Jim Lucas: August 25, 2008

Many marketers are rapidly becoming more concerned with how retailers think. They want to know their concerns, objectives, equities and images and how they go about creating bonds with shoppers.

That's because today's retailers are evolving far beyond their historical role as simple points of distribution for selling national brands. They have changed their approach, marketing their stores as their own brands and systematically building better, stronger relationships with shoppers.

As a result, on behalf of our clients, we must now help the retailer build its business.

Think about it: With the average U.S. household making 150 to 200 store visits a year, it seems reasonable that while shoppers might make several trips to their local stores each week, they may not purchase the same branded products each time. Thus, shoppers generally have more contact and experience with their local retailers than with the majority of national brands.

Going their own way

Clearly, the nature of retailers' value creation has dramatically changed. And rather than just establishing loyalty to branded products, retailers want voices of their own. They are seeking to establish their own brands, and they are doing so by tailoring their customer experiences, differentiating them from their competitors' and creating better, ongoing relationships with shoppers.

Today's retailers have made huge inroads in fortifying their relationships with shoppers. Research by "Private Label Strategy" authors Nirmalya Kumar and Jan-Benedict E.M. Steenkamp clearly suggests that the nature of shopper loyalty is changing. While many shoppers are still loyal to brands, a significant portion increasingly are loyal to stores. This may be largely a function of convenience, but at the very least, retail brands are becoming more established in the minds of shoppers.

For example, Aldi, the European hard-discounter extraordinaire, has done a good job making its customers feel like smart shoppers. It has been aggressive in driving down prices on branded consumer package goods through strongly negotiated deals with manufacturers. It has created a wide range of store-brand products that also keep the price of the average shopping basket down. Its small, Spartan store formats help make the shopping experience more efficient. It has also developed a number of near-legendary promotions featuring "hot-priced" items ranging from well-known brands of wine to laptops specifically designed for and sold through Aldi stores, which are known as a place to "treasure hunt."

Believing that their long-term growth is tied to shopper loyalty, retailers increasingly want to develop their own shoppers. And because it is easier to get additional shopping trips, and increased purchases per trip, from shoppers who like your store, retailers are consistently using organized, data-driven, shopper-insight approaches. Retailers as diverse as Best Buy, H&M, Zara, Tesco, Tchibo, Kroger and Safeway are creating better touch points and shopping experiences to build stronger, more-loyal shoppers. This is largely the result of the creation of their own voices -- their retail brands.

U.S. supermarket chain Kroger is a prominent example of such a makeover. While working hard to become more efficient in its operations, Kroger also has negotiated sharper prices for its shoppers, has developed its store brands and is experimenting with new formats (for example, Kroger Right Now, a convenience, vending-machine format at gas stations). Kroger also is leading retailers in its investment in a shopper-loyalty program (with Dunhumby, the same firm that was instrumental in establishing Tesco's successful shopper program), the kind of strategic investment that provides an advantage in developing shopper insights and the ability to uniquely tailor the shopping experience to reach core shoppers.

Fresh focus

Safeway, another U.S. food retailer, recently has aligned itself with freshness and quality. Its lifestyle-store format has remade perishable areas such as produce, ready-to-eat meals, bakery and salad bar while creating new category/aisle descriptors (for example, Poetry in Bloom for floral). Its "Ingredients for Life" campaign extends the freshness/quality focus beyond the store. Moreover, its creation of store-brand product lines Eating Right and O Organics is designed to meet shoppers' needs. Such store-brand product lines are not simply about price points but are in sync with customers' lifestyles -- and unique to Safeway. It will be interesting to see how the marketplace reacts to Safeway's announced rollout of its house brands to competitive grocery chains. Will the availability of those brands at other stores cannibalize Safeway trips and sales?

It's an intriguing move because there does not seem to be a clear historical precedent. For example, Canadian-based Loblaw sold its President's Choice products to other retailers, typically in the U.S., so increased sales were generated from the additional distribution. But typically only one retailer or store banner carried the President's Choice items in a given market; thus there was really no competition for shopper loyalty or trips.

These supermarket examples, which similarly exist in other retail categories, indicate a fundamental change in how retailers are now approaching profitability. While efficiency is important, it's a "greens fee." Whether they be Whole Foods Market (natural/organic), H&M (celebrity design) or Zara (fresh fashion), retailers see long-term profitability as linked to their ability to provide unique shopping experiences that create loyal shoppers.

This shift in perspective suggests that the brand-marketing discipline many grew up with -- and the marketing-mix tools previously used -- have evolved. Retailer brands are now about connecting with shoppers' lives to build bonds and differentiate one retail experience from another.

Complex brands

Retailers are focused on positioning themselves through alignment with shoppers' lifestyles, and these positionings are less about marketing platforms than strategic cultural ideas.

It is also worth noting that retailer brands are generally complex, with many more dimensions than a traditional CPG brand, demanding that retailers turn to a new and growing set of marketing-mix tools to create the voices of their multidimensional brands.

The new marketing mix being used to create and maintain these retail brands is a far cry from the traditional one. Store ambience, layout, category organization, food theater, store-brand product lines, shopper programs, design, assortment and websites are just a few of the tools being used.

Today's retailers are first and foremost "meaning managers" or "choice editors" aligned with the needs and lifestyles of their shoppers. Retailers and manufacturers together must align with shopper needs to create unique shopping experiences and programs that help shoppers choose one store over another.

Working together

It is also important for retailers and manufacturers to align business goals, including driving traffic to the store or a specific destination in the store; creating larger sales receipts, better conversion rates, solution selling and cross-selling; and improving the total shopping experience -- for example, making it easier or more engaging, entertaining, educational or inspirational to shop.

Manufacturer brands must provide solutions that align with and help build and leverage retailers' equities, are tailored to retailers' needs and objectives, and are consistent with the positions the retailers are trying to establish and maintain.

Today's challenge for brand marketers is to help leverage retailers' marketing-mix tools (the shelf, category organization, in-store media or loyalty programs) or co-create new tools (new media, unique offerings, tailored products or packaging) to help retailers build stronger, better brands.

ABOUT THE AUTHOR
Jim Lucas is exec VP-director of the shopper-marketing division of DraftFCB in Chicago. He previously served as director of strategic planning and research at Draft, Chicago.

Marketing Memo: Safeway's Challenge: Going From Store Brand Marketer to Consumer Brand Marketer With its O' Organics and Eating Right Brands

Pleasanton, California USA-based Safeway Stores, Inc. is preparing to roll out its popular O' Organics organic foods and Eating Right healthy foods store brands to a wider audience-- competing food retailers in the U.S.--along with to grocers globally, as we reported and wrote about in this April 28 piece: Marketing Memo: Safeway Stores, Inc. to Market its 'O' Organics' and 'Eating Right' Organic and Healthy Brands to Other Retailers in U.S. and Globally.

The supermarket retailer's target date to begin selling the brands (they won't be store brands anymore) to other U.S. food retailers and wholesalers is sometime this fall, just a few short months away.

Natural~Specialty Foods Memo was the first publication of any kind to report in this piece in December, 2007 and in others that Safeway Stores, Inc. was already selling some items in its O' Organics organic food and grocery product brand in Asia and South America through a distribution deal with the giant French supermarket chain Carrefour, which is the second largest retailer in the world after Wal-Mart, Inc.

Safeway plans to extend international sales of both its O' Organics and Eating Right brands to other international retailers and to other parts of the world. Plans call for the increased international marketing also to begin this fall in conjunction with the launch to various U.S. supermarket chains and wholesalers at home.

Today's Advertising Age, the trade publication for the marketing and advertising industry in the U.S., has a story about Safeway's plans to launch the two brands into the stores of many of its competitors this fall, as we've previously detailed in Natural~Specialty Foods Memo.

Safeway's O' Organics brand--which currently consists of an impressive 300 items in over 30 product categories, including dry grocery, perishables, fresh meats, dairy and fresh produce--did about $150 million in gross sales in its first year, 2005. Last year the brand did about $300 million in annual sales. Safeway is projecting sales of $400 million for the brand this year in its 1,750 stores in the U.S. and Canada. That's impressive by any score card.

Safeway CEO Steve Burd told Natural~Specialty Foods Memo earlier this year that the Eating Right healthy foods brand was on track to do even more the O' Organics' $150 million in its first year, which won't be until a bit later this year. Safeway is projecting annual sales of about $200 million for Eating Right this year. That would surpass first year sales of the O' Organics brand by about $50 million. Even more impressive.

In our earlier pieces we've projected that with the rollout to competing retailers in the U.S. beginning this fall, along with the expanded international marketing program, O' Organics and Eating Right have the potential to become the leading brands/product lines in their respective categories--organics and healthy foods--in the U.S. By this we mean not the leading store brands--but the leading brands period in those respective categories.

Safeway is banking on this as well, as it makes its unique for a U.S. supermarket chain transition from store brand marketer to consumer brand marketer.

In fact, in today's Ad Age article, James White, president of Safeway's Lucerne Foods division, which is handling the marketing for the two brands, and Safeway corporate vice president for consumer brands, says he believes the organic food and grocery market particularly is strong enough in the U.S. and internationally that Safeway will neither see a drop in sales in its own stores, or have a problem gaining distribution and sales to its competitors, with the O' Organics brand.

The O' Organics brand is "democratizing the organics market by making organics available for everyone." He (James White) said both lines represent a "great-tasting, highest-quality, more-affordable option [than established organic brands], which allows for the mainstreaming of market," White is quoted as saying in the Ad Age story.

Further, the Ad Age piece quotes Mr. White as saying: "The economy isn't affecting the organic segment's pricing power. "There is a significant consumer market for organics, and I don't think that will slow down."

We disagree with Mr. White on these two counts, despite being fans of both O' Organics and Eating Right, as well as being very impressed with the two brands' performance.

First, in terms of O' Organics' democratizing the organics category, we think that's yet to be seen. In fact, when it comes to price, O' Organics products are far from being all that reasonably priced. For example, in its current weekly advertising circular, Safeway is promoting O' Organics Boneless,-Skinless Chicken Breasts for $8.99 pound in its California, Nevada and Arizona stores. Natural~Specialty Foods Memo has seen independent natural foods stores selling organic boneless-skinless chicken breasts for $2 less per pound everyday.

This pricing scenario plays itself out on many of the O' Organics brand products vis-a-vis other supermarkets' and natural and specialty foods retailer's house brands. For example, overall Trader Joe's, Kroger divisions, Costco and Tesco's new Fresh & Easy Neighborhood Market stores in California and elsewhere in the Western USA have considerably lower everyday and promoted prices on organics than Safeway offers with its O' Organics brand.

Safeway does offer some good deals on a variety of O' Organics brand items--but its far from a pricing policy one could call a democratizing of the organics category in our analysis. The Safeway O' Organics' marketers' pricing pencils need to be sharpened a bit to achieve that.

It will be very interesting to see the retails on the O' Organics brand items in competing retailers' stores, since they should be higher priced than what they currently are selling for in Safeway stores since the company has to take a margin on the items as a brand marketer and distributor, along with building some margin into the cost of goods to retailers and wholesalers for marketing and promotional brand building expenses.

Further, if Safeway doesn't sell the O' Organics brand items for less than competitors' stores do, it could lose substantial sales in the brand. Conversely, if Safeway sells the brand's items for too much less than its competitor's are, it will create a disincentive for those retailers to carry the brand. A fine balancing act it will be indeed.

We happen to know Safeway makes a very healthy gross margin, based on its current retails, on the O' Organics brand items. Therefore, it has some room to get more value-centered with the brand in its stores if it wants to--and might have to because of the current poor U.S. economy--and lower the retail prices across the brand.

Safeway itself is seeing its customers move from higher priced national brands to value-based store brands like its Safeway, Lucerne and other economy branded food and grocery product lines, as company CEO Steve Burd himself said in this April 28 story in the blog. Within the store brand organics category this has helped O' Organics in part since Safeway makes sure the items in the brand are about 10 -to-15% cheaper overall than similar national and regional organic branded items in its stores, thus tapping into the consumer store brand trend within the organic category to take sales away from those national and regional brands and drive shoppers to buy O' Organics over the national and regional brands.

But in this poor U.S. economy, average consumers just can't afford $8.99 per-pound organic chicken breasts or $7 per gallon organic milk. Not when they can buy conventionally-raised boneless-skinless chicken breasts at the very same Safeway store on sale for $2.19 pound; or Lucerne non-organic milk for less than half the price of the O' Organics organic milk next to it in the dairy case. For most shoppers the discretionary money for organics just isn't there right now.

Whole Foods Market, Inc's poor quarterly sales performance this week demonstrates how even organic-loving shoppers are trading down in the poor U.S. economy out of need rather than choice.

Safeway shoppers are no different, nor are customers of those competitor stores Safeway plans to sell O' Organics to. We are going to see organics take a considerable sales hit until the U.S. economy turns around. Retailer scan data already is showing lower organic category sales across the U.S. Sales numbers for 2008 category sales don't come out until next year--and we bet they show a drop in overall category sales.

It's also important to note that once O' Organics is marketed by Safeway to competing retailers, it no longer becomes a store brand. This means no favored shelf placement, no special treatment by those retailers in terms of end-cap display space, no "free" weekly ad circular feature ad placement, and the like. The brand will have to be marketed as and compete equally without the advantages Safeway is able to give it as a store brand. Those home court advantages after all are part of the reasons we call them store brands.

As a result, Safeway will have to compete with its organics brand just like all of the national and regional organic products' brand marketers are in this down economy--along with suffering the lower sales fate most category marketers are currently suffering ,which has as a key feature soaring food price inflation--because the average (and many above average) U.S. consumers just can't afford to buy that $8.99 pound organic chicken, even if the breasts are boneless and skinless. Just ask the Whole Foods guys. They are seeing organic category sales dropping across the board--from fresh produce and meats to dry grocery.

However, while we disagree with Mr. White regarding his view that the poor U.S. economy won't hurt organic sales in general and O' Organics' sales specifically, we understand and appreciate his marketers' optimism. We also think the O' Organics and Eating Right brands have the potential to do very well at competing supermarkets, as well as continue to sell well and grow in Safeway's stores.

One important note is that sales of the O' Organics brand in Asia have been at best mediocre. A regular reader who lives on the island of Taiwan has reported to use that since our piece about the brand being sold in Carrefour stores there, she has seen many of the O' Organics brand items discontinued in the Carrefour hypermarts on the island. She has been told by store managers it is for lack of sales performance. (Well, that's what happens to non store brands.)

Of course that's Taiwan, not the U.S. or Western Europe. But it does illustrate that Safeway will need to market the brand in ways other than just using price promotions--which has been the case in the Carrefour stores--if it hopes to build the brand in stores other than those owned by Safeway.

Food and grocery retailers can use push marketing to build a store brand and grow sales in their own stores, using the techniques we mentioned above, but it's much more difficult to do so in competitor's stores when its just a brand and not that particular retailer's store brand.

Despite these concerns, we see a bright future inside of and outside Safeway stores for O' Organics and Eating Right. Of course, in the competitors' stores it will all come down to distribution, marketing, merchandising and promotion, along with allocating the budget to achieve all four.

And, of course, Safeway will get a taste of being on the other end of those slotting fee, ad space and display space fees in its role as a consumer brands marketer. Our advice: Better build in plenty of extra margin on the O' Organics items as brand marketers have learned to do with the brands they sell to Safeway Stores, Inc.

Media Memo: Safeway's O' Organics Brand In Asia

Financial Times picks up on (our?) O' Organics in Asia story

On December 21, we reported that Safeway Stores, Inc. was selling its O' Organics brand organic grocery products in Carrefour stores in Taiwan. We followed that story up with more reporting on the topic in a December 23 story--and then again with another story on December 27. {You can read our three stories here.}

Today, the prestigious Financial Times newspaper reported the story. The Financial Times is the first mainstream business publication to report on the O' Organics brand being sold in Asia. {Read today's Financial Times story here.} (Note: The major supermarket industry trade publications haven't reported the story yet.)

Note: In our stories we reported the O' Organics brand was also being sold in Taiwan and in other parts of Asia by Marketplace by Jason's stores, in addition to Carrefour. These stores are a fairly new upscale division of Hong Kong-based supermarket chain Wellcome.

In its story today, the Financial Times said that in addition to Carrefour carrying the O' Organics organic grocery items in its Taiwan stores, the brand also is being carried in stores owned by Hong Kong-based Dairy Farm Group.

Dairy Farm Group is the parent company of Wellcome Supermarkets. Wellcome is actually a separate division of Dairy Farm (which is a diversified company), and that is why we stated in our original reporting that the O' Organics brand items are being sold in those particular stores, under the ownership of Wellcome. The Financial Times story doesn't mention the Jason's stores by name--but that's where the O' Organics brand grocery items are being sold in addition to Carrefour.

The Financial Times story also says the O' Organics brand grocery items appeared in the fist Carrefour store earlier this year. However, we wrote our first story on the grocery items being in a Carrefour hypermarket in Taipi, Taiwan on December 21. The items were in that particular store at least a week--and probably longer--prior to December 21, 2007.

The Financial Times story also says Carrefour, the second-biggest retailer in the world after Wal-Mart, declined to say whether or not it has an agreement with Safeway to sell the O' Organics brand in areas other than Asia.

Carrefour declined to comment to us as well when we broke the story almost three weeks ago.

However, based on what our sources have told us, Carrefour at present doesn't plan to sell the O' Organic brand items outside of Asia at present, but that is subject to change.

The French mega-retailer is evaluating the potential of offering products from the O' Organics line in its stores in Latin America. (We provided some detail on this in our December 21, 23 and 27 stories.) Carrefour has over 300 stores in Latin America, the majority being in Brazil and Argentina.

We're pleased to see the Financial Times cover the story today. It's one of our favorite international business publications.

We are presently working on a story on potential O' Organics brand sales in Latin America. However, we don't yet feel comfortable reporting it based on our current level of sourcing, so we haven't. When we do feel comfortable doing so, you will be the first to know.