Small-Format Food Retailing Memo: Safeway Stores Mass-Mails First Advertising Flyer Promoting its New Small-Format 'market by Vons' in Long Beach, CA

Safeway Stores, Inc. has mass-mailed its first promotional flyer for its first small-format grocery store, "the market at Vons," which opened in Long Beach, California in May.

The advertising sheet, which was mass mailed to members of Vons' Club Card who live not only in the neighborhood where the store is located but also to residents who live a considerable distance away from the grocery store, introduces the Long Beach small-format grocery market as "Your neighborhood store (that) offers the best of everything."

The front of the advertising flyer, as you can see in the photograph at the top, features a picture of a bicycle with a basket full of groceries on it, with the tag line: "a refreshingly simple way to shop." The picture reinforces the messages of simplicity, conveniece, neighborhood, community, and the environment.

The messages are then elaborated on inside the flyer, pictured directly below, along with featuring items at promotional prices.

Below is the full text or copy inside of the mass-mailed promotional flyer:

welcome

Your neighborhood store offers only the best of everything.

a refreshingly simple way to shop

The Market by Vons is designed with a simple layout, so its easy to find what you're looking for. It's the perfect place for you're "fill-in" shopping or to grab a quick and delicious meal or snack.

the big little store

We offer a wide range of products, including fresh produce, meat and seafood, ready-to-enjoy meals, freshly baked goods and other everyday basics. So you can find everything you need but less of the things you don't, like long lines and 12 different kinds of ketchup.

no extra charge for convenience

You can expect the same great service and everyday value prices you'll find at Vons. we want to be a responsible neighbor. Our store is 100% wind powered and is actively involved in programs that benefit our community.

have a taste

We offer samplings of our products daily. We'd like to help you discover what's in store in a delicious way.

In the advertising flyer, Safeway is offering 10% off every item in "the market by Vons" for the entire month of July.

In addition to the across the board 10%-off deal, the flyer promotion offers five features at fairly substantial discounts above 10%. These features are: A bag of Safeway's private label Eating Right healthy brand fresh mixed lettuce greens, offered for free with no minimum purchase; $2-off any of Safeway's popular O' Organics store brand organic food and grocery items in the store; $3 off of the regular price of Safeway's Signature Cafe in-store roasted ready-to-eat whole chickens; and two deals on wines.

Safeway's Southern California Vons division has pre-loaded these promotions into all of the Vons Club Cards so that when shoppers purchase the items at the Long Beach "the market by Vons" store the promotional prices will automatically be reflected at the point-of-sale.

In the advertising flyer, under the "a refreshingly simple way to shop" header, Safeway mentions "The Market" is great for "your fill-in shopping." This is the retailer's positioning of the small-format "The Market" stores as we first reported here.

Unlike Tesco's Fresh & Easy Neighborhood Market for example, which is positioning its small-format (10,000 -to- 13,000 square foot) Fresh & Easy combination basic grocery and fresh foods Fresh & Easy stores as everyday or primary shopping neighborhood grocery markets, Safeway is positioning its "The Market" small-format (15,000 -to- 20,000 square foot stores) as more upscale, "fill-in " shopping venues as part of a multi-format strategy.

In Southern California that multi-format strategy including Vons supermarkets and superstores, Vons Pavilions supermarkets, which have an upscale and specialty foods focus, and now the small-format "The Market" format, the first store of which is "the market by Vons" in Long Beach.

The Long Beach "The Market" store has come under some criticism since opening in May for having prices which some shoppers say are just too high in general, while others have commented the small-format store's prices are higher than those at traditional Vons supermarkets in Southern California.

Natural~Specialty Foods Memo has learned two things in this regard:

First, Safeway is adjusting the pricing in the Long Beach "market by Vons" store to make sure its generally in line with the everyday pricing at nearby Vons supermarkets.

Second, we've learned Safeway plans to mass mail flyers like this first one on a regular basis in order to create a value proposition for "The Market," along with positioning the format as convenient, quality and community-oriented.

In the mass-mailed advertising piece, Safeway says the Long Beach store is powered 100% by renewable wind power. The grocery chain is achieving this by buying wind power credits for 100% of all the energy the store consumes. Safeway has been doing this for some time for the stores throughout the U.S. in which it operates fueling or gas stations alongside the stores. Every Safeway fueling center is powered by wind energy in the form of Safeway buying wind power credits equally the energy used by those gas stations.

As Safeway opens more "The Market" format stores, the retailer plans to put a major emphasis on the dual and compatible concepts of the environment and community with the small-format stores.

Green issues are front and center currently at Safeway. In addition to the wind power credits, Safeway is in the process of putting solar panel arrays on about 35 of its supermarkets in Northern California. The solar panels are designed to provide about 35% of a store's total energy use. Additional panels are set to be installed on more stores in Northern California, as well as on a number of stores in Southern California.

Safeway also is converting its entire trucking fleet from traditional fossil based diesel fuel to biodiesel fuel, made primarily from vegetable oils. The retailer initiated this program last year, before the price of diesel fuel soared, primarily for environmental reasons. However, with diesel fuel edging towards $6 a gallon, the economics of converting its huge trucking fleet to biodiesel should pay off well for the grocery chain much faster than it anticipated they would.

Food Trends Memo: 'Green' Consumerism, the 'Greening' of the Food and Grocery Industry, and the Impending End of the Era of 'Cheap Food'

For the eight months or so we've been publishing Natural~Specialty Foods Memo (NSFM), we have suggested a number of overall themes in our writings as they relate to the natural and specialty foods (and general food and grocery) industries globally, and more particularly in the developed western world.

Two of these themes are that there's a "green" or environmental trend or movement coming from consumers from the bottom-up (grassroots), as well as from the private sector food and grocery industry, which is way ahead of the world's (especially the U.S.) respective national and local governments' environmental policies.

In terms of the consumer "green" movement or trend, it's evidenced by the perhaps slow but progressive changes we're observing in people, ranging from middle-class and upper middle-class consumers, to the more affluent. These environmental changes folks are making also are do in part to harsh economic realities, ranging from the soaring costs of gasoline and home energy fuels, to rising food prices.

For example, we've been observing a change in consumer car buying habits which include a shift from gas-guzzling SUV's to smaller, more energy efficient automobiles. This shift is most apparent in Western Europe (where smaller cars have always been more generally popular anyway) but also is occurring in the U.S., home of the SUV and muscle car.

Evidence of this purchasing behavior shift in the U.S. can be seen in automaker sales numbers: smaller car companies like Toyota and Honda are thriving for example, while SUV and big car makers GM and Ford are losing billions of dollars annually, and trying to retool their vehicle designs to smaller, more gas efficient car and truck models.

We also see a consumer "green" trend at the supermarket. Sales of organic and local food products are up by double-digits. Additionally, more and more shoppers are bringing their own reusable shopping bags with them to the store, rather than having their grocery purchases packed in single-use plastic or paper carrier bags. Further, surveys in Western Europe and the USA show more than 50% of consumers are for outright bans on the use of free plastic carrier bags at the supermarket, as well as packaging like disposable styrofoam take-out containers at in-store foodservice venues and at restaurants.

Other examples of this grassroots consumer "greening" include an increased concern by shoppers about the carbon footprints of the retail stores where they shop and of the manufacturers' who's products they buy. Increasingly, consumers are factoring in companies' environmental policies, as well as price and quality, when choosing a brand and spending their money for food, groceries and non-foods items.

The 'greening' of the food and grocery industry

Food and grocery manufacturers, marketers and retailers are increasingly noticing this gradual bottom-up consumer "greening," and responding to it. They're "greening" product packaging, food manufacturing plants and supply chains, among other environmentally responsible efforts.

Food and grocery retailers also are increasingly adding environmental improvements to their operations; some more so than others of course.

Among the "greening" trend at retail we're obviously seeing more and more retailers, including mid-range grocers, increasing the variety of natural, organic, sustainable and local food and grocery products they sell. The reason for their doing this isn't just do to increased consumer concern about eating healthier products, although that's key. It also has much to do with sustainability and other "green" consumer concerns as well.

Food and grocery retailers also are moving towards a stronger conservation and energy-reduction mind-set. Numerous U.S. retailers such as Wal-Mart, Target, Safeway Stores, Inc. and others are installing solar panels on the roofs of their stores and distribution centers. Others like Whole Foods Market, Inc. are combining solar panel installations with other energy-saving innovations like fuel cells. Still, others like Sainsbury's and Tesco in the UK are installing wind turbines in store parking lots as a way of providing 30 -to- 40% of a store's energy needs from a sustainable source.

The retail "greening" trend, which is in its infancy, is towards using more and more sustainable sources of energy like solar, wind and fuel cell technology to provide a percentage of power to supermarkets and distribution facilities.

Other green practices among food and grocery retailers include charging customers for free plastic grocery bags if they want one, like Marks & Spencer in the UK will soon begin doing, and like small-format discount grocer Aldi does in its stores throughout the world, including the nearly 900 it operates in the U.S.

Some retailers are going even further. Austin, Texas-based Whole Foods Market will stop using plastic grocery bags at its 270-plus stores in the U.S., Canada and the UK beginning on April 22, Earth Day.

Others, such as U.S. specialty grocer Trader Joe's, which is owned by Germany's Aldi, doesn't use plastic grocery bags at all in the majority of its 300-plus grocery markets in the U.S. Rather, Trader Joe's uses paper grocery sacks made from 100% post-consumer recycled paper only in the majority of its U.S. grocery stores, as well as selling reusable shopping totes for 99-cents each.

In fact, nearly every supermarket, from the most upscale to the most downscale, in the developed western world is selling reusable shopping carriers in its stores. Many grocery retailers also give shoppers a discount of anywhere from 5-cents -to- 10-cents-off per-reusable shopping bag they use at the store rather than having the store provide a free plastic or paper bag for the grocery orders.

Era of cheap food on the way out

The second theme we sound frequently in NSFM is that for the developed western world, and particularly for the U.S., the long, post World War II era of relatively "cheap" food is coming to an end.

As we mentioned, this is especially true for the United States, which has experienced about 60 years of relatively cheap food compared to the rest of the developed world. This era of cheap food, which Western Europe has experienced but to a lessor degree than the U.S., is do to three primary factors.

First, as part of the reforms to get the U.S. out of the Great Depression in the 1930's, the U.S. Federal Government enacted a serious of farm and crop subsidiary programs that would give taxpayer money to farmers, encouraging them to plant certain crops (wheat, corn, soybeans and rice, for example) for which they would be compensated for producing. These farm subsidies also lowered the retail prices of certain foodstuffs by tinkering with the market in a way that allowed products made with corn and wheat for example to sell for much less than they otherwise would without the government price guarantees.

These farm subsidy policies were stalled in the U.S. in the 1940's do to America's involvement in World War II. The costs of the war required food and fuel rationing in the U.S. because so much of the agricultural products and oil being produced at home was being sent abroad to fight the two wars in Europe and Asia.

However, the end of World War II signalled a new era in government crop and farm policy and subsidies in the U.S. And, as a result, Americans have been able to purchase and eat most food and grocery products for far lower prices than would be the case if these farm subsidies didn't exist.

Of course, not all foods are subsidized in the U.S. Fresh fruit and vegetable crop farmers receive very little if any government subsidy money for example. In fact, nearly 90% of all U.S. government farm payments go to growers of four crops: corn, rice, soybeans, cotton and wheat. In other words, it's no accident that the cheapest processed and packaged food and grocery products in U.S. supermarkets have three of these four farm commodities as their primary ingredients.

However, the U.S. and Western Europe are experiencing the highest levels of food inflation in decades. Commodities like corn, rice, soybeans and wheat are up by double-digit percentages this year, compared to last--and are continuing to increase. Milk, eggs and butter are up 20% this year over 2007. And, processed and packaged goods are up at retail ranging from 6 -to-15% this year over last.

Natural, sustainable, cruelty-free and organic food and grocery products have and are increasing at an even higher percentage rate. For example, free-range, organic eggs are up nearly 30% this year, compared to last. Organic Milk has seen a 30% rise in the last two years alone.

While it's true much of these dramatic increases in food costs across the board--from basic commodities, to upscale and organic foods--is do to the current economic downturn or recession in the U.S. and increasingly in Europe--that's far from the only cause. Nor, are increasing food and grocery costs a temporary phenomenon.

Rather, do to a number of factors--an increasing world population, diminishing farm land acreage, a growing movement to trim government crop subsidies, the use of commodities like corn in ethanol fuel production, and a few others--the era of "cheap" food is coming to an end.

Natural foods industry vets agree with both of our trend assessments

We aren't the only experienced food and grocery industry folks who make these two arguments: that there's a bottom-up "green" trend among consumers, as well as a "greening" trend occurring in the food and grocery industry which is ahead of government environmental policies; and that the era of "cheap" food in the developed, western world, especially in the U.S., is coming to an end.

Last week, Walter Robb, co-president of supernatural foods' retailer Whole Foods Market, Inc. and Gary Hirshberg, the president of organic foods' company Stonyfield Farms, echoed our themes about the grassroots and food industry "green" trends and that the era of "cheap" food is over, in talks they gave together to students at Iowa State University and Drake University, in the U.S. farm belt state of Iowa.

In terms of the impending end of the era of "cheap" food, Hirshberg said: "Every assumption we've made about agricultural policy, industrial policy, is now irrelevant." Robb was even stronger in his comments, saying: "The era of cheap food is over," according to David Elbert, the business editor for the Des Moines Register newspaper, who interviewed both natural products' industry veterans after their talks to the agriculture students.

Robb said the cost of food is rising on average at a rate of about 5-6% a year, and will continue to do so at those levels or higher. Both men said higher-priced oil is the cause in part of these soaring food costs. However, it's not the only reason.

Robb sighted another key factor (in agreement with us basically), which is the historic levels of farm crop subsidies for conventional food products and commodity crops. "Conventional food has been heavily subsidized with price supports to farmers and government research," he said. Robb believes, like we do, that will end. His argument primarily is that consumers will realize the benefits to them of such subsidies aren't what they expected and aren't worth it to them personally as taxpayers and consumers.

Regarding the costs versus the benefits of these government subsidy programs, both Hirshberg and Robb offer their analysis.

Hirshberg says many of the packaged food products made from the subsidised commodity crops are "empty calories." He adds: "Instead of building up the nutrients in the soil (because of the conventional commodity crop farming methods), we've synthesized nutrition from the soil."

Focusing on the U.S., Robb said: "Americans have been eating more but getting less, which is causing more obesity, juvenile diabetes and other health problems." His argument is empirically sound based on the soaring rates of obesity and diabetes in the U.S., which doctors and nutritionists attribute primarily to dietary factors.

Least you think Both natural foods industry veterans (or us) believe the ending of the era of "cheap" food means doom for the natural and organic foods industry, think again.

Both Robb and Hirshberg believe it actually will help the industry to grow. In addition, they both suggest the "greening" trend among consumers and by food and grocery industry companies is evidence in part of that fact.

They argue the two trends we've identified go hand-in-hand; that the consumer trend towards more healthier and environmentally sustainable foods and the impending ending of the era of "cheap" foods will serve the natural foods industry well. Both men say consumers are driving the green revolution and that will force corporations to be more sustainable. The natural products industry therefore is in the position to be the driving force in this change because its long been, and continues to be, the leader in sustainability and healthy foods.

Conclusion

The two themes we sound here often--the "greening" among consumers and in the food and grocery industry, along with the impending end of the era of "cheap" food--aren't just ours alone, or merely shared by Mr. Robb and Mr. Hirshberg.

For example, we just finished reading a transcript of a recent symposium held by the Agricultural Policy Issues Center at the University of California at Davis, which is one of the top agricultural and food research centers in the world. A major theme of the participants' in that conference was that the era of "cheap" food is coming to an end, especially in the developed western world, and particularly in the U.S.

Additionally, this topic is currently high on the agenda at meetings of farmers and policy makers at farm and agricultural trade associations throughout the world. It's also a hot topic of discussion in the executive suites of global agriculture and food corporations like Monsanto and Archer Daniels Midland Corp., as well as in the offices of medium-sized and small natural and organic foods' companies.

We agree with Robb and Hirshberg that the natural foods industry could benefit--and certainly won't be hurt by--the era of "cheap" foods' impending end. However, "cheap" is a relative term. The fact is, current retail prices of many natural and organic foods products are just out of reach for the average family to purchase primarily or regularly.

We also don't believe government crop subsidies in the U.S. will go away anytime soon, although we suggest the cost of food will continue to go up at far-higher than historic average rates even with these subsidies in place. (Imagine the increases if they were removed?) In fact, the current U.S. farm bill, which looks like it will pass with a few changes, actually increases commodity subsidies, and for the first time gives some fresh fruit, vegetable and nut growers subsidies on certain crops.

However, we do agree that the long-term trend will be to decrease such subsidies, especially in the land of debt, the U.S. If not, in order to pay for them--along with a host of other things like war, Medicare, Social Security and other social programs and financial institution bailouts--the future U.S President and Congress will have to raise taxes, which doesn't seem politically tenable at the present time. There's really no other solution under current U.S. government spending levels.

In terms of the natural foods industry, we suggest it needs to try to reduce the current retail costs of natural and organic food products--or at least contain the increases--if the industry is going to truly benefit (many) consumers. [Keep in mind that many consumers already are having a difficult time being able to pay for that "cheap," subsidized food which is currently increasing at double-digit rates.]

A key goal of the natural foods industry--in addition to its already laudable ones of producing and selling cleaner, healthier and more sustainably-grown foods--needs to be attempting to be more inclusive as well. By this we mean doing everything economically possible (including perhaps a bit of retail margin reduction) to make natural and organic food and grocery products more affordable so that more lower -to- middle-income consumers can afford to regularly buy natural and organic food and grocery products.

We realize this isn't easy, especially in today's food inflation climate. We do argue however that it's a worthy goal, right alongside of the healthier and more sustainable ones, that the industry should work hard to achieve, from the organic farm to the supernatural food store.

Ethical Retailing Memo: What Wal-Mart CEO Lee Scott Left Out of His Social and Ethical Manifesto

On Saturday we wrote about what we termed Wal-Mart CEO Lee Scott's corporate social and ethical policy manifesto speech, which he delivered last Wednesday to over 7,000 store managers at corporate headquarters in Bentonville, Arkansas.

Today, we would like to offer some constructive criticism (and positive encouragement) to CEO Scott regarding three key issues in the areas of social ethics and economics, health, and the environment we feel he left out of his social and ethical policy speech, and encourage him to address the issues we describe below.

Store-level employee wages

First, CEO Scott addressed a wide-range of social and ethical policy issues for Wal-Mart in his Wednesday speech. However, he left out one glaring and important one: The wages Wal-Mart pays its store-level associates.

Although it's the largest food retailer in the U.S., Wal-Mart pays it associates, particularly entry-level ones, less per-hour than all the other big chain supermarket retailers in the country. In the case of unionized retailers like Kroger Co., Safeway Stores, Inc. and a number of others, that hourly-wage disparity is huge.

We strongly suggest to CEO Scott that at a minimum, Wal-Mart immediately increase it hourly wage for entry-level associates by at least two dollars hour. Additionally, the retailer needs to bump-up its hourly pay-scale so that retail associates who've been with the company for one year also are making at a minimum two dollars hour more than they currently are paid.

As a comparative example, retail supermarket clerks in California who work for Kroger Co.'s Ralph's chain, Safeway Stores', SuperValu's Albertsons, Save Mart, Stater Bros., Raley's Superstores and others, make about $20.00 hour after one year of full-time experience. By contrast, a Wal-Mart Supercenter clerk with the same amount of experience makes about $13.00 -to- $14.00 hour in California.

Employee health insurance

Second, CEO Scott also failed to address Wal-Mart's employee health insurance plan in his Wednesday speech. This is not only an ethical issue, its a health and economic one as well. In a conference call with members of the media a couple days before the social manifesto speech in Bentonville, Wal-Mart announced that for the first time in the company's 45-year history, more than half of its employees had enrolled in the company health insurance plan. (Read our January 22 piece on the topic here.)

However, among the many statistics shared by Wal-Mart as part of the announcement, was the fact that over 7% of Wal-Mart workers have no health insurance at all. Further, over 25% of the company's employees are insured by a spouse or parent's health plan. Additionally, many others are on government programs like Medicaid.

We urge CEO Scott to improve Wal-Mart's health insurance plan significantly. When compared to the plans made available to store clerks who work for the California chains mentioned above for example, Wal-Mart's health plan is an embarrassment. These unionized clerks, who work for Safeway Stores, Kroger Co. and the like, have one of the best health plans in the United States. Co-pays are low, employee contributions are reasonable, and coverage is excellent. Further, where in the case of Wal-Mart, which has only half of its U.S. employees enrolled in its corporate health plan, Safeway Stores has nearly 100% of its store associates enrolled in its plan.

Increasing hourly wages for store-level associates and dramatically improving its corporate health plan are two social, ethical and health issues Wal-Mart must address. As a wise woman once told us, get your own house in order before you go out and try to save the world. We applaud Scott's larger social and ethical vision for Wal-Mart, but encourage him to get his house in order at the same time.

Superstores and the environment

The third issue CEO Scott left out of his social and ethical policy manifesto speech on Wednesday has to do with Wal-Mart's Superstores and the environment. Wal-Mart has made some great strides in the area of sustainability in the last few years, in our opinion. Further, the commitments Scott made in his speech Wednesday to store managers goes even further towards helping to make the company a "greener" and more sustainable one.

The one glaring issue Scott didn't address at all however are Wal-Mart's Supercenters in general from an environmental and sustainable perspective. Although the company has a few "green" prototype stores built (4-5) and is building a handful more, the vast majority of their Superstores are conventional ones. These stores leave much to be desired in terms of energy conservation elements and green design principles. We are talking about 98% of its Supercenters here.

By their very nature, Supercenters (or big box stores in general) which average about 200,000 square feet, are energy hogs. They're filled with electric lights, have hundreds of feet of perishable products' display cases that suck electricity, and require lots of energy to heat the huge stores in the winter and cool them in the summer. Big box stores also are by their very design located almost always away from the central city. This means customers have to drive some distance to get to them, requiring more energy use in the form of gasoline. The huge stores also have massive paved parking lots, which aren't friendly either in terms of reducing energy use.

Wal-Mart needs to do two things in our analysis: First, the retailer needs to make the "green" prototype stores the norm, rather than a cut-and-paste format that they use in a limited way. All new Supercenters should be "green" and sustainable Wal-Marts. Additionally, the company needs to embark on a major effort to remodel--say over a 5-year period--all of its U.S. Superstores so they meet at least the sliver (we would like to see the gold) standard for energy conservation set by the U.S. Green Building Design Council.

In his speech, CEO Scott revealed he has talked to automobile industry companies about having Wal-Mart sell electric and hybrid cars. He further said he envisions the retailer having wind turbines in its store parking lots where customers could recharge the electric and hybrid cars they buy from Wal-Mart.

We like this type of visionary thinking from Scott. However, we want to see some practicality combined with it. Its a long way off before electric and even "plug-in" hybrid cars are going to be on the market for Wal-Mart to sell, and for it to build wind turbines in its parking lots to recharge those renewable energy-powered vehicles.

However, it's not too far off at all for Wal-Mart to install those same wind turbines in its store parking lots--but use them to provide renewable energy to help power the store. Other retailers throughout the world are beginning to do this. It's time for Wal-Mart to let those wind turbines bloom in the parking lots CEO Scott. Then, when you do sell the electric and hybrid cars, they can be used not only to help power the stores, but to recharge those cars you will sell as well.

Wal-Mart recently completed the installation of solar panels on about 20 stores in California and Hawaii, along with putting solar panels on a new distribution center in the western region. We congratulate the company on that development, and suggest to CEO Scott that he dramatically excellerate the company's store-level solar power initiative.

It's feasible that a Wal-Mart Supercenter, with a full solar panel roof array and two or three modern wind turbines in its parking lot, could be able to obtain about 40% of the store's energy from those renewable sources. What a huge achievement that would be for the world's largest retailer.

Conclusion

By increasing the hourly wages of entry-level and one-year-plus store-level associates, enhancing the employee health insurance plan, and "greening" its Superstores in a more-rapid fashion, CEO Scott and Wal-Mart would demonstrate that on the socio-economic, ethical, health and environmental fronts, Wal-Mart is a company that not only does walk-the-walk, but believes in putting its own house in ethical order, along with embarking on a larger corporate social and ethical policy.

Monday Morning Java

Blog Action Day at Natural~Specialty Foods Memo

Today is Blog Action Day. Blog publishers from throughout the world have committed to write something about the environment today in their blogs, offering there own unique perspectives depending on what industries, topics, issues or other things their publications focus on. You can read the organizer's full press release here.

As our readers know, Natural~Specialty Foods Memo (NSFM) writes about environmental or green issues as they relate to the food and grocery industries, on a regular basis. The topic is part of everything we write about--food marketing, retailing, food processing, agriculture and a myriad of related industries, topics, issues and ideas. We also have a weekly feature, Weekly Green Report, where we discuss all aspects of the environment as it relates to the natural and specialty foods and related industries.

As a participant in Blog Action Day NSFM has decided to bring you some interesting information and ideas regarding all things green this morning. Our goal is to stimulate our readers' thoughts regarding the environment and the natural and specialty foods industries. We also invite you to read our latest "Weekly Green Report" (published Friday, October 13) here. Over 15,000 blogs have signed up for Blog Action Day, and it's estimated their combined writings will reach about 12.5 million readers. We welcome our regular readers and readers viewing NSFM for the first time to Blog Action Day.

Report: Wal-Mart and Environmental Sustainability

In Friday's Weekly Green Report NSFM provided a report with various points of view from Wal-Mart's Living Well Sustainability Summit held in Roger's Arkansas on Wednesday, October 11. Read our report here.

Sami Grover, an executive for The Change, a company that works on environmental sustainability issues, attended the all-day green conference in Rogers, Arkansas, and was able to get an interview (one of the few if not the only one) with a group of key Wal-Mart executives.

These executives included: Andy Ruben, vice president of strategy and sustainability, Linda Dillman, executive vice president of risk management, benefits and sustainability, Leslie Dach, executive vice president of corporate affairs and governmental relations, and Doug McMillan, CEO of Sam's Club. Grover's interview is published in today's Treehugger Blog. You can read Sami Grover's exclusive interview with Wal-Mart's sustainability brain trust here. (We thank the folks at Groovy Green Blog for the Wal-Mart graphic at left.)

In addition to reading the piece linked above, you can listen to an 18 minute podcast interview with Andy Ruben, Wal-Mart's sustainability chief, and Ashok Gupta of the Natural Resource Defense Council (NRDC). In the interview, conducted by Betsy Rosenberg of the EcoTalk sustainability radio network, Ruben and Gupta lay out Wal-Mart's sustainability program and discuss how the mega-retailer and the non-profit environmental group are working together on some green issues and the Wal-Mart sustainability initiative. Listen here.

Speaking of EcoTalk, we suggest the following podcast interviews below conducted by Ms. Rosenburg. Like the Wal-Mart/NRDC interview above, all of the podcasts are free and you can download them here. Suggested podcast interviews:

>Interview Title: "Greener Pastures." Kate Clancy, author of the paper, "Greener Pastures: How Grass Fed Beef and Milk Contribute to Healthy Eating." She is the Senior Scientist with the Food and Environment Program at the Union of Concerned Scientists.

>Interview Title: "Daniel Imhoff: Paper or Plastic." Mr. Imhoff is the author of the book, "Paper or Plastic: Searching for solutions to an over packaged world."

>Interview Title: "Al Gore." Former U.S. Vice President Al Gore just won the Nobel Peace Prize for his work on reducing global warming. He is interviewed by Ms. Rosenberg about his book "An Inconvenient Truth" and the issue of global warming.

>Interview Title: "Frog's Leap Winery." Jonah Beer of California's Frog's Leap Winery is interviewed. The Winery and company vineyards are considered to be among the most environmentally sustainable in the U.S.

There are a number of other podcasts available at this link in addition to those we have suggested our readers listen to. Enjoy!

Analysis & Opinion: The State of the Organic Foods Industry 2007

We believe 2007 will mark the beginning of the "mainstreaming" of organic foods in the developed world. By this we don't mean organics will replace conventionally-produced food products as the norm anytime soon. Rather, by the "mainstreaming" of the organic foods industry we mean 2007 marks the realization among all sectors in the food and grocery industry that organic food products no longer are a tiny niche product limited to merely the elite, but rather the category is one that can have widespread appeal if factors such as the price/value ratio are reasonable.

We see five major develoments which have made 2006-2007 the "moment" in our opinion when the food industry (and consumers) have began to really look at organics as a viable, potentially mainstream food and product category. Those five "moments" are:

>The announcement late last year, and focus this year, by Wal-Mart that the world's largest food retailer would begin making a major push in the organic products category, merchandising many more skus of organic food and grocery products in their stores and making organic marketing a corporate retailing priority.

>An Announcement by the CEO of Kroger Co., the largest supermarket chain in the U.S., soon after the Wal-Mart organics initiative kick off that he wants Kroger to be the food retailer which brings organic foods to the masses. Kroger has dramatically expanded the number of branded organic food and grocery products it sells in its stores and developed an extensive private label organic grocery product line (which they continue to grow) since the announcement.

>The fabulous success of Whole Foods Market, Inc. and its acquisition last month of natural foods supernatural retailer Wild Oats Markets. Just 10 years ago Whole Foods was a retail super-niche grocer. The chain had stores in just a few regions of the U.S., primarily in major cities. Even in those places where there was a Whole Foods store 10 years ago only a select group of consumers shopped in the stores. Today, ten years later, Whole Foods has more than doubled the number of stores they had a decade ago, including markets in places like Tennessee, Kentucky, Illinois and other heartland and southern states as well as on the east and west coasts in the U.S. They also have stores in Canada and one in the UK.

Whole Foods also is growing as fast as it can. The grocer is going through a new store building frenzy, constructing and opening huge new lifestyle retail stores where organic products take center stage in every department, from produce, meat and seafood, to grocery, bakery, health & beauty care and non-foods. These stores have become more than a place to buy groceries for consumers from various walks of life--they've become "third places" where people love to spend time in the in-store restaurants, wine bars and even mini day spa's like the new addition to the recently opened store in Canpbell, California.

>The development by major grocery and mass merchandising retail chains like Wal-Mart, Target, Kroger, Safeway Stores, Publix, Wegmans and others in the U.S., and Carrefour (France), Tesco and Sainsbury (OK-based) and others throughout the world, of comprehensive private label organic grocery product brands which not only rival branded organic products, but conventional ones as well.

>The growing number of large, conventional consumer packaged goods companies that are either creating new organic grocery product brands or acquiring existing, smaller organic foods companies, or doing both. General Mills, Kraft Foods, Heinz, Kellogg, M&M Mars, Kimberly-Clark, Unilever, Nestle and many others are moving aggressively into the organic grocery and non-foods categories. Organic industry pioneering companies like Hain-Celestial are creating mega-consumer products companies built on organic product brands.

We believe these five key developments in 2006-2007 (plus a few others) mark a key moment in time--2007-- when all sectors of the food and grocery industry realized the organic category is not only here to stay but also becoming part of the mainstream.

Below is a chart prepared by Dr. Philip H. Howard, an assistant professor in the Department of Community, Agriculture, Recreation and Resource Studies at the University of Missouri. The chart shows the acquisitions of organic food and product companies made by the top 25 food processors in North America over the last decade. (The chart was prepared in July, 2007.)

The chart graphically shows the "mainstreaming" process of the organic industry via acquisitions by major consumer packaged goods companies over the last 10 years. We believe these types of acquisitions will increase dramatically over the next decade as the organic category grows in consumer demand and is merchandised even more extensively by major food retailers. Dr. Howard also has created a number of other charts detailing the current structure of the organic foods industry in the manufacturing, marketing and retailing segments. You can view those charts here.

Essay: 2007 A Green Tipping Point for Food Retailers

Just as we believe 2007 is a watershed year for the beginning of the "mainstreaming" of organic foods and products, we also believe this year is a major tipping point for the food retailing industry in most of the developed world in terms of environmental or green retailing.

Just a few years ago very few if any major food retailers (just like corporations in general and most people) took seriously such concepts as global warming, energy conservation, environmental sustainability and related green issues. In our opinion, today there is widespread acceptance in the retail food industry that all these environmental issues are real and that the time is here to address them aggressively. This year will be noted we believe as the year of the green tipping point environmentally for food retailers.

North America and Europe's (also Australia and parts of Asia) leading food retail chains (and many independents) are to one degree or another launching green initiatives. Some initiatives are more aggressive than others but the key point is the industry norm is now that companies must incorporate their carbon footprints and other green issues into their day-to-day business operations. Leading global retailers like Carrefour in France, Marks & Spencer, Sainsburry and Tesco in the UK, Wal-Mart, Kroger, Safeway Stores, Publix, Whole Foods and many others in the U.S., are all in the process of refining their environmental policies and carrying out initiatives that include everything from attempting to measure carbon footprints to installing solar energy panels on store rooftops, buying wind power, cutting down dramatically on packaging, and in a number of cases even building "eco-stores" to the strictest green standards.

In Scotland, UK-based Marks & Spencer just opened two "eco-stores" which use 40% less energy than conventional supermarkets. Tesco is developing a similar "eco-store" format in the UK. In the U.S. Whole Foods is building two new stores that meet the strictest green building standards thus far developed globally under the LEED system. In California, Safeway Stores just installed solar panels on a store and is in the process of installing them on 30 more. Wal-Mart has done the same with 22 stores in California and Hawaii as well as at distribution centers in both states. These green initiatives are just the tip of the iceberg in terms of what these and many other food retailers of all sizes are doing environmentally. Much more is on the way.

In our view the green tipping point has arrived. This year will go down as the "environmental moment" when food retailing changed its paradigm from a raw energy consumer to a green, conservation-minded corporate citizen. A "Green Grocer" if you will. This tipping point was achieved by the realization that green retailing impacts the bottom line. Conservation makes environmental sense, but even more important to these retailers, it makes economic sense. We have no problem with economics being the driving force.

As realists we know much more needs to be done. However, our point is that the tipping point has arrived, which means the discussion now is focused on how best be good green retailers rather than the old discussion about whether doing so even made sense. We're also optimists and believe--especially with prodding from consumers and groups--these food retailers want to do the right thing. That doesn't mean they will compromise profits. But it does mean they are open to listen, to improve, and to make the environment a central aspect of their corporate and merchandising operations.

The next decade will look different than we can imagine in terms of green food retailing. The green retailing moment has arrived and we believe those retailers who seize the environmental mantle also will be the ones who succeed and thrive.

Monday Marketing Memo

Does the Ethical Policy Paradigm Present a New Model For Food & Beverage Marketing and Retailing in the Coming Post-Organic Era?

Two new studies, one a major survery conducted by the market research firm Business Insight and the other a three month-long survey being conducted by UK retailer the Co-operative Supermarket Group, are bringing the concepts of "Ethical" food and beverage marketing and retailing to the front and center of the industries internationally.

Some Background

Ethical food and beverage marketing refers to a collection of practices expressed via a philosophy of what "good" food and beverage marketing is. These practices include the use of sustainable farming practices, Fair Trade agricultural systems, green packaging, nutritional and environmental certification, local food product sourcing/marketing and a few other concepts which when are taken as a whole make what is being referred to as ethical practices in the food and drink sector. These practices are premised on an ethical philosophy that embraces environmentalism, social justice issues, healthy foods and sustainable principles, in farming, food and drink manufacturing and marketing throughout the supply chain.

Ethical retailing is part and parcel of ethical marketing. They are sisters joined at the hip if you will. Its focus is on selected "ethical" food, beverage and related products (from these ethical growers and marketers) as a retailers product mix. The concept also involves all the behaviors and practices a retailer conducts in its day-to-day retail operations. These include environmental, economic (employee relations for example), store building and operating (green) procedures and a few other concepts which make up both ethical marketing and retailing. Not only is it a group of practices but a retailing ethic as well.

The Ethical Product Marketing Study

According to the study by Business Insight, the "ethical consumer market" is increasingly moving from its beginnings as a niche area catered to by a few specialized food and beverage brands, towards the mass market mainstream. As examples the study sights the fact that food certification and other ethical product labels are now an everyday feature of products sold across Europe and North America, popularized by greater consumer awareness and wider distribution.

The study also suggests the ethical model is growing in the areas of organic brands (becoming mainstream), more Fair Trade brands on the market (including by major packaged goods companies), a growing trend to use sustainable and recyclable packaging, the growing popularity of the grow and buy local movement (food miles) and the consumer rejection of GMO-grown foods and the use of additives in food and beverage products.

The report says the growing adoption of these ethical practices, not only by smaller and medium sized food and drink companies but by large multinational packaged goods corporations, is evidence of a growing movement towards such an ethical food and beverage ethic on the behalf of increasing numbers of consumers internationally.

Ethical Retailing: The Co-op Survey

The survey by the UK's Co-operative Supermarket Group, the largest Co-op retailing group in the world, is an attempt to aggregate the opinion of its members on the issue of ethical food and drink retailing in its stores. The Co-operative group has millions of members and operates 2,700 retail food stores in the UK.

The Co-op mailed survey questionnaires to one million its members on September 3 of this month. Shoppers also will be able to fill out the questionnaires which will be available in-store. Survey questions include food and beverage product, retail and related issues such as food quality, diet, health, animal welfare, community retailing, ethical product sourcing, climate change, green packaging and recycling.

You can read and review the Co-operative Supermarket Group's Ethical Food Policy questionnaire here. Also learn more about the co-ops various retail and other businesses here.

As part of this member-survey the Co-operative group is consulting its members in order to find out what is most important to them in terms of what kind of retailer the co-op becomes. They plan on using the survey data when tabulated as part of a process to create a new retail philosophy for the Co-op. The retailer makes it clear they aren't going to adopt all the recommendations ad-hoc but rather use the member input as part of a multi-level review process. The supermarket operator already is one of the leading "ethical" retailers in the world with extensive green, health and nutrition and related policies and programs.

Paul Monaghan, the Co-ops head of ethics, is leading the research project. He says "the consultation (with members) will be extensive. It will be a very interesting social experiment. the balloting will last for three months and the results will be known next year."

The results of the survey and how the Co-op implements them in its process should be interesting to watch. The retailer is an international leader in terms of how retailers should address ethical and environmental issues. For example, it was the first major retail chain to champion the Fair Trade label and programs when it merchandised the Fair Trade brand Cafe'direct coffee in all its stores in 1992. The Co-op also was the first major retailer to stock Fair Trade bananas in its store's produce departments in 2000. Since then major retailers throughout the world have merchandised Fair Trade coffees, chocolates, fresh produce and other food and beverage items, and it's becoming more common among mass market supermarket chains to offer a selection of Fair Trade items in various categories.

The Co-op also is a leader in using renewable energy in its stores. Its been far ahead of nearly every other retailer in the world in this area. Currently about 75-85% of all 2,700 Co-op stores are powered by a combination of renewable wind and hydroelectric power as opposed to fossil fuels.

The Ethical Policy as Models

The ethical policy paradigm is a way or model of lumping a variety of environmental, social, economic, agricultural, marketing and retailing principles together into a coherent whole. Today we are seeing numerous components or principles of this ethical paradigm being implements across food retail format channels. In the supermarket sector numerous chains such as Safeway Stores, Kroger, Publix, Wegmans and more are adopting many of these principals, especially the green or environmental elements of the ethical retailing policy. The same is true for many mass merchandisers such as Wal-Mart, Target, Macy's Department Stores and more. The natural foods channel (Whole Foods as the leader) is doing the same. Even the C-store channel is getting on-board.

In the food and beverage manufacturing and marketing sector the same is occurring. Food and drink producers are creating green standards for packaging, introducing more all-natural and organic foods, and paying closer attention to Fair Trade, sustainable growing practices and the like. Health and nutrition and the marketing of it is becoming nearly ubiquitous among food and beverage manufacturers of all sizes, especially those who are creating new products that allow for the telling (and labeling) of a positive health and nutrition marketing story.

The Developing Ethical Policy Paradigm

How do we see the ethical product marketing and retailing paradigm developing, especially as it relates to natural and specialty foods manufacturer's, marketers and retailers?

We see food retailers in general continuing to aggressively adopt numerous principles of the ethical policy whole for their stores on a regional and neighborhood basis. We also see more progressive food retailers--supernatural grocers,supermarkets and mass merchandisers like Whole Foods, Safeway Stores, Publix, Wegmans, Supervalu, Kroger, Raley's in California, Wal-Mart and some others--move further towards adopting a more corporate ethical retailing philosophy and policy. We're seeing this currently in the case of Wal-Mart, Whole Foods, Safeway, Publix, Wegmans and a few others.

We aren't suggesting food retailers will adopt an ethical retailing policy on the order that the Co-op Supermarket group is considering or even one like many "orthodox" natural foods stores currently have. These retailers--and to a lesser degree Whole Foods--have placed restrictions on the types of food and beverage products they will sell in their stores all together. For example, restricting foods and drinks that contain artificial coloring or food additives. These product ingredient restrictions fit these types of retailers philosophies and marketing niches which is well and good.

However, supermarkets and mass merchandisers' stock in trade is product variety and assortment and that isn't going to change--and it shouldn't. But that won't stop these retailers from further adopting a more comprehensive ethical retailing policy, focusing on areas like environmental or green practices and other principles of the overall ethical paradigm being crafted by the Co-operative Supermarket Group. We currently see an example of this in the UK where both Tesco and Marks & Spencer for example are crafting comprehensive ethical retailing corporate philosophies and practices but basing them on their own respective needs and niches as retailers.

The 'Post-Organic Era and Ethical Policies

In the title of this piece we ask: Does the ethical policy paradigm present a new model for food & beverage marketing and retailing in the coming post-organic era? Quite a mouth full. By this we mean a couple things. First, in terms of a post-organic world we don't mean to suggest in the least that retailing is nearing an end to the marketing and sales of organic products. Quit to the contrary--we're just seeing the beginning of what will eventually become a near norm.--widespread multi-format and channels organic products retailing.

Rather we use the phrase "post-organic" to mean we are coming to an end (because of the growing popularity of organics) of an era in which food manufacturers, marketers and retailers can continue to use organic foods as a major or primary marketing niche. We believe there are many years left for this niche to be effective. But with the mass-marketing and retail format explosion we're seeing in organics merchandising we're beginning to see a massification of the category which over time will result in it being less affective as a primary market niche. After all, today you can buy a decent selection of organic food products not only in natural foods stores and supermarkets but also in mass merchandisers, drug stores, dollar stores, food boutiques, farmers markets, online and more.

So this coming "post-organic" era merely means that food marketers and retailers need to look for more in terms of having a specialty/natural niche in the market. Additionally tomorrow's "post organic" era consumer also will be looking for more. And what we believe they will be looking for are manufacturers and retailers who have ethical type policies and can tell a story of who they are as a food manufacturing or retailing company based on their comprehensive ethical policy.

No one policy need be the same, although they will likely have similar elements. But we believe those progressive manufacturers and retailers who get out in front of this development--like many who already are--will reap the benefits as consumers continue to change and develop. Let's not forget it wasn't too many years ago when if you told a group of supermarket executives and food manufacturing CEO's they would soon need to be producing and selling a large selection of organic products, creating biodegradable and recyclable food packaging, selling reusable grocery bags, putting solar panels on their store roofs or distribution warehouses and other similar developments, most of them would have laughed at you. Not only aren't they laughing today, they're rushing and competing to see who can be the greenest food manufacturing and retailing company in the respe4ctive industries.

The future development and path to ethical product marketing and retailing policies will be varied and proceed at different paces depending on the region of the world and on a particular country's economic system, social composition and politics. The pace also will, like most developments, tend to lag a bit behind consumer demand for such policies as these type of initiatives require much thought and investment. However, we believe it's a real development, the empirical beginnings of which we've discussed above. Ethical policies also provide opportunities for committed and savvy food manufacturers, marketers and retailers who can get it right for their customers and other stakeholders.

Friday Feature

Pictured above is Wal-Mart's experimental green,"eco-friendly" store in Aurora, Colorado.

Who Will Build the First All-Green Eco-Store in the U.S.?

UK Retailer Marks & Spencer is building two new stores in Scotland that currently come closest to being the most comprehensive green, "eco-stores" in the world. Will a U.S.-based retailer do the same in America soon?

Yesterday Natural~Specialty Food Memo (NSFM) reported that UK-retailer Marks & Spencer is building what are likely the most comprehensive green retail stores in the world to date. The stores are in Scotland and set to open next month. We also reported yesterday that a Whole Foods' store being built as the retail anchor of a new shopping center in Madison, Wisconsin is part of the shopping center developer's plans to build the center using strict green building guidlines established by LEED, the enviromental building association in the U.S. that uses the strictest "eco-design" standards.

NSFM also reported yesterday that California-based Safeway Stores, Inc. unvailed a new solar panel array on the rooftop of its Dublin, California store on Thursday. The solar panel system is designed to produce at least 25% of the store's electric power. The Dublin store is the first of 23 stores Safeway plans to have powered in part by similar solar panel arrays. You can read all three of these stories from yesterdays NSFM here.

Numerous other U.S. retailers, including Wal-Mart, are launching green building and remodeling efforts for their stores. However, as of yet no U.S. retailer has announced a major "eco-store" building initiative on the scale of what Marks & Spencer is doing in Scotland in building its first two"eco-stores" there.

Wal-Mart has constructed two energy-efficent and "environmental-friendly" supercenters, one in McKinney, Texas, the other in Aurora, Colorado, which come close to the Marks & Spencer model. However the two stores are less comprehensive in their green design elements and use more carbon-based conventional energy sources than the Marks & Spencer stores. The two stores also doesn't use water recycling and reuse elements like those being incorporated into the M&S "eco-stores, " among other key environmental elements.

Wal-Mark has dubbed these two units "Experimental Stores." The stores are designed to serve as a green retail building laboratory for the chain in terms of learning how best to design, build and incorporate "eco-friendly" elements into future stores. The two stores will allow Wal-Mart to discover what works best (continuous improvement) and what doesn't work in these stores as the chain continues to search for ways to create even better green stores.

The Aurora, Colorado "Experimental Store" is the newest of the two. Its also the only one of the two that was build from the ground up. The McKinney, Texas store was originally a basic Walmart that was converted into a supercenter. It's the first of the two Experimental "eco-stores." Both stores were built in 2005. You can read about the green aspects of these two Wal-Mart "Experimental Stores" and take a virtual tour of the stores here.

These stores are part of a major, comprehensive environmental effort the chain's CEO Lee Scott announced in early 2006. (If you want to read an update on Wal-Mart's environmental programs at present this piece from today's abcnews.com provides a fairly good overview.)

It's now been two years since the experimental stores were built and Wal-Mart hasn't taken the next step which would be to make one of its new supercenter stores an environmental showcase, incorporating all that's worked best in the two "Experimental Stores" with today's latest "eco-building" innovations and new technologies. The renewable energy and green building fields are moving fast and many new innovations have come on the market in the last two years. Additionally, Wal-Mart didn't use all the green building materials and technology that was available in 2005 when it built the stores.

So where are we in terms of a U.S. retailer meeting Marks & Spencer's across the pond green retail building challenge?

Perhaps we need a contest. Something on the order of "America's Next Top Model" adapted for green store building. Maybe,"America's Best Green Store." Or more seriously perhaps what is needed is a "Green Retail" version of the $20 million NEXT prize, the multi-million dollar cash prize being offered to the first private company that can get a spacecraft on the moon. We could call it the "Green Building Challenge."

Rather than these two economic motivations for building the first comprehensive green retail store in the U.S.--one a bit tongue-in-cheek, the other more serious--NSFM believes that such a real, comprehensive "eco-store" will come soon in the U.S. not because there will be a big cash prize awaiting the winner but rather because it makes such good environmental, economic and marketing sense for a retailer to do it.

We also believe that Whole Foods, Wal-Mart and Safeway are likely to be among the first U.S. retailers to build such a store from the ground-up based on their current environmental building commitments and the fact they have deep enough pockets to do so. Of course the REAL goal here isn't just a demonstration "eco-store" but rather for these and other retailers to begin building all of their stores this way and to remodel all of their existing stores to strict green building standards over time.

On the other hand it might not be any of these three retailers who is first. It might be a smaller chain like Publix or Wegmans, both grocers who have established strong environmental principles, and are on the cutting edge of green marketing. Or it might be another large chain like Kroger Co. or a mass merchandiser like Target. Both have made serious green principle commitments.

We also see the possibility it may be an independent or small chain that realizes what a great marketing tool it would be to build the first major "eco-store" in the U.S. and then follow that achievement up with a commitment to build all of its other stores using the same strict green building principles.

Further, nobody says it even has to be a food retailer (or even mass merchandisers like Wal-Mart or Target Stores) thats builds the first comprehensive ground-up "eco-store" in the U.S. For example, department store retailer Macy's has made a major commitment to green principals for it existing stores and we may see them create a real "eco-store" in one of their new store building projects. NSFM suggests it hopes the first retailer to build such an "eco-store" is a food retailer since supermarkets are most often the number one energy users out of all retail formats.

One small but growing drug store chain, Pharmaca Integrative Pharmacy, also could be in the running. The small chain currently has 17 stores in the Western U.S. and is using many green building principles in the construction of their new stores. They seem to have a major green building commitment but will need to do more if they want to call their stores comprehensive "eco stores."

We aren't suggesting by any means that the current efforts by Safeway, Wal-Mart, Whole Foods and many others aren't good or positive. Rather, we're looking to the future and believe the industry is ready for a leader to step forward and match what Mark & Spencer (and to a lessor degree Tesco) is doing in the UK. In fact we commend these current green building efforts and see them as much more than marketing tools for these retailers. The retail companies realize doing good environmentally is both good for the planet and good for the bottom line.

We also believe the Federal government (and state governments) needs to establish a more comprehensive program to encourage retailers of all types to go greener with their new and existing stores. A package of market-based incentives like tax credits and other similar things would be ideal. The goal would be energy-use and water-use reduction in building and remodeling stores along with creating stores that reduce a company's overall carbon footprint.

Currently European and Canadian retailers are leading U.S-based retailers in green building. In addition to Mark & Spencer in the UK, Tesco, the Co-op chain and others are moving towards a real, comprehensive green building standard for all stores. In Canada Wal-Mart- Canada is currently building five new supercenters that are incorporating higher green building standards than Wal-Mart currently is using for new stores built in the U.S.

This green building leadership gap however is decreasing. And U.S. retailers are undertaking their green building initiatives without the strict environmental laws present in most European countries and in Canada, and without a comprehensive set of guidlines and economic incentives available to them, like those availible to European and Canadian retail companies.

NSFM is waiting with baited breath--and keyboard at hand--for that soon to be made announcement from a U.S. retail company that they are building the first, state of the art, comprehensive Green "eco-store" in the U.S. A store that utilizes today's cutting-edge green building and energy technology to the fullest in a comprehensive way. Who will that retailer be?

Learn More About Retailer's Who Are Launching Green Renewable Energy Programs

One of the most interesting and promising green developments among retailers is that so many of them are beginning to install solar panels on store roodtops--or are buying solar and wind generated power produced by third parties-- to help power their stores. Below is a brief list of retailers and there solar power initiatives that NSFM has identified for our readers.

> Macy's Department Stores is installing solar power systems and solar panels in 26 of its stores.
>Target Stores recently installed solar panels at four of its stores in California and announced it will do the same at 14 more stores starting later this year.
>Kohl's Department Stores announced it's converting 75% of its stores in California to solar power beginning in early to mid 2008.
>Wal-Mart recently began purchasing 20 million killowatt hours of solar-produced power for 22 of its stores in Hawaii and California from BP Solar, SunEdison and Powerlight Energy Co. Wal-Mart also is doing the same in many other parts of the country and currently has solar panels in use on the roofs of its Aurora, Colorado and McKinney,Texas Experimental Stores. The retailer also says it will install solar panels on the roofs of many other stores.
>Costco Wholesale recently installed its second solar powered system at its huge Lake Elsinore, California distribution center. The club retailer says it plans to install solar power systems at four more distribution centers in California and Hawaii.
>B.J's Wholesale Club has installed solar panels and systems on the rooftops of two of its stores located in Connecticut.
>Tesco, which is opening a chain of upscale convenence-style stores in the Western U.S., has installed a huge solar-power system and a rooftop of panels at its new multi-building 830,000 square-foot distribution center located in Riverside, Califronia. Tesco also is building its U.S. Fresh & Easy Neighborhood Market stores using many green building standards and says some of its stores will have rooftop solar panels and systems.
>Office Products retailer Staples recently completed the largest solar power installation in New England at its 300,000 sqaure-foot distribution center in Killingly, Connecticut.
>Safeway Stores introduced a solar power system yesterday for its 55,000 square-foot store in Dublin, Califronia. The store's rooftop contains more than 1,000 solar panels. The retailer said this system is the first of 23 (23 total stores) it plans to install this year and next. Safeway Stores also is purchasing 87,000 megawatt hours of renewable wind energy which the chain is using to power all 295 of its at-store gas stations as well as its corporate offices in Pleasanton and Walnut Creek, California.
>Whole Foods Market, Inc. is building a new store in a Madison, Wisconsin shopping center development that will use LEED (Leadership in Energy and Environmental Design) green building standards which are the strictest in the U.S.

Weekly Green Report

New Whole Foods to Anchor Madison, Wisconsin 'Green' Shopping Center
By NSFM: Wednesday, September 12, 2007
At left is the new 'Green' Whole Foods Market being built in Madison, Wisconsin and scheduled to open in early 2009

The Hilldale Shopping Center and a new addition called "The Heights," currently under development in Madison, Wisconsin, will have a 65,000 square-foot Whole Foods Market as its retail anchor, according to the firm Joseph Freed & Associates of Chicago, the property's owner and master developer. Construction of the Whole Foods store began today.

The center is being built using the strict green building standards developed and certified by LEED (Leadership in Energy and Environmental Design), the leading environmental building organization in the U.S.

The center's existing shopping center has been completely renovated and the developers are now beginning the second stage of the development ("The Heights" buildings) which includes an upscale 150 room boutique hotel, an 11-story, 112-unit condominium building with 43,000 square-feet of office space and tens of thousands of ground floor retail square-footage set to open in early 2009. The 65,000 square-foot Whole Foods store will be the anchor store for this ground floor retail space.

The new addition to the shopping center is being built using strict green/environmental building standards and methods according to Adam Fink, the project manager for the developer. "The Heights" promises to be the Madison areas first LEED (Leadership in Energy and Environmental Design) residential and retail building," Fink says. "We are using cutting-edge green technology that residents (and others) will notice in terms of energy savings."

The LEED program is considered to be the most stringent and "environmentally-sound" building standards program in the U.S. Read more about the LEED green building program and the organization's environmental building standards here.

The 65,000 square-foot Whole Foods is part of the "Heights" development and as such will be built to these same LEED green standards. The Whole Foods store should open in early to mid 2009 according to the developer. The supernatural grocer hasn't publicly announced the new store yet.

UK Retailer Marks & Spencer Building New "Eco-Stores"
By NSFM: Wednesday, September 12, 2007

British retailer Marks & Spencer (M&S) will open the first of its new "eco-stores" in Scotland next month (October, 2007). The stores are a dramatic environmental step forward in retailing. M&S says the stores will use 25% less energy than conventional stores and will cut carbon dioxide emissions by 50%.

Marks & Spencer stores sell food and groceries as well as clothing, housewares and related upscale department store offerings. The chain is renowned for its upscale, high-quality prepared foods offerings.

Among the "eco-friendly" features of these new M&S stores include the use of rainwater and condensation harvesting equipment so that rain water and recycled municipal water can be used in flushing toilets and for other non-drinking water uses.

Store lighting, refrigeration equipment and ventilation systems will be of the highest energy-efficient category available to provide for maximum energy-efficiency. All the lumber used in the stores' construction has been accredited by the Forestry Stewardship Council, a UK body which promotes and certifies responsible and sustainable forest management.

The stores also will be powered in part by by renewable energy--using both wind powered turbines and solar panels. M&S also will by it's conventional energy for the stores from renewable energy producers to as close to 100% as is feasible, says Richard Gillies, director of store design, development and procurement for the chain.

The retailer is working on a plan to help local, small farmers develop waste-to-energy systems which would use animal waste as the energy source. M&S would guarantee to buy all of the renewable energy produced by these farmers for the new stores, says Gillies. 'That's something we want to develop so it can become a secondary income source for the farmers," he says.

The chain is experimenting with the use of naturally grown product packaging, which is biodegradable, to replace the use of cellophane in its prepared foods packaging and other store departments. All paper, cardboard, plastics and metals used in the store or received as merchandise will be recycled as well.

During the building of the "eco-stores" the construction workers have been required to follow a "green" travel plan which involved a care-sharing program for all the workers from their homes to the construction sites. Building materials suppliers also have been required to recycle at least 80% of the building material waste from the sites as part of their contracts.

Gillies says the new stores will be used to test environmental design principles and measures which if they work can be adopted in new M&S stores as well as in existing store remodels. The chain wants to eventually have all of their existing stores become "eco-stores." Gillies said these new stores are just the beginning and that M&S plans to learn from them, adapt and create even more "eco-friendly" stores down the road.

Marks & Spencer has set a corporate goal of becoming a carbon neutral retailer and the new "eco-stores" are a big part of achieving that goal.

Industry Green News

Safeway Store Goes Solar-Powered

Safeway Stores, Inc.'s Dublin, California store starts off today a much greener supermarket than it was yesterday. Beginning today the store will be powered primarily by a new acre-wide rooftop solar panel system which will provide the majority of the 55,000 square-foot store's electricity. The Dublin store also powers it gas station with wind power from turbines it recently installed for that purpose.

Safeway says the solar and wind-turbine units are part of a larger environmental initiative the retailer has launched, the goal of which is to reduce the retailer's carbon emissions dramatically as well as to conserve energy.

Other green, energy-saving programs launched by Safeway to meet this goal include new investments in store energy-efficient lighting, equipment and store heating and cooling systems. The chain also has launched a massive store-wide and corporate recycling program for paper, plastics, cardboard and other recyclable materials. Safeway says it recycles enough cardboard, paper and plastic each year to fill a football field 190 feet high.

Whole Foods Introduces Organic, Sustainably-Packaged Wine

Whole Foods Markets is introducing Green Path brand wines, a line of organically grown and sustainably packaged wines, to its stores this month.

Whole Foods has designated September as "Organic Harvest Month" in all its stores and is promoting organic and green-oriented products throughout the month, including the "green" wine line. The brand is produced by an Australian winery called The Country Vintner.

Green Path wines are made using certified organic wine grapes and following a growing process that minimizes environmental impacts. The winery's sustainable practices also include vigilant water management and the recycling of waste into compost, according to a winery spokesperson.

A unique feature of the wine line is that it's packaged in 1 Liter Tetra Pak Tetra Prism aseptic packaging rather than the traditional glass wine bottle. The Tetra Prism aseptic packages are fully recyclable and use a smaller amount of energy and less material in their manufacture than most other types of food or beverage packaging. According to packaging experts the Tetra Prism package is one of the most sustainable forms of packaging currently on the market.

Whole Foods is introducing Green Path Chardonnay and Shiraz varieties in its stores beginning this month. The Australian-produced wines are made from single-estate organic grapes. The winery was founded in 1976 and is one of the oldest in Australia according to a winery spokesperson. The 280 acre vineyard where the wine grapes are grown is certified organic and bio-dynamic. You can learn more about the winery here.

Going green Isn't Just For Humans

When Candace Smith, founder of the "eco-friendly" Cain & Able brand of all natural canine personal care products, developed the line she did a species reversal...Instead of testing the line of dog shampoos, soaps and spritzes on animals, she tested the line on a human--herself.

Smith felt that if her green, all natural Cain & Able line, which is named after her two dogs, was going to be good enough for man's best friend then it also should be good enough for man.

All-natural and "eco-friendly" pet personal care products and foods are a booming segment of the multi-billion dollar pet food, personal care and accessories market in the U.S. And just as more and more American consumers are going greener in their lives they also are bringing their pets along for the "environmentally-friendly" ride. This article from the Sept. 11, 2007 Kansas City Star newspaper talks about the growing green pet personal care and food market and how "going green" isn't limited to just two-legged creatures anymore.

Green Notes

Company Produces Simple Commercial Solar Power System
Florida-based Solarsa, a solar energy development firm, has introduced one of the first solar cooling systems targeted specifically for commercial businesses. The innovative system, called Energy Independence System 005, can also use the sun to heat water and allows restaurants and in-store food service operations to recycle waste cooking oil. Read more about the innovative commercial solar power system here. Green Car Seats and More...Auto company Mazda has developed a material for car interiors and seats which is made out of 100% plant-derived fibers. The "green" material contains zero petroleum-based compounds. The material is rugged yet attractive and has many uses other than car seats. Read more about this green material innovation here.

The Kitchen of The Future: Green and More
The folks at the "Counter Intelligence" research group at MIT (Mass. Institute of Technology) has been studying peoples kitchens (yes that kind of "counter") and working on creating the kitchen of the future--an "eco-friendly," high-tech yet functional place for food preparation and more. You can read about some of their findings and ideas here. Also you can learn more by visiting their website. Lastly you can watch a video from the discovery channel about the "kitchen geniuses" here. Plastic Grocery Bag Bans...Louisville, Kentucky is the latest U.S. city to propose an outright ban on plastic grocery bags that aren't made of biodegradable materials. San Francisco, Oakland, Baltimore and a few other municipalities have already passed similar laws. California has a new law which requires all retailers with stores over a certain size to provide plastic bag recycling bins in their stores. The retailers must also offer reusable grocery bags for sale. New York state is currently considering a similar law. You can read more about the Louisville, Kentucky proposal here.

Green Notes from the UK
British Internet, Home Delivery Grocer To Tout Green Credentials...Online retailers are getting bad press these days for the amount of packaging they use to process and deliver grocery and other product orders. If you have ever purchased anything from Amazon.com or an online grocery delivery service you know these retailers generally use more packaging than even traditional brick and mortar retailers do. One online retailer, popular British E-grocer Ocado, is fighting back. The online grocer is set to launch a multi-million British pound TV advertising campaign touting its green credentials. You can read more about the UK E-retailer's green credentials and marketing plans here. Co-Op to Launch "Ethical" Mineral Water...UK retailer Co-op is introducing what it says is the world's first "ethical" mineral water brand. The brand is called Fairborne Springs Mineral Water, a Co-op corporate label. For each purchase of a bottle or multi-pack of the spring water brand the Co-op will make a donation to a charity that will fund the installation of a PlayPump clean water system. The PlayPump systems are powered by roundabouts, which children play on, pumping water into a storage tank that can be used by the whole community. The devices are used in countries like Africa where access to water is a challenge. Each PlayPump costs about $7,000 and Co-op says it wants to be able to purchase at least 100 per year through the donations. Tesco Invests $25 Million to Help Consumers Become Greener...UK retailer Tesco, the number two largest food retailer in the world, is investing $25 million dollars to fund an institute at Manchester University in Great Britian that will research ways to get consumers to be greener in their behaviors and to buy and use more "eco-friendly" products. You can read more about the donation and initiative here.

Good & Green Marketing Conference
Natural products companies Burt's Bees and Silk Soymilk will be among the companies who present case studies on green marketing at the upcoming Good & Green Green Marketing conference. The conference is being held in Chicago at the Chicago Cultural Center November 29-30, 2007. Get more information and details about the Good & Green Marketing Conference here.