Green Retailing Memo: California State Assembly Committee to Vote on Plastic Bag-Fee Measure Monday; Many Grocer's Support Bag-Fee Legislation

On Monday (April 14) the Natural Resource Committee of the California State Legislature is set to vote on a measure that would impose a mandatory fee of 25-cents per-bag on the use of free, single-use plastic carrier bags at all grocery stores and pharmacies in the state, regardless of the stores' size.

According to the legislation, which if passed will then go to the full California State Assembly for a binding vote, the money raised by the 25-cent per single-use plastic carrier bag fee would be divided-up using a per capita formula between the state's local governments to be used for litter prevention and reduction efforts and programs.

If the bill makes it out of committee to the full California State Assembly and then passes that body with a majority vote, it would be the first statewide mandatory per-bag fee law in the United States.

There has been very little media attention in the Golden State regarding the proposed statewide 25-cent single-use plastic carrier bag legislation. This is largely because the vote on Monday is only a committee vote. While in committee, legislation can still be amended and changed, although since the bill is coming to a vote on Monday that's generally a signal the committee majority party chair (Democrat) and the ranking member (Republican) have agreed most of the amendments to the bill if any have been made and it's time for a full committee vote.

Our California state government sources tell us the chances for the 25-cent per-bag fee legislation to pass in the Natural Resource Committee on Monday are pretty good.

One interesting aspect of the proposed legislation is that to date there has been very little if any opposition from either the state's supermarket and pharmacy retailing trade associations, such as the California Grocers' Association, or individual grocery retailing chains or independents in the state.

In part this is because as we mentioned earlier, the legislation is still in committee rather than being up for a binding vote in the full state assembly.

However, that's only a small part of the reason for the lack of any significant opposition to the proposed law.

The more interesting aspect of the story is that numerous supermarket chains and independent grocers in the state agree with the 25-cent per plastic bag fee legislation, or are at least not inclined to oppose it. Part of the reason these grocery retailers might agree with the proposed statewide law is they see either outright bans or per-bag fee laws coming on a city-by-city piecemeal basis anyway.

As mentioned above, San Francisco passed a single-use plastic carrier bag law last year, which has now been in affect for about eight months. The law is limited in that only grocery stores and retail pharmacy's which operate stores over 10,000 square feet are banned from offering shoppers the free plastic bags to pack their purchases in. Department stores and mass merchandisers regardless of size are exempt from the law, as are the city's hundreds of small mom and pop grocery stores, convenience stores and green grocers, among others.

Across the Bay, the city of Oakland has passed a similar law. However it's currently in the courts because an association representing plastic grocery bag manufacturers has challenged the ordinance.

Other California city's, ranging from nearby Bay Area cities Berkeley and Palo Alto, to tiny Willits in the north coast, Davis in the Sacramento region, and Santa Monica and others in Southern California, are proposing outright bans on the single-use plastic carrier bags.

Huge Los Angeles County also is getting ready to propose legislation that would either ban the bags completely or impose a per-bag fee.

The state of California also passed a law last year which requires all supermarket chains and independents with stores over a certain square footage to place plastic grocery bag recycling bins in their stores and to sell reusable shopping totes in each store.

It's this climate which we believe is the reason there hasn't been any significant industry opposition to the proposed per-bag fee legislation thus far. In fact, numerous California grocers seem to be just fine with--and in some cases even supportive of--the proposed bag-fee law which will be voted on in committee on Monday.

Bay Area grocers voice support for per-bag fees at meeting

For example, at a meeting of grocery industry leaders and grocers held yesterday morning by the Palo Alto Chamber of Commerce in the San Francisco Bay Area city of Palo Alto, a number of grocers attending the gathering voiced their support of a single-use plastic carrier bag fee rather than seeing outright bans happen on a city-by-city piecemeal basis, which is occurring.

The city of Palo Alto is planning to implement a law on April 28 which will ban plastic grocery bags from being used in the city's 13 largest supermarkets and pharmacy's.

The grocers at yesterday's meeting said they oppose the Palo Alto plastic bag-ban. But not perhaps for the reasons you might think.

Although the grocers oppose the city ordinance, they said it isn't because they have a fondness for the single-use plastic bags. Rather, they argued since laws like the San Francisco bag ban have been implemented (some of the grocers at the meeting have stores in San Francisco as well as in Palo Alto) what they've seen is a surge in shoppers requesting paper bags, even though all of the stores are selling reusable shopping bags for as little as 99 cents each, and have even held free reusable bag giveaway events to encourage shoppers to bring their own bags to the stores.

Dave Bennett, President of local upscale supermarket chain Mollie Stone's, which has a store in San Francisco, along with a number of stores in the region, told the group since the plastic bag ban was enacted in San Francisco "our paper bag usage (in that store) has shot through the roof."

Dan Conway, the corporate director of state and local governmental affairs for supermarket chain Safeway Stores, Inc. which is headquartered in the Bay Area, said paper bags cost grocers about 10 times as much as the single-use plastic carrier bags. He didn't say if Safeway is opposing or supporting the plastic bag fee legislation set for a committee vote on Monday.

The consensus among the grocers at the Palo Alto Chamber of Commerce meeting yesterday was that they would go along with some sort of per-bag fee, including putting a surcharge on paper grocery bags as well as plastic carrier bags.

They further said they are in support of an aggressive campaign, which they would help support financially and materially, that would launch an educational program in the city, which is home to Stanford University and many high-tech companies, designed to encourage shoppers to use reusable bags, including holding frequent free reusable bag giveaway days in their stores.

The grocers, along with Tim James who is with the California Grocers Association trade organization and was at the meeting, also said they want all retailers to be included in any law which puts a fee on plastic and paper bags, not just supermarkets and pharmacies.

"Allowing consumers to use plastic bags at some stores, but not at others (types) sends a mixed message," James told the group at the meeting.

Another grocer, John Garcia of the local multi-store independent JJ&F Fine Foods, agreed with James. He said, "My personal feeling is you just make this big bang (a law imposing a fee on both plastic and paper carrier bags) and then there is no confusion. Everybody does the same thing, and it's done."

Safeway's Conway told the group instead of banning the plastic bags, the city council should create a per-bag fee scheme, perhaps indicating that Safeway will support the statewide plastic bag-fee scheme set to be voted on in the Natural Resource Committee on Monday?

"Adding a fee would literally solve the problem with single-use bags," Conway said. "You (the city of Palo Alto)would see the swiftest and most dramatic decline in single-use bags in the entire country, hands down," he added.

Other representatives of Bay Area supermarket chains and independents joined in the chorus saying they too would likely support a single-use plastic carrier bag fee like the one set to be voted on by the Natural Resource State Assembly committee on Monday.

A spokesman for upscale Bay Area-based grocery chain Andronico's Market, which has one store in Palo Alto and others located throughout the Bay Area, said he supported charging a fee for the now free plastic grocery bags.

"You (the city of Palo Alto) need to take it (plastic bag ordinance) to the next step," he said. "If we've been giving these (plastic grocery bags) away since the 1970's and not getting reuse out of them, it seems like the fee would be the most effective; you might even get national attention," he told the Palo Alto city officials who were present at the meeting.

Local independent grocer Steve Piazza, who owns the 3-store upscale Piazza's Fine Foods chain in the area, said he too would go along with a law that imposes a per-bag surcharge on the now free plastic bags, as well as on paper grocery sacks.

The city officials at the meeting, along with the grocers present as well as the local business leaders who are members of the city's Chamber of Commerce, said at the meeting they felt it was an historical morning. The grocers' commented it was the first time they could recall being able to sit down with city officials as a group and be able to give input and perhaps shape or change a policy that effects them directly.

Palo Alto is set to enact its single-use plastic carrier bag ban on April 28. The law will only ban supermarkets and pharmacies over a certain square footage from offering the free, single-use plastic carrier bags in their stores. That's why only 13 local supermarkets are affected by the ban. All other types of retailers, along with smaller grocery and convenience stores will still be able to use the single-use plastic carrier bags.

After the meeting, Phil Bobel, the city's environmental compliance manager who is responsible for making the ban happen on April 28, said he was willing to work with the grocers on the issue, and would consider recommending to his bosses in the city that the upcoming ban perhaps be postponed until September, so the city and grocers could work together on the issue.

Further, he said if the grocers' seriously supported and worked on gaining support in the next few months for a per-bag fee instead of the ban, he might consider suggesting his bosses take that matter to the city council for review before September.

After the meeting however, a number of city officials and others in the audience told us they believe the city will go forward with the single-use plastic carrier bag ban on April 24 because such a large majority of Palo Alto voters are in favor of it.

A number of these actors and observers told us it would be a good idea to impose an across the board per-bag fee for every type of retail store in the city; but not instead of the upcoming April 28 ban, but rather in addition to it.

The argument from many in the city is that these 13 largest supermarkets and pharmacies (especially the supermarkets) account for a much higher percentage of plastic carrier bag use because of the nature and volume of the businesses. As a result, they believe by starting with the largest supermarkets and pharmacies, then moving on perhaps later to other retail classes of trade, they will see an immediate decrease in litter for example, from the bigger-store plastic bag ban.

SoCal grocers not as vocal on the issue...yet

We haven't heard similar support for local or a statewide plastic carrier bag fee law from grocers in Southern California, although since numerous cities in that region have bag-ban laws set to be voted on by city councils soon, they may feel the same way as their Northern California cousins do.

Additionally, Safeway is a major supermarket industry player in Southern California (as in northern) where it operates the Vons' chain. Therefore, if California's leading grocery chain were to support the statewide bag-fee legislation in committee that would go along way to not only gaining similar support from other grocery chains but from the California Grocers Association as well.

Further, as mentioned early in this piece, Los Angeles County is working on passing a law that would impose a charge on all single-use carrier bags used by supermarkets in that highly populated Southern California county.

This means grocery chains like Vons, Ralphs and many others which have stores in Los Angeles County and in numerous other counties in the region, will be able to offer plastic bags in their stores outside Los Angeles County but not in those stores in the country. Piecemeal laws like this can cause havoc for retailers.

In addition, if many of the cities pass their own pending plastic grocery bag bans, that means the region's grocers will end up with a further piecemeal system--some stores in some counties and cities offering plastic bags, while those in the cities with the bans won't be able to.

Most of Southern California's supermarket chain and independent retail companies are likely to come to the same conclusion the grocers at yesterday morning's Palo Alto Chamber of Commerce meeting have we think: that a uniform, statewide single-use plastic carrier bag fee (of say 25 cents a bag) might be far better than either county-by-county or city-by-city outright bans or piecemeal bag fees.

Whole Foods Market to stop using plastic grocery bags on Earth Day

One major event that's going to put single-use plastic carrier bags in general, and the legislation to be voted on in committee on Monday specifically, in the spotlight in California is that on April 22, Earth Day, Austin, Texas-based Whole Foods Market, Inc. will voluntarily stop using single-use plastic carrier bags in all of its stores in the U.S., Canada and the United Kingdom.

Whole Foods' has numerous stores, and is building many more, in California. The supernatural grocer also garners lots of publicity in general in the California media, and will garner even more in the days leading up to the Earth Day self-imposed plastic bag ban.

All of Whole Foods' California stores (and most of those throughout the U.S.) are planning major events on Earth Day, including celebrating the retailer's voluntary plastic bag ban. Whole Foods stores will be giving away free reusable shopping tote bags, selling others at discount and holding major in-store promotions celebrating the earth, environmentalism and sustainability.

No other grocery chains in California have yet to announce that they, like Whole Foods, plan to stop using the single-use plastic carrier bags in their stores.

We expect Earth Day (April 22) and the days leading up to the event and after, to be a watershed moment in terms of the single-use plastic carrier bag issue internationally, nationally in the U.S., and particularly in California if the Natural Resource Committee passes the plastic bag-fee legislation on Monday and sends it to the full California Assembly for a binding vote. Even if passed by the full State Assembly, such a bill would still have to be signed by the governor in order to become law.

Further, if the bill is killed in committee on Monday, that will increase and intensify the local county and city bag-ban legislation efforts in California, which is the focus at the local level rather then per-bag fee legislation.

This story is just beginning. We will be following closely, starting with bringing you the results of the Natural Resources Committee vote on Monday.

The issue is a global one. Single-use plastic carrier bag bans are happening all over the world. Earlier this year the world's largest country, China, banned every retail store in the nation from using the bags. Other Asian countries and numerous African nations are doing the same.

Additionally, the United Kingdom's Parliament is currently debating the enactment of either an outright bag ban or a per-bag charge in that nation. Prime Minister Gordon Brown has already said he is in favor of passing either an outright ban or a per-bag fee scheme before the end of this year.

Ireland has already passed a nationwide law which puts a charge on every single-use plastic bag used by every retailer in that country. The law has been in effect for about two years. The country's government says plastic bag use has been reduced by nearly 90% since the law was passed.

The European Union is discussing a nationwide ban or bag-fee scheme as well. In addition, there is legislation pending in Australia on either a ban of per-bag fee, as there is elsewhere in the world. It's a global issue--and it's heating up.

If the California 25-cent per bag fee legislation does pass, it will have global influence. Not only is California the largest state in the U.S., but it has the world's fifth-largest gross domestic product, which makes its economy even bigger than those of a number of European nations.

The state also is a trend setter in the grocery industry. If the Golden State's grocers and grocery trade associations do support the bag fee legislation, that could open the door for grocers all over the U.S.--and elsewhere like the UK--to do the same. Stay tuned. We will be.

Marketing Memo: Marketer is 'Dancing Close to the Edge' With its Postioning of the Super-Strong Breath Mint 'Antipoleeze'

Move over "curiously strong" Altoids, A Brooklyn, New York-based division of a Swiss company named RNY Group recently introduced a new breath mint it says will eliminate bad breath odors caused by alcohol, smoking and food.

The super-strong bad breath-elimination mint is made in Switzerland and in being sold under the interesting name of "AntiPoleez" (yes, as in police). The product's package features a picture of an attractive blonde-haired woman in a police uniform, tipping the brim of her policewoman's cap, with the name of the brand, "AnitiPoleez" right below. To the immediate right of the brand name is the subheading "Eliminates alcohol and tobacco breath."

Although the booze-breath-busting mints were only recently introduced, and are currently being sold primarily online through the company's website and in a few bars, restaurants, convenience and grocery stores in the East Coast and a few other parts of the U.S., critics of the product are starting to emerge.

These critics are saying the product's name and how it's being marketed (see our description of the package above) could lead consumers to believe they can drink, take the mints, and then pass a roadside alcohol breath test if stopped by a police officer for suspected driving while intoxicated.

The critics also say the product and its marketing positioning might promote alcohol abuse and smoking, especially among underage kids who when they discover the booze and tobacco breath-busting mints could feel its the solution to covering-up such behaviors as drinking and smoking from parents.

RNY Group, the marketers of "AntiPoleez," say the above concerns don't reflect the intention of the company or its marketing positioning for the new super-strong breath mint line, despite the product name and picture of the sexy policewoman on the package.

On its "AntiPoleez" website--which offers a brief background about the product and merchandises a number of different packaging options for the super-strong breath mints, including the 48-serving "Fiesta Pack" ($14.99) and the even larger 96-serving "Frat Pack" ($28.99)--the company has a constantly moving banner which reads: "Don't Drink and Drive," as a disclaimer.

The website's home page also has two boxes containing text, one which explains how the super-strong breath mints work, and the other explaining what the booze and cigarette breath-busting product is for. There is no direct mention on the website about using the mints to mask alcohol breath while driving.

The corporate story is that the president of Switzerland-based RNY Group needed a solution to a personal breath problem. That problem is he likes to drink alcohol. However, his girlfriend is totally against it. Therefore, he created the super-strong breath mints as the solution, allowing him to enjoy his drinks but mask the odor when he's around her. There's no mention about whether or not the scheme worked.

The "AntiPoleeze" brand mints contain a mixture of various sweeteners and ammonium chloride, which is perhaps the product's secret alcohol and tobacco breath-busting ingredient.

the company claims (and offers to give consumers their money back if they disagree) the super-strong breath mints don't just mask food, tobacco and alcohol breath odors, but eliminate them, based on the combination of ingredients contained in the breath mints.

The company's marketing message with the breath mints is clear: They will "eliminate" the smell of alcohol on a person's breath. The elimination of cigarette and food odors is secondary.

Further, the picture of the attractive blond dressed in a police uniform on the package--along with the name of the product itself--sends a clear message as to what the primary use of "AntiPoleeze" breath mints is: to eliminate that boozy-breath smell in general and also so the cops won't smell it on you if you get stopped.

As far as we know, and we did ask a lawyer friend, the company is doing nothing illegal in its marketing of the product. Unethical? Perhaps? Dangerous? Maybe? We leave that up to our readers to decide for yourselves. We do however believe from a marketing standpoint the company is dancing dangerously on the edge in terms of the breath mints positioning.

The name of the breath mints largest packaging offering, the "Frat Pack," also sends a clear signal to college students that they're part of the target market. Although we always thought having a slight alcohol-tainted breath was somewhat of a rite of passage for college students. By the way, we've heard the super-strong mints are beginning to gain a consumer base among students at a number of New York City colleges and Universities.

Even though "AntiPoleeze" currently has only limited distribution--something the company is trying to change by searching for distributors who will gain distribution in more convenience stores, supermarkets, drug stores and other retail venues--we think the controversy over the product and its marketing positioning also is just getting started.

We anticipate perhaps you will soon be hearing from the group Mothers Against Drunk Driving on the use of the mints to mask alcohol breath and driving issue, police departments and associations, conservative political groups and others, once the product starts to gain increased publicity and awareness.

Of course, the fact is consumers can always use a better breath mint in general. It's not just alcohol and tobacco breath that's a problem, is it? If the "AntiPoleeze" breath mints work as good as the makers and marketers say, they might just be missing a far bigger market, which are the hundreds of millions of Americans and others across the globe who just want to eliminate bad breath in general, and have yet to find a breath mint on the market that does so to the degree they desire.

Think about it. In marketing, sometimes positioning a product as too niche-oriented can lead to less rather than more sales. In the case of bad breath--and solutions to the problem--consumers from all social, economic and ethnic groups see it as a problem and spend lots of money every year trying to solve it.

In other words, consumers in mass are constantly looking for "the next new thing" in bad breath solutions. If "AntiPoleez" is that better solution, we think the marketer might want to consider broadening its market positioning for the product.

After all, when was the last time you heard anybody say they felt their breath was perfect?

Wine, Beer & Spirits Memo: Organic and Biodynamic Swiss Beer Vollmond is Only Brewed When There's A Full Moon

Appenzell, in North Eastern Switzerland, is a picture-perfect rural setting. There are rolling hills with steep mountains in the background. The region contains scores of neatly-tended small farms, along with postcard-perfect wooden Swiss chalets, each with its own well-manicured flower beds and vegetable gardens.

The town (or canton as the Swiss call it) is the smallest of all the cantons in the area. Important civic decisions aren't decided by a city council in Appenzell. Rather, if you can believe it, such matters are decided by an assembly of the canton's residents in the town square, who then vote on the issue at hand by just that: a show of hands. The vote wins the day.

The North-Eastern canton of Appenzell also has a recent history of gender discrimination and is very masculine in its approach to most things. For example, the canton's official seal is a huge coat of arms depicting a giant and ferocious black bear, sporting...a massive erection. Yes, that type of erection, we kid you not.

Further, the tiny Swiss canton of Appenzell was, until 1991, a bit behind the times in gender equality as well--to say the least. It was only in 1991 that the woman of Appenzell were allowed a vote during those town square majority takes-all hand raising votes.

With this bit of background about tiny, rural Appenzell, it shouldn't surprise those who have read thus far then to learn that one of the dominant enterprises in the male-dominated culture of the Swiss canton is beer (beir) making.

But, not just regular old beer making mind you. Rather, Appenzell is home to an artisanal beer called Vollmond, made by the Locher family brewery. Vollmond beer is produced using 100% organic hops, barley and yeast, along with pure spring water from a local natural mountain spring.

but that's not all...The organic and biodynamically-produced Vollmond beer (beir) also is only brewed when there is a FULL MOON. (Notice the dog barking at the moon on the beer's label at left.)

Yes, you read that last sentence correctly.

So, why brew Vollmond beer only when there's a full moon? And isn't that form of production difficult in terms of inventory control? You know, Meeting supply with demand and all that logistical stuff.

Well, listen to the explanation Karl Locher, the owner and president of the Locher family brewery which produces Vollman, has for the full moon-only brewing process, and you will soon learn the reasons why it's essential to the process:

"The moon is like a watch," Locher says. "It doesn't make time, it marks time, telling us when to do something, such as eat or sleep. It governs the tides and the way things grow. I cut my hair, for example, on a waxing full moon. There's simply a right time to so everything," entrepreneur and brew master Locher says.

See what we mean? Absolutely essential and integral to the biodynamic process:)

Among the unique aspects of the organic ingredients that go into the full moon only-brewed beer is the fact the barley that goes into Vollmond beer is grow at an altitude of nearly 5,300 feet. As a result, this "sky high" barley crop has no need for fungicides because the insects and other pests die at that altitude.

Appenzell and Locher's isn't famous just for its Vollmond beer. In fact, the tiny canton--and Locher's --is so famous for the premium quality beers it produces it has it's own appellation: Beers produced in the canton are called Appenzeller beer.

Locher family brewery also produces such beer varieties as Weizenbier (wheat beer), malty-tasting, oak-aged Holzfassbier, Schnuggebock, which is a unique beer infused with pine needles, a chestnut-flavored beer named Castegna, and last but far from least, the brewery's famous Hanfblute, which is a beer made from hemp.

Regarding the latter specialty beer, Karl Locher says it happens to be one of the brewery's current best selling specialty varieties, among the many it produces.

"Our customers love it for its soporific, relaxing, health-inducing qualities," he says with only a slight grin. "In fact," Lochner adds, "insomniacs absolutely crave it."

Least you think because the Locher family brewery is located in the smallest canon among lots of generally small canons in North-Eastern Switzerland, and as a result is merely a tiny mom and pop brewery, think again dear readers.

It's currently either the third (depending if you count Heineken and Carlsburg) or the fifth-largest brewery in Switzerland. Locher produced about 1.54 million gallons of its various varieties of beer last year.

Not only is the brewery one of the country's largest today, but it's believed to be the nation's oldest as well. Karl Locher's distant relatives bought the Appenzell canton-brewery in 1886. It's been operating continuously since then. He and his cousin Raphael are the fifth generation of the family to operate and make beer at the brewery.

Further, Karl Locher says he has evidence and documentation the brewery was in operation as far back as 1712, which would make it far and away the oldest established brewery in the nation.

The tiny canon of Appenzell, with its pristine farms, rolling hills and lush green pastures, is famous for artisanal foods as well as the fresh-brewed products made at its famous Locher brewery.

For example, dairy farming is one popular form of agriculture in the region. As a result, because of the abundant supply of fresh, high-quality milk available, Appenzell has become a famed center of artisanal cheese making.

Appenzeller cheese, which is produced in small batches by numerous entrepreneurs in the canton, is considered one of the best artisanal cheeses, not just in Switzerland, but throughout Europe and in the U.S. as well.

Additionally, because of the rural and agrarian nature of the region (including lots of organic, sustainable and biodynamic-based farming) numerous other foodstuffs are produced in Appenzeller and the general area by small, quality-minded artisanal food producers.

Unlike Karl Locher and his team at the brewery however, who only make Vollmond beer when there's a full moon, these other quality food producers prefer to work primarily during daylight hours.

Vollmond organic and full moon only-brewed beer is being marketed in the United Kingdom and other parts of Europe, as well as in Switzerland. We're told it should hit the United States soon, if it's not currently already in the states at limited retail outlets in limited quantities.

One of the beer's distributors in the UK is that country's division of U.S.-based (St. Augustine, Florida) Tree of Life, Inc., which has distribution facilities located throughout the United States. Vollmond beer is primarily being distributed by natural and health food distributors in Europe. Tree of Life is owned by the Dutch food company Royal Wessanen NV, which also distributes natural and specialty foods and beverages throughout Europe.

As they say in Appenzell: By the light, by the light...of the silvery moon...We will drink, we will swoon. And, if you drink too much "full moon only-brewed" Vollmond beer tonight...We won't see you tomorrow until at least noon.

Retail Marketing & Public Relations Memo: Was Tesco's Fresh & Easy Neigborhood Market 'Listening' to Our April 2 Memo?

NSFM Editors Note: Below is a Tesco Fresh & Easy Neighborhood Market corporate press release distributed by PR Newswire. It just landed in our email box a couple minutes ago (April 8, 2008)

We suggest you read the press release which we've reproduced in its entirerty below. Then read our piece, "Retail Marketing & Public Relations Memo: What Tesco's Fresh & Easy Neighborhood Market 'Should' Be Doing Now," which we wrote six days ago on April 2, 2008, and have reproduced directly below the Tesco Fresh & Easy corporate press release. First the Fresh & Easy press release below:

Fresh & Easy to Give Away Free 'Bag For Life' For Earth Day

Grocer offers free reusable bags on April 22nd

EL SEGUNDO, Calif., April 8, 2008 /PRNewswire/ -- In celebration of Earth Day, Fresh & Easy Neighborhood Market today announced its 61 stores will bag groceries with free reusable "bags for life" for customers on April 22nd. The company encourages customers to reuse these bags and lessen their impact on the environment.

(Photo: http://www.newscom.com/cgi-bin/prnh/20080408/AQTU198.)

Fresh & Easy offers its customers two different types of reusable bags, including a $2.50 canvas bag and a plastic reusable "bag for life," which retails for $.20. The "bag for life" is larger and more durable than standard grocery bag and, if damaged, Fresh & Easy will replace the bag for free, forever. These bags are made with recycled material and are 100% recyclable.

"We want to make it easier for our customers to make more environmentally friendly decisions," said Tim Mason, Fresh & Easy CEO. "If everyone in the neighborhood shops with reusable bags, we can really make a difference."

Fresh & Easy has made a considerable effort to be a good neighbor and steward of the environment. For example, the company only sells energy efficient light bulbs, uses LED lighting in external signs and freezer cases, offers plastic, aluminum and glass recycling, and provides preferred parking for hybrid vehicles.

More broadly, Fresh & Easy has committed to build LEED (Leadership in Energy and Environmental Design) certified buildings and voluntarily joined the California Climate Action Registry to disclose its greenhouse gas emissions. At its distribution center in Riverside the company invested $13 million in a solar roof installation, which is one of California's largest
at 500,000 sq. ft.

More information regarding Fresh & Easy Neighborhood Market can be
found at http://www.freshandeasy.com/.

###

Below is our April 2, 2008 piece. Please pay special attention to the text highlighted in green.

Retail Marketing & Public Relations Memo: What Tesco's Fresh & Easy Neighborhood Market 'Should' Be Doing Now.
By Natural~Specialty Foods Memo: April 2, 2008

Last week, Tesco Neighborhood Market chief marketing officer Simon Uwins posted in his corporate blog on the Fresh & Easy website that the small-format, convenience-oriented neighborhood grocery chain was taking a "pause" in its new store opening blitz, which has found Fresh & Easy opening 59 grocery stores in Southern California, Arizona and Nevada since November, 2007. [Read about the Fresh & Easy new store "pause" or "breather" here.]

Blogs such as Fresh & Easy Buzz were the first to report on Uwins' announcement, followed by a number of UK newspapers. The U.S. business press picked-up the story starting on Monday.

And yesterday and today numerous major newspapers and news services like the Associated Press the Los Angeles Times, San Francisco Chronicle and many others are running stories on the retailer's three month new store opening "pause." Blogs of all sorts are writing about the three month new store opening moratorium and store sales' underperformance issue as well.

Most of these news stories and features (and likely those to come the rest of this week) aren't positive for Tesco's Fresh & Easy Neighborhood Market retail venture in the USA. The new store opening "pause" is the story news peg in all of the pieces, along with reports like those we offered months ago that the 59 Fresh & Easy grocery markets opened to date are seriously underperforming in sales as compared to Tesco's internal sales targets.

Uwins and company should have better prepared for this fact, which any experienced U.S. marketer or PR professional should have known would happen. It can happen to anybody though.

The reason any professional with experience with the U.S. business press should have known how the news cycle would have played out is because of the nature of today's media. First, because the newspaper business in the U.S. is doing so poorly, newsroom budgets and staffing has been lean for the last five years or so. As a result, today's U.S. business and popular press is a reactive rather than investigative enterprise in the main.

Business reporters at America's newspapers--with some exceptions of course--tend to report and write stories based on press releases issued by corporations, or based often times on news reports they find in blogs and other alternative media sources.

For example, the business section reporters who are reporting on the Fresh & Easy "pause" yesterday and today didn't read it on Mr. Uwins' corporate blog--even though it was there for blogs like Fresh & Easy Buzz to find, which reported it last Saturday. Rather, they either discovered the news from that blog, or from the British newspapers which started reporting the story on Sunday and Monday.

As a result though, Mr. Uwins' corporate blog post--which we think was a good idea but not complete as we will explain shortly--offered a news peg for the U.S. business press to generate stories about Fresh & Easy, which hadn't been much in the news in the last month. Since the "news" is that Fresh & Easy is taking this new store opening breather, originally reported by the grocery chain's marketing chief, and that the stores have been underperforming for sometime, based on numerous reports, put the two together and you've got the news peg the publications' went with; and rightly so--it's what is news, especially in the absence of any follow-up prepared by Fresh & Easy.

Mr. Uwins and the Tesco Fresh & Easy Neighborhood Market team should have been prepared for this news cycle however--and even used it to the grocery chains marketing advantage. And, based on the responses from a Fresh & Easy Neighborhood Market spokesman to the reporters in many of these stories, there hasn't been much preparation. His quotes to date have been on the order of: 'Things are going well, the stores aren't underperforming, we don't know where this data (the sales estimates) is coming from.'

Not good. Too boilerplate. Non-responsive. Sounds too much like spin. It's not the spokesman's fault either. He can only go with what he's provided with. It's not an easy roll.

What Uwins and company should have done before publishing the "pause" news in the corporate blog (a communication we agree with) was to be ready for the media before the post was made.

What do we mean by ready?

We suggest Uwins and company should have had three stories (news pegs) prepared and locked-and-loaded for the post "pause" announcement. Remember, today's business press, and even many bloggers, are a reactive lot in most ways.

We would have prepared three "news pegs" in the following areas:

First, we would have had one concrete change to be implemented in the Fresh & Easy stores. For example, a common complaint (which happens to be true) about the stores is that they aren't localized and customized enough to the demographics and character of the neighborhoods they are located in. We would have used this post-pause announcement period to announce a major initiative in which Fresh & Easy plans to start in May bringing in a substantial number of more local food and grocery products into its stores. Neighborhood-oriented merchandising.

For example, bringing in more Southern California-produced fresh produce and specialty products for its stores in that region. There are tons of such goods produced and marketed in the region. Additionally, how about a similar initiative for the Arizona Fresh & Easy grocery stores? An announcement that the grocer will stock many more Southwestern-style food and grocery products, produced in Arizona and New Mexico, in its stores. There are lots of those available as well.

Lastly, for both regions, and Nevada, an announcement that the small-format "neighborhood" grocery chain would be increasing the amount and variety of ethnic foods it merchandises in all 59 stores--Hispanic, Asian and other ethnic foods--based on the specific demographics of a given neighborhood. It's needed.

Such an announcement, say yesterday, would have generated lots of press, which in many cases would mean positive stories along with the more negative new store opening "pause" pieces. In some cases, such an announcement (local foods are big news in the U.S. right now) would have cut-short the "pause" story news cycle for the new "local foods initiative" cycle of stories.

But, if we were in charge we wouldn't have stopped there in our pre-publishing of the "pause" strategy, for the post-pause news cycle period.

April 22, just two weeks away, is Earth Day. Numerous grocery retailers, manufacturers and marketers are planning major Earth Day green marketing or green retailing promotions and activities for the day which celebrates the earth, conservation and environmental stewardship.

We haven't heard of any plans for Earth Day from Tesco's Fresh & Easy.

Our second, "locked-and-loaded" post-pause corporate blog post news peg would have been tied to Earth Day. For example, why not an announcement from Fresh & Easy that it plans to give away thousands of free, reusable, canvass grocery tote bags at its 59 stores on Earth Day.

Further, that as part of this give-away promotion, it will give one dollar for every free tote bag it gives away to shoppers to local environmental groups and charities in its market areas.

Green or environmental news from retailers is big news right now.

Or, the grocery chain could even go bolder. It could follow in the footsteps of Whole Foods Market, Inc.--which beginning on April 22 (Earth Day) will no longer offer single-use, free plastic grocery bags in its 270-plus stores in the U.S., Canada and England.

Fresh & Easy could announce it's decided to offer only paper grocery bags produced from 100% post-consumer recycled paper, along with reusable grocery tote bags in its U.S. stores. In fact, such an announcement would be even more powerful if it was done in conjunction with the free reusable tote bag scheme suggested earlier.

Either way, just doing one or both, we guarantee there would be a significant batch of news stories generated on the announcement in the U.S. media. [Just Google or Yahoo Search Whole Foods plastic grocery bags to get a flavor for what we are suggesting in terms of news coverage. Also, just wait until a few days before Earth Day for the Whole Foods plastic bag self-ban stories to come flowing in.]

Just as we mentioned above about the "local foods initiative" story, one or both of these Earth Day news pegs would result in considerable positive news coverage, along with the more negative "pause" and store sales underperformance stories currently all over the pages of newspaper business sections and in online editions. Further, just as with the "local food" news peg--and even more so because both that announcement and the Earth day one would be timed to be released fairly shortly apart--the "pause" and sales underperformance story news cycle would be shortened in our analysis, experience and opinion.

Lastly, we would have one more bullet in our "pre-pause" corporate blog post/"post-pause" post-publication strategic media arsenal. We might or we might not use it right away depending on the results of our above news pegs, by the way.

This third and last strategy would be to have Fresh & Easy CEO Tim Mason and his new, soon to be number two man, U.S.-born Jeff Adams who currently is the CEO of Tesco's Tesco Lotus retail division in Thailand, issue a joint-statement saying the retailer recognizes there are some sales underperformance and other format, operations, marketing and merchandising problems with the Fresh & Easy stores, which is why as CEO Mr. Mason ordered the new store opening "pause." [Mason hasn't issued a statement or said a word on the "pause" to date. Not a good communications strategy. Further, believe it or not, the press loves it when a CEO comes out and walks-the-walk and takes charge. It hurts a little at first. But starts to feel real good soon after.]

Further, in the statement, we would have CEO Mason state that in part this is why Adams, a U.S. native, has joined the senior executive team. That he's coming in, from his highly successful run as CEO of Tesco-Lotus, to provide a fresh mind (one that was formed in the U.S.) and a new set of eyes as Fresh & Easy enters a new phase, after the amazing task of opening 59 of the small-format basic grocery and fresh foods markets in a mere 150 or so days.

Further, in the statement Adams would offer his two-cents worth, not to mention talking about how happy he is to be returning to the USA, land of his birth, to be involved with what might just be one of the most interesting grocery grocery retailing ventures in the U.S. in the last five decades, which it is. This isn't spin, it's all factual--and real.

There's an old saying in politics and political campaigning: 'If you have a problem...hang a lantern on it.' We all know the converse: most corporations and politicians (and others) get in trouble not because they address an issue or mistake head-on, but rather because they deny it or even attempt to cover it up. Like its often said about Richard Nixon's Watergate fiasco: 'It wasn't the third-rate burglary that lost Nixon the Presidency; it was the cover-up.'

We aren't suggesting Tesco is covering anything up about Fresh & Easy. Nor are we naive enough to think or suggest any corporation should fully disclose its operational difficulties (first it has to know them though) completely if it chooses not to.

What we are suggesting though is two-fold: First, as we write this, Tesco's Fresh & Easy appears to have absolutely no strategy for dealing with the mostly negative stories that are appearing mostly in the business sections of U.S. and UK newspapers this week. As we have outlined above, there exists a strategy for doing so; one that should have been in place already.

Second, Fresh & Easy has not just an image problem, but a real retail format, operations, marketing and merchandising one as well. But these aren't end of the world problems. They're "fixable," especially by one of the world's most innovative and successful retailers, which Tesco is. However, to fix these problems, those in charge first have to discover them; and do so despite personal pride or hubris. The suggestions we offer are part of hanging that lantern on these problems, as well as thinking strategically when it comes to marketing and media relations.

The story, of course, is still developing. Stay tuned. By the way, with some fast-moving and nimble work, Fresh & Easy could still launch a campaign like we describe above before the week is out.

###

NSFM Editor's Note: We think Fresh & Easy's Earth Day-themed resusable "bags for life" giveaway is a decent first step towrds the comprehensive program we outlined above in our April 2 piece--if it's followed up rapidly with more action.

Although the "freebie" Earth Day reusable carrier bags aren't the canvass type (or even the type we describe below which Fresh & Easy should sell in addition to the two types of reusable carrier bags it already sells), but rather the cheap, 20 cent bags--it's still something--and far better than no giveaway at all.

Further, the fact Fresh & Easy will replace these free "bags for life" (hence their name) as part of the promotion is fantastic. An excellent concept in our opinion. Why? It offers a good deal for consumers, as well as suggesting in a small way Fresh & Easy wants you to be our customer "for life." Lots of little things designed to create primary shoppers can add up to a "big thing"-- eventually gaining more primary shoppers.

[Note to Fresh & Easy: Supermarket chains all over the U.S.--and Wal-Mart and target too--are selling very attractive reusable carrier bags made out of a light cloth material for 99 cents or one dollar each. Check out Wal-Mart's current advertising circular, for example. There is a picture of its dollar reusable shopping bag in the promo flier

In terms of the type of plan and program we laid out for Fresh & Easy in our April 2 piece, there's much more for the retailer to do to make it an overall comprehensive plan. Good starts become better with the next step.

By the way, we aren't suggesting causality between our April 2, 2008 piece and tonight's (April 8) press release from Tesco's Fresh & Easy. We were trained in the scientific method far to well to think that "correlation equals causality."

Supply-Side Memo: Giant Nestle is on the Prowl for Natural, Nutritional, Health and Wellness Food Companies to Acquire

The world's largest food company, Nestle, will soon have $11 billion dollars of cash on hand from its planned sale of 25% of its 77% stake in the U.S. eye care company Alcon, to drug company Novartis. Nestle announced the sale today.

Further, not too long after that, Novartis will acquire the remaining 52% of Nestle's original 77% stake (23% of Alcon isn't owned by Nestle in other words) for a fixed price of $28 billion, making the total purchase price of Nestle's (77%) stake in the U.S. eye care company by Novaris a whopping $39 billion.

Even more interesting to those in the natural products industry is the fact Nestle plans on using a big chuck of those new billions to acquire companies in the natural, healthy, nutritional and wellness food and product's sectors, we've learned.

This acquisition strategy fits well with the food giant's strategic positioning and strategy to become the dominant global corporate force in natural and nutritional foods. In fact, Nestle could use as much as half of the $39 billion, nearly $20 billion, to acquire natural, nutritional and healthy product food companies, we've learned.

In fact, one of our sources who is close to Nestle and thus needs to remain anonymous, told us on Monday Nestle executives have already identified a number of natural and nutritional foods companies which they plan on making acquisition offers to.

Switzerland-based Nestle has positioned itself into the world's foremost nutritional, health and wellness foods company, with top brands in these categories across the board. But it is far from finished. The world's "most admired" food company, as named by Fortune magazine, wants to dominate the nutritional and health and wellness categories globally because it's in these sectors where the company's leaders believe the most future growth will com.

Nestle makes and markets far more than just nutritional, health and wellness category food products of course. [Take a look at the company's brand portfolio here.] However, nutrition, health and wellness are the giant global food and beverage companies fastest-growing categories and where its going in terms of its overall global positioning, as we mentioned above.

Overall, Nestle controls food, grocery and beverage brands, and markets products in the following categories: bottled water (number one globally); baby foods; dairy products (including Hispanic and Asian specialty products); breakfast cereals (including partnering with General Mills outside of North America); and beverages (Nescafe coffee, Libby's fruit juices, Nestea and more, as well as a complete line of Hispanic coffee products).

Other categories include: ice cream (including marketing the frozen treat in China and the Middle East, among other places in the world), chocolate and confectionery (everything from basic chocolate bars to gourmet treats), prepared foods (everything from packaged soups and pasta sauces, to shelf-stable dinner entrees and frozen foods, including numerous specialty, ethnic, gourmet and natural/organic brands), and pet foods and pet care (the Carnation brand and Ralston-Purina brand, along with others.

Lastly, is the nutrition, health and wellness category, which Nestle is growing the fastest of all the above sectors in its consumer packaged goods and beverage group, and plans to use a major portion of the $39 billion from the sale of its 77% stake in Alcon eye care to Novartis to grow even faster by acquiring numerous companies in these categories, which are all related.

Nestle also has a huge global foodservice operation called Nestle Professional, as well as owning 30% of the cosmetics firm L' Oreal.

Look to Nestle for multiple acquisitions of natural, nutritional and health and wellness-oriented food companies in the U.S. as well as globally before 2008 is over.

Despite the global economic slowdown, Nestle believes there's no better time than the present to make major acquisitions to continue growing its nutritional sector. That's the primary reason, along with wanting to pay down some debt, the comapny is selling its 77% stake in eye care company Alcon.

Nestle's acquisition search is going to shake up the scene

There hasn't been much acquisition activity in the natural, health and nutritional foods manufacturing and marketing sector in the last year. With billions in its acquisition bank, Nestle is going to stir things up quite a bit and shake up the currently static M&A scene.

For example, there a number of successful, large and middle-sized natural and nutritional foods companies in the U.S. that are looking to be acquired or merged as they're in need of additional capital in order to get to the next level.

However, since there hasn't been a "big foods guy" like Kraft, General Mills, Heinz or Nestle (all which have made major acquisitions in the sector in the past) out there for a couple years, there's a pent-up demand so to speak in the natural, health and nutrition industry for suitors, in our analysis. Nestle could be that suitor many of these companies are looking for. Stay tuned.

Reader Memo: Former Sam Walton Protege, Wal-Mart Executive and Renowed Wal-Mart Expert Michael Bergdahl Gives NSFM Props For Our 'Marketside' Work

Michael "Bird Dog" Bergdahl is the former corporate director of people for Wal-Mart, Inc. in Bentonville, Arkansas. Mr. Bergdahl, who was given the nickname "Bird Dog" by Sam Walton himself, worked side-by-side with the late Wal-Mart founder for years.

These days, Mike "Bird Dog" Bergdahl is a professional business consultant, international speaker, author and authority on Wal-Mart, Inc. and its competitive practices.

His books include, "What I learned from Sam Walton: How to Compete and Thrive in a Wal-Mart World," and, 'The 10 Rules of Sam Walton: Success Secrets for Remarkable Results."

Mr. Bergdahl speaks to audiences at corporations, business associations, non-profit organizations, universities, and in numerous other venues, throughout the world about Wal-Mart and its competitive process and culture. He also speaks about numerous other aspects of business, competition and human resources.

The "Bird Dog," as Sam Walton generally called him on a daily basis, has appreared on CNN, MSNBC, CNBC and numerous other broadcast media outlets, providing insight and expertise about Wal-Mart and its competitors.

Last week, we recieved a note from Michael Bergdahl, who we've never met--not before or since we received his note via email.

The former Wal-Mart executive apparently was doing some research about Wal-Mart's new Marketside small-format grocery store project, which we were one of the first publications to report on some months ago, and have followed up about with a number of analysis pieces--as well as breaking additional news about.

As we reported some months ago, the first four or five Marketside "Small Marts" are scheduled to open this summer in the Phoenix, Arizona Metropolitan region. [You can read some of our pieces about Wal-Mart's Marketside format here.]

Here is what Mr. Bergdahl had to say in his note to Natural~Specialty Foods Memo last week:

I needed information on "Marketside" and your site provided a tremendous education for me on the small mart battle!

Thanks!

Michael Bergdahl

International Speaker / Author / Wal-Mart Competition Authority 412-635-2638

www.michaelbergdahl.net

We coined the term "Small Mart" back in August, 2007 to describe Wal-Mart's small-format Marketside stores specifically and what we have called (and written extensively about) the small-format grocery store revolution currently going on in America generally.

Your welcome Michael. It's good to be read; and even better to be useful. Now...about that Wal-Mart smiley face... Never mind :)

Retail Memo: Wal-Mart, Target, Drug Chains Further Blur the Natural~Specialty Foods' Retail Class of Trade Lines

Stuffed into yesterday's Sunday newspaper editions in newspapers located throughout the U.S. were the weekly advertising circulars from major mass merchandisers Wal-Mart and Target, and national drug chains Walgreens and Longs.

The advertising circulars from these retailers were chalk-full of natural, specialty and premium food and grocery products offered at promotional prices, which demonstrates how these retailers are continuing to blur the class of trade distinctions between retail format sellers of products in these categories.

The nature of these advertising circulars (they are far from the first ones we've seen by the way) also further demonstrates what we've written about before in Natural~Specialty Foods Memo (NSFM), and observed continually over the last couple years, which is that these "alternative format" retailers continue to add a more extensive assortment and wider variety of natural, specialty and premium food and grocery brands and items to there store product mixes, along with figuring out promoting the category items is good for their business.

below is an overview of the natural, specialty and premium food and grocery products each of these four retailers are promoting in this week's advertising circulars, which were to distributed to millions of American consumers yesterday in their Sunday newspapers, as well as been direct mailed to many homes:

Wal-Mart

Wal-Mart's weekly advertising circular is one of the biggest (24 pages) we've seen the retailer distribute in years. Being "the peoples retailer" the brawny big box retailer from Bentonville's promotional circular for this week includes everything from basic grocery products like toiler paper, laundry detergent and Hamburger Helper, to television sets, patio furniture and kids toys.

The 24-page advertising peice is part of Wal-Mart's month-long April Earth Month campaign. You can read more about it here and here.

However, the retailer devotes at least one-fourth of its 24 page advertising circular (the most we have every seen it do) to natural, organic, sustainable "green" products--including food, groceries, beverages and even clothing. Here's a look:

The Wal-Mart weekly advertising flier devotes almost an entire page to promoting Clorox Co.'s new line of Green Works all-natural cleaning products, which include bathroom cleaners, toilet bowl cleaner, window cleaner and other cleaning items. The entire "green" cleaning products line, which Wal-Mart was the first U.S. retailer to merchandise and sell per an agreement with Clorox, is promotionally-priced at 2 for $5, which is about 25% off the items in the line's everyday prices.

Additionally, Wal-Mart is introducing its new line of Sam's Choice brand of Fair Trade, organic, premium whole bean coffee in this weeks advertising circular. The line, which has has six varieties, is USDA certified organic, Fair Trade certified and endorsed by the Rainforest Alliance environmental group.

The 10-12oz whole bean coffee items are being promoted at a price of $5.88 for a 10-12oz bag. The graphics on the package connote both sustainability and premium quality, with a background of a lush green coffee field, the certified organic and Fair Trade organization logos on the front of the package, and text which evokes premium quality.

In its current 24 page advertising flier, Wal-Mart also is promoting its own reusable shopping bags at $1 each, PUR brand home water filters as an alternative to bottled water (and reusable metal water bottles as well), and a limited addition offering (at 60 cents each) of "Earth Day," green and white labeled (instead of the traditional red and white) Campbell's condensed soup.

The "Earth Day" Campbell's soup is touted as "green" for two reasons: the cans are 100% recyclable and source reduction, do to the fact that condensed soup which must be mixed with water results in much smaller cans than ready-to-heat canned soup. As a result, far less tin is used per-can than is the case with ready-to-heat canned soups, which Campbell's also sells by the way.

There are additional "green" food and grocery items promoted in the advertising circular. Further, Wal-Mart devotes nearly an entire page in the thick promotional flier to "transitional organic cotton T-shirts for men, woman and boys and girls. Transitional organic cotton that comes from fields in which farmers are just beginning to transition from conventional production to organic methods.

In the ad circular Wal-Mart says its buying products produced with transitional cotton as a way to encourage further transformation by farmers to organic growing methods for their cotton production Further, it suggests in the promotion that by buying the "transitional organic cotton-produced" T-shirts, consumers can join in with Wal-Mart to encourage farmers to make the transition from tradition to organic cotton production.

Lastly, the Wal-Mart advertising circular devotes a half-page to two natural, new-age beverage lines: the Vitamin Water line (now owned by beverage giant Coca-Cola) at $1 a bottle, and a new line of cranberry juice and green tea drinks called Cranergy from cranberry juice-maker Ocean Spray. The Ocean Spray line looks like it comes from a small, natural beverage company.

Finally, Wal-Mart sets off all the natural, organic and sustainable products in its weekly promotional circular using its green "Save Money Live Better" logo, which has become its trade mark for "green" or sustainable marketing.

Target

This week's Target advertising promotional circular, which just happens to be 24 pages like Wal-Mart's, features a mix of its Archer Farms corporate brand natural, specialty and premium food and grocery products on the front of the circular, setting the tone for the promotional publication, which is health and wellness.

On the front cover, with full-sized color pictures of each item, Target is promoting a variety of Archer Farms' brand natural and premium products.

For example, there's Archer Farms' brand premium whole bean coffee in numerous varieties. The coffee is promotionally-priced at two 12oz packages for $11.00. The front page of the circular also features Archer Farms' all-natural, premium frozen pizza's at 2 for $7, Archer Farms' baked natural potato snack crisps priced at $1.88 per bag, Archer Farms' yogurt-drizzled all-natural Fruit & Oat snack bars (2 for $5), and a line of Archer Farms' brand premium, all natural ready-to-drink flavored green tea in flavors like Pomegranate.

This week Target also is promoting its entire line of Archer Farms' brand natural, organic and premium/specialty food and grocery products in all its stores for 15% off, which it flags in a circle on the advertising circular's front cover.

Inside the 24 page circular, Target also is promoting Vitamin Water at $1 each, as well as a number of other natural and specialty items. And, being a "peoples retailer" as well, albeit a more upscale one, the 24 page target circular also promotes everything from Nabisco Ritz Crackers and Coca-Cola, to computer printers, inexpensive upscale furniture, trendy Dyson brand vacuum cleaners, cell phones and more.

Perhaps most interesting in terms of natural and specialty products' retail channel blurring has been what drug chains like Walgreens, Longs and others have been doing recently. These retailers have been increasing the variety and quantity of natural, organic, specialty and premium food and grocery products (as well as natural cosmetics and garden supplies) in their stores for the past few years. It's been in just the last year though that we've seen these drug chains increase their offerings in these categories substantially, along with promoting the items regularly in their weekly advertising circulars.

Let's take a look at Long's advertising circular for this week, which came out yesterday in most of the U.S.:

Longs Drugs

Longs' 16 page advertising circular for this week has numerous natural, specialty and premium food, grocery and beverage items in it at promotional prices. For example, there's Starbuck's Frappucino iced coffee drinks at $5.49 per four-pack, Dannon Frusion Yogurt drinks at 2 for $3 and a number of promotionally-priced premium wines.

In the specialty and gourmet products' category, Longs' is promoted imported Nutella Hazelnut Spread, extra virgin olive oils, Ghirardelli premium dark chocolates, Bigelow, Stash and Lipton specialty teas, and a number of natural and organic grocery items and beverages under its own Walnut Grove label, which is a private label the drug chain created about two years ago--and has been expanded--devoted to natural, organic and specialty products.

Not to be left out among the natural and specialty foods category class of trade blurring party is mega-drug chain Walgreen's. While Longs' has long sold a strong selection of basic grocery products in its drug stores, and started adding natural and specialty foods in a small way nearly 10 years ago, Walgreen's came a bit later to the party--but that's changing.

Even though Walgreens' operates fairly small-format drug stores, the retailer has been increasing the quantity and variety of food and grocery products it stocks in its stores, including adding natural and specialty items, and promoting them in its weekly advertising circular on a near-weekly basis.

Let's take a look at Walgreens' weekly advertising circular for this week:

Walgreens

While not quite a extensive and broad-based in natural and specialty category items it's promoting in its circular this week compared to competitor Long's, Walgreen's still offers numerous items, especially for a mainline drug chain.

Among these natural, specialty and premium food, grocery and beverage items include: ZeroCalorie brand Vitamin-Enhanced Water, which looks much like the Vitamin Water brand which Coca-Cola acquired from Glaceau for billions last year. Walgreens' promotional price on the product is a buck-a-bottle, the same as Wal-Mart and Target are selling the "big brand" for this week

Walgreens' also gets into the premium coffee promotional game, advertising Starbucks premium whole bean and ground coffee at $7 per 12 oz package.

The national drug chain also is promoting Dreyer's most-premium variety of ice cream, Lindt and Ghirardelli premium quality milk and dark chocolate items, and a new line of its own Walgreeng brand premium nuts (cashews, pistachios, almonds) packaged in very upscale-looking stand-up-style packages.

The drug chain also has Blue Diamond brand's line of premium nuts in this weeks advertising circular, along with a number of natural nutritional supplement items and vitamins. There's also organic potting soil and garden mulch advertised in the promotional flier.

The natural~specialty channel blurring continues

As we've discussed in NSFM before, there's been a continual blurring in the natural, organic, specialty and premium foods categories in the U.S. over the last ten years, with the class of trade blurring trend being particularly strong in just the last three years.

This isn't to say mass merchandisers like Wal-Mart (in its discount stores not Supercenters) and target (its regular Target stores not SuperTarget which have full supermarkets in them like Wal-Mart Supercenters) and drug chains like Long's and Walgreens' are going to compete head-to-head with such natural and specialty foods grocers like Whole Foods Market, Safeway Lifestyle and the numerous regional chain's and multi-store independent supermarkets and natural foods stores in the U.S. that specialize in natural, specialty and premium food and beverage sales. That's not the case--or the issue.

Rather, the point is these "alternative format" retailers are doing two things: First, by expanding their store selection in the respective categories they are broadening the popularity of natural, organic, specialty and premium products. This is a good thing for the industries. They also are exerting more price competition in the categories by promoting the items, which results in upscale supermarkets and supernatural and natural foods retailers having to get more price competitive in their retail pricing strategies.

However, on the retail side of the ledger, it's a fact these alternative retail channels are taking away some sales from the above mentioned format grocers. After all, every jar of gourmet or imported jam, each bag of organic coffee, each quart of organic milk, and every bar of premium dark chocolate that's purchased by consumers at a mass merchandiser or drug chain, means these items aren't being purchased at Whole Foods, SuperValu's upscale Bristol Farms in Southern California, Wegmans in New York and scores of other specialty and natural products merchandising-oriented and positioned grocery chains located throughout the U.S.

The retail class of trade blurring in these respective categories is an interesting phenomenon to observe and analyze. It also should be of particular interest to natural and specialty food and grocery manufacturers and marketers. Many of these folks know little about what's going on in these alternative channels. Those manufacturer's and marketers who are participating and selling to many of these retailers are seeing benefits and added sales.

We suggest those marketers and sellers who aren't involved in selling to mass merchandisers, drug chains, online retailers and others, check it out. Done properly, selling to these channels can increase top line sales without hurting bottom-line profits considerably. It also can be a great way for national and regional sales managers to make bonus towards the end of the year. But that's a completely different story, right?