Tag Archives: Whole Foods

True value is found in being true to your value proposition

As the author of Fresh & Easy Buzz says in a recent article about Tesco Neighborhood Market, “value is in across all grocery formats and it’s not just a fad.”

Many experts are calling the current economic climate a “perfect storm” of inflation, government debt, reduced consumer spending, weak dollar and intense foreign competition. It’s enough to make retailers reach for the red pen to start marking down prices faster than you can say, “Dollar General.”

Even the staunchest niche and aspirational retailers, including Whole Foods and Safeway, among others, are trying to find ways to fit the square peg of their specialty brands and products into the round hole of extreme price sensitivity.

Whole Foods has become known as “whole paycheck” because of the “high” prices consumers are willing to pay for the products and experience of the organic and natural foods retailer. But now the grocer is putting an extreme emphasis on its private labels, and its leadership has promised consumers it will find a way to make products less expensive.

But is this the right strategy? The right reaction?

Only time will tell. But there are certainly two retailers who will tell you that pairing another key brand attribute with low prices is a potentially profitable way to go: Target and Wal-Mart.

Wal-Mart has put up big numbers in the past year, going from $43 to $59. Target stock is down about 10 points from this time last year.

Target sort of pioneered “get more, pay less,” but as the economy has worsened, Wal-Mart has performed exceedingly well. That might be-and this is conjecture, of course-because Wal-Mart “owns” low prices, making it better suited to be recession-ready while injecting a bit of style as its business model allows.

Everyone else, from Whole Foods to Safeway to Tesco, would be playing catch-up to Wal-Mart’s EDLP proposition at this point.

Remember, Wal-Mart fared none too well when it tried to water down its EDLP concept with style and name-brands that strayed from its core value proposition. Today’s batch of niche and aspirational retailers would do well to remember to stay true to themselves.

That doesn’t mean they can’t graft a cost-savings aspect onto their existing strengths and points of differentiation, but it does mean they shouldn’t shift away from what makes them successful.

Furthermore, they had better be ready to do things operationally and within the supply chain to reduce costs as much as possible to fund any kinds of discounts they want to use to entice consumers. Because shoppers are happy to pay less, but they don’t want to sacrifice quality, and that money has to come from somewhere.

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The Mother Road yields a mother lode

On the ground in Tulsa less than three hours and already there are exciting food marketing revelations in this town along the Great American Highway. After a tasty and filling early dinner at Pei Wei, it was off to Wild Oats to see the latest products and brands of natural and organic food.

The decidely neighborhoodly feel of Wild Oats was complemented fairly naturally, if you will, by the 365 brand a la Whole Foods. It is amazing how seamlessly even private-label brands can assimilate with other stores following mergers and acquisitions.

We also encountered some really special brands. Some new. Some familiar. They all have something to teach us about a topic we touch on a few posts ago: It’s better to be first than better.

Exhibit A: Pet Food

This brand takes it to an all new level. It says, “It’s not about taste, it’s not about health, it’s not about all-natural ingredients. It’s about wellness, Mr. and Mrs. Cat Owner. A holistic approach to food your cat deserves.”

It’s an “everyday” brand of cat food, but one that promises the all-around, no-compromise lifestyle your cat expects. After all, you expect to be able to “indulge” routinely on a moment’s notice without having to sacrifice health or convenience.

Your feline friend should get the same treatment. Wellness cat food promises just that.

So for being the no-compromise brand of cat food for unpretentious, yet discerning kitties, Wellness wins the Get Your Kicks Award in the pet food category.

Exhibit B: Beverage

The market is flooded with tea of all varieties and brands nowadays, and teas promising medicinal and antioxidant effects are among the most popular.

So what is a brand of tea to do? Obviously “first” has been claimed long ago by Lipton, Nestea, Republic of Tea and HonestTea, among others.

The beauty of innovation is that one can be first by creating a category or sub-category, staking out a unique position and value proposition.

GT’s Organic Raw Kombucha Muli-Green tea has established a convenient bottled, refrigerated tea for the serious imbiber determined to replenish and rejuvenate everything from digestion to immune system to healthy skin and hair.

It’s all thanks to the power of a “handmade Chinese tea that is delicately cultured for 30 days. During this time, essential nutrients form like: Active Enzymes, Viable Probiotics, Amino Acids, Antioxidants and Polyphenols.”

Those attributes appeal to tea and health aficionadoes, along with a price of $3.99 for 16 ounces that separates the serious from the casual. GT’s Kombucha, you win for taking tea to a whole new level.

Exhibit C: Snack Food

This one is proof that you can teach an old dog new tricks. For a long time, Terra was the first and only exotic vegetable chip.

Recently, the latest iteration of the health food craze has spawned other vegetable chips, along with regional chip-makers, kettle-cooked chips and other “gourmet” offerings.

This new bag of snacks from Terra is called Stripes and Blues. Just in time for the dog days of summer, it’s a break from the brand’s traditional taro chips and other mainstays. These chips are also seasoned with sea salt, leveraging another popular item. What’s more, they have zero trans fat.

All this to say that the brand is always looking for brand-appropriate product line extensions to stay ahead of intruders into its market space.

Terra Stripes and Blues demonstrate that even if you’re first, you still have to stay fresh. So they’re the King of the Road in snacks.