Organic Foods Crowd onto Mainstream Grocery Shelves

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There was a time when organic food was a rarity, relegated to farmer's markets and niche groceries. But now you can find at least a small selection of organic products at most big grocery stores. Even Wal-Mart has started stocking its shelves with organic options.

RENEE MONTAGNE, host:

Over the summer, Wal-Mart has been stocking its shelves with far more organic products, and that move underscores the fact that organic offerings are no longer niche products but have become mainstream.

NPR's Wendy Kaufman reports.

WENDY KAUFMAN reporting:

Shoppers today can find organic milk, including private label brands, in conventional supermarkets: Costco, Wal-Mart, even gas station convenience stores.

Ms. LAURIE DEMERITT (President, Hartman Group): Organic milk right now is extremely hot among parents.

KAUFMAN: Laurie Demeritt is President of the Hartman Group, a consulting firm that works with companies, including Wal-Mart, on their organic products. She says consumers' health concerns are behind the increased demand for organics.

Ms. DEMERITT: It is no longer something that is being driven by environmental concerns. It's absolutely driven by a belief that it's going to keep them healthier, and thereby give them a higher quality of life for a longer period of time.

KAUFMAN: Americans now spend roughly $15 billion a year on organic food and beverages. That's just 2.5 percent of total food purchases. But the double-digit growth in the industry, year-over-year, has been extraordinary.

Beyond giving shoppers what they say they want, Wal-Mart hopes its increased organic offerings will give upscale consumers, and others who don't typically shop at Wal-Mart, a reason to visit its stores. It's trying to lure them in with ads, like this recent TV spot which shows a happy family and a very messy baby sitting around a table.

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Unidentified Woman: (In Wal-Mart Commercial) And Quinn(ph) laughed until milk came dangerously close to coming out of her nose. Talk about having a lot on your plate.

Introducing organics at the Wal-Mart price. What will you bring to the table?

KAUFMAN: The world's largest retailer prides itself on low prices, and some observers believe that Wal-Mart's market power may mean lower prices at other retailers. But it's too soon to tell.

Jim Speirs, a vice president at Whole Foods, the nation's leading natural food grocery chain, says his company is always looking at competitors' prices.

Mr. JIM SPEIRS (Whole Foods): So if there were a Wal-Mart next door or down the street that was selling Horizon Milk, you would come into Whole Foods Market and you would find that item very closely, if not matching, the price. We have markets in the country now where that's going on.

KAUFMAN: But make no mistake, he adds, Whole Foods is about more than just price, and it isn't about to change the kind of shopping experience it offers.

At a Seattle area Whole Foods store you'll find a vast array of organic and premium items: Washington-grown organic peaches, at $4.99 a pound, organic grapes - $3.99 a pound. But the regular price of organic milk, both private label and brand name, is less than in my neighborhood chain supermarket.

David Brown(ph) is not surprised.

Mr. DAVID BROWN (Tracks Natural Products): A lot of times stores will target certain commodities where they just know that they have to be competitive, and they are going to be loss leaders for the store. They're not going to make money on those products.

KAUFMAN: Brown's company, Spins(ph), tracks the sale and price of natural products.

With demand for organics growing so quickly, some providers of meat and dairy have had a hard time keeping up. But suppliers, including those who used to produce only conventional products, are ramping up organic production to meet the growing demand.

Wendy Kaufman, NPR News, Seattle.

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MONTAGNE: This is MORNING EDITION from NPR News. I'm Renee Montagne.

STEVE INSKEEP, host:

And I'm Steve Inskeep.

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