In 2000, New Seasons Market started with one store in the Raleigh Hills area of Portland, OR, where the company is headquartered. Currently, there are 19 stores with a 20th planned to open soon in San Francisco.
OPN Connect spoke with Jeff Fairchild, produce director for New Seasons Market just days after Amazon Inc. announced its Prime Now customers in Seattle can shop for organic and local fresh produce from New Seasons and receive free delivery within two hours. Jeff shared some of his thoughts on Amazon and all things organic produce.
OPN Connect: Can you share more about Amazon Prime Now customers’ ability to get free two-hour delivery of organic products from New Seasons?
Jeff: We’ve been doing this successfully in our Portland stores for a couple of years now and it’s worked well. I think that the grocery shopping experience is an interesting phenomenon — grocery shopping used to be a chore for our parents. Now, it’s a gathering place and a central place for the community. Online shopping and delivery works for those who choose to get their food quickly without having to shop for it. It’s really all about having choices. Nevertheless, there will still be a need for gathering places and food centers are compelling places for gathering. We’ve had online shopping as far back as ten years ago and it works well for staples. People still like to see, smell, touch and select perishables like produce. Produce is a sensual experience. Amazon is great for staples like bananas, but maybe not so much for specialty and unusual produce items.
OPN Connect: What does this mean for New Seasons organic produce department? How will you be able to estimate demand and re-stock accordingly?
Jeff: This has never been more than five percent of our business so it’s not really that large of a challenge. It’s not like opening a new store where you don’t know what to carry, so it’s not a problem.
OPN Connect: What are your thoughts on the future types of growth for organics?
Jeff: I believe that we’re on a significantly decreased growth plane right now. I say that because of the vibe I’ve been getting from retailers, growers and others in the organic fresh produce community that the industry is struggling to keep up with past growth. A friend of mine in the salad category said that this is the first year they’ve seen flat growth. I know that in our stores it’s a lot more of a dogfight than it used to be.
In terms of the future, there are just so many questions surrounding politics, millennials, buying habits and economics. There are more unknowns than ever before. Growth depends on whether the category will continue to work for everyone. There are lots of positives but as a society we like change. Organic was that change when it was a niche market. What’s next? Is the average shopper in Iowa tuned in to organics and committed to it or has the organic produce category matured and will be replaced by that bright and shiny new thing?
OPN Connect: How can the organic produce industry be of better help to retailers to increase their organic sales?
Jeff: Part of what I see is the challenge of parity among chains. A store like New Seasons—which is 70 percent organic—can’t rely on having a balance of less expensive conventional produce to offset the higher cost for organic and specialty. Keeping or expanding organic produce as a loss leader and not having that impact your bottom line is less risky for the big chains. There is already strong demand. I’m not really sure what the right answer is.
OPN Connect: What are some the differences/opportunities and challenges you see in marketing and merchandising organics?
Jeff: I started in the business in a 90 percent organic format store, now we’re 70 percent organic and 30 percent conventional. How to get conventional customers to understand organics isn’t something I’ve had to learn. My problem is the reverse. The biggest challenge now is what once was an organic niche is now mainstream. That home-grown experience with the small local family produce farm created that niche. Now that larger producers and retailers have entered the market, we need to find ways to provide information and tell the organic story in a compelling way.
The opportunity might be that the next big shopping generation is mission driven. This may focus on their ability to make decisions based on company philosophy, size, farm size and the like. How does one present that to shoppers? If you’re sourcing on mission, how can you effectively sell the story if price equalizes between big and small? What’s left for me to be unique and still meet price demands on both grower and retailer sides? How will the big chains react?
OPN Connect: What are the hot organic items for 2017? What are the future trendsetters?
Jeff: There’s a push for consumers to get a restaurant-quality experience in a grocery store. I see the future of organic produce focused more on kits, easy-to-eat salad mixes and grab-and-go products. Grocery will look different, but I think the produce department will look the same. Next year, I foresee what’s hot in organic produce being tropical fruits and flavors like turmeric, ginger, lemongrass, passionfruit and mangosteen. Worldly consumers seek food from other cultures and exotic places they’d like to visit. How do we bring these foods into the market here in the U.S?
New Seasons Market is based in Portland, OR, and operates 20 stores in California, Washington and Oregon and five New Leaf Community Stores in Northern CA. New Seasons is the first Certified B Corp grocery chain.