December 1, 2017
The Kroger Co. said Thursday natural and organic food sales during the third quarter grew by double digits.
Cincinnati, Ohio-based Kroger (NYSE: KR), with $115 billion in 2016 sales, operates nearly 2,800 supermarkets and multi-department stores in 35 states and the District of Columbia under two dozen local banner names including Kroger, Harris Teeter, Ralphs, QFC, City Market, and Dillons.
The company sells natural and organic products under its private-label brands Simple Truth, which represents natural products, and Simple Truth Organic, which represents certified-organic products.
CEO Rodney McMullen told analysts during the earnings call that "Simple Truth continues to resonate in a big way with our customers with sales growing 19 percent in the third quarter."
Kroger's sales of natural and organic products generated $16 billion in 2016, about 14 percent of total sales.
Overall, Kroger reported third quarter net earnings of $397 million, or $0.44 per diluted share, beating estimates by 4 cents, on sales of $27.8 billion, up 4.5 percent, and exceeding analysts expectations by nearly $300 million.
In October, Kroger hosted its first natural foods expo, further pushing into a category where it describes the top trends as "holistic health, convenience and sustainability."
"Consumer insights show that customers are adopting a 360-degree approach to health and wellness, including greater consumption of natural foods to prevent illnesses," the company said in a statement. "A growing number of customers are seeking healthier on-the-go snacks and meals, and nutritional drinks are increasingly becoming meal replacements."
In September, Kroger rolled out the welcome mat for local and emerging brands with the launch of a new website inviting local suppliers to partner with its stores.
The company said sourcing locally supports its sustainability commitments, including its Zero Hunger | Zero Waste initiative launched last month. Recently, Kroger joined the Sustainable Packaging Coalition.