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In Massachusetts, the Patriot Ledger reports that Hannaford Bros. has expanded its organic SKU count so that it “now carries at least 1,400 organic products at each of its 159 New England stores, including 90 new organic items added this month.” The initiative comes as Hannaford has been certified as an organic retailer by Quality Assurance International, which describes itself to the paper as the “last link in the chain,” and one that has “certified nearly 260,000 organic products and more than 4,700 companies, including manufacturers, retailers and distributors.”

The paper notes that Hannaford is integrating its organic selections into its regular departments, using signs and labels to distinguish these items from their mainstream counterparts.

The Patriot Ledger reports that Hannaford’s moves illustrate the kind of positioning and posturing that is going on in the organics field – it allows the company to be more competitive with the likes of Whole Foods and Wild Oats (which are themselves seeking as merger that both companies believe will make them more competitive). And, “both Quincy-based Stop & Shop Supermarket Co. and West Bridgewater-based Shaw’s Supermarkets are exploring whether to seek certification as an organic retailer, representatives for the chains said. Both companies declined to say whether they have applied for third-party certification.”
KC's View:
In many ways, the gamesmanship going on in New England illustrates the point we’ve been making about the ill-advised decision by the US Federal Trade Commission (FTC) to oppose the Whole Foods acquisition of Wild Oats – all of these players are playing the same game, even if they are working at different ends of the field. It isn’t like Whole Foods and Hannaford aren’t competing for the same customer and the same business – they are, though from different directions.

The FTC opposition to the Whole Foods acquisition of Wild Oats, by the way, reportedly hinges on the fact that Whole Foods CEO John Mackey has always tried to differentiate his company (and Wild Oats, for that matter) from the mainstream supermarket business. Well, of course he has – that’s the nature of competition. If one is doing one’s job, you try to be different, act different, and tell everybody why and how you are different. But people can only eat so much food, and the government is making a mistake when it suggests, in essence, that Whole Foods and Hannaford aren’t competing with each other. (By the way, they’re both competing with every convenience store, fast food joint, quick service restaurant, four star bistro and any other place that sells food – for share of stomach. Any relevant analysis of the marketplace has to take this perspective.)

We think Hannaford is taking exactly the right approach, not just because it is embracing the growth-driven organics business, but because it is selling them side-by-side with traditional grocery items, offering consumers a choice on a case-by-case basis. This is, by the way, an approach not taken by Whole Foods…

One other note, on a different issue. We were taken by the timeliness of the final paragraph of the Patriot Ledger story:

The USDA certifies food to be organic if at least 95 percent of its ingredients are organic. Organic meat, eggs and dairy products come from animals that are given no antibiotics or growth hormones. Organic food is also produced without most conventional pesticides, bioengineering or synthetic fertilizers. All organic foods are natural foods, but natural foods cannot be labeled as "organic" without the USDA inspection and certification process.

Quite right. But in view of the discussions currently taking place in the US government about whether these standards should be relaxed, this paragraph made us wonder how many consumers even know that standards are this relaxed.

But more on this below in Your Views