(Oct. 4) From Whole Foods Market to Kroger, the organic wave is spreading.

Last year the U.S. organic industry reached $10.8 billion in sales, a 20.4% increase from the year before. The produce category made up 42% of sales, according to the Organic Trade Association 2004 Manufacturer Survey.

The increase is largely because of increased public awareness and availability, says Dean Nelson, owner of Dean’s Natural Food Market, a two-store company in New Jersey. The store in Shrewsbury carries 60 feet of organic produce, and the store in Ocean Township has 48 feet.

It’s not just natural grocers or health food stores selling organic products. Supermarkets and other mass markets represent 44% of organic sales, according to the OTA survey. Natural and specialty retailers accounted for 47% of sales, leaving 9% from direct sales through farmers markets, co-ops, foodservice and exports.

Jason Hollinger, organic buyer for Four Seasons Produce Inc, Ephrata, Pa., says he has seen an increased commitment from chain stores to run organic produce in ads.

Other reasons for growth are the increased selection of organic produce and longer periods of availability, says Joe Sandro, organic director of FoodSource, Monterey, Calif.

HEALTH FACTOR

Organic products appeal to some shoppers because they have not been exposed to synthetic fertilizers or pest controls. Consumers are more conscious of what they’re putting in their bodies, says Bobby Sullivan, produce specialist at Earth Fare, based in Asheville, N.C. Each of the company’s 10 stores average 140 feet of organic produce.

“With organics there must be a paper trail,” Sullivan says. “There must be documentation for what’s been done with the produce.”

Younger generations are concerned about the chemical pesticides going into produce, and the processing that conventional products go through, says Ron Prom, merchandiser at J&J Distributing in St. Paul, Minn. He says older generations are looking to prevent disease. Although the U.S. Department of Agriculture makes no claims that organically produced food is safer or more nutritious than conventionally produced food, Prom says he speaks to consumers who have had cancer and eat organic now to maintain a healthy immune system.

It’s environmental health other consumers are concerned about, says Mayra Velazquez, director of sales and marketing at Organics Unlimited in San Diego. She says shoppers may choose organic products because it means fewer chemicals are entering the soil and water supplies.

Despite the hype, there has been little research comparing organic and conventional products for either short-term or long-term health benefits. However, last year a study from the University of California, Davis, reported some organic produce had more nutrients and antioxidants. Before you make any claims, check them with the USDA Agricultural Marketing Service of the National Organic Program at www.ams.usda.gov/nop.

TO SEGREGATE OR INTEGRATE

Retailers differ in their opinions on whether to separate organic and conventional produce. Hollinger of Four Seasons says there really is not a right answer.

“If you segregate, then the area needs to be taken care of with separate staffing and attention so it is not left on the back burner,” Hollinger says. “If you integrate, it will probably be well taken care of, but the signage must be right so it’s not intermingled.”

Because of the National Organic Program’s handling standards preventing comingling, more retailers are choosing segregation, which offers more than just this benefit. Consumers can more easily find the organic product they’re looking for if it is displayed separately, says Prom of J&J Distributing.

Segregating also can reduce profit loss for retailers, says Velazquez of Organics Unlimited. If produce is integrated, shoppers can more easily transfer the organic produce sticker to conventional items, thus paying less.

Frank McCarthy, vice president of marketing for Albert’s Organics in Vernon, N.J., recommends having a professionally managed organic section as a prominent part of the produce section. Educate your employees so they will be able to answer questions about organics and so they can properly handle the category.

Consistency is the key to merchandising organic products, says Sandro of FoodSource.

“You need to display organics in front of core customers,” he says. “You can’t carry them one week and not the other. You need a 52-week plan.”

HELP FROM THE SOURCE

Invite organic farmers to your store to talk with consumers about growing practices. Capers Community Market in Vancouver, British Columbia, a group of three stores, uses local farmers during corn season to demo their product and educate shoppers about the best time to eat it, says Bruce Ashley, regional produce manager.

The market also conducts the Living Naturally fair, an annual two-day event that raises money for charitable organizations. Capers invites organic farmers, food producers, vitamin and nutrition experts, musicians and nonprofit organizations to attend.

This year the fair was Sept. 11-12.

Ashley says at least 80% of Capers’ produce is organic and that the store carries an average of 120-125 organic items.

A simpler way to promote is to feature organic items in your circulars, especially if the price is comparable to conventional products.

Dorothy Lane Market in Dayton, Ohio, advertises organic items with conventional, devoting half of produce advertising space to organic produce, says Joe Manzano, director of produce. He says the three Dorothy Lane Markets average about one-third organic produce in their produce displays.

Sampling organic produce is important because there is a significant difference in flavor, compared to conventional produce, says Prom of J&J Distributing.

“Until they try it, they won’t know the taste difference,” says Prom. “Sometimes we’ll demo something when we’re in stores, and it’s very rare a customer walks away without buying.”

NEW DIRECTIONS

Offer consumers all-organic meal kits as they become available. Earthbound Farm leads this trend with its three salad kits.

But the newest trend in organic products may be in packaging, says Prom. He says items that used to only be available in bulk are now being packaged. “Organic is an exciting field now because it’s growing rapidly,” Prom says. “There are more products and growers and better distribution, quality and prices. The future looks good.”