Posted by: Mahdi Ebrahimi | February 7, 2008

Organic produce drives growth at Vitamin Cottage

Consumer interest in fresh organic produce has proven to be a significant driving force for Vitamin Cottage Natural Grocers. The family-owned company, which began in 1955 as a door-to-door operation in Golden, CO, opened its 26th store Jan. 15 in Colorado Springs, CO. This latest addition expands the company’s regional visibility in Colorado and New Mexico.

“It’s a very well-prepared store,” said Vice President of Marketing Nancy Flynn. “It was a very productive opening. People have been asking for more produce.”

Vitamin Cottage stores are designed to be warm and friendly. Produce Coordinator Steve Carlton said that store size is kept smaller to create a more intimate atmosphere for patrons. “The stores are arranged in a way to make customers comfortable,” he said.

All produce found at Vitamin Cottage is organic, and produce is a real draw for customers. “It’s really a hallmark of Vitamin Cottage that [customers] can get fresh produce,” Ms. Flynn said. Mr. Carlton agreed, saying, “Customers know when they come to our stores, they don’t have to sort through produce.”

To illustrate the importance of produce to the operation, Ms. Flynn said that 25 of the 26 stores have produce departments. Colorado’s Happy Canyon store is the only one which doesn’t, and due to increasing customer demand for produce, the store will be moving to a new location this spring that will allow for a produce department.

Vitamin Cottage sells only U.S. No. 1 organic produce, and prices are fairly consistent among the individual stores. When commodities are in season, Mr. Carlton said that Vitamin Cottage works to source product locally with growers and distributors.

“That’s part of our uniqueness,” he said. “[Our stores’] produce managers are buying from approved sources. Prices are as good, if not better, than the big guys. We keep markup small.”

Vitamin Cottage devotes approximately 10 percent of its overall floor space to produce. Mr. Carlton said that this percentage allows the stores to minimize product loss and maximize quality. “We don’t have too much, and we don’t have too little,” he added.

Ms. Flynn said that the formula works well since organic produce does not hold as long as traditional produce.

Mr. Carlton carefully plans Vitamin Cottage produce ad campaigns around customer needs. Emphasis is placed on carrying the organic counterparts of traditional produce found in supermarkets. “The organic crowd tends to want the same items they have bought before,” he said.

As is reflected in everyday national trends, bananas are generally the top ring at the cash register, followed by apples. But shoppers can also find more unusual items such as tomatillos and star fruit.

As for the company’s organic shoppers, Mr. Carlton said that they can’t be profiled or pigeon-holed. “It varies depending upon the store,” he said, adding that one store in Denver caters to people of Russian and Israeli heritage. The Boulder, CO, store, on the other hand, has “more hardcore organic shoppers.”

“Some people are educated, and some are not,” Mr. Carlton said. “Some people are open to new ideas, while others are not. Our customer base is really wide-ranging.” He added that some may be shopping Vitamin Cottage to address health conditions. “They may be looking for an answer to a problem.”

Ms. Flynn said that interest in ethnic produce items continues to increase the company’s overall customer base.

In response to increasing customer awareness about the health benefits of fresh produce consumption, Mr. Carlton said Vitamin Cottage is exploring the feasibility of offering an organic cut fruit program.

He went on to say that the company is in the process of getting all its produce departments certified by QAI for U.S. Department of Agriculture organic standards. “It shows we’re serious,” Ms. Flynn said about the company’s commitment.

Mr. Carlton added that the process would take a few months once it has been initiated.

Three or four new stores will be opening in 2008, Ms. Flynn said, and Vitamin Cottage is already looking at expansion into yet another state this year. “We’re not putting in 100 stores in two years,” she noted. “[Expansion] really has to be calculated for us.”



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