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This article announces Target’s plans to raise its grocery business by integrating a new

organic natural store brand. Due to the growth in popularity of organic foods and

the fact that organic foods are growing at twice the rate of conventional groceries

Target’s Senior Director Amanda Irish says it plans to expand its organic food selection

by 25% by the year 2017. In the article it also mentions how stores in general are trying

to improve brand imaging as well as give the consumer what they want. The new line

will be called Simply Balanced and will introduce nearly 250 products over the next

several months. As well as product lines they have already, Archer Farms and Market

Pantry ; brands intended to challenge national name brands by offering cheaper

alternatives.  The overall goal is to make Target a place where someone can go and get

a multiple of needs without having to shop anywhere else to contend with its rivals like

Wal-mart. Target’s grocery and pet supply sales have gone up from 16% to 20% since

2009 and are expected to continue to rise. I selected this article as it relates to such

topics as Branding, Planning, as well as Social Responsibility, Social Responsibility by

providing a product which is to be considered a healthier option.

http://www.usatoday.com/story/money/business/2013/06/08/target-organic-grocery-brand/2400315/

 

Target plans an organic, natural grocery brand

7:07 p.m. EDT June 8, 2013

Big-box store tries to expand into emerging organic food market

(Photo: SAMUEL M. SIMPKINS GANNETT)

STORY HIGHLIGHTS

• Target will call organic line Simply Balanced, plans to boost organic food selection by 25% by 2017
• Organic foods are growing at twice the rate of conventional groceries
• Supermarkets have tiered store brands with a cheap and premium alternatives for shoppers

NEW YORK (AP) — Target is planning a new organic and natural store brand as it works to rev up its grocery business.

The big-box retailer said the new brand, called Simply Balanced, will start with drinks and snacks like corn chips on Sunday. The line is an outgrowth of similar products within its existing Archer Farms store brand, which is positioned as a premium alternative to national name brands.

Amanda Irish, senior director of Target’s store brands, said the new line is in response to the growing popularity of organic foods. Although they still account for less than 10% of overall grocery sales, she said organic foods are growing at twice the rate of conventional groceries.

As such, the Minneapolis-based company also plans to announce next week that it will boost its organic food selection by 25% by 2017.

The rollout also reflects a broader push by supermarkets and big-box retailers to improve the image of their store brands. Store brands usually carry fatter profit margins for retailers than name brands and help lure shoppers with exclusive offerings to fend off competition.

Supermarkets aren’t just focusing on cheaper prices when it comes to store brands, either. Many now have tiered store brands, with a line intended as a cheaper alternative, as well as more premium lines that compete with or seek to be better than those made by companies such as Kraft Foods and General Mills.

In addition to Archer Farms, for example, Target also offers a store brand called Market Pantry that is about 10 to 30% cheaper than national name brands.

The new Simply Balanced line, which will eventually include about 250 products over the next five months, will be priced more in line with Archer Farms and national brands.

About half the items in the line are organic and three-quarters of it is free of genetically modified ingredients. Target says it will eliminate all genetically modified ingredients from the line by the end of 2014.

Groceries tend to have lower profit margins for Target than other parts of its business. But the retailer has nevertheless been touting its groceries in recent years as a way to attract more shoppers and become a “one-stop” shopping destination.

Last year, groceries and pet supplies accounted for 20% of Target’s overall sales. That’s up from 16 % in 2009.