November 2, 2015

Kosher Supermarkets Turn into Whole Foods as Well

In one of my most recent forays into the growing network of kosher supermarkets, I noticed an increasing number of natural and organic products. In fact, I found many of the same products that I one would typically find at a Whole Foods store. This trend makes a lot of sense for a variety of reasons. First, many more people are buying the natural and organic products as part of a greater awareness about eating healthy. Second, the supermarkets are projecting the idea that irrespective of the food, if it is kosher it can be found in the store, thus eliminating the need for shopping in multiple stores. Third, the mark-up on some of these foods is better than from many ordinary items. It seems that general supermarkets are also taking note of the trend and are increasingly catering to this consumer group. Supermarket giant Kroger recently said that natural and organic accounts for a whopping $11 billion in sales. By comparison, the coveted Whole Foods Market had a total of $14 billion in sales in its last fiscal year, while Costco said that its annual sales of just organic products are about $4 billion.

Despite observing the terns in several of the kosher stores, I noticed that in most cases, it is merely an incidental. In other words, there is little merchandising and placement on shelves is often relegated to a “back-seat” positioning. I believe that we are witnessing the advent of a serious and lucrative trend which requires serious strategic planning. While the kosher community may never reach the sales level of a Kroger or Costco, I have no doubt that it is an up and coming profit center.