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    GROCERY: Specialty Foods: Don't get passed over

    Smart merchandising to more mainstream shoppers can turn kosher sections into a bang-up business in dry grocery.

    By D. Gail Fleenor

    Keeping kosher these days can mean a lot more than the observance of kashrut (Jewish dietary laws), especially in the supermarket. The certified soups, sauces, crackers, and other items that take up most current kosher sections in the dry grocery aisles are just a starting point for a more sophisticated program that can attract a customer base well beyond observant Jews.

    As a market boasting double-digit growth for the past 15 years, this center store segment's healthy sales can also offer a vital profit center for grocers that know how to optimize the potential. The key, experts say, is to balance the authenticity and respect that's a given in proper kosher merchandising with modern innovation in variety and promotion that should help build excitement.

    Many grocers today already recognize that consumers of kosher, whether they're shopping for religious reasons or because of quality or safety concerns, or dietary goals, tend to be valuable customers indeed.

    For example, kosher shoppers spend an average of 47 percent more annually than the typical non-kosher customer, with a much higher basket ring year-round, according to Cannondale Associates' ShopperGenetics Analysis 2006.

    The market is there. To capture a growing piece of it, grocers must make sure finding kosher items in the store isn't hard work for shoppers.

    "We try to segregate traditional kosher products so that they're easier for shoppers to find," says Wayne Bailey, v.p., merchandising and marketing at Sunbury, Pa.-based Weis Markets.

    Some grocers are going so far as to employ a store-within-a-store concept, where the local demographics justify the space and effort. Jacksonville, Fla.-based Winn-Dixie, for instance, will soon open its second store featuring this approach.

    "Positive customer response to our first implementation in Tamarac, Fla. drove the decision to use this concept in Jacksonville," says Jim Carrado, senior merchandising director at Winn-Dixie. "We're rolling it out as fast as we can."

    "We're giving our kosher customers a one-stop-shop option so that they don't have to go to multiple stores," adds specialty foods category manager Deborah Shapiro.

    Many mainstream products throughout the typical supermarket sport kosher certification. However, grouping traditional ethnic kosher products together boosts sales by giving kosher customers the chance to take all of the items in at once, says Rabbi Eliyahu Safran, senior rabbinic coordinator and v.p., communications and marketing for the Orthodox Union, based in New York.

    "Place a special focus on kosher, and let the customer know that you carry a broad kosher line," advises Menachem Lubinsky, president and c.e.o. of Brooklyn, N.Y.-based LUBICOM Marketing Consulting.

    Market outside the core

    "Research shows that only 50 percent of kosher customers are Jewish," notes Carrado. The remaining half, he says, includes Muslim shoppers, who consider kosher an alternative to halal, when the latter isn't available; customers in search of higher-quality products; vegetarians and vegans; the lactose-intolerant; and shoppers allergic to gluten.

    Shapiro says kosher is often viewed as having "almost a Good Housekeeping seal of approval." Winn-Dixie's kosher marketing isn't just for the core Jewish consumer, she adds. The chain carries about 800 kosher dry grocery items, and every store has a kosher section, ranging from four to 48 feet.

    "We've seen many more kosher items being purchased by mainstream consumers, because it's perceived as being healthier or safer because of the certification guidelines," says Weis Markets' Bailey. "About 70 of our stores carry ethnic kosher in dry grocery, with category sets ranging from four to 32 feet, depending on the demographics of the area surrounding each store."

    Despite this obvious appeal to mainstream customers, some operators still rely on cues from store-level demographics to dictate the decision on how far to go kosher.

    "We feel that kosher best practices include correctly defining demographic areas that have an actual need for kosher products, and then working to make it a true destination for this important niche customer," says Yakov Yarmove, corporate category manager, ethnic marketing and specialty foods at Minneapolis-based Supervalu. "Many of our stores have kosher grocery sets, with some stores boasting a complete aisle or two. We carry upwards of 2,500 kosher grocery products, depending upon the store's set."

    Supervalu kosher sections range from four to 200 feet, adds Yarmove.

    Given its prominence in and around the metro New York market, the Elizabeth, N.J.-based ShopRite banner has a comprehensive kosher marketing program, including twice-monthly kosher swing pages in the weekly circular, circulars for holidays, and in-store advertisements. "All of our stores have some kosher representation," says Wakefern Food Corp./ ShopRite spokeswoman Karen Meleta. "Our kosher sections range from four to 100 feet. About 30 of our stores have over 50 feet of kosher grocery."

    Based in Bethesda, Md., Balducci's creates separate kosher sections in its stores on a seasonal basis during Hanukkah or Passover.

    "The rest of the year, kosher products are typically located within their own product sections," says Al Romero, Balducci's merchant for grocery and candy. "Seasonally we display kosher products on a white tablecloth, to focus on the importance of cleanliness." About 7 percent to 10 percent of the chain's dry grocery is kosher.

    Most retailers, not surprisingly, agree that it's important to avoid merchandising items in or around kosher sections that might be offensive to customers' religious sensibilities. "All products in a kosher section should be kosher, and not merchandised adjacent to forbidden products such as pork, shellfish, shrimp, etc.," notes Dwaine Stevens, spokesman for Lakeland, Fla.-based Publix. "Retailers should respect Jewish dietary laws as they relate to merchandising during holiday and non-holiday times."

    Publix's kosher dry grocery sets range from four to 76 feet, says Stevens. His advice for keeping kosher interesting as well as authentic: "Retailers should provide variety within the kosher section. A good balance between 'traditional' kosher items such as matzo ball soup mixes and 'nontraditional' products like candy and snacks helps keep the section fresh and exciting for the customer."

    Latest and greatest

    Healthy growth in the variety of new kosher dry grocery items can also help keep the category vital for consumers.

    "We're bringing in more Israeli items," says Winn-Dixie's Shapiro. Israeli foods are important new additions to the category, agrees LUBICOM's Lubinsky. "The Jewish community is more affluent, looking for new and different products, and has strong links to Israel, which is producing exceptional products nowadays."

    New sauces, gourmet items, and snack foods are also important, the experts say.

    "The traditional kosher consumer base is small and declining, so the only way to drive meaningful growth is through expanding the consumer base," says David Rossi, v.p. of marketing for specialty food supplier R.A.B. Food Group in Secaucus, N.J. "One of the most important new items is our Manischewitz broth, being test-marketed in Chicago."

    Part of an all-natural kosher broth line, the item is shelved with mainstream broths like Swanson. "It's selling very well, and illustrates my point that many kosher products can break out of the niche if we get more creative and aggressive with how we merchandise them."


    How 'kosher certified' happens

    Many consumers are familiar with products that are kosher certified, and many know that those products must pass inspection to achieve this distinction. But what are the details? Here are the major steps in the process, from the Orthodox Union Web site (www.ou.org):

    --The food company chooses a kosher certification agency such as the Orthodox Union or Star-K. The food company provides the agency with a list of products to be certified and ingredients. "There are more than 900 certifying agencies in the world, with some operating worldwide and some local. In the mindset of consumers, kosher designation indicates a good-quality product," says Marty Stein, who handles sales and marketing for specialty foods distributor Tree of Life in Brooklyn, N.Y.

    --A rabbinic coordinator or account executive is assigned to answer questions and guide the company through the process.

    --A qualified rabbinic field representative visits the company’s plant to observe operations and determine the feasibility of certifying products. The rep tours the plant and files a written report. Some fees are charged.

    --The rabbinic coordinator reviews the report and application, advising the company whether the agency can grant certification. Sometimes system modifications are necessary for certification.

    --A contract is signed regarding requirements for certification, and a letter of certification is sent to the food company.

    --The food company can then submit new product labels with the agency's certifying symbol for approval.

    Items in the kosher aisle aren't the only ones with certification. Oreos, Smucker's jam, and Duncan Hines cake mixes are a few of the thousands of mainstream but kosher-certified dry grocery products available.

    Certified kosher store brands: An advantage?

    Can kosher certification and private label strategy mix well? According to some retailers and experts, they're a natural together.

    "We have found, and continue to find, that when private label products are Orthodox Union certified, sales go up," says Rabbi Eliyahu Safran, senior rabbinic coordinator and v.p., communications and marketing at the Orthodox Union (OU) in New York.

    "Kosher certification of our private label has helped increase awareness," says Deborah Shapiro, specialty foods category manager at Jacksonville, Fla.-based Winn-Dixie. "We weren't known as being No. 1 in kosher in the past, but now we're seen as being right up there."

    Winn-Dixie has over 1,000 kosher-certified private label products, which are listed on its Web site.

    "Our private label has certifications from many different agencies, depending upon where the manufacturer applied," notes Shapiro. "We have also partnered with Star-K for more certification agencies for our private label. We know that kosher customers shop the entire store and are finding that our private label gives a lot of value. We're working to broaden that."

    Elizabeth, N.J.-based ShopRite has more than 200 locations in New York, New Jersey, Connecticut, Pennsylvania, and Delaware -- five states that collectively are home to more kosher customers that any other region of the country.

    Over 1,000 of the company's private label products are OU certified, according to ShopRite/Wakefern spokeswoman Karen Meleta. "We also have our ShopRite Kosher line, which includes items such as chicken broth and hot dogs." The company's Web site features a kosher page with a directory of products.

    Some supermarkets that carry kosher-certified private label products:Bashas', Bi-Lo, BJ's Wholesale Club, Costco, Food Lion, Foodtown, Harris Teeter, HEB, Wegmans, IGA, Hannaford Supermarkets, Ingles Markets, Kroger, Loblaws, Meijer, Pathmark, Publix, Raley's, Sam's Club, Shaw's Supermarkets, ShopRite, Stater Bros. Market, Stew Leonard's, Supervalu/Albertsons, Target, Trader Joe's, Wal-Mart, Weis Markets,
    Whole Foods Market, Wild Oats Markets, and Winn-Dixie.

    List courtesy of the Orthodox Union

    Who keeps kosher?

    Who’s buying kosher, and why? The kosher customer base has changed over the years, to encompass consumers with dietary issues or quality concerns, as well as those who shop for religious reasons. Here are some kosher facts:

    Number of kosher consumers in the U.S.: 11 million

    Percentage of Americans who buy kosher products because they're kosher: 21 percent

    Reasons Americans gave in 2003 & 2005 for buying kosher:

    Health and safety: 55 percent

    Vegetarian diet: 38 percent

    Taste/flavor: 35 percent

    Product guidelines: 16 percent

    Halal diet: 16 percent

    Keep kosher: 8 percent

    Good products: 8 percent

    Number of year-round kosher Jewish consumers: 1.15 million

    Number of all consumers who say kosher is better: 6.4 million

    Dollar value of kosher market : $11.5 billion

    Annual growth (2005): 15 percent

    Average number of kosher products in U.S. supermarkets: 17,000

    Sources: Mintel Report (March 2003, May 2005), Jewish Population Study, United Jewish Communities (Sept. 2003), LUBICOM Kosher Analysis (Oct. 2005)

    By D. Gail Fleenor
    • About D. Gail Fleenor

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