GMA Show: Sam's Club Grows Organically

Sam's Club is looking to increase its assortment of organic products over the next several months in response to the category's increasing popularity, says Michael Heintzman, the chain's senior vice president for dry grocery and consumables. Speaking at the Grocery Manufacturers Association's Merchandising, Sales and Marketing Conference, Heintzman admitted that Sam's Club has been slow to take advantage of the growth in organic products. "We're playing catch-up really hard. It's key for us," he said. "Our members are voting for [organics products] with their dollar," Heintzman said. In a recent week, the average receipt total for baskets containing organic items was $148, versus $90 for baskets without organics, he noted. Sam's Club currently carries about 55 organic SKUs in mainstream categories such as pasta and snacks, and is looking to boost that count to 100 by Feb. 1, 2006. The remarks came during a wide-ranging presentation that touched on everything from the chain's relationship to corporate sibling Wal-Mart to its embrace of environmentally sound business practices. Heintzman explained that "everything we do at Sam's Club is to benefit small business," and discussed each of the nine business segments on which the chain focuses. (See "Marketing at Sam's Club" for more on that strategy.) Heintzman also emphasized that packaging for Sam's Club should adhere to the "five-by-five" rule: "From five feet away, in five seconds, can I immediately identify what the item is and what the value is?" In other presentations at the conference: Retailer demand for customized packaging continues to grow, according to a study from A.T. Kearney. The consulting company surveyed high-level executives at large, mid-size and small CPG manufacturers on the topic of customization. At least one respondent predicted that special packaging would account for 45% of total sales by 2010. A study from Accenture, ACNielsen, GMA and McMillan Doolittle asserts that reports of the center store's death have been greatly exaggerated. According to the study, there were 189 center-store shopping trips per household in 2004 -- the same amount as in 2001. The study also finds that the decline experienced by the supermarket channel has been more than offset by growth of center store categories in other channels. In fact, there has been a 4% increase in center-store sales across all channels since 2001. The GMA's Merchandising, Sales and Marketing Conference was held Oct. 10-12 in Colorado Springs, CO.

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