Shop Talk

Show must go on for Organics…

This year’s All Things Organic conference and expo showcased necessity as the mother of invention.  Slumping sales and a weak economy have forced the industry to innovate just to hold onto customers.

In a 2009 briefing on the organic packaged food market, Euromonitor International said the largest threat to the future growth of organic products is price sensitivity among U.S. consumers in the current economic climate.

“In previous years, many consumers were willing to trade up to premium products,” the briefing said. “However, more consumers are looking to trade down, as they can no longer afford to even try some premium products, much less purchase them on a regular basis.”

The response has been for some companies to expand their product offerings, such as Clorox’s Green Works laundry detergent, hitting store shelves this summer, and Rain Organic Vodka’s new lavender flavor.

Others are expanding their reach as they try to drive sales. Safeway’s O Organics line, for example, is now in other grocery chains, such as Albertsons.

Still, people were all smiles, saying that while their sales were down, their companies had still experienced growth.  In their eyes, weathering the economic storm means that they’re just that much more prepared for the recovery.

Watch the audio slide show below:

Clorox’s recipe for the recession – stay home

When people hunker down, apparently they eat more salad.    It’s either that or they’re using Hidden Valley Ranch dressing on veggies or some other snack.  Despite it’s higher price – it sells at about a 40-50 percent premium to its rivals - the bottles are selling well in the downturn, Clorox CEO Don Knauss said on Thursday.  Yes, the company that brightens your whites also sells white dressing. 

Incidentally, we chatted with Knauss while he dined on a salad served with, you guessed it, Hidden Valley Ranch.   While some shoppers are laser-focused on saving, overall Americans still want what they want when they want it and they’re willing to pay.  The recession may have changed some mindsets, though.

“Leveraging your equity to sustain a lifestyle, I don’t think that’s coming back. I don’t think people are going to be ripping equity out of their home so they can get another plasma TV or a third car, I think that’s changed,” Knauss said.   Lucky for him, about 90 percent of his company’s products sell for under $8.

Knauss said Clorox is seeing “very good trends” on people buying little indulgences like Burt’s Bees and that dressing.

As the downturn continues, one thing people have cut back on is caring for the appearance of their cars.  Products such as Armor All tend to be more discretionary than cleaning or food products, Knauss told Reuters.  Still, it’s a business worth being in, since it carries some nice margins that boost the company’s average.

(Reuters photo)

Nothing sells like a little potty humor

In the news you may have missed category, a couple of household products makers are trying to grab your attention with a dose of elementary-school styled laughs.

First, Clorox is bringing some giggles to a blazing issue in its backyard.  Nearly 30 portable toilets have been set on fire in San Francisco according to Clorox, which is based in nearby Oakland, California.

“With more than an estimated $50,000 in property damage and potential fire hazards, this is no bathroom joke,” Clorox said.   So here’s what Clorox has planned.  It started the ”Operation Flush the Outhouse Arsonist” campaign to, as the company says, “help bring the potty pyromaniac to justice.”

The company, which makes its namesake toilet bowl cleaner and other products, took out an ad in today’s San Francisco Examiner.  In the ad, which features a picture of a porta-potty, Clorox offers a $5,000 reward for tips leading to the arrest of whomever is the potty pyromaniac.  The company is also giving away a year’s supply of toilet products to the person who gives the information.  Here’s the Examiner’s take on the news.

Meanwhile, Procter & Gamble wants to help people find a place to go when they need, well, a place to go.   P&G’s Charmin toilet paper brand on Tuesday showed off the “Sit Or Squat” web site and applications for the iPhone and Blackberry that helps users find clean public bathrooms.   In case you were wondering, yes, this is the first time a toilet paper brand partnered with a downloadable mobile application, according to P&G.  The SitOrSquat site lists more than 52,000 toilets in 10 countries.  Depending on the ratings of users, a toilet is called a ”sit” — clean enough to sit on, or a “squat” — well, you get the idea.

(Reuters photo of portable toilets lined up in Washington in January)

Check out Line: Store growth plans squashed

Check out fewer places to sip that latte or buy that power saw.

Late on Wednesday, Starbucks said it would slash U.S. coffee store openings through 2011 as it adjusts to slower U.S. growth.

The coffee giant blamed the domestic housing crisis for a significant quarter-over-quarter deterioration in U.S. customer traffic and said it saw early signs of a potential traffic slowdown in the United Kingdom, which may be related to economic problems there.

“Starbucks coffee and premium coffee experience has, over time, been an affordable luxury.  And at this time, it isn’t for some people,” Chief Executive Howard Schultz said.

Then on Thursday morning, Home Depot said it plans to close 15 underperforming stores and will curb future store openings. 

Home Depot said it will no longer pursue the opening of about 50 stores that had been in its new-store pipeline. New store spending will be cut by about $1 billion over the next three years, it said.

Announcements of store opening slowdowns or store closures are nothing new this year. Retailers’ growth plans, designed during a consumer spending boom, are being squashed by the consumer spending slowdown.