Ch. 12 Links in the Chain: Retailer to Consumer

The organics industry has brought great opportunity to food retailers as well as suppliers and finding a place compatible with the products being sold is a crucial part of the retailing mix. All natural products are filling grocery stores at an increasing rate and consumers are purchasing more and more of these products with the intent to protect themselves and their families from harmful pesticides and artificial ingredients.

Specialized health food stores and markets are no longer the only retailers taking advantage of this growing awareness. Now, supermarket chains and convenience stores (including college campus stores where they are in high demand) have jumped on the organic hay ride and are being rewarded by rising sales that are even leaving some conventional products in the dust. Many ingredients, and therefore brand products, are offering an organic format to their existing product lines.

Integrating organics into mainstream supermarkets has posed a bit of a challenge though. The question is whether or not they should have their own section or fixture within a store or whether they should be dispersed throughout the store with their conventional counterparts. Commonly, brands that sell primarily organic, like Amy’s Kitchen, will be placed in an organic section or in worst case (I’ve seen it before) stuck in the far corners of the frozen food isle with very little visibility. Andy Berliner, founder and president of Amy's Kitchen said in an article by Richard Turcsik of the Progressive Grocer, "We've come to the conclusion that if the store does a really nice job with fixtures and staffing and having it in a section of the store with a lot of foot traffic, then the store-within-a-store concept can work," and added, "But a lot of people don't do it that way, they kind of stick it in a corner and say, 'This is the natural food corner.' There's not much signage, and that doesn't work. It's kind of like a dust collector."

Now that many conventional brands are adding organic to their product mix they can be found collectively within the family of products. For example, Silk has original and organic soy milk and they can be found on the same shelf. Berliner, mentions the use of banners, awnings and self danglers to draw attention to these products in an integrated setting. This is a form of advertising that proves to be very affective in a retail setting. Amy’s soups are placed on the same shelves as such popular soup brands like Campbell’s and Progresso and they often use such forms of advertising to distinguish themselves from the rest. Amy’s is presently the #1 organic brand soup.

Both, the “store within a store” concept and full integration can be equally as successful if executed well. This entails actively conducting in-store consumer research and excellent management activities. As a customer who frequents the organic food section I know that they can certainly have their own charm but I feel strongly that in order to penetrate the entire market the organics must put on their best suits and venture into the big picture. There are the consumers that know before they set foot in the store that they are going to buy organic and then there are the majority who aren’t exactly sure what organic is or means for them and their family. These are the people that companies need to fight hard for, educate and develop strong relationships with. These people and their children will decide the future of the organic expansion and the companies who put organic on the front burner.

Ch. 12: Marketing Channels and Supply Chain Management

Meet Tom Mello, Manager of Organic Agriculture at Amy’s Kitchen! Tom works with growers and processors to ensure the quality of all the agriculture products needed to make Amy’s foods.


It all starts with fresh, organic ingredients at Amy’s Kitchen and organic sourcing is of top priority to them. Generally the organic supply chain is not a difficult road but it does require diligence on the part of the purchasing professionals and research and development departments. This is because they have to ensure that outside suppliers comply with organic regulations. For an ingredient to be deemed certified organic they have to meet very specific criteria that have been fine tuned over time. With the increasing popularity of organic foods many companies are adding organic to their product mix, increasing volume and strengthening the organic food supply chain.

In order to insure that regulations are being honored, strong relationships between suppliers and purchasers are necessary. Amy’s Kitchen takes pride in knowing most of the farmers, (many being family farms) that grow their ingredients, by name and have developed long and trusting relationships with them. Some of their growers have been with them since the start of their business. Over 50% of the vegetables are grown within 200 miles of Amy’s headquarters.

In this field of production, scheduling is less about meeting inventory demands, and more about meeting the demands of “mother nature”. Amy’s uses produce managers and tirelessly dedicates time to assure that harvesting is done according to the natural rhythm of nature. This brings about the best corn, broccoli and onions for the best pot pies, enchiladas, and veggie loaf. For example, broccoli has only a 2-day window during each harvest that it is at its peak flavor and quality. Harvesting organic broccoli within this strict timeline is one of the strategic moves taken very seriously by farmers and Amy’s Kitchen.

Rachel Berliner, founder of Amy’s Kitchen compares the distribution of their products with throwing a dinner party and though she can’t make a place setting for every Amy’s customer they do set the standards high. They have developed a reputation for having very rigid standards within the farming community. Amy’s has maintained solid relationships within the supply chain in order to consistently serve up the best that nature has to offer.

Ch. 10: Rate of Adoption

Amy’s products have grown popular greatly in part from word-of-mouth communication. Amy’s products feed a niche market, literally, and because of this compatibility they have been eagerly adopted. Though sales didn’t skyrocket from the start, despite discouraging impute from others, the Berliners continued to introduce new products. Consumers eventually caught on and have past on their experiences. Vegetarians, as well as people with special dietary needs, have always had a challenge finding a variety of prepared foods. Amy’s has given these people a convenience that they never had before with a selection large enough that it never gets boring. Because of this Amy’s is now the leading vegetarian, organic frozen food company. Below is a fan letter written to Amy’s that pretty much sums up why Amy’s has become so successful.

Dear Amy,
I have never written a fan letter to a company, but this one is warranted. Since discovering Amy's a number of years ago, our family of five has been gradually increasing our consumption and reliance on your meals. We bring it to work for lunch, it is a great dinner when I am too busy to cook, and we call it our "Amy's Diet" when we have put on a few pounds and need to cut back for a few days. My kids come home and say,"did you make dinner, or is it an Amy's night?" When I go to the supermarket, people in line tease me about all the different Amy's meals I have in my cart, and I tell them how wonderful a product it is, how healthy, delicious, and portion controlled. My son is in college and has an apartment there, and instead of having a full meal plan he opts for one meal at the cafeteria, and supplements with a lot of Amy's meals. I am a psychotherapist specializing in Eating Disorders, and recommend Amy's to many of my patients as good, delicious food that is convenient and quick, and low in calories. In fact, my husband and I recently had a trip to Hawaii, where we stayed in a timeshare with a microwave, and found Amy's at the grocery. We ate your food for breakfast and lunch, and then went out for dinner resulting not only in money saved, but not gaining weight on this vacation! Can you
tell how excited and passionate we are about your product? Thank you guys for a job well done, and products that enhance this family's life immeasurably. I don't know what we would do without you.
Sincerely,
Emily B

Ch. 10: Developing and Managing Products

When Amy’s started out 1987, selling frozen vegetarian potpies, the mass market wasn't quite ready for their products. The few frozen vegetarian products that existed where assumed by most to be similar in taste to cardboard and very often they were right. In the mid-'90s, as people were becoming more educated about nutrition, the organic food market suddenly began to take off. Amy’s sales had been growing steadily, about 20 percent per year, but in 1997, their sales grew 80 percent. They are definitely still in their growth stage and regularly introducing new products as they continue to cruise the upward sloping product life cycle curve. A complete list of Amy’s Kitchen’s products can be found here: http://www.amyskitchen.com/products/index.php

Ch. 16: Coupons and Contests

Amy’s offers coupons as a purchase incentive for potential buyers and as a gift for loyal fans who write to Amy’s to express their love for their products. Coupons are also used as prizes in promotional contests. Most recently they are offering $500 in Amy’s products for whoever can come up with an official Amy’s slogan (mentioned in an earlier post), which will most likely be in the form of coupons. If you write to Amy’s, pledge your love for their products and ask for coupons, they will most likely send you a few. Their coupons aren’t found regularly in supermarket fliers, though. Let’s just say, I’ve been looking and haven’t found one coupon at my disposal as of yet. It’s probably time I wrote in! Here is an image of one I saw someone selling on ebay (weird).

Ch. 16: Sales Promotion and Personal Selling

As I’ve mentioned in my previous posts where I discussed advertising and public relations, Amy’s Kitchen doesn’t involve itself in advertising. They don’t pay for ad space or commercials. They do however have a loyal customer following that has strengthened over Amy’s life span. Amy’s repeat customers make up the greater portion of their business and they do much of the product promotion for them. Numerous bloggers follow Amy’s activities and regularly share their stories and passion for Amy’s company. Amy’s is frequently referenced in blog posts or websites that are directed to people who are living with diets restrictions, for example http://theglutenfreefoodblog.blogspot.com/2009/06/amys-kitchen-gluten-free-meal-plan.html. Amy’s reach is far via the thousands of health related channels that are identifying consumers with their special diet products. They are also recognized in the sustainability awareness community for their environmentally friendly business practices. Sustainlane.com shows Amy’s product ratings and Food, Nutrition & Science: From the Lempert Report, acknowledges Amy’s in their sustainability series with and in-depth overview of their business practices. It can be found here: http://www.foodnutritionscience.com/index.cfm/do/monsanto.article/articleId/327.cfm Customers write in, email, and post letters raving about their favorite products. Vegetarians, the health conscious, and diet restricted all exist within a tight knit community that bases many food choices on personal research and experience and the communication that takes place via the web and word of mouth.

Tina Fey is CRAZY for Amy's Burritos!!!

*SATURDAY NIGHT LIVE with Tina Fey*