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By The Numbers

Target wants to take a bite out of the organic market

Shannon Mullen Jun 10, 2013

Whole Foods might be king of the organic grocery mountain for now, but Walmart has been gaining ground for years. And now Target wants a bigger share the lucrative organic market.

The Minneapolis-based big box retailer says it will increase its organic food offerings by 25 percent by end of fiscal year 2017. On June 9, Target will roll out a new store brand called Simply Balanced. Initial offerings include apple juice, tortilla chips and cage-free eggs.

The company declined to be interviewed but said in a statement: “We know many of our guests are increasingly seeking to add wholesome and organic food options to their wellness lifestyle.”

Target says most of its Simply Balanced products are made without genetically modified ingredients, artificial flavors, colors and preservatives, and about half of the new line will be organic.

The economic downturn didn’t put much of a damper on the growth of the country’s organic industry. The USDA says last year, organic sales accounted for more than 3.5 percent of total U.S. food sales. American consumers spend around $30 billion on organic products every year, according to the Organic Trade Association (OTA) and 81 percent of U.S. families buy organic “at least sometimes.”

Produce tops their shopping lists, followed by organic breads and packaged foods. Target, Walmart and Costco are all angling for a better position in the healthy foods market.

With the biggest reach of the bunch, Walmart has pledged to source more of its fruits and vegetables from local farms, including organic crops, and to sell it at a lower premium than competitors. The nation’s largest grocer also just announced a new 100 percent money-back guarantee on the freshness of its produce, a commitment that could squeeze smaller rivals like Safeway.

As Target grows its array of organic products, it could gain an edge over Walmart because shoppers who seek organic skew into the higher income brackets. The median income of Target’s customers? $64,000. Wamart’s ranges from $30,000 to $60,000.

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