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Size matters: Bulk foods are going mainstream in US grocery stores

Kroger, Wegmans and Hy-Vee are among the retailers stocking up on loads of seeds, rice, beans and other products.203e68f00d0445943b1b1a4ec2db4d71


March 29, 2017

In an industry that runs on packaged convenience, self-service bins full of rice, seeds, beans and oats aren’t typically viewed as sources of growth. But thanks to increasing consumer interest in natural and organic products, cooking at home and experimenting with new ingredients, bulk bins are migrating from their traditional homes in natural grocery stores to mainstream retail.

Giant Eagle’s Market District now carries an assortment of spices, nuts, dried fruits and other ingredients, as well as a few attention grabbers, like a make-your-own trail mix station, bulk candy bins and various bulk olive oils. Midwest retailer Hy-Vee offers pasta, cereal, tea, coffee and dozens of other selections in bins positioned inside its stores’ dedicated natural and organic departments. Kroger also has bulked up in recent years, as have Wegmans, H-E-B and other grocers.

Diana Sheehan, director of retail insights with Kantar Retail, said more premium stores — including those owned by mainstream supermarkets — are turning to bulk as a way to help their stores stand out in an increasingly competitive environment.

“These stores are starting to embrace bulk,” Sheehan said. “And it’s less about a natural and organic offer and more about that premium, unique offer.”

The benefits of bulk

Bulk foods generate high margins for retailers and are fairly simple to execute, she said. These sections also tend to be destinations for loyal shoppers. The mere presence of bulk often signals that a store is committed to whole, unprocessed foods at a time when these characteristics are increasingly being sought by shoppers.

For consumers, bulk foods carry the promise of less waste with shoppers taking only what they need. It also offers price savings compared to packaged alternatives. A 2012 study by Portland State University in cooperation with the Bulk is Green Council, an industry trade group, found bulk saved shoppers an average of 89% over packaged varieties. Subsequent reports have tempered that number — Sprouts Farmers Market has estimated its bulk items are typically 15% to 20% cheaper than their packaged counterparts. Regardless of the number, the fact remains that buying in bulk is a money-saver.

Another advantage is that consumers can use it to try unique foods or ingredients that might be difficult to find or considerably more expensive in packaged varieties. Shoppers can find everything from amaranth flour to Himalayan salt and raw cacao nibs to different types of nut butters.

“Bulk is as much an experiential play as anything,” said Sheehan.

Brett Karminski, senior brand manager in the bulk division at Frontier Co-op, a manufacturer specializing in herbs, teas and spices, noted many consumers turned to bulk during the recession, and have stuck with it even as the economy has improved. He said customers recently have shown a high level of interest in herbal teas and cooking spices. Sales of Frontier’s bulk organic hibiscus flowers used to make tea have grown 71% over the past year, while finely ground Himalayan salt has surged 69%.

Credit: Jeff Wells

“We’re seeing a more educated spice consumer who is looking to experiment with new flavors and bulk items they may have learned about through social media and digital influencers,” Karminski told Food Dive in an email.

Todd Kluger, vice president of sales and marketing at Lundberg Family Farms, said he’s seen strong consumer interest in bulk rice and quinoa varieties sold by his company, including sushi rice, short-grain brown rice and tri-color quinoa.

“Being able to experiment with variety, being able to purchase as much or as little as they need, and looking for price to value are all drivers of interest from consumers in the bulk section,” he told Food Dive in an email.

Ward’s Supermarket in Gainesville, Fla., installed its bulk department twenty-five years ago. The section was comprised of sixteen bins, according to natural foods manager Russ Welker. Today, the retailer has 400 bins located in the center of the store, offering everything from roasted peanuts to pasta and hard-to-find flours and spices.

“Being able to experiment with variety, being able to purchase as much or as little as they need, and looking for price to value are all drivers of interest from consumers in the bulk section.”


Todd Kluger

Vice president of sales and marketing at Lundberg Farms

The top sellers in the department are the traditional bulk offerings — oats, raisins, beans and grains. But Welker said he’s also seeing interest in the trail mixes, cooking flours and spices. Oftentimes, customers will shop the stores’ fresh departments and then stop by the bulk section to pick up herbs and seasonings.

“There are some interesting things happening in the spice section,” Welker told Food Dive. “Indian spices are especially popular right now. People like to buy our produce or seafood and use that seasoning when they’re making meals.”

Welker said bulk not only has helped Ward’s grow sales, but added an aura of health to its aisles. 

“Part of the ‘natural’ image is having a bulk department,” he said.

Educating the consumer

Despite their ability to generate sales and healthy vibes within stores, bulk foods face significant barriers. Shoppers are often perplexed by the rows of bins, or simply overwhelmed by choice. Many don’t know what to do with amaranth flour or raw wheat germ, and often opt for packaged foods because they’re more convenient.

That’s why in-store education involving recipes, product definitions and simply how to bag and pay for bulk items is critical, said Sheehan.

“Educating [consumers] about why it works and how to execute that department are going to be critical to the department evolving,” she said.

Credit: Lucky's Market

At Lucky’s Market, a natural and organic chain that operates stores in eleven states, education is an integral part of its bulk department. Shoppers can find instructional signage — including a flowchart on how to use a store-provided bag versus a personal container — along with recipes for spice blends, homemade granola and other items.

Kristen Tetrick, Lucky’s director of marketing and community engagement, said bringing customers up to speed is crucial to helping the grocer sell the more than 300 bulk items on display in each of its stores. Space dedicated to bulk has steadily increased over time, she said, with stores introducing an average of one new item each month. Top sellers right now are bulk candies and chocolate.

“Over the years we have incorporated a lot of savory and sweet snacks in our bulk bins, such as yogurt pretzels, trail mixes, mixed nuts and sesame sticks,” Tetrick told Food Dive in an email.

In addition to a consumer learning curve, bulk’s unique delivery method can become a liability if not properly managed. Filling bags and jars with loose food can be messy, and stray piles of food can make a bulk department appear sloppy. Frontier's Karminski said design innovations in bulk bins have helped with flow control, but messes still happen. The setup also can invite some shoppers to snag a handful of food without paying.

“The challenge with bulk foods is that you need it in stores that are very well serviced from a customer personnel perspective. You want to make sure those items are well taken care of.”


Diana Sheehan

Director of retail insights with Kantar Retail

These challenges raise the potential for dollars lost in the department, which means it’s imperative retailers have at least one staff member on hand to monitor the department. Welker said he always has at least two people “to nurture" the department.

“The challenge with bulk foods is that you need it in stores that are very well serviced from a customer personnel perspective,” said Sheehan. “You want to make sure those items are well taken care of.”

Looking to the future, Sheehan said bulk foods will continue to expand their presence in premium supermarkets. She also predicted growth will increase with regional grocers, which tend to invest more in staffing and are looking to stand out from their large-scale competitors.

“I’m not sure yet if bulk is going to be the next big thing for Kroger, because they’re not staffed that way,” said Sheehan. “Wal-Mart, same thing. But for those strong regional players that have strong levels of personnel, I think you could see an evolution.”

Follow Jeff Wells on Twitter

Top image credit: Lucky's Market

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