Organic not for everyone: B&G Foods

by Monica Watrous
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BOSTON – The center-of-store consumer has a different health agenda than perimeter shoppers, said David Wenner, president, chief executive officer and director of B&G Foods, Inc.

While the company said it seeks opportunities to be on-trend with natural and non-G.M.O. offerings, products with organic claims simply don’t resonate in dry grocery as its reduced-sodium products have.

“We have tried any number of organic products in any number of brands in the past, and it really has not resonated,” Mr. Wenner said March 13 during a presentation at RBC Capital Markets Consumer & Retail Conference in Boston. “But we are doing things like lowering sodium in a broad array of our products, taking high-fructose corn syrup out of products and replacing it with sugar or lowering the sweetness of the product altogether. … So we’re trying to make those claims that we think are relevant to dry grocery, be it lower sodium, be it less fat, those kind of claims.”

On the success of an Ortega taco seasoning with 40% less sodium than the regular product, B&G Foods has launched a Mrs. Dash no-sodium taco seasoning that Mr. Wenner said is “doing pretty well.”

B&G Foods couldn’t resist entering the market for non-G.M.O. products by introducing its Polaner All Fruit preserves line with a Non-G.M.O. Project verification.

“So, if you care about that, we now have something that appeals to somebody like that,” he said.

Fundamental shifts in the retail landscape have guided B&G Foods’ moves in innovation and acquisition. The company has focused heavily on building its snacks portfolio, with four big purchases over the past year and a half that have helped the company gain distribution in warehouse clubs and other channels.

“I think the consumer does feel better in general, but I really have a hard time getting past the fact that I think there are some fundamental shifts happening in what consumers do in terms of what they eat, in terms of how they eat it and where they buy it,” Mr. Wenner said. “So, to the extent you hitch your star just to the center of the store or supermarket business, you’re going to have a problem. And even mass merchants to some extent are having their issues in terms of growing same-store sales in that part of the store because I think consumers are snacking more. I think they are buying products at warehouse clubs more. They’re buying products at c-stores and dollar stores and all these other outlets more.”

Incremental shifts – not a huge jump – will drive demand away from traditional grocery shopping, he said.

“And I just don’t see that stopping, underlying the whole business,” Mr. Wenner said. “I don’t see that changing anytime soon.”
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