What Costco’s exponential growth in organics says about the industry at-large
The face of the organics industry is changing—in short, it’s becoming increasingly more mainstream as consumers take an ever greater interest in the food they’re eating and how it travels from the farm to their plates. Organic food is no longer a fringe interest.
For a shining example, look no further than the largest organic retailer. While up until recently you wouldn’t be wrong for assuming a specialty retailer like Whole Foods Market would be the top retail outlet for organic produce and packaged goods. But this year it’s a retailer that specializes in both quality and bulk: Costco Wholesale.
According to the Seattle Times, Costco Wholesale chief financial officer Richard Galanti announced during an earnings call last week that the big box retail business exceeded $4 billion annually in its sales of organic products (a considerable increase from its $3 billion estimation the year before). This puts the retailer ahead of the previous industry leader Whole Foods Market, who last reported $3.6 billion in annual organics sales.
As the Seattle Times points out, $4 billion isn’t a huge amount in terms of total Costco Wholesale profits—the retailer pulls in overall sales of $114 billion per year, rendering its organics sales just a small fraction of its strategy.
But it’s a massive amount in terms of organics sales, which is valued at roughly $36 billion according to the Organic Trade Association. That means that more than 10 percent of all organics purchases right now are made at a Costco. More than $1 out of every $10 spent on organic produce and packaged goods is spent within in a Costco Wholesale warehouse.
RELATED TOPIC: The UK organics market saw 4 percent sales growth in 2014
What does this say about the industry on a larger scale right now? It says that organics are breaking out of their once niche market to become part of the larger and more mainstream conversation. Consumers are buying them on a larger scale, and as retailers like Costco Wholesale have responded to that by increasing their supply and inventory, the result has been that consumers no longer have to go out of their way to specialty organic-centric retailers when they can just incorporate organics into their regular shopping routines.
As a further result, early mainstream organics adopters are pulling ahead and picking up larger portions of a covetable market share. It stands to reason that more mainstream retailers will be increasing their organics offerings in the very near future.
Lidl's climate targets and carbon neutral ambition
Discount retailer Lidl has announced its aim to reduce CO2 emissions from its own operations.
By 2030, Lidl aims to reduce its operational emissions by 80% across all 32 countries it operates in.
Lidl lowering prices and carbon emissions
To achieve this, Lidl will focus on cutting carbon emissions across its retail stores and distribution centres in a number of ways:
- Solar panel installation on all new stores, where possible
- Improving overall energy efficiency through investment in the latest refrigeration and lighting technologies
- Lidl will operate 350 electric vehicle charging points at its stores by 2022
- The company will also oblige suppliers, representing 75 % of product-related scope 3 emissions, to commit to their own climate protection targets according to the methodology of the Science Based Targets initiative, by 2026
- Lidl will continue to support farmers in Lidl GB’s Grassroots programme, to conduct develop carbon reduction plans.
Lidl’s ambitious targets to make a significant contribution
Lidl has been building partnerships with other suppliers to boost sustainability, such as its initiative with Wyke Farms to produce a supermarket-first carbon neutral cheddar and Lidl’s commitment to ban peat from its compost range by 2022.
“With the UK hosting COP26 in November, this is a crucial year in the fight against climate change and we recognise our responsibility to reduce our emissions to help tackle this important issue”, said Christian Härtnagel, CEO at Lidl GB. “As part of the Schwarz Group, Lidl has a presence in 32 countries around the world and more than 310,000 employees globally. We’re therefore one of Europe’s largest retail businesses and through these ambitious targets we hope to make a significant contribution by not only rapidly decarbonising our own operations but also supporting our suppliers to do the same. As a discounter, it is ingrained in us to be constantly looking to maximise efficiency and reduce waste. Whether it’s how we heat and light our stores, or how we transport food from our suppliers to our warehouses, we are continuing to find ways to cut emissions across our business.”