Kroger's organic food line hits $1B in sales

Kroger's (NYSE:KR) exclusive brand of organic products has reached $1 billion in annual sales. The Simple Truth natural and organic foods line, which launched two years ago, has seen consistent sales growth amidst increasing consumer demand.

The company's brand is touted as being "Free From 101," meaning 101 artificial ingredients and preservatives. The line carries more than 35,000 products and one-sixth of those items were added in the past year, reported Bloomberg Businessweek.

"This is one area where the customer has clearly said that we're interested in," Michael Ellis, president of Kroger, told Bloomberg Businessweek. "We're really just answering the customer's call for more and better."

Kroger won't disclose the actual total sales for organic products, but the overall category has already passed the $1 billion mark for the company.

The rise in consumer demand for natural and organic brands has helped to lower the prices on a range of products. It's also opened the door for big box and traditional grocers to get into the game. In fact, Kroger executives called it a "blurring of groceries and natural foods."

What was once thought of as trendy and expensive, and mostly available at specialty retailers such as Whole Foods (NASDAQ:WFM), is now becoming the norm. In fact, in order to compete, Whole Foods recently launched its first national brand campaign to highlight its quality standards, healthy offerings and its milestones as a pioneer in the natural and organic food industry. The ads are part of a larger campaign as the retailer tries to change its image—often given the nickname "Whole Paycheck"—and starts offering more competitive pricing as it vies to compete with the many larger, cheaper retailers now offering health foods.

Simple Truth's $1 billion in annual sales accounts for about 1 percent of Kroger's annual revenue. Kroger has seen success with all of its private brands, which now account for 25 percent of the company's overall sales.

For more:
-See this Bloomberg Businessweek article

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