Dive Brief:

• Natural Grocers by Vitamin Cottage unveiled its new Natural Grocers brand of private label products focused on organic ingredients and low-price messaging, according to a news release. The line encompasses pantry staples like bread, olive oil and preserves as well as frozen and fresh items.
• At launch, the new line includes 35 products across 10 categories. Next month, Natural Grocers will roll out further additions, bringing its total to 50 products across 15 categories. Natural Grocers says it intends to keep expanding the line, with organic coconut milk, fair-trade chocolate and grass-fed beef jerky set to hit shelves next year.
• Natural Grocers has partnered with How2Recycle to provide instructions on packaging that shows shoppers how to properly recycle each new store brand product.

Dive Insight:

Natural Grocers is stepping up its store brand rollout at a time when shoppers are more willing than ever to put these products in their carts. Recent Nielsen data shows private brand sales growing at three times the rate of national brands.

But Natural Grocers’ private label assortment lags behind Whole Foods — a close competitor — along with conventional grocers like Kroger and Albertsons, which have both introduced more natural and organic store brands in recent months. Kroger’s Simple Truth line encompasses more than 1,400 products and brings in more than $2 billion annually.

Natural Grocers’ organic standards and low-price messaging should appeal to a wide range of consumers while also helping the grocer stand out from the crowd. Premium offerings, Nielsen found, are driving private label growth right now, and as Natural Grocers points out in its news release, organic is fairly untapped across store brands.

The Lakewood, Colorado-based retailer has performed well of late. During this year’s third financial quarter, Natural Grocers posted a 9.5% increase in net sales and a 5.2% rise in comp-store sales. Store traffic was up 4% while average transaction grew by 1.1%.

This is due to several factors centered around slowing store growth and focusing on sales momentum, as co-president Kemper Isely noted during Natural Grocers’ most recent earnings call. The company, he said, has sharpened its marketing focus around low prices and its stringent product standards. It’s also promoting its {N}Power loyalty program savings program, with more than 600,000 members and between 20,000 and 25,000 signing up each month across the chain’s 148 stores.

Isely also noted that, contrary to popular belief, Natural Grocers has not seen any impact from Whole Foods stores under Amazon.

“We're not really seeing any significant effect on our sales because of their Prime initiatives,” he said.

The grocer’s private label push should improve its ability to battle Whole Foods and other competitors in the 19 states where it operates.