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Indiana Grocers Adapt To Growing Demand For Local, Organic Food

According to the Organic Trade Association, the amount of money Americans spend on organic food has more than doubled in the past decade, to more than $43 billion in 2015.

Hoosier grocers are responding to a demand for organic and local food by opening more stores and offering more products. It's a good thing for consumers, but it's a gamble for some stores as they work to differentiate themselves from their competition and earn consumer business.

Grocers Look To Customers To Adapt To Changing Demands

Marissa Foosaner shops at Bloomingfoods for most of her groceries. She says she likes the personalized feel of a co-op.

"I think Bloomingfoods is special because it has so many organic products and it's a more intimate store," Foosaner says. "Kroger and all the other ones are so big that it's hard to find everything. Everyone here is so nice and helpful."

Bloomingfoods also recognizes the importance of its relationship with customers.

"Everybody that contacts me gets an answer or a phone call or a discussion because we care," says Bloomingfoods General Manager Tony Alongi. "And I've had people contact me: 'Please stop selling this product, please bring in this product, I don't like this policy.' Everybody gets kinda personal attention."

But now other stores are starting to recogniScreen Shot 2017-02-24 at 2.39.57 PMze the value of specialty products, and they're beginning to implement them as well.

Kroger, for example, is beginning to move toward a more specialized approach with its products. The chain has 8.5 million customers everyday across the country, but each person's voice is still important.

"I would say more and more is based on customer feedback," says Kroger's manager of public affairs Eric Halvorson. "We try to be open and if somebody wants to come in and say, 'We'd really like to see that,' we'll listen. So I think it's amazing how influential a few phone calls can be."

Along with more organic produce, Kroger stores have begun to carry more specialized products, just like Bloomingfoods has for years. That includes everything from coffee beans to organic soaps that are made in Indiana.

This reflects the growing need for organic products: a demand that grows 4 to 8 percent each year.

Shopping Local: Increased Demand For "Indiana Grown"

Along with a demand for organic products comes a demand for local products. Producers and retailers have even begun to affix "Indiana Grown" labels to their products to make it easier for customers to identify things that are local.

Ted McKinney, the director of the Indiana State Department Of Agriculture, says the need for local products is on the rise.

"There is a desire on the part of many consumers to support that local farmer in his or her products. And I tell ya, it's heartwarming to see that."

"There is a desire on the part of many consumers to support that local farmer in his or her products," McKinney said. "And I tell ya, it's heartwarming to see that."

Workers are finishing up construction on a Fresh Thyme store, opening in Bloomington next month. The store will specialize in local, organic food.

Then, a 365 by Whole Foods will open this fall within walking distance of Bloomingfoods' flagship store.

It's a familiar situation for Bloomingfoods. Lucky's, another specialized grocer that opened in Bloomington in 2015, siphoned a lot of business away from Bloomingfoods – forcing the co-op to close the doors at its Elm Heights location the following Spring.

Bloomingfoods execs are taking a more aggressive stance this time. A group flew to Portland recently to see what they're up against when Whole Foods opens.

"So we wanted to get a jump on what the store was, what it's gonna be, what might we need to do to compete better against that?" Alongi says. "So no, it's not something we can wait. I think in fairness if you look at what happened when Lucky's opened in town, we waited. And we're not in a position to do that anymore."

The future, McKinney says, is about diversification. He thinks there's room for everyone because he doesn't anticipate demand slowing down.

"The whole movement toward niche markets continues to grow nationwide and the same goes for here in Indiana," he says.

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