Wednesday, April 6, 2016

Costco Can't Keep Up With Its Demand For Organic Food - This is What They Are Doing

Photo credit:  Wikimedia.org

Some good news today?


Costco's CEO Craig Jelinek announced at their annual shareholder meeting that not only are organic food sales doing great at the warehouse giant, but, in fact, the retailer cannot meet the demand they have and is falling short constantly.

What are they doing about this?

Well, in what I believe is a novelty move, Costco is going to start working with organic farmers to help them buy land and equipment to grow organics (Whole Foods lends money to farmers but mostly for new equipment and infrastructure)  



The idea? Simple: ensure they can get a larger supply of organic foods to meet their soaring demand that they have been unable to meet. At the moment, they have only partnered with one company and offered them a loan to expand, but are planning to help other existing organic farms expand too through loans and cooperation contracts.

Among other initiatives the giant has undertaken to ensure organic quality and quantity in their stores, is their purchase of cattle and move to contract owners of organic fields in Nebraska to raise the livestock to help meet Costco's organic ground beef needs.

Bringing lower cost organics to its customers is huge business for Costco, in fact it has become the number one supplier of organic food in the US!

It is also beneficial to the general public since, according to RealFoodRealDeals.com, organic foods sold in Costco are much less expansive than those sold at other retailers like Whole Foods, Trader Joes and Stop and Shop.

The problem of demand for organic food is actually not only a Costco problem, its an industry wide problem. According to the Seattle Times " While organic-food sales reached nearly 5 percent of total food sales last year, organic farmland makes up only about 1 percent of U.S. farm acreage." The reason? Land free and clear of pesticides and ready for organic farming is scarce and quite expensive (land used in conventional farming takes 3 years to 'detox' and be available for organic farming).  This is why Costco loaning money to farmers to buy organic ready land can help.

In any case, all of this seems like really good news to consumers who buy organic foods since, hopefully, as supply and demand increases, prices could potentially decrease. Not to mention, organic food becomes more easily available, affordable and friendly to the average consumer who might not have a whole lot of organic selling outlets nearby.

Maybe its time to get myself a Costco membership!

1 comment :

  1. Organic, pasture-raised, cage free...and we'll be at your door!

    ReplyDelete