OPS EXCLUSIVE: Albertsons' Jim Donald Touts Organics & the Retail Industry

Jim Donald, Albertsons Companies' Co-Chairman and one of most admired CEOs in the world, told an Organic Produce Summit (OPS) on-line audience that sales of organics are “screaming”, with the spike in at-home cooking pumping up a trend that was long in the making and will only continue to grow in the coming years.

As part of his discussion with Kevin Coupe of Morning NewsBeat, Donald highlighted the very essential role the supermarket industry is playing during these challenging times, gave tips as to how top executives can succeed, and commented on some of the keys to his own success.

With huge organics sale gains top of mind during the ongoing pandemic, Donald credited those on the front lines of both the retail and supply community with keeping the supply chain moving.  He also applauded the grower-shipper community for their commitment to provide fresh product on a steady basis during the pandemic.

Donald said the current retail landscape is showing the strength of brick and mortar locations as well as the growing direct to consumer marketplace. “Brick and mortar remain as strong as ever, and we have shown that it can co-exist with e-commerce," Donald said. 

Donald attributed on-going and consistent communication as a key to how retailers are faring during these uncertain times. “Communication is the main ingredient in leading during a crisis and it is important to hear the leader’s voice every day," he said. “Has communication improved during the pandemic? It has.”

Donald drew on his past experiences leading Starbucks and Walmart in understanding how retailers must react to consumer needs.

“You’ve got to remember that no matter how big you get, no matter how many stores you have, you have to pretend you have one store, one employee and one customer and treat them as if they are the only one,” Donald said. 

“Communication is the main ingredient in leading during a crisis and it is important to hear the leader’s voice every day." -Jim Donald

The same theory, he said, applies to each SKU in the produce department.  When selling organic produce, you should treat each produce item as if it is special and take extra care to merchandise it properly and if you do that “great things will happen.”

Donald said organics at the 22 banners under the Albertsons' umbrella have seen major increases this year and he expects the trend to continue. “Anything green and organic is blowing out,” noting that organics continue to outpace its conventional counterpart in sales growth. 

Using a variety of merchandising techniques at store level, including both co-mingling and separate sections, seems to work best in driving sales Donald said. It takes a combination of both to get the job done and to support the category correctly. He also advocated the use of GS1 labels to make sure the product is being rung up correctly at the check stand and the organic data reflects that.

Speaking about his own success as a leader, Donald advocates leading from behind. He said the instinct of a great leader is to support their front-line personnel. For the retail supermarket business, he said nothing is more important than those 98 percent of employees that have direct contact with the customers. 

Returning to the role of communication, Donald also reinforced the importance of consistent messaging and outreach in the success of any company. In fact, Donald believes the supermarket industry has never been better than it is today. He said grocery retailers have a history of dealing with crises and they have truly shined during the past few months. He noted that 40 percent of food purchased elsewhere (foodservice) went away from its normal channel and transitioned back to supermarket, with the industry able to absorb that business very well. 

“You’ve got to remember that no matter how big you get, no matter how many stores you have, you have to pretend you have one store, one employee and one customer and treat them as if they are the only one." -Jim Donald

“All retailers have a better sense of urgency, and more respect for what the front lines do,” Donald said. “We are stronger as an industry than we were before this.”

Donald said the growth of organics shows no sign of slowing, and “there is no ceiling at all” as to how high organic sales can go.  He added all Albertsons’ banners are experiencing year over year sales increases and noted that there is “more margin in organics”, which is also an incentive for the supplier community to continue to grow the category. He called organic produce “mainstream” and predicted it would continue to garner increased square footage at retail.

As one of the most respected and admired CEO’s in America, Donald also gave advice to new hires and noted that the same excitement they bring to a new job can apply to merchandising any item within the store.  Calling it a “freshman’s mentality”, he opined that when a freshman goes off to college, he or she approaches the situation with some nervousness and curiosity…a little bit scared, but full of questions, listening more than talking and the willingness to take risks.  Donald said new employees should approach their job in that same way, with the eagerness of a freshman and the willingness to do whatever is asked.

He said that same freshman attitude can guide the merchandising of any item, any day. He advised retailers to go back to the excitement that the industry felt when organics first launched to recreate the energy and continue to grow the organic category.

Catch up with Jim and Kevin HERE