Conveniently Organic

Written By Jeff Siegel

Posted August 10, 2005

Dear Wealth Daily reader:

Conveniently Organic

Last weekend I took a trip to Ithaca, NY to visit some friends. The drive from Baltimore is roughly five and a half hours. So that equates to at least one bathroom break and fill-up each way. (Now stay with me, because it’s the bathroom breaks and fill-ups that maintain the importance of this story.)

Once out of Baltimore, much of the drive through Pennsylvania and upstate NY was beautiful. Very little development, lots of trees and fresh air and clear skies the whole way.

Now I have to admit, living in Maryland, I’ve grown accustomed to certain conveniences. Mostly access to healthy, natural and organic food. Living so close to Baltimore and D.C., these things are pretty easy to come by.

But after you cross over the Pennsylvania line, and pretty much all the way up through 81 and into upstate New York – well, let’s just say there isn’t a Whole Foods Market or health food store on every corner.

There are however, plenty of truck stops and convenience stores – providing tired and restless nomads with the finest in beef jerky, well-preserved bologna sandwiches and some kind of colorful slush drink. Yum.

Now I’m the last person you’ll find eating this kind of stuff. But while my dietary requirements often lead me to pack my own food for these trips, I still make an almost involuntary effort to obsessively read ingredients labels on pretty much anything within my periphery.

And this is when I made a surprising discovery that I knew I’d absolutely have to share with you today.

Now stay with me. Because what I’m about to tell you might not sound that exciting at first. But trust me…this is a huge deal!

During my first pit stop at a local gas station/convenience store just outside of Scranton, PA, I noticed a display rack of snack crackers. You know the kind. Cheese and wheat, cheese and peanut butter, ranch and rye, etc.

Normally these snacks are manufactured with hydrogenated oils and loads of unhealthy preservatives. But not these.

In fact, on the front of these packages, standing out like Michael Moore at a Pat Buchanan honorary dinner were three colorful words – ‘Zero Trans Fats.’

Think about this for a second.

Most people who buy food from truck stops and convenience stores, especially in places like Pennsylvania and upstate New York, are probably not too concerned with unhealthy oils.

Or are they?

Don’t get me wrong. Over the last year or two, I’ve certainly noticed some healthier versions of snack foods in convenience stores.

From natural juices and teas to low-fat candy bars and potato chips. I even remember stopping at a convenience store in Los Angeles that actually sold organic sandwiches, snack foods and juice blends.

But that was L.A. – not rural Pennsylvania.

So I decided to stop in at a few more convenience stores and truck stops to see if any of the other junk food oases were peddling the same types of products. Again, to my surprise – they were.

I found the same snack crackers at nearly every one of these stores.

I also found potato chip packages declaring the same ‘Zero Trans Fats’ and ‘No Hydrogenated Oils,’ a dark chocolate candy bar that contained no hydrogenated oils with a wrapper that read, ‘natural dark chocolate is high in antioxidants’ and some natural honey roasted peanuts (manufactured by the Frito-Lay company) in a small bag affirming ‘no preservatives’ and contained no hydrogenated oils.

Now here’s the thing…

Convenience stores exist because of, well – convenience. These stores provide consumers with instant gratification. Quick food, quick drinks and convenient packaging.

The Next LOHAS Crossover

When 7-11 first opened its doors in 1946, the last thing marketers were thinking about was "do we need to provide our customers with a healthy alternative?"

But in 2005, marketers have to take the needs of these customers into consideration. There’s too much money at stake for them not to.

With 63 million LOHAS consumers actively and consistently purchasing natural and organic foods, it simply no longer makes sense for convenience stores and gas stations to ignore them.

And not only because there are so many LOHAS consumers – but also because the LOHAS population spends a significant amount of time traveling.

36 percent of adult travelers in the U.S. fall into the LOHAS category – often referred to as sustainable tourists, eco-travelers or geo-tourists.

These consumers seek travel experiences that protect and preserve ecological and cultural environments. And many also maintain dietary requirements dictated by their healthy lifestyles. i.e.) natural and organic food

Someone has to feed these people!

LOHAS consumers who do maintain natural and organic diets often pack their own food – mostly because they cannot find the food they prefer to eat at convenience stores, truck stops, airports and train stations along the way.

But in the last year or two, food manufacturers have decided to take into account this untapped market, and are now starting to produce natural and organic foods to be sold not only at natural and organic food retailers and conventional supermarkets – but convenience stores as well.

And why not?

With 37 percent of organic sales in 2003 coming from the mass-marketing of organic foods in supermarkets, it’s only natural that manufacturers and retailers look to the next logical crossover market – convenience stores.

This year, at the National Association of Convenience Stores show in New Orleans, a special ‘Organic Aisle’ will be included and will feature new product options for convenience store retailers to attract health conscious consumers to shop in their stores.

I predict that by the end of 2006, convenience stores throughout the U.S. and Canada will be fully-equipped with natural and organic food varieties strong enough to lure LOHAS consumers to the cash register.

By the way, the convenience store industry hit record revenues of $394.7 billion in 2004. To give you an idea of how big that is, if the convenience store industry were its own nation, it would have the 25th largest economy on earth.

Add the LOHAS impact to that figure and watch it skyrocket!

Right now, it looks like Frito-Lay’s ‘Natural and Organic’ line seems to have the largest LOHAS-worthy presence in convenience stores throughout the U.S.

This ‘Natural and Organic’ line was launched in April of 2003 after marketing execs acknowledged a growing consumer demand for organic snack choices.

2003 was also the year that Frito-Lay added the ‘Zero Grams Trans Fat’ on the front of the packaging for Lay’s, Doritos, Tostitos, Cheetos, Ruffles and Fritos following its move to become the first U.S. food company to remove trans fat from its salty snack products.

Being that Frito-Lay has a well-documented and profitable history within the convenience store establishment, it’s no wonder it’s been able to stock its ‘Natural and Organic’ line in practically every convenience store in the U.S.

Most LOHAS firms in the snack manufacturing game will however, find it hard to penetrate this retail market competitively as none have the established distribution networks or gateway products that Frito-Lay has.

But don’t completely count LOHAS-specific companies out on this one either.

With an increased demand for commercial products, like healthy oils, unrefined sugars and large-scale organic ingredients – established natural and organic food producers and manufacturers have never been in a better position to provide their goods to non-LOHAS companies trying to convert to healthier alternatives.

That’s certainly what Spectrum Organics (SPOP.OB) has been doing – and with much success. (This ‘healthy oils’ manufacturer that we first told you about back in March hit a new high of $0.78 yesterday.)

Incidentally, Frito-Lay announced back in June that it had officially opened the doors to its new state-of-the-art, environmentally responsible distribution center in Rochester, NY. This is Frito-Lay’s first exclusively ‘green,’ environmentally friendly building and will serve as a model of resource conservation through innovations in renewable energy, alternative lighting, energy efficiency standards and environmentally intelligent choices.

11 LOHAS Stocks For The Rest Of The Year

In a few days I’ll be releasing my special report, LOHAS PROFITS: 11 Green Chip Stocks for 2005.

If you have even a remote interest in Green Chip Stocks – this is the report to have.

Analyzing the history, growth and profitability of the LOHAS market, each of these 11 stocks represent the next wave of LOHAS profits.

The big money on behemoths like Whole Foods has already been made.

In Green Chip Stocks, I’m looking for the next generation of Whole Foods. And they’re out there.

Some of these stocks are trading as low as $0.32, $0.76 and $5.15, could easily double by early 2006.

One particular stock – a company I’m calling the "Whole Foods of Canada" has been public for the past 4 years. And in each of those years, the stock has finished with a gain.

And get this, the stock trades at a market cap less than $20 million. It’s completely unknown… and incredibly cheap.

As a comparison, Whole Foods now trades at a market cap of $8.6 billion. But when it went public in the early 1990s, it traded for $6 a share… and commanded a small capitalization of $400 million.

You have to start somewhere.

This is the time my friends. This is the time when the rock-solid Green Chip stocks with the most potential are at the lowest they’ll ever be.

Don’t miss your shot to get it now.

Until next time…

Jeff Siegel
Editor, Green Chip Stocks

P.S. – Be sure to catch my next installment of the Green Chip Review where I’ll introduce you to the $540 billion world of Eco-tourism. And some of the companies that are leading the way. This is one of the most profitable segments of the LOHAS marketplace – and it’s only going to get better.

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