IKEA Gets Into Food in an Organic Way

Discussion
Jul 12, 2005
George Anderson

By George Anderson

Turnabout is fair play. Others are selling furniture in addition to other products and now IKEA is going to be selling its own brand of food items, including its Swedish meatballs,
in its U.K. locations.

The retailer has been selling the same items in its in-store restaurants and, as the company’s food services managing director Jan Kjellman said, the packaged items will mean
“customers can take home what they have tried in our stores.”

The company is looking for its own brand to represent about 30 percent of Swedish-made food skus in its stores within two years.

The retail chain also announced that it intended to move from conventional to organic ingredients in its foods wherever possible. According to a report on the Food Navigator
Web site, IKEA is launching organic coffee, strawberry/ orange jam and blue cheese.

Moderator’s Comment: What do you think about IKEA’s move in Europe into packaged food from its foodservice operation? Is it making the right move in
looking to develop a strong store brand presence including organic products?

George Anderson – Moderator

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4 Comments on "IKEA Gets Into Food in an Organic Way"


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Bernice Hurst
Guest
15 years 7 months ago

Cain’t think of a good reason not to try it but with the usual provisos. First, own label food in the UK is made in a handful of factories; IKEA will have to be careful that the quality of the product their customers currently enjoy isn’t bastardised by the processes of mass production. Secondly, organic fits well with the rest of their ethos but does contradict the low prices on which they pride themselves. I’m not sure whether people who go to the stores for cheap housewares and furniture will want to shell out premium prices for organic food. It would probably be better to emphasise the quality message, as they try to do with their other products and keep the prices to a reasonable level. Own label and organics are definitely growth areas in the UK and with a customer base that has already shown they like the product, consistency is a key issue that could lead to lots of success. I don’t know anywhere else to buy a range of Swedish food.

Michael Richmond, Ph.D.
Guest
Michael Richmond, Ph.D.
15 years 7 months ago

Yes it appears to be a good move but I would test the proposition before doing a full roll out. Time compression is a global issue and opportunity. So if you are out buying tools or wood shopping, why not slip over a few isles and pick up dinner or a few of the “staples” you are out of at home? Channel blurring is going on everywhere and consumers are willing to buy items if it saves them time. On the Private Label(PL)/Store Brand question: This is a great growth market globally and PL is growing faster than branded products, organic is one of the fastest growing categories and PL is also a leader in 25% of the categories it competes in – so why wouldn’t they go after the opportunity? Good for IKEA!

Karen Kingsley
Guest
Karen Kingsley
15 years 7 months ago

I’m answering this, trusting (perhaps mistakenly) that IKEA doesn’t intend to become a grocery store. Many people go to IKEA as eager to enjoy the Swedish meatballs as shop (I hate to admit it, but I know a lot of these people). I think it’s a great idea to sell their signature foods (although it will deprive some people of the additional excuse they use to go there, which decidedly increases the sale of lower-priced accessories), as long as they don’t lose sight of their primary purpose.

Antoine Heijden van der
Guest
Antoine Heijden van der
15 years 7 months ago

Test the proposition? IKEA Foodservice is already a 0.5 billion euro food seller!

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