Target expands Made to Matter program in organic, natural products

J.R. Watkins, a growing company based in Winona, Minn., usually doesn't do exclusive deals. But the maker of natural dish soaps and bath products made an exception for Target Corp.

"It wouldn't make a lot of sense with a lot of other retailers," said Mark Jacobs, the company's CEO. "But not a lot of companies have the reach that Target has."

So when his company was invited to be a part of a Target program that highlights exclusive better-for-you products from mostly up-and-coming brands, he jumped on board. As a result, J.R. Watkins will soon roll out a line of its products in a fragrance — coconut milk and honey — that will only be available at Target.

J.R. Watkins is one of 31 brands that Target has selected to be part of the second year of its Made to Matter program, which showcases new sustainable, organic and natural products. To be part of the collection, companies have to agree to sell the new product exclusively to Target for six months. After a successful introductory year, Target is doubling the program this year to more than 200 products.

The items include new exclusive ice cream flavors from Ben & Jerry's — "Peanut Butter World" and "Blondie Ambition" — a fair-trade soccer ball and an aloe water drink for children. It even encompasses dog food.

The program is one of the ways the Minneapolis-based retailer is trying to bolster its reputation as a go-to place to find healthier and less toxic options, especially as consumers are increasingly seeking such products out. And, of course, executives hope it will help set Target apart from its competitors.

"We think this program really differentiates us and makes us a stronger destination for wellness categories," said Kathee Tesija, Target's chief merchandising officer.

If all goes as planned, she said the brands included in the program are expected to rake in close to $1 billion in sales this year, which would be on par with Target's best-performing private-label brands. That projected figure doesn't just include the specific products in the program, but also takes into account the rest of the items those brands sell at Target, which are also expected to benefit from greater brand awareness.

Last year, the brands that participated in Made to Matter saw a 30 percent lift in their overall sales at Target, which is double the rate those vendors saw in other parts of their business, Tesija said.

"There was a halo effect on those brands once we called them out, put them on endcaps, talked about them and what they stand for," she said.

A handful of products in the collection began hitting shelves last month and the rest will be rolled out this spring and fall. Signage calling out the products in stores will begin showing up in the coming months. After hearing from customers last year that they wanted to see all of the products together, Target will showcase all of the Made to Matter products this spring in the seasonal area at the back of stores (where Valentine's Day or Christmas items are often displayed). Target also will promote the products on its website, in its weekly circulars and through its mobile apps.

The Made to Matter program began last spring before Target CEO Brian Cornell came on board over the summer. But he has taken an interest in it, especially since it aligns with his strategy to help revive the retailer's sales by elevating its signature categories such as health and wellness.

While some of the items in the program are just variations of existing products in new flavors or scents, a majority of them are altogether new products. Some are from brands that consumers might already be familiar with, such as Yes To, Annie's and Kind. A handful are making their debut with a major retailer. And a couple are new to the market, including Olly, which makes gummy and soft gel vitamins, and Paddy's Bathroom, a line of baby toiletries not previously available in the United States.

Target's shoppers tend to have a bit higher incomes and are particularly interested in health and nutrition, so this program makes sense to appeal to that core demographic, said Amy Koo, an analyst with Kantar Retail.

"For a retailer that is trying to find its footing, this is a strong position for them to put out there, saying 'We know this is important to you and your families, and we want to stand behind that,' " she said.

She added that Target has always tried to stay on top of what's new and hip. One way to do that is by asking suppliers to make exclusive products for them.

"This is certainly a coup for Target," Koo said. "A lot of retailers want something special from their suppliers."

Angie Bastian, co-founder of Mankato-based Angie's Artisan Treats, known for its popcorn Boomchickapop, said retailers have asked her company to make exclusive flavors for them. She was more inclined to oblige in the past when she was just starting out. But she's done fewer of those partnerships as her company has grown.

Still, she thought it made sense to do so in order to be part of Made to Matter for which her company will be debuting a new line of popcorn cluster snacks called Boomchickabites.

"We're still an emerging brand, and to have Target partner with us is an amazing honor," Bastian said. "That's what every small company wishes to happen to them."

Target says it still sells most of the items that were part of last year's program and notes that 11 of its 16 partners returned to be part of it this year.

One of the five suppliers that decided to sit out this year's program was Vita Coco, which sells coconut water. It made its first sports drink last year as part of Made to Matter. Arthur Gallego, a Vita Coco spokesman, said the product sold well, but the company is not planning on producing more of it once its inventory is sold through Target. Instead, it is focusing on its core product.

Another brand that is not returning to the program is cereal maker Kashi, which introduced a new granola last year. The company said in a statement that it decided to focus its efforts this year on expanding its line of granola nationally.

Kavita Kumar • 612-673-4113