Warehouse retailer Costco Wholesale Corporation COST has partnered with Amira Nature Foods Ltd ANFI to sell the latter’s organic products at its stores in Arizona, Nevada, California, Colorado, New Mexico and Utah.
The above-mentioned Costco stores will sell 20 lbs bag of Amira Organic Sona Masoori Rice, a low starch and lightweight variety of rice and part of Amira Nature Foods’ latest organic products range. Amira Nature Foods is a Dubai based company that sells basmati rice along with other organic rice products.
Americans are becoming increasingly health conscious these days and as a result, demand for organic food has shot up considerably. Like other retailers, Costco too has jumped on the bandwagon to make the most of this opportunity presented by the growing organic food industry.
Consumers now expect better quality food and a range of diet options at their local grocery store and are ready to shell out extra for it. Natural and organic foods aren’t just a fad, as some predicted – they’re the new standard.
Moreover, the best part about the food industry is that, while it is relatively less vulnerable to adverse economic conditions, it will surely step up during sustained economic recovery when higher disposable income automatically increases the demand for food. Hence, in the current scenario of a rebounding economy with falling unemployment rate and gasoline prices along with improving consumer spending, this industry displays much potential.
Apart from Costco, retailers like The Kroger Co. KR and Wal-Mart Stores Inc. WMT are also developing their organic and natural food business.
Currently, Costco carries a Zacks Rank #3 (Hold).
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