Postcards Are Gems to Diamond Organics

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Diamond Organics' mail-order strategy is still a diamond in the rough -- it continues to be refined in an attempt to find the best return on investment. This year, the company is decreasing its catalog circulation but will put more emphasis on a postcard strategy that is proving successful.

The company got its start selling organic food to restaurants from a warehouse in Maine in 1990. It mailed its first catalog to consumers several years later and relocated to a 35,000-square-foot warehouse and distribution center in Moss Landing, CA, in 2004.

Just as the trend for organic foods continues to grow, with new Whole Foods stores opening all the time and even Wal-Mart recently starting an organic program, Diamond Organics has seen its sales grow about 20 percent every year since the mid-1990s.

However, the company's catalog has been less successful. Rising paper and postage costs and low response rates forced co-founder Jasch Hamilton to slash circulation to 150,000 this year from 250,000 last year.

Yet the book continues to expand as more product categories are encompassed by the organic umbrella. Two years ago, the catalog numbered 64 pages, last year it was up to 72 and this year there are 84. Diamond Organics mails a catalog four times a year.

The added space is being allocated to organic meat, which continues to rise in popularity since the company added the category four years ago and now accounts for 20 percent of its sales, Mr. Hamilton said. Diamond Organics also has expanded its selection of fish as well as items from its in-house kitchen, which go under the Kathleen's Kitchen label. These include home-cooked entrees, vegetarian sushi and Buffa-loaf, made from buffalo meat.

However, its signature specialty remains its produce, Mr. Hamilton said. "Our biggest-selling item is our avocados," he said, and the company's fruit and vegetable gift baskets are also popular.

Diamond Organics offers next-day delivery nationwide on orders placed by

2 p.m. Pacific time. The price of gift baskets and samplers includes free delivery.

"Our goal is to open distribution centers in different parts of the country," which will let the company work with more local organic farmers while continuing to offer next-day delivery, Mr. Hamilton said.

What has proven more successful than the catalog is a postcard strategy the company began for the holiday 2004 season. Based on its response that year and in 2005, the company added Mother's Day in 2006 and looks to extend the program to other holidays as well.

The postcards highlight a selection of the company's best organic food gifts and call out Diamond Organics' ability to offer next-day delivery nationwide. They are mailed with last-minute gift giving in mind. So for Christmas, for example, the in-home date might be Dec. 10.

The postcards "work better than any catalog," said Mr. Hamilton, noting that the typical response rate is 4 percent.

The cards mailed to 50,000 best buyers in 2005. But for the upcoming holiday season the company wants to raise that number to 100,000.

While the postcards focus on gift giving, the company's site at www.diamondorganics.com is geared to the more than 50 percent of its customers who shop the brand for their everyday needs. Web sales account for 50 percent to 60 percent of Diamond Organics' volume, Mr. Hamilton said.

The company also sends two e-mail blasts a week featuring recipes to 35,000 names. n

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