Safeway Inc. said on Tuesday that it would expand its O Organics line into baby food and food for children and introduce a new brand for consumers on a diet or just looking for healthier fare.

Safeway, the No. 3 U.S. grocer, introduced the O Organics line in December 2005. Since then, the products, which are only sold in Safeway chains such as Dominick's, have reached more than $150 million in sales.

During a meeting with analysts and investors, Safeway said the O Organics line is helping to attract shoppers from chains such as Whole Foods Market Inc., the No. 1 natural and organic grocer.

The O line currently features produce, cereal, milk and coffee. Safeway said that it now plans to introduce affordable organic food for babies and a group of organic products targeted at children aged six years old to 12 years old.

It also plans to introduce a new line, called Eating Right, with nutritional icons on packages that should help consumers find products that fit their diet.

Steve - I hope Whole Foods is ready for war. All the "conventional" food stores are starting to flex their muscle.