vSphere 5.1 group vms by folders

Hi

I have been used to using Workstation and grouping VMs into folders such as LAB1 or Production.  Is there anyway to do this on vSphere ESXi 5.1 (free version)?

I would have thought that just organising VMs into folders was a simple process like Workstation as ESXi was the more powerful beast.  Obviously correct me if i'm wrong.

Thanks.