Tempe's Gentle Strength Cooperative moving

 

July 22, 2004

Grocer looks for new home to boost sales

Janna Braun
The Arizona Republic

Gentle Strength Cooperative, a longtime food co-op in Tempe, has signed a contract to sell its property at 234 W. University Drive, a location it has occupied since 1985.

Co-op leaders are hoping that a new location, in a more residential neighborhood, will improve sales. Where Gentle Strength once had a virtual monopoly on the Valley's organic and natural food market, it has been challenged by the arrival of natural food chains and changes in its neighborhood.

General Manager Don Downs would not disclose details of the pending sale. However, the co-op has had previous offers of $2 million and $3 million for the land. Gentle Strength is now considering a move to Apache Boulevard, Downs said.

Neil Calfee, Tempe's redevelopment manager, said the city has had discussions with the co-op about remaining in the area.

"They're an asset to the community," Calfee said. "We've talked about how (a location on) Apache could be a good fit because it's near the university and there's a light-rail line coming in," he said. "But we're still waiting for them to come to us. We've been in on-and-off discussions with them for years about moving, but we just haven't seen anything come forward that has yet to gel."

Bob Kammrath, a Phoenix commercial real estate analyst, says that while the Gentle Strength site is not the most prime location, it is desirable for commercial development.

Terry Hughes, a Gentle Strength board member, said the area around Apache is similar to the neighborhood the co-op found in 1985 when it moved to its current site.

Over the years, that area has changed dramatically.

"There used to be a lot more residents on Ash and more locally owned businesses," Hughes said. "Now it's mostly chain restaurants and bars."

Like many food co-ops, Gentle Strength emerged from the peace movement in the late 1960s and early '70s. Another impetus was the 1962 publication of Rachel Carson's book Silent Spring, which trumpeted the dangers of pesticides and chemicals in foods, Hughes said.

"Before co-ops, you couldn't buy natural or organic products at markets," he said. "Out here, a group of young people decided to combine their buying power and form a buying club, a form of a co-op. They got deliveries from wholesalers and split them up and got their groceries for what they cost the co-op.

Gentle Strength opened its first retail location in 1973 at Fifth Street and Mill, the current site of Tempe Mission Palms Hotel. In 1984, Tempe began to redevelop the area and bought the land, and Gentle Strength moved to its current property.

When Gentle Strength opened, Downs said, there was no competition. But with stores such as Whole Foods arriving in the late 1990s and Trader Joe's, Wild Oats and Sprouts appearing in the Phoenix area, the co-op has faced big competition.

"Today, there are lots of chains around," Hughes said. "As of late, we're starting to see an (increase) in the business, but for the last five or six years, we've been in a decline."

Gentle Strength is not the only grocery co-op feeling the pinch from larger grocery chains.

Eugene Fram, a marketing professor at the Rochester, N.Y., Institute of Technology has studied co-ops and has seen them struggle for several years.

"Co-ops mostly depend on volunteers, and people just don't have the time they used to for volunteer work," Fram said. "Also, in terms of buying power, they don't have the power that other, large retailers have. They also are tied to a target market, which is usually a group of people that is socially aware from a food point of view. With such a niche market, that makes it difficult to handle.

"From what I've seen, the co-ops haven't filled that niche as well as for-profits have."

Despite that seemingly bleak outlook, Patricia Cumbie, spokeswoman for the National Cooperative Grocers Association, said co-op business is growing.

"They're not struggling," Cumbie said. "From the data that we collected for 2003, from co-ops that are our members, the sales growth for co-ops in 2003 was 10.4 percent. In the natural and organic food category, sales growth overall for all stores, including for-profit, was 9.9 percent, so co-ops actually did better."

Hughes and others believe there are ways to return Gentle Strength to growth.

Fram recommends better efforts to target the co-op's niche market.

"The people most interested in buying from them are those that see co-ops as a social advancement," Fram said. "They need to actively find others that are willing to support it."

Hughes said Gentle Strength may offer products that complement its business, such as holistic health insurance or clothing made from organic fibers.

©Arizona Republic 2004

 

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