By MICHAEL SASSO
TAMPA - Fliers touting an array of things, from a Dalai Lama speech in Miami to a metaphysical temple in Tampa , can be found near the entrance to Nature's Harvest Market. Like other natural food stores, Nature's Harvest Market serves as a forum for progressive and alternative views - as well as a grocery store, owner David Taylor said.
However, the independent streak and loyalty of the store's customers will be tested next fall. That's when the area's first natural food superstore, Wild Oats Natural Marketplace is expected to open a mile away.
Boulder, Colo.-based Wild Oats Markets Inc. will bring the marketing muscle and superstore gloss that can steal shoppers from even the most respected mom-and-pop retailer.
To prepare for the new competitor, Taylor and his family are expanding Nature's Harvest Market and beefing up its selection of organic food.
The battle on the horizon highlights a question many independent businesses - even those with 20 years of community goodwill such as Nature's Harvest - grapple with these days. How can an independent businessman survive when a large national chain moves into the market?
Nature's Harvest Market, at 1021 N. MacDill Ave., will face formidable competition.
Wild Oats is what the industry refers to as a ``supernatural'' store. The chain is one of two supernaturals that have emerged in the industry. The other is Austin, Texas-based Whole Foods Market.
In the past, most natural food stores averaged about 3,000 square feet, about the size of a convenience store. In contrast, Wild Oats and Whole Foods stores are often 30,000 square feet, about the size of a small Publix supermarket.
They also have some features of mainstream supermarkets, such as a wide selection. For example, Wild Oats' store in Fort Lauderdale has 10 varieties of natural and organic fresh fish, including swordfish and Alaskan halibut. The store also has hot meal bars that serve 7,000 meals a week, said assistant store director Joe Stoddard.
Wild Oats is preparing to open its first Tampa superstore at the new Walter's Crossing shopping center at Dale Mabry Highway and Interstate 275.
At 34,000 square feet, it will be almost double the size of the Nature's Harvest Market in south Tampa . That store will be 18,000 square feet once the Taylors complete the expansion.
Other tenants at Walter's Crossing will include Target, Linens 'n Things and Rooms To Go, chains that draw customer traffic.
Wild Oats has 108 stores in North America and racked up sales of almost $1 billion last year, but until recently it held off on opening in the Tampa Bay market. Competition for the South Florida market forced it to focus its attention there first, but Wild Oats now is looking to expand throughout Florida , said Ted Andrews, director of Wild Oats' East Coast operations.
Taylor 's store could face even greater competition in the future.
Whole Foods, which leads the industry with 164 stores and more than $3 billion in annual sales, is considering the Tampa market for expansion, said Whole Foods regional marketing director Karen Mathis. Wild Oats and Whole Foods have been expanding rapidly in recent years, particularly in South Florida , often by acquiring independent natural and organic food stores.
Taylor said the head of Wild Oats approached him about buying Nature's Harvest Market in the 1990s. However, he cares too much for his business and employees to sell out, he said. ``I told him we enjoyed what we're doing and we really weren't interested,'' Taylor said.
Ready To Compete
With Wild Oats' superstore under construction a mile away, Taylor is not sitting around waiting.
He recently paid $2.6 million for the office/retail plaza where Nature's Harvest Market is. He is knocking down the wall between his store and a former physician's office and expanding Nature's Harvest Market to 18,000 square feet from its current 13,000 square feet. He is also adding to his bulk grains, frozen foods and prepared hot foods departments. He is even adding sushi - with organically raised fish, of course.
And, he is borrowing ideas from chains such as Wild Oats, Whole Foods and Lakeland- based Publix Super Markets. Like Publix, he is creating an employee stock ownership plan and giving employees an opportunity to purchase a combined 20 percent of the company.
Perhaps most important, Taylor said, he will focus heavily on selling organic food, bumping the selection to 90 percent of the store's inventory from the current 60 percent.
``I can really take my store and specialize it toward my customers, the organic community, where Wild Oats is going to have to go after some of Publix's customers,'' Taylor said. ``If a store like that's not doing $10 million to $12 million a year, they're not even going to break even.''
Nature's Harvest Market sells about $5 million a year in natural and organic food. That is considered high. Many natural food stores typically book sales of less than $1 million, Taylor said.
Counting On Customers
Taylor is counting on the loyalty and goodwill his family has built up with customers over 20 years to retain business.
The Taylor family has been in the retail business for four generations, going back to the days when Taylor 's great- grandfather ran a general merchandise store in Tennessee and doubled as an embalmer in the back room.
Taylor opened Nature's Harvest Market on Dale Mabry Highway in 1985, then moved to MacDill Avenue in 1990.
Taylor is depending on customers such as John Eloian to keep the business thriving when big competitors come to town.
``Anytime you have a question, they answer you personally,'' said Eloian, 71, a Nature's Harvest Market customer who said he will still shop there after Wild Oats opens. ``They have good information, and they treat you well. They have an honor system here, and there's nobody watching you like a hawk.''
`Organic Philosophy'
There is irony to the rise of natural food superstores such as Wild Oats because of the industry's antiestablishment roots, industry experts say.
Mary Hendrickson, an assistant professor at the University of Missouri 's Department of Rural Sociology, said natural and organic food retailing was pioneered by cooperatives made up of environmental activists and health food advocates. These co-ops banded together to buy natural and organic food and sell it to other co-op members, and they shared an ``organic philosophy,'' Hendrickson said. That philosophy included concern about chemicals used in agriculture and a desire to provide a good living for small farmers.
Some large co-ops still exist in cities where organic food is popular, such as Minneapolis and Sacramento , Calif. , said Philip Howard, a researcher at the University of California- Santa Cruz 's Center for Agroecology and Sustainable Food Systems.
Still, corporations have moved heavily into the manufacturing of organic and natural food by snatching up smaller producers. They have been lured into the industry by the promise of profits, Howard said. The sale of organic food has been growing at a rate of 20 percent a year for more than a decade, Howard said. Combined, natural and organic food sales reached $16.2 billion last year, up 13 percent from 2002.
Particularly upsetting to purists was the 2000 acquisition of Ben & Jerry's Ice Cream, an environmentally conscious company, by the British consumer goods company Unilever. Another was Kraft Foods' acquisition of Boca Foods, maker of the Boca soy burger, that same year. The majority of Kraft Foods stock is held by Altria Group, formerly known as Philip Morris Cos. Altria makes and markets cigarettes under its Philip Morris USA subsidiary.
``A lot of people looked at that and said, `Oh my gosh, organic is going corporate,' '' Hendrickson said.
Taylor 's brother Ben, a co- owner of Nature's Harvest Market, said he is counting on progressives and socially conscious shoppers to help the store win the battle with corporate competitors.
However, Terry Dalton, a Fort Lauderdale businessman who once owned one of Florida 's largest natural food stores, Unicorn Village near Miami Beach , said consumers' allegiance goes only so far.
In the mid-1990s, Dalton saw the rise of the natural food superstores and decided he didn't want to compete with them. So, he sold his store, which had annual sales of $18 million, to Whole Foods in 1995. These days, the South Florida natural food market is dominated by Whole Foods, he said.
``Some people won't shop Whole Foods because they're publicly held, but as they continue to expand, people tend to compromise their values somewhat,'' Dalton said.
Small Store's Advantage
Taylor may have a few things going for him in the upcoming competition with Wild Oats.
First, Wild Oats is not unstoppable. In some cases, it has struggled in new markets, particularly when incorporating small stores that it has acquired, said Chuck Cerankosky, a stock analyst with KeyBanc Capital Markets in Cleveland .
The company also suffered from management and strategy issues. Those issues appear to have been resolved, and the company may be on the right track, Cerankosky said.
During the first nine months of this year, Wild Oats reported a $3.3 million loss on sales of $766 million. Its share price has fallen to about $7 from $11 a year ago. Meanwhile, shares in rival Whole Foods, which reported earnings of about $98 million on sales of $2.7 billion from Jan. 19 to Sept. 26, has seen its share price soar to more than $90 from $65 a year ago.
Nature's Harvest Market also may have history in its favor. Unlike in the hardware and drugstore industries, there is little evidence that independent natural food stores are being driven out of business by large chains, said Marty Traynor Spencer, editor in chief of the industry's trade journal, The Natural Foods Merchandiser.
In fact, the number of independent natural food stores in the United States rose to 11,151 last year from 9,039 in 1998, Spencer said. A boom in natural and organic food consumption probably spurred that growth, creating opportunities for independents and chain stores, Spencer said.
Still, she said, the natural food superstore is a relatively new phenomenon for the industry, and she doesn't know what the long term holds. However, she thinks natural food shoppers will still want the personal attention they can get from an independent.
``It will take some business away from [independents], but it's not like people will go flooding into a Wild Oats,'' Spencer said.
© 2004 Tampa Tribune
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