Halloween Memo: A Really 'Great Pumpkin' Charlie Brown: Stay At Home Dad Wins Safeway Stores' Pumpkin Weigh-Off Contest With Massive 1,528 Pound Gourd

Thad Starr (pictured at left with his prize-winning pumpkin), a 41 year old stay at home dad from Pleasant Hill, Oregon USA is the winner of the 35th Annual Safeway World Championship Pumpkin Weigh-Off in Half Moon Bay, California.

This is Starr's second consecutive year to win the annual competition sponsored by Pleasanton, California-based Safeway Stores, Inc.

Safeway Stores, the third-largest U.S.-based supermarket chain, has a supermarket in Half Moon Bay, which is about 40 miles from its corporate headquarters in the San Francisco Bay Area.

The stay at home dad and grower of mighty pumpkins won this year's contest on October 13 with a massive 1,528-pound gourd. Starr's 'Great Pumpkin' is the second-biggest pumpkin in the world weighed to date this year.

In just his third year of growing competition pumpkins, Starr won for the second year in a row, taking home $9,168 in prize money ($6 per pound) and topping the Half Moon Bay record he set last year. He easily defeated a formidable, veteran field of sixty five heavyweight contenders to win the coveted title and a "starring role" in the Half Moon Bay Art & Pumpkin Festival, which was held October 17-19, where his colossal guard was featured on display along with the top five overall winners' pumpkins.

The Safeway World Championship Pumpkin Weigh-Off is a part of the annual Half Moon Bay, California Art and Pumpkin Festival, which is held in the coastal Bay Area city each October. This year's festival was the 38th annual. Half Moon Bay is a major pumpkin-growing region. Safeway Stores has been sponsoring the weigh off contest for 35 years.

Click here for a list of additional Great Pumpkin winners, along with some additional photographs and information about this year's event.

The Safeway-sponsored Pumpkin Weigh-Off contest and related community festival is lots of fun for the residents of Half Moon Bay and the nearby communities who attend the vent in the thousands. However, for the competitors in the 'Great Pumpkin' Weigh-Off competition it's serious business. Like competitive eaters, chili cook-off contestants and competitive grilling masters, these growers of the giant gourds prepare all year for the big day.

We can imagine now that Thad Starr has won the contest two years in a row, the other competitors are going to be gunning for him next year, looking to prevent him from achieving that perfect trifecta (three years in a row) as the King of Pumpkin growers.

Wine Category Memo: Organic Chilean Wine 'Syrah Palin' Getting Lots of Attention in U.S. Because of its Namesake, Republican VP Candidate Sarah Palin

With just five days to go until the 2008 U.S. Presidential election, a certain brand of Chilean organic wine imported into the U.S. by Berkeley, California wine importer and distributor North Berkeley Imports , is getting an unusual amount of attention.

It's not all positive attention though. In fact, consumers' attitudes and opinions about the organic Chilean wine, named Syrah Palin (pictured on display at top, left), seem to be more about whether or not they support the Republican Presidential ticket of John McCain and Sarah Palin or the Democratic ticket of Barack Obama and Joe Biden rather than whether or not they like the taste of the wine.

Yes, the "Syrah" (Sarah) variety wine, spelled Palin (pronounced "Pay- Leen) just like the Republican Vice Presidential candidate's last name, has a political season ring to it. And in Berkeley, arguably the most liberal city in America, it is raising a few eyebrows.

According to the wine importer and distributor's Web site, the vintner's (Palin wines) and wine's name "describes a ball that was used in an ancient game played by the Mapuche, a group of people indigenous to central Chile, where the vintner is based. It has nothing to do about Alaska, governors, moose hunting, $150,000 wardrobes or other attributes involving Senator John McCain's Vice Presidential running mate, Sarah Palin.

However, wine drinkers in Berkeley, the San Francisco Bay Area and other parts of the country where the organic wine is being distributed by the importer, are obviously connecting the Syrah Palin wine to the Governor of Alaska, who wants to be the next Vice President of the United States. Some consumers are getting a chuckle out of the resemblance, others are not as happy about the namesake wine.

For example, Chris Cavelli, the co-owner of San Francisco's Yield Wine Bar, which is offering Syrah Palin organic wine for sale by the glass, says "they (customers) just are basically saying, 'Oh, I don't want to drink that. That's too close.' It reminds them too much of Sarah Pain," he says.

Cavelli adds that prior to Governor Palin getting the Republican Vice Presidential nomination, Syrah Palin wine was selling briskly at the wine bar. "I actually think the whole thing is pretty funny," he says. Cavelli said he plans to keep it on the wine list at Yield Wine Bar.

The political nod away from Syrah Palin wine at the San Francisco wine bar isn't surprising though. No Republican in modern history has won the majority of the vote from San Franciscans. San Francisco voters tend to vote in about an 80% majority for the Democratic Party candidate for President in every election. And its the Green party that gets the majority of that remaining 20% rather than the Republican candidate.

But in other parts of the Bay Area and elsewhere, importer David Hinkle, owner of North Berkeley Imports, says there's been an "uptick in sales of the Syrah Palin organic wine since the Governor of Alaska was nominated as John McCain's Vice Presidential running mate.

Hinkle avoids any political connection to the wine. Since he imported it from Chile long before Sarah Palin was nominated, such a thought was the farthest thing from his mind.

"The wines (Palin brand) are outstanding," he says. "Very rich, full-bodied. There's nothing political about the wine in any way."

Well, at least intentionally.

Of course, we suspect a few San Francisco Bay Area Democrats are buying the Syrah Palin wine anyway. Perhaps as a keepsake. Or maybe they are planning to break the bottle against a John McCain-Sarah Palin campaign sign celebration style if Barack Obama and Joe Biden wine the Presidency on November 4?

On the other hand, Berkeley wine importer Hinkle might want to call Sarah Palin and pitch his Syrah Palin as the wine of choice for the Presidential victory parties in the event the McCain-Palin ticket wins on November 4.

We also could see big in-store displays on November 5, the day after the election, if McCain-Palin wins. But if they lose, well...'Que Sera Sera (pronounced Saraaah) [Whatever will be will be],' (pronounced Sarah) as Doris Day sang in the famous song of the same name.

Specialty Foods Retailing Memo: A Love of Good Italian Olive Oil Leads to A Thriving Business For Two Specialty Foods Entrepreneurs

Natural~Specialty Foods Memo Editor's Note: Lea Ann Vessels, a former employee of consumer packaged goods giant Proctor & Gamble, and Marta Miranda, a University professor, have turned a love of good Italian olive oils and good food in general into a thriving specialty foods store, along with their own brand of award-winning premium Italian olive oil that has developed a cult following, and a line of Italian tomato and pesto sauces.

The partners operate the Abbondanza specialty foods store in Lexington, Kentucky USA, where they also bottle their Oliva Bella brand (which means beautiful olive) olive oil and a recently introduced line of Italian tomato and pesto sauces.

The two specialty foods entrepreneurs started out in 2004 bottling some olive oil they imported from Italy and then selling it at the local farmers market. They built a customer following, then opened their specialty foods store. They added additional varieties of olive oil under their own brand, then expanded the inventory in the store into other specialty and gourmet foods categories, along with creating their own line of Italian tomato and pesto sauces.

Business is booming. But they are keeping the store small and niche-oriented by design. It's their point of differentiation, along with marketing and selling their own brand of Italian olive oils.

The food-loving partners are branching out into offering food education classes and seminars through the store, allowing them to not only put a focus on their olive oil line and the other products they offer for sale in the store, but to also further explore and share with customers their love of good food and the good food lifestyle.

Writer Cynthia L. Jones has a profile of the two owners of Lexington, Kentucky's Abbondanza specialty foods store in Southsider Magazine, a publication that focuses on lifestyle and other topics in the Lexington region. Read Ms. Jones' feature article below:

A Bottled Bounty

Abbondanza owners know how to keep customers coming back

By Cynthia L. Jones

Southsider Magazine, Lexington, Kentucky USA

October 30, 2008

When Abbondanza co-owners Lea Ann Vessels (at left in the photo) and Marta Miranda began peddling their extra virgin olive oils at the Lexington Farmers' Market in 2004, they dreamed of its success, but never expected the cult following it has acquired.

Today, the savvy co-owners have customers calling them at home after hours for oil. "One customer called and said she had an olive oil emergency," Vessels said. "She said even if I could put some in a mason jar that she would pay whatever." Vessels sent the customer home with olive oil in an empty wine bottle.

Vessels, who has even received calls on New Year's Day from customers, says she tries to be accommodating. Another customer who was having a dinner party called on a Sunday asking for oil. "She apologized for the Sunday call," Vessels said. "And I told her to meet me down at the shop."

The two began their venture by importing 200 liters of olive oil, which they sold in two months time. With a growing customer base from the farmers' market, Vessels and Miranda opened a tasting room, located at 406 S. Broadway, for their Oliva Bella oils imported from farms in southern Italy. Since opening last summer, the owners have expanded their products to include fine balsamic, pastas and specialty cheeses. Last year, the company began selling their homemade pomodori agrodolce (slow roasted tomato sauce), cipollini (roasted onion) and pesto sauces that have also become wildly successful.

The idea for bringing olive oil to Lexington began when Vessels' work with Proctor & Gamble took her to Italy. She began tasting oils that her colleagues would bring to her from their own family groves. Vessels explained that the difference in quality was striking. "I had always loved olive oil," she said. "But I realized I had never really tasted fresh olive oil until then." As Vessels began tasting fine oils, she began to realize there was a need in Lexington for oil of this caliber.

Vessels then joined with Miranda, a friend and partner in other business ventures. "We are people who are passionate about good food," Miranda said. "We love to put things together in a healthier way." Miranda is an associate professor and director of the Office of Multicultural Affairs and Women and Gender Studies at Eastern Kentucky University. Miranda grew up cooking with her father in his restaurants' kitchens. At age 5 she had a special stool in order to be tall enough to stir the pots.

The owners have purposely kept the shop small and quaint to give it that corner store feel. "People are starving for the old fashioned way of the community or neighborhood market where they can visit and talk about food," Vessels said. She explained that the customer base is very diverse. "It's not just high end," she said and explained that the store attracts everyone from cancer patients looking for the medicinal benefits of fresh olive oil to retirees and college students.

Vessels and Miranda came up with the name, Abbondanza, because it means "abundance" in Italian. Vessels said the idea of fullness or having enough for everyone at the table fits perfectly in description, value and name for the company. "Since we were importing olive oil from Italy," Vessels said, "we wanted to weave in the beautiful Italian language as well." The two named the oil Oliva Bella, which means "beautiful olive"–a name they feel is easy for customers to remember.

Miranda and Vessels believe it's important to teach their customers about the differences their fresh olive oils provide not only in taste, but also in healthful benefits. "A big part of our business is educating people," Vessels said. "Once people taste it, they can't go back to their supermarket bottles."

Anyone who wanders inside the tasting room will be invited to try their products and learn about the advantages of using oils made from hand-harvested olives. The nutritive benefits of the olive oils remain in their high antioxidants and low acidity levels. As a result, each bottle has the harvest date on the back to help customers understand the importance of keeping it fresh. To ensure their commitment to selling fresh oils, the owners keep the oil shipments to a minimum and bottle the oils themselves. Loyal customers, however, have been disappointed when the supply was gone. Ralph Brown, a Lexington customer, said he ran out of oil before the next shipment. "I came into the store every day asking, 'Okay, where's the oil?'"

The oils recently won the 2007 silver medal award at the Los Angeles International Extra Virgin Olive Oil Competition. Oliva Bella competed against over 400 oils, most of which came from outside the United States.

Vessels said that the company does very little advertising and added that most of their business is from word of mouth. Many new customers also stop in as a result of seeing displays on white butcher paper. Each day, Vessels writes catchy, hand-written signs inviting them to stop into the store. After taste testing their products, customers will be offered a small cup of Miranda's Cuban coffee.

The most recent venture of Abbondanza is their cooking parties that take place in the tasting room kitchen. "The idea is to teach people how to creatively put things together," Miranda explained. "Cooking for people is one of the most important ways to love and nurture them."

Miranda explained that the secret is having few ingredients and putting them together in a way in which most people hadn't thought. For instance, Vessels came up with the idea of using peaches wrapped in prosciutto or adding a tablespoon of cream cheese into their tomato sauce to make a very rich and creamy rosato (pink) sauce.

Before opening Abbondanza, Vessels says she would spend her Sundays cooking all day and delivering food to friends. "Food is my therapy," she said. "It's what I think about all the time, it's how I de-stress; it's my nightly entertainment."

She says she loves reading food magazines and cookbooks and watching the Food Network; the food is what she wants to talk about most of the time. "When I greet friends," Vessels said, "I am more likely to ask, 'What did you eat last night' than 'How are you?'"

Several Kentucky restaurants are already using the oil in their recipes. Holly Hill Inn, in Midway, and several others in Louisville are among them

[Photo Credit: Photograph above by Robbie Clark for Southsider Magazine.]

Supply Side Memo: Current Credit Crunch and Financial Crisis Beginning to Have Negative Impact on Smaller Specialty and Natural Foods Companies

The current credit crunch and financial crisis in the U.S. is starting to have a negative impact on smaller specialty foods manufacturing companies, particularly those who had embarked on growing their product lines and distribution prior to the crisis emerging so strongly in September to the present.

Yesterday's San Francisco Chronicle profiles one such specialty foods company in a credit jam, Napa, California-based The Perfect Pear, which produces and markets homemade specialty pear sauces, oils, marinades and jams.

The Napa specialty foods company was founded in 2003 by former corporate marketing executive Susan Knapp, who left her corporate job to live her dream, to become a specialty foods industry entrepreneur.

Today The Perfect Pair produces 19 different pear-based specialty foods products and has annual sales of $700,000.

Not bad for a self-funded,start-up niche specialty foods company that's not yet five years old.

But that's the good news.

The not so good news is that Susan Knapp needs $200,000 right now to fill current orders from customers like Whole Foods Market, Inc. and others, as well as to meet the increased demand from retail customers for her products, she tells the San Francisco Chronicle staff writer Julian Guthrie in the story.

Normally that wouldn't be a big problem for the specialty foods industry entrepreneur, since her company has good credit, she has fairly strong sales, and has an existing retail customer base, along with new customers wanting to buy her pear-based specialty products.

But because of the frozen credit markets Susan Knapp has been unable to obtain a working capital loan. In order to hold on, she is using her credit cards, asking friends and associates for loans or to invest in the company and searching out private investors who if the deal is right she is willing to sell a stake of her self-funded specialty foods company to in return for working capital so she can fulfill her orders. Investors in small companies like hers are very hard to find in good times let alone now though.

Read the story, "Successful pear products firm in a credit jam," from yesterday's San Francisco Chronicle here.

Susan Knapp's specialty foods company is far from alone in experiencing the freeze in the credit markets, even for short-term, working capital loans. In recent weeks we've spoken to a number of smaller, entrepreneurial specialty, natural and artisan foods manufacturing companies facing the same issue.

Most of these companies are doing well. They just need short-term loans to produce inventory. In most of the cases we've come into contact with there are orders from distributors and retail customers for this to be produced inventory. It's cash flow that's lacking. And crdit is tight.

Unlike larger manufacturing companies, these entrepreneurial specialty companies don't have the sales or cash flow to always fund production. This is expecially true if they get a new customer like a Whole Foods Market, Inc., who's initial order of such a product for all of its U.S. stores can easilty be 400 -to- 1,000 cases. or more Most of these smaller firms don't keep that much extra inventory on hand since doing so isn't financially prudent.

Another difficulty is in the current poor economic climate distributors and retailers often hold back their payables a bit longer than normal. Going say just an extra 30 days without being paid by a couple major customers can play havock on the cash flow of these smaller specialty producers.

Another problem many smaller specialty, natural and artisan foods manufacturers have is they may not have noticed the coming economic downturn like bigger companies did. Therefore they didn't cut expenses or make other preparations soon enough. Of course in the case of the current credit crisis, not even the largest U.S. banks and corporations, let alone the Bush Administration and Congress, appeared to have had any idea it was on the way. And despite the $700 billion taxpayer bailout of financial institutions we have yet to see any thawing in the credit markets.

Unfortunately for these smaller, entrepreneurial companies the current credit crisis is just the tip of the iceberg. Most U.S. economists believe the country has now fallen into recession, and that things are going to get far worse before they turn around.

As a result, for smaller specialty foods companies this not only means a continued period of frozen credit markets. It also means the possibillity of decreased sales to retail customers because the demand for more expensive specialty and natural products is decreasing. There is across the board evidence of this, as consumers are trading down to lessor-quality, cheaper food and grocery products -- and shopping more at discount rather than natural and specialty stores -- in significant numbers all across America.

This means less sales, cash flow and resources for these smaller specialty foods companies. It also means those who are going to survive need to look at their operations from stem to stern and cut costs whereever they can -- from procurement and production to administrative and operations.

This week's Newsweek magazine has an informative article suggesting small businesses of all kinds need to do just that now -- to shift into cost-cutting mode.

Read the Newsweek article, "Shifting into Cost-Cutting Mode," here.

Now is the time for smaller specialty, natural and artisinal food companies to cut costs. The longer and deeper into a recession it gets the harder it becomes to realize proper savings. And to survive.

Below are a few suggestions we have for smaller specialty companies looking to and needing to cut costs now:

>If you use a co-packer sit down with him or her and talk costs. Also talk to one or two competing co-packers and find out what they would charge you compared to what you currently are paying. There is usually money to be saved by doing this exercise.

>Cut any extra administrative costs to the bone. Do you really need those two company vehicles? Can you pay yourself a smaller salary for a while? What are you paying for office supplies? Probably too much. Lastly, can you afford the current number of employees you have working for you?

>Cut back on travel. Do you really need to attend the number of food shows you have been? Coudn't you cut back to two or three key shows and still be fine? Do you really need to travel to the number of customer calls out of the region you have been? Can you cut back on this expense -- air fair, hotels, meals when on the road -- a bit in order to save big dollars without hurting sales.

>Look at packaging. Packaging is one of the biggest money wasters smaller specialty companies neglect. Talk with your suppliers. Get estimates from competitors. Could you save by say going from glass to plastic, for example. Maybe you should reduce the size of your package from say 16oz to 14oz so you can make a bit better margin per unit of sale. Notice how the traditional gallon of bleach is now a few ounces less than an actual gallon? That's because Clorox and the other big guys have reduced package sizes in order to gain a few extra pennies per unit in gross margin. It's the same with various food products from numerous major manufacturers. They've been reducing package sizes by small increments since last year.

These are just a few examples of places smaller specialty, natural and artisan food companies can look to cut costs.

Generally speaking, cost-cutting isn't going to solve the need for cash that Susan Knapp and her The Perfect Pear has, although cutting costs to the bone without harming sales is the first thing she needs to do if she hasn't already done so.

However, we've never seen one smaller-size (under $10 million in annual sales say) specialty or natural foods company that couldn't cut costs, be it cutting back on excess travel, trimming administrative costs, doing better with marketing and sales, shopping around for better deals on co-packers and packaging, and other key operational, production and related expenses.

It's also important that along with cutting costs right now these companies make sure they are collecting receivables on time. There is a time-honored practice by some customers to hold their accounts payable for as long as possible in recessionary times. Even an extra week can be negative to the cash flow of a smaller specialty foods company.

Therefore, keep on top of receivables. Also, if things get real bad check into factoring companies. These companies will advance you cash on your unpaid customer receivables, taking a percentage cut of course, which in the case of seriously outstanding accounts can mean the difference between surviving and folding up the tent in terms of needed cash flow.

Now is the time for smaller specialty and natural foods manufacturing and marketing companies to take a comprehensive, rational look at every aspect of production and operations. Doing so will allow you to whether the current recessionary storm.

Also such companies should be all over their Congressional representatives about the $700 billion bailout's not yet having even a minimal affect on thawing the credit markets. After all, its is small business, such as specialty and natural foods companies, that provide the majority of new jobs in America, as is said by both Presidential candidates multiple times a day on the campaign trail. These very same small businesses need access to the credit markets in order to create these jobs.

[Photo credit: Credit Crunch Cereal graphic courtesy: lewrockwell.com. That's Federal Reserve Bank Chairman Ben Bernanke pictured on the front of the cereal box.]

Small-Format Food Retailing Memo: The Small-Format, Neighborhood-Oriented Food and Grocery Retailing Trend Continues to Emerge and Grow in the U.S.

Giant Eagle, Inc's (supermarket chain) first Giant Eagle Express small-format, neighborhood-oriented food and grocery store in Harmonville, Pennsylvania is about 15,000 square feet. (Photo credit: Pittsburgh Post Gazzette.)

Neighborhood Food Retailing USA

We've been writing extensively about what we termed the "small-format food retailing revolution" in the United States, and what we call the "international small-format food retailing revolution," since we started Natural~Specialty Foods Memo in August, 2007.

In conjunction with our small-format focus, we've written extensively about what we have called a return to neighborhood food retailing in the U.S., which goes hand-in-hand with the re-emergence of smaller-format food and grocery stores in the country.

We've received lots of correspondence from the mainstream press about our small-format food and grocery store and neighborhood food retailing reporting, coverage and analysis, including from reporters from the New York Times, Los Angeles Times (and other U.S. papers), business publications and daily papers from Canada, Mexico, Europe and Asia, and other mainstream publications, along with Blogs.

It has been interesting to receive this correspondence.

What we've also started to notice is that the mainstream press has discovered what we've been writing extensively about for 15 months -- that small-format food and grocery retailing and neighborhood food retailing is indeed a growing trend in the United States.

For example, on October 3, the Pittsburgh Post Gazette ran this story, "Tight economy has shoppers, grocers looking to neighborhood stores." The piece, by staff writer Teresa F. Lindeman discusses many of the issues we've been writing about since last August in terms of the external and economic factors involved in the small-format grocery store trend in the U.S.

It also talks about Tesco's Fresh & Easy Neighborhood Market, Wal-Mart's Marketside, Giant Eagle's Giant Eagle Express and SuperValu, Inc's Urban Fresh by Jewel" all small format chains, all which we've written about extensively.

And today, the Associated Press, which is syndicated to nearly every newspaper in the U.S., ran this feature story, Like shoppers' budgets, grocery stores shrink, which so far has been picked up and published by a number of American newspapers.

The AP piece also features a discussion of many of the issues we've been writing about, and suggested last summer would be occurring now, for the last 15 months regarding small-format food retailing in the U.S. and the greater focus on neighborhood markets.

Our analysis of the growing small-format food retailing trend in the U.S. isn't one that says smaller format, neighborhood grocery stores, which have never gone away completely in the U.S., are going to replace larger supermarkets and mega discount stores like Wal-Mart Supercenters, Costco club stores or Super Target combination food, grocery and general merchandise stores.

Rather our analysis is that the growing small-format trend, which is a unique event because major chains like Wal-Mart, SuperValu, Safeway, Tesco and others are driving it in the U.S., is a new layer of an old concept -- the independent neighborhood grocery store -- which is an American original.

Mega stores aren't going to go away. However, in our analysis fewer of such stores will be built and more smaller, neighborhood-oriented food stores will be built over the next decade.

We already are seeing evidence of this emerging. For example:

>Wal-Mart recently said it will built fewer of its combination food, grocery and general merchandise Supercenters (which average 180,000 square feet) next year and in 2010 than its original plans call for.

Wal-Mart also is building numerous smaller Supercenters and of course opened its first four small-format food stores, Marketside, in the Phoenix, Arizona Metropolitan region on October 4.

>Target Stores has recently decreased the size of some of its new Super target grocery and general merchandise mega-stores, and in some cases even shrank the stores significantly and decided not to add the grocery side in a few cases.

>Costco is looking at building smaller club stores in urban areas like the store it has in San Francisco's South of Market neighborhood. This even includes the possibility of building smaller, multi-story Costco stores in large cities.

>Supernatural foods retailer Whole Foods Market, Inc. has decided to downsize a number of the new stores it has in development. The retailer also is questioning whether or not it will even continue to build and open any additional stores in the 60,000 -to- 80,000 square foot range, something it has done a lot of in the last five years, in the future.

Our analysis is that just as cars, houses, bank accounts, retirement fund portfolios and other key aspects of American life are getting smaller, and will continue to do so for most Americans for the next few years, so too in many cases will food and grocery stores trend towards getting smaller.

But although size does matter, it's not just smaller square footage that's important in this analysis. What is equally important is that the reason the small-format trend is here to stay for a significant number of years is that it's neighborhood-driven. In other words, small-format food stores aren't just growing in quantity and popularity because they are small. They are doing so because they are designed to serve as neighborhood markets -- just like the independents have done and continue to do in the U.S. -- although to a far-lessor degree today than in the past because of the emergence of the big box chain store.

This means a few things.

First, it offers a new opportunity for the big chains to create small-format operations in conjunction with their larger store operations. Doing this can provide some real cost savings for retailers like Wal-Mart, Tesco, Safeway and the others.

Second, it's our analysis the small-format food retailing trend provides a renewed opportunity for independent grocers to thrive in the U.S. Independents are the original small-format neighborhood grocers and still do it the best.

Third, we see the small-format, neighborhood food retailing trend providing a new opportunity for traditional convenience store operators.

These chains and independents sit right between convenient retailing and neighborhood food retailing, straddling that definitional fence. As such, they can create new formats, as many are currently doing, that are hybrid grocery and convenience stores.

This offers the c-store chains particularly a new way to broaden their offerings away from the traditional c-store staples of alcoholic beverages, cigarettes, gasoline and "gut buster-quality" ready-to-eat foods, all of which are declining categories, into a more diversified product category mix. Not closing their traditional c-stores but diversifying with a new format. Pennsylvania-based Wawa is a good model of a very successful hybrid convenience store/grocery store retailer.

There is still a long way to go in the small-format trend in the U.S. We are just seeing the beginning of it at present. Our analysis is that the neighborhood retailing aspect of the small-format trend will get even stronger and we will see various different formats, as we are beginning to see at present, emerge to serve neighborhood residents' food shopping needs.

We will be covering and analyzing the small-format and neighborhood food retailing trend, as we have been for the last 15 months, extensively. We may even have a couple more new terms to coin.

Independent Grocer Memo: Going Where A Chain Store Used to Be; Texas Independent City Market Welcomes the Opportunity

Neighborhood Food Retailing USA

The Minyard supermarket chain may have given up on its store in the Westcliff Shopping Center at 3511 West Biddison Street in Fort Worth, Texas USA because it was underperforming. But that didn't stop independent grocer Kurt Jaeger from buying the store and spending a serious chunk of change to remodel the market from floor to ceiling.

Jaeger, who already owns an independent supermarket in nearby Burleson, Texas, says in a story published today in the Fort Worth Star-Telegram, that he knew the former Minyard supermarket could be a success if remodeled and given the proper independent touch the moment he toured the empty store.

So he bought it. Took it over and named it City Market, which is the name of his first store.

In July, Coppell,Texas-based Minyard Food Stores sold 37 of its stores to Grocer's Supply Co. of Houston. Grocer's Supply is Jaeger's wholesale supplier, and he acquired the site from them.

The store has been completely revamped. Walls and murals are freshly painted, shelves have been rearranged and restocked, and several new freezer cases have been installed. The produce section has been expanded, as has the selection, and the beer and wine offerings have also grown, according to the Forth Worth Star-Telegram. Tomorrow the store celebrates a big grand opening.

You can read the story, "Neighborhood grocery returns to Westcliff area," by staff writer Sandra Baker here.

As we often write, the independent food and grocery retailing sector in the U.S. is a vibrant one. Every so often a pundit or two will state that independents are an endangered grocery retailing species. However, American independents prove those pundits wrong each and every day, opening new stores and very seldom closing existing ones compared to other types of retailers.

Despite the growth of huge supermarket chains with a near national reach in the U.S., along with the discounters like Wal-Mart, Target and Costco that do have a national presence, the independent neighborhood grocer not only continues to survive in America, most are thriving.

Most independents survive and even thrive by sticking to the basics -- and then adding their own unique touches.

On the financial side they don't generally over-leverage themselves. They tend to follow a prudent pay-as-you-go philosophy of doing business.

On the merchandising side successful independents know the neighborhoods their store or stores are in like the back of their hands. They then create and nurture a niche -- be it upscale, natural-specialty or discount -- based on this knowledge of the market area.

In terms of customer service, independents invented this concept in grocery retailing. Nothing can be to high touch for many independents, be it offering carry out service, home delivery, special product orders or other neighborhood-oriented customer services features for their customers.

Successful independents also become part of the community rather than just being a grocer that has a store in the community. And like this community focus, most successful independents also create a sense of community and family among their employees and customers.

Another very important key to the success of independents in the U.S. today is the way their wholesale suppliers work closely with the retailers, offering financing, store design services, marketing, advertising and merchandising support, and other forms of expertise and help, like Grocer's Supply is doing with Kurt Jaeger and his now two City Markets stores.

Kurt Jaeger and his two City Markets supermarkets are a good example of creating a niche, offering superior customer service and focusing on community. The independent grocer has been very successful with this approach at his City Market number one. And we have a feeling if he follows that same formula he will make his City Market number two in Forth Worth, Texas equally as successful.

[Photo Credit: Paul Moseley: Forth Worth Star-Telegram.]

Retail Memo: Sprouts Farmers Market Store Number Eight Sprouts in Texas; Deep in the Heart of Whole Foods Market Country

Fast-growing, Arizona USA-based natural products retailing chain Sprouts Farmers Market opened its newest store in Whole Foods Market, Inc.'s home state of Texas on Friday (October 24) in a new 570,000 square foot shopping complex, Murphy Marketplace, in Murphy, Texas. Murphy is a suburb of Dallas.

The new Murphy Marketplace Sprouts is the natural grocer's eighth Texas store. It has additional natural markets set to open in the Lone Star State, where supernatural foods retailer Whole Foods was founded and is headquartered, in Austin. The national and international natural grocery chain currently operates 15 stores in its home state of Texas. Sprouts Farmers Market currently has stores in Arizona, California, Colorado and Texas.

The new Murphy, Texas Sprouts Farmers Market unit opened on Friday. But a big grand opening celebration by the grocer and the developer of the shopping center is planned for this Wednesday, October 29.

The $90-million Murphy Marketplace shopping and lifestyle destination center of which the new Sprouts natural market is a part is owed and was developed by Langford Property Company. The center is located at the intersection of FM 544 and Murphy Road in Murphy, which is in East Collin County. The Sprouts' store is the first natural-specialty market in the county, according to Eric Langford, president of the development company.

Langford says the joint Sprouts-Murphy Marketplace grand opening event will kick off with a ribbon-cutting ceremony at 10:30am at the Sprouts natural market. In conjunction with the ribbon-cutting ceremony, Langford says the center will dedicate a special clock tower, which was donated for the shopping center by the area Chamber of Commerce. The tower cost $10,000 and adds a historic flair to the lifestyle shopping center, Langford says.

The new Sprouts' store will hold all sorts of grand opening activities on Wednesday, including food tastings, special promotions and events tied-in with the clock tower dedication ceremony.

Like its other natural products markets, the new Murphy Marketplace Sprouts Farmers Market store specializes in farm fresh produce, purchased from local growers when possible. Sprouts also offers a large selection of vitamins and supplements, all natural meats, fresh seafood, bins full of bulk foods, an extensive selection of natural, organic and specialty grocery items, imported cheeses, deli meats, prepared foods and more.

Sprouts Farmers Market stores average about 15,000 square feet.

The Sprouts' natural market is the retail food anchor of the new Murphy Marketplace center which covers about 76 acres. Among the center's other retail tenants include: a Lowe's big box home improvement store, 24-Hour Fitness, Wachovia Bank, Saxby's, Massage Envy, Monarch Dental, Red Brick Pizza, Smoothie Factory, Planet Tan, Mattress Giant, Azura Nail Spa, Firehouse Subs, Cristina's Fine Mexican Restaurant, T-Mobile, Whataburger and more, according to the developer.

Being the only natural-specialty grocer in the county gives Sprouts a competitive advantage in this fast-growing and changing part of Texas. In fact, Sprouts has been locating a number of its Texas stores in regions in the state where no natural-specialty markets exist but where the emerging demographics and growth patterns offer good current and near term opportunity.

For example, According to the City of Murphy, the median household income for the city is $111,000-plus. Nearly 90 percent of the city's residents are college-educated. College-education is one of the key demographic variables that correlates to prime natural foods consumers. In fact, education-level is the top criteria Whole Foods Market uses in terms of locating one of its stores in a city or neighborhood.

Murphy's population has more than quadrupled since 2000, from 3,000 residents to more than 14,000 in early 2006. East Collin County, where the city is located, also is one of the fastest-growing counties in Texas. The new shopping center is regional in its scope, so the Sprouts' natural market is expected to draw from a much larger population base than just Murphy's 14,000 residents.

According to research conducted by the city, county and the developer of the new shopping center, FM 544 (the highway where the center is located) supports traffic of nearly 40,000 vehicles per day. In other words, at least 40,000 vehicles drive past the Murphy Marketplace daily.

The city of Murphy was established in the late 1800s during the time the railroad was extended into the area. It quickly became a shipping hub for the local farming and ranching families. As it did for other Texas towns, the railroad gave Murphy residents the opportunity to import building materials that were not locally available. Bricks that were mass-produced in Bedfordshire, United Kingdom and slates from North Wales were incorporated into the construction of new buildings.

Along with these new materials came the "Victorian" architectural style. The Victorians invented a way to make big panes of glass, called "sheet glass." So Victorian houses had bigger windows. Victorians also loved to decorate their houses by embellishing these large windows and by adding bay windows, iron railings, Flemish bonding and other decorative brickwork patterns. Early Murphy residents were quick to adopt this affluent style into their new homes.

Murphy Marketplace has blended many of these local design elements into the architectural design of the retail center. The center's -- and the new Sprouts natural market's -- design features include the use of soft earth tone colors, simple building lines, colorful canopies, decorative lighting and extensive landscaping in keeping with the community's design theme. Walking paths, shade trees, water features and gathering areas also provide a place to stroll, play and visit with friends, creating a strong sense of place in the center.

Memo to FTC: Whole Foods' Hegemony is baloney

In this October 21 piece, "Retail Memo: Natural Grocers Joining Sunflower Farmers Market in Opening First Stores in Whole Foods Market's Home City of Austin, Texas USA," we wrote about how two other fast-growing natural foods retail chains, Sunflower Farmers Market and Natural Grocers, are joining Sprouts Farmers Market in opening stores deep in the heart of Whole Foods Market, Inc. country -- Texas.

That Sprouts already has opened and currently operates eight natural foods markets in Whole Foods' home headquarters state, with more new stores on the way -- a new Sprouts store is planned to open in McKinney Texas in the summer of 2009 and another in Coppell, Texas in late 2009, for example -- demonstrates the marketplace (and Sprouts) disagrees with the argument by the U.S. Federal Trade Commission (FTC) that Whole Foods Market, Inc. has a monopolistic or hegemonic position in the natural and organic products retailing space as a result of its merger with Wild Oats last year.

Do smaller competitors really open stores in an aggressive manner in the home state of a retailer that has a monopoly in the natural and organic products retailing segment? Of course not. They do so because they see a niche and an opportunity to compete, which means competition exists.

Add to Sprouts the fact Sunflower and Natural Grocers are both opening stores in Texas and the FTC's argument becomes even more silly.

Further add the significant competition in Texas from supermarket chains like H-E-B and United Supermarkets' Market Street banner, Safeway-owned Randall's, Costco, Wal-Mart and a few others in the state (all retailers deep into the natural and organic foods categories) and the FTC's argument looks like pure folly.

And Texas is far from an isolated example. It's the same all over the U.S. Whole Foods Market is faced with stiff (and getting stiffer) natural and organic category competition from regional natural foods chains like Sprouts, Sunflower, Natural Grocers and others, including independents and Co-operatives in some places, and national and regional supermarket chains (and local independent grocers), as we wrote about in this October 19 piece focusing on the Colorado market.

Also toss in the national mass merchandisers and club chains: Wal-Mart; Target; Costco; BJ's Wholesale; and Wal-Mart's Sam's Club. All are deep in the natural and organic products categories -- and getting deeper. Then there is Trader Joe's. And we are just getting started. Tip of the iceberg stuff. There is no lack of category competition at retail for Whole Foods Market.

This competitive fact is true in California, Oregon and Washington State, the Midwest, the South, and the eastern U.S. In all U.S. regions natural foods retailers and supermarkets -- national, regional and independent -- all are challenging Whole Foods in the natural and organic products retailing segment in various ways. We can't find one region in the U.S. where a person with real knowledge of natural products retailing could say Whole Foods has a real monopolistic position. Rather, the supernatural retailer is actually fighting for its life nationally.

Despite this market reality, the FTC plans to hold a new hearing in February, 2009 to discuss what it says is Whole Foods Market, Inc.'s monopolistic position in the natural and organic category retailing segment. This despite the fact every shred of empirical evidence shows it isn't the case. We even wonder how many of the current members of the FTC will be around in 2009 when a new President has taken office following next week's election?

Perhaps it's time to have a Boston Tea Party in front of the FTC offices in Washington, DC as a symbol of how this government agency continues to waste resources and U.S. taxpayer money in its non-marketplace reality-based pursuit of a natural and organic products category retailing monopoly that doesn't exist. We suggest organic tea of course.

There are real monopolies out there after all. Whole Foods Market, Inc. just isn't one of them.

[Editor's note: Natural~Specialty Foods Memo owns no stock in Whole Foods Market, Inc. Nor does it have any sort of business or professional relationship with the company.]

Independent Grocer Memo: The Battle of the Brooklyn Independents Need Not Be a Battle; It's All About Finding and Exploiting the Niches

Neighborhood Food Retailing USA

America's neighborhood independent grocers are often faced with competition from the "big guys" when a big national or regional grocery chain opens a store in the city or neighborhood where the independent has been doing business for years.

It's less often the case that another independent food retailer moves in and challenges the more established independent grocer on its home turf in the neighborhood.

However the dynamism of food and grocery retailing in the U.S., where thousands of independent grocery stores exist and more new stores open every week, is such that this occurs far more frequently than is commonly reported or discussed.

In fact, what is usually the case is in any given neighborhood in America at any given point in time, one finds multiple independents going not only head-to-head with supermarkets owned and operated by national and regional chains but with fellow independent grocers as well.

Al Sale (pictured at top left in his store), the 54-year-old owner of Good Food Supermarket (pictured in the second half of the photograph at top, left) on Court Street near Fourth Place in Carroll Gardens, Brooklyn, New York USA, has been one of the more fortunate independent grocers in America. Mr. Sale, who with his brother, Michael, has run Good Food for 30 years, has been blessed during those three decades by not having a competitive grocery store nearby -- neither a chain unit or fellow independent -- according to a story in yesterday's New York Times.

But that all changed about two weeks ago when a new independent grocery store opened near the Sale brother's (interesting last name for a grocer by the way) Good Food supermarket in the Carroll Gardens neighborhood.

That new independent supermarket, Gourmet Fresh, has been opened in the neighborhood by a family who formerly ran a Key Food chain supermarket in the area.

Al and Michael Sale hadn't been too worried about the new store since the name, Gourmet Fresh, suggested to the brothers the store would be selling specialty, gourmet and premium foods rather than a full selection of basic food and grocery products like their Good Food Supermarket offers.

But then the trucks started arriving. Al Sale tells the New York Times when he saw products like Coca-Cola and other basic groceries being unloaded at the Gourmet Fresh Market he began to worry a bit.

It appears Gourmet Fresh is offering items that match its name. But the new neighborhood supermarket also is offering basic food and grocery items, thereby serving as a direct competitor to Good Food Supermarket.

The Sale brothers are worried. The new independent supermarket is bigger than their store. It's more upscale in design and is offering more products than Good Food Supermarket stocks.

However, if our observations over the years are correct, Al and Michael Sale will figure out, like nearly all independent grocers do, how to not only survive the new competition but also how to thrive against it. It's all about finding a niche and becoming the best at it. This is something -- adaptation -- America's independent grocers are very good at doing.

And in the case of the Sale's and their Good Food Supermarket, they may have not had competition close by in the neighborhood for 30 years. However, lasting 30 years still takes hard work and dedication.

We suggest the Sale brothers place close attention to what the new independent Gourmet Fresh supermarket is doing for a couple months. Then figure out what they do best at Good Food Supermarket -- be it service, quality, niche merchandising, pricing, ect. -- and then do it even better than they have done it for the last 30 years.

Also, the brothers shouldn't forget about all the customer loyalty they've built up over the last 30 years in the neighborhood. Maybe it's time to thank those loyal customers with a valued-shopper discount program? Or hold a customer appreciation day -- reminding all who attend that the store has been around for 30 years and plans to be around for another 30 or more years.

Additionally, since Gourmet Fresh has just moved into the neighborhood, it's likely they are paying much higher monthly rent than the Sale's, who've been in their location for 30 years. Gourmet Fresh also has start up costs involved in creating and stocking the new supermarket.

This means Good Food Supermarket is at an advantage in terms of overhead. That could mean offering a few weeks of super hot, discount price sales promotions for the Sale Brothers. Offer basic and specialty groceries at hot prices so the store's regular customers might check out the new Gourmet Fresh store but will still load their pantries with sale priced items offered by the Sale brothers. Make those regular customers a price offering they can't refuse. Have some fun with the promotion: Call it the "Sale's Sale of Sales," for example.

Good Food Supermarket can't do anything about the fact Gourmet Fresh is a larger and more upscale looking store. But the brothers can play up on the fact they are the longtime local guys; the neighborhood guys. That's a niche worth making even stronger, especially in the face of the new competition, which almost always makes a grocer better than before.

Read the complete story from yesterday's New York Times, "Trouble, Two Doors Down," here

Food & Culture Memo: America's Up-and-Coming Food Capitals and the Growing Food Culture in the United States

Salt Lake City, Utah (above) is one of America's Up-and-Coming food capitals.

Americans no longer have to live in cosmopolitan cities like New York, Boston, San Francisco, Los Angeles, Miami or Chicago in order to have a wide range of top-quality food shopping and eating choices available to them, including natural, organic, specialty, gourmet and ethnic food products.

The explosion of upscale independent grocers and regional food retailing chains, specialty stores and national chains such as Whole Foods Market, along with farmers markets and culinary-focused restaurants, throughout America has changed the food culture and availability of premium-quality foods in what used to be referred to as "second-tier" food cities in the United States.

Not too many years ago, if a consumer wanted a decent selection of say fresh organic produce, Asian grocery products or gourmet delights in cities like Phoenix, Arizona, Salt Lake City, Utah or Baton Rouge, Louisiana, it was slim pickings in terms of retail food stores and other shopping venues that carried products in these and other natural, organic, specialty and premium foods categories. The same was true in the case of quality ethnic or healthy foods-oriented restaurants.

For the most part though, those days are gone. American cities like these and many others, including even smaller cities of under 100,000 residents, today have in most cases numerous food shopping choices, from the organic to the super premium, available to residents. There's supermarkets that stock an abundance of natural and specialty products, natural foods stores, specialty markets, farmers markets, combination grocery stores featuring premium, prepared foods and much more. And even more so, this food culture is growing rapidly.

Today's Forbes.com focuses on this fact in an article it calls "America's Up-and Coming Food Capitals."

In today's piece, Forbes looks at those "second cities" like Salt Lake, Phoenix, Baton Rouge, Chapel Hill, North Carolina and a few others, which the publication calls America's emerging food capitals.

Along with food stores such as Whole Foods and others, Forbes takes a look at farmers markets, restaurants, specialty shops and market halls on the retail side, and writes about the specialty ans artisan food purveyors in these cities who are making the emerging food culture possible with their respective creations and innovations.

For example, here is what the Forbes feature says about the emerging food culture of Salt Lake City, Utah:

"That's right. In Salt Lake City, a group of local farmers, cheese makers, bakers and chefs are remaking the city's culinary image. Rockhill Creamery, Beehive Cheese and Drake Family Farms utilize area grazing pastures to produce a variety of cheeses, including goat's milk, Gouda, feta and Gruyère. Crumb Brothers Artisan Breads hand-crafts olive, sourdough and ciabatta loaves, as well as other breads and pastries. And establishments like Bambara, a Kimpton Hotel restaurant that uses ingredients from local growers and ranchers, prove that Salt Lake can compete with the standard-bearers."

In terms of food retailing, Whole Foods not too long ago opened one of its bigger natural and gourmet food emporiums in Salt Lake.

Additionally, local multi-store independent supermarket chains Harmon's and Dan's Foods are major sellers of natural, organic, specialty and gourmet food and grocery products. There also are farmers markets in Salt Lake and numerous gourmet food and wine stores helping to establish the city's culinary reputation, in addition to fine restaurants and other premium food venues.

A major engine behind these emerging American food capitals is the "local foods" phenomenon. Artisan food producers have and continue to spring up all over America, focusing on producing products made from locally-grown fruits, vegetables and grains, along with locally-raised and produced animals, eggs and dairy products.

Local retailers (and branches of national retailers like Whole Foods and many others) and local restaurants are supporting these purveyors by buying and selling their local crops (in the case of growers) and products. Farmers markets also serve as a showcase for these locally-produced and created bounties.

An example of this is the Durham-Chapel Hill Metropolitan region in North Carolina, which Bon Appetite magazine recently named "America's Foodiest Small Town." There are 120 small farms within a 50-mile radius of Chapel Hill, according to the magazine, and close relationships between chefs and farmers are helping the town gain credibility as a culinary destination.

You can read Forbes take on these emerging culinary cities here. Forbes also offers a more in-depth look of the topic at this link: In Depth: America's Up-And-Coming Food Capitals.

The growth of an American food culture beyond these cosmopolitan cities is good for the food industry as a whole, especially the natural, specialty, gourmet and related segments.

The growing local foods movement also is good for communities. It allows for the building of an agricultural and entrepreneurial food industry in these cities and regions which in many cases disappeared decades ago when mass-market distribution meant the cheapest food, regardless of how far away it came from, was King. It gives local growers a local market. This means they can sell their crops for more more than they would get by selling it to outside manufacturing companies or national food chains.

A stronger food culture also offers more opportunities for retailers, particularly local independents, to create a niche in which they can compete in against the mega chains.

Lastly, this emerging food culture in the U.S. is just plain good for communities and residents. More choices means fresh, better quality foods, be it at supermarkets, natural foods stores, restaurants or farmers markets. More consumers of quality food also means the prices will come down, since such a food culture creates more demand for more natural, premium and locally-produced foods.

Food & Politics Memo: It's Zen and the Art of Chocolate Making For City Council Member Turned Chocolatier and Confection Company Entrepreneur

Oakland, CA city council member Nancy Nadel shows off some of the chocolates that she has made from beans. Nadel spends her summers in Jamaica cultivating a cooperative of cacao farmers to supply her with fermented beans. (Photo Credit: Mike Lucia/Oakland Tribune)

From the Natural~Specialty Foods Memo Editor's Desk: Who says food and politics don't mix? Not longtime Oakland, California USA city council member Nancy Nadel.

Her honor, perhaps finding a lack of sweetness in her position as a local politician and lawmaker, decided to seek her sweet delights elsewhere: She founded a confections company, Oakland Chocolate Company, specializing in chocolate, and named it after the city she serves.

Nancy Nadel remains on the city council, she just added a second hat (well, a hair net actually) to her already busy life.

The Oakland Tribune newspaper profiled city lawmaker/chocolatier Namcy Nadel and her Oakland Chocolate Company in a recent article. We enjoyed the story, including the interesting juxtapositon of local politics, chocolate-making and small business building. We thought you would enjoy it too. Read it below:

Oakland council member finds her Zen in chocolate
By Cecily Burt
Oakland Tribune
October 18, 2008

After a grueling week immersed in the city of Oakland's problems, Councilmember Nancy Nadel unwinds in a unique way. She puts on a hair net, cranks up the reggae, and loses herself in swirling vat of warm, rich, dark chocolate.

Nadel has become a chocolatier in her (very little) spare time, launching the Oakland Chocolate Company with its roots in Jamaican soil.

"It's like my Zen," Nadel said last Sunday, the only day of the week she isn't buried in budgets and voluminous agenda packets or other issues affecting her West Oakland district. "The preparation and even the clean up, I get into it. When I give people my chocolate they are happier than when I talk about my progressive policies."

No doubt. But Nadel's progressive policies have a way of steering her life choices, and the decision to dabble in chocolate is no exception.

The story can be traced back to the last vacation Nadel and her late husband, West Oakland activist Chappell Hayes, took to Jamaica before he died. She has returned year after year during summer breaks from council business, staying with friends in the rural reaches in the parish of St. Mary on Jamaica's north coast.

Cacao farmers such as Steve Belnaviz eke out a living selling their just-picked beans to the government, which sends them to a state-run fermenting plant. Many of the poor farmers that Nadel met have land, but no money to harvest their cacao trees. Some have cleared the trees that shade the cacao to plant other crops.

"It's a beautiful place but it has the same kind of (economic) problems as Oakland," she said.

At first Nadel wondered whether she could help the farmers get better prices for their beans by helping them organize a fair-trade cooperative. The cooperative would ferment its own organic beans and sell the product in bulk to chocolate companies, basically removing the middle man. Then she thought, why not try her own hand at farming and making chocolate?

"As a city council member I've talked about sustainable issues and farming for a long time," she said. "My goal is to put my money where my mouth is."

So she took a weeklong class at UC Davis in chocolate technology and hasn't looked back. The Oakland Chocolate Company started small and Nadel intends to keep it that way for the foreseeable future, given the demands on her time.

For a time Nadel rented kitchen space at Brown Sugar restaurant on Mandela Parkway. But that arrangement required her to bring in her supplies and pack it all out at the end of the day. She recently subleased space from the maker of Barlovento artisan chocolates in Jack London Square. She bought a bigger machine for melting her chocolate and she can leave all her equipment, ingredients and finished products there.

Nadel is averaging about 200 pieces of filled chocolates or dipped nuts and fruits each Sunday, plus molded chocolate leaves and textured chocolate crunch bark. She eagerly gives visitors samples of nutty-tasting cocoa nibs to munch on as she describes how the milky white beans are harvested from football-sized pods that grow from the trunks of cacao trees, and then placed on trays and covered with banana leaves to dry and ferment.

It's taken years of research and outreach, but Nadel and her partners in Jamaica gathered with cacao farmers for the first time in February to discuss their plans for a cooperative and fermentary, and efforts to join the Jamaican Organic Agriculture Movement.

And it will be some time yet before a production-sized fermentary is established and the farmers can produce enough fermented beans to provide a steady supply to her company and other chocolate makers.

Still, the seeds are starting to take root.

"Two weeks ago was the first time I made chocolate from beans that I had picked, fermented and dried, and brought back 3,000 miles," said Nadel, sounding like a proud parent. "It's an incredible feeling."

A portion of the sales from the Oakland Chocolate Company will go to help build a production-sized cocoa bean fermentary in Jamaica.

To learn more about the company and the Jamaican farmers, or to order chocolates, visit http://www.theoaklandchocolateco.com/.

Food Retailing & Society Memo: Wal-Mart Foundation Gives New York USA Food Bank System Over Half Million Dollar Cash Donation

Volunteers at this Manhattan food pantry, which is one of the hundreds located in communities throughout New York that are supplied by the food bank network and other donors, pack food boxes for fellow New Yorkers who need food assistance.

The Food Bank Association of New York state USA said yesterday it received a check for $577,000 from Wal-Mart Stores, Inc. to be used by the state's food bank network to provide food and groceries for the increasing number of New York residents caught in the nation's severe economic recession.

A spokesperson for New York's food bank network told Natural~Specialty Foods Memo that because of the network's size and ability to purchase food and grocery products at bargain rates from manufacturers, it believes it can leverage Wal-Mart's $577,000 donation into as much as $6 million dollars worth of food to distribute to the state's needy.

Wal-Mart broke down its donation to the food bank network this way, in order to localize the monies as well as to provide a significant portion to the main food bank network: it gave a lump-sum cash grant of $322,000 to the New York Food Bank Network from its Wal-Mart foundation, and an additional award of $25,000 to seven of the Food Bank Association's eight affiliates. On top of that it gave an $80,000 grant to the Food Bank of New York City.

Yesterday, Wal-Mart representatives and leaders of New York's food banks also announced the mega-retailer would hold a major food drive at all of its New York state Wal-Mart and Sam's Club stores beginning next month and continuing over the following 12 months.

Scores of Wal-Mart-New York store associates also said on Tuesday they are planning to volunteer at the food banks and in other activities designed to help those in need of food assistance.

At yesterday's announcement, Wal-Mart also donated a semi-truck full of food and grocery essentials to the food bank network.

Last year, Wal-Mart Stores, Inc. gave more than $7 million in cash and in-kind donations to causes and organizations throughout New York state, according to audited records.

The retailer has a strong and growing presence in the Empire State, with 92 Wal-Mart Supercenter and Discount stores, 17 Sam's Clubs, and three distribution centers.

Wal-Mart gets lots of flack, some of it deserved, for being a big bad corporation and mega-retailer. However, we should note we did a little checking and none of New York's investment or commercial banks -- the ones with their headquarters in New York City and the ones that the American taxpayer is now bailing out to the tune of $700 billion -- have donated anything even coming close to the $577,000 Wal-Mart donated in just this one check to the state's food banks.

Love it or hate it, or remain in between, but Wal-Mart isn't asking the American taxpayer for any sort of bailout. And in these tough economic times it is emerging as one of if not the major corporate charitable contributor in the U.S.

If you are hungry and in need of food assistance in New York and elsewhere in the U.S., you're going to be mighty happy that Wal-Mart is willing to write half a million dollar checks, along with conducting year-long food drives and other activities which will raise even more than that for the state's food banks. In fact, Wal-Mart is making similar cash donations and conducting similar food drives throughout the U.S.

Meanwhile, many of those New York investment banks that should be giving big donations to the New York Food Bank Network this year are instead asking New York and American taxpayers for a bailout because in numerous instances, unlike Wal-Mart and other retailers that do business the old fashion way -- they buy goods and sell them for a profit, adding value along the way to consumers -- these financial institutions created a way of doing business that made a few rich at the expense of many. In fact, it is safe to say the behavior of many of these financial institutions is having a direct effect in adding more Americans to the food insecurity roles.

Packaging & POP Memo: Lights, Sound, Video - On Packaging and In-Store Point-of-Purchase Displays

From the Natural~Specialty Foods Memo Editor's Desk: High technology is making its way to product packaging and in-store point-of purchase displays. Specifically, according to a report in the marketing and advertising publication Advertising Age, lights, sounds and streaming video are beginning to show up on product packages and in-store point-of purchase (POP) displays.

Perhaps in today's 24/7 electronic, plugged-in world, packaging and in-store displays are the next logical extension of technologies such as streaming video? On the other hand, do consumers really care, especially when it comes to packaging? And will the added costs of such packaging enhancements really lead to increased sales for the brands and products that use the electronic elements on the product packages?

Perhaps in the case of in-store point-of-purchase displays, features like electronic lights, video and sound can help draw attention to the displays and thus lead to increased sales. After all, various types of interactive POP displays have been around for many years. They just aren't as sophisticated as the ones mentioned in the Ad Age piece.

When it comes to product packaging we are skeptical. In some special cases, depending on the nature of the product, such technology might have some merit. And in the case of new product introductions it might be interesting to create a limited run say of the new products' labels featuring electronic ink or some form of streaming video for promotional purposes.

But in the case of the majority of food, grocery and health and beauty care-general merchandise items we are hard-pressed to think at this point in time consumers will be drawn to such bells and whistles on the outside of the product -- it's labels.

Rather, we think brand building the good old fashion way will still be what's key. Quality, value, price, an attractive package or label, marketed to generate trial and then to build brand isn't going to be replaced by technology applied to packaging in the vast majority of cases.

We are far from Luddites though, so we welcome the innovation, especially for in-store POP displays, and in those particular product packaging cases like we describe above for product packaging. Generally, the more options the better.

And we like enjoy the "Gee Whiz" factor at times as much as anybody.

Of course there is the "green factor" as well. Such as since the packaging will be electronic, won't it have to be disposed of in special ways like most electronic waste is. That could be a real kettle of worms. It's also something it appears to us the developers and users of this new packaging have yet to take into serious consideration.

Read the report from the October 20, 2008 issue of Advertising Age below:

Soon, Your Mayonnaise Label May Have Sight, Sound, Video
Electric Ink Could Be Low-Cost, Energy-Efficient Option for Advertising
By Jack Neff
October 20, 2008

BATAVIA, Ohio (AdAge.com) -- In-store displays and product packaging are getting a whole lot flashier -- literally, with lights and streaming video.

Henkel's Right Guard is testing use of printed electronics to power flashing lights in corrugated in-store displays at Walgreens stores in the Chicago area, a first step for a technology from Arizona start-up company Nth Degree that could eventually bring low-cost streaming video to printed displays, packaging, direct mail or magazine inserts.

Other tests are in the works involving other marketers and formats, according to people familiar with the matter, including one expected next year involving printed electronics on packaging for a Procter & Gamble Co. brand, believed to be a tissue-towel brand. P&G declined to comment on the project.

Anil Selby, VP-business development for Nth Degree, declined to comment on tests involving marketers, though he said the company has been in discussions with P&G, General Mills, Coca-Cola Co. and PepsiCo, among others.

Even for hardened marketers, it's hard to get past the gee-whiz factor. "It's just incredible what they're doing," said Tom Owen, director of in-store merchandising for Henkel of America (formerly known as Dial Corp.), when Nth Degree executives showed him an 8½-by-11-inch sheet of paper running a video snippet from the original "Star Trek" series. (Moving newspaper photographs in Harry Potter movies come to mind.)

Limited rollout

Henkel is taking a disciplined approach to evaluating the technology's commercial potential, which it's been testing in 27 Chicago-area stores, compared with a control group using the same basketball-themed display without the electronic enhancements in 27 other Chicago stores.

"When it comes to investing in something nationwide, cost will be a factor," said Mr. Owen, who has been working with the Alliance in-store marketing unit of corrugated display maker Rock-Tenn Co.

Nth Degree, based in Tempe, Ariz., near Henkel's Scottsdale headquarters, uses "wafer printing," employing conventional presses to print layers of ink that act like circuit boards.

The Right Guard displays use battery packs, but Mr. Selby said it's also possible to affix a wafer-thin power source directly onto paper or a package. He said he sees printed streaming video as part of a second phase of the technology's rollout.

The wafer-based inks are 90% more efficient than fluorescent lighting, environmentally friendly and can be powered using solar collectors, Mr. Selby said. The technology can be mass-produced cost effectively for as little as 20¢ per unit, he added, though initial installations are in the $3 to $10 range. That's one reason the company has targeted store displays that can reach hundreds or thousands of people at once.

Scale, individual attention

Mr. Selby ultimately sees the technology being used for outdoor ads, or as a cost-effective replacement for LED video displays in retail. Nth Degree can make displays individually addressable, allowing different messages in different stores.

Magazines also have been taking a look at electronic-ink technologies, most notably in the case of Esquire, which used it on the cover of its 75th- anniversary issue. Get a behind-the-scenes look at how that cover was put together in a 3 Minute Ad Age.

Supply Side Memo: Long Live Newman's Own and its Charitable Mission: Famous Name Food Maker on New Product Introduction Rampage; Next Up Frozen Pizza

Ladies and gentlemen, start your ovens -- natural and premium foods company Newman's Own is getting into the ready-to-bake frozen pizza business.

The food company founded by and named after actor, race car driver and entrepreneur Paul Newman, who passed away last month, plans to soon introduce four varieties of all-natural, premium, frozen ready-to-bake pizzas called Newman's Own Thin and Crispy frozen pizza. The all-natural and premium frozen pizza pies come in four varieties: Supreme; Four Cheese; Roasted Garlic and Chicken; and Uncured Pepperoni.

According to Mike Harvard, vice president of marketing for Newman's Own, the all-natural, premium frozen pizza's will be competitively priced with the leading national frozen pizza brands. This has been one of the keys to the fabulous success of the Newman's own brand in fact. While offering a premium-quality product, be it salad dressing, pasta sauce, popcorn or ready-to-drink lemon aid, the food company always made sure to price the brand close to or just slightly higher than other national, mass market brands in the respective categories, even though its products are all-natural and of premium quality.

Asked why frozen pizza's are the newest line extension for Newman's Own, Harvard says: "For 25 years, our consumers have loved our all-natural products that help make delicious meals. So, we figured, why not make it easier and provide the whole meal. Our new pizzas deliver what consumers want --delicious, convenient meal solutions the whole family will love."

"I guess you could say we've jumped from the salad bowl onto the pizza pan," Harvard adds.

Of course he is referring to the fact the very first category Newman's Own began with 26 years ago was ready-to-pour salad dressings. We see lots of potential synergies between the two product lines, such as salad dressing and frozen pizza FSI coupon cross promotions, in-store tie-ins and the like.

The new frozen pizza line is being launched in stores this month in five test market areas. Those market regions are: New England; Albany, NY; Milwaukee, WI; Minneapolis, MN; and Charlotte, NC. Harvard says Newman's Own has plans to expand to other U.S. markets next year and roll the frozen pizza line out nationally by 2010.

Newman's Own Thin and Crispy pizza retails for a suggested price of $6.49-$6.99 for pizzas that range from 12.3 oz. to 14.7 oz, according to marketing vice president Harvard.

Among the supermarket chains in the U.S. states mentioned above involved in the frozen, premium pizza pie line's introduction this month include: Shaw's supermarkets; Price Chopper; BigY; Hannaford; Demoula's Market Basket; Roche Bros.; Foodmaster; HarrisTeeter; CUB Foods; Piggly Wiggly; Woodman's Markets; Copps; Sentry; Byerly's; Lund's; Kowalski's and a number of others.

That Newman's Own is introducing its new line of frozen pizzas just shortly after the death of Paul Newman is particularly bittersweet because along with popcorn (and pasta and Lemonade), pizza is said to be the award winning actor's other favorite food.

The Newman's Own brand frozen pizza's go from the freezer to the oven, taking only 10-12 minutes to bake, according to the company.

All four of the premium, thin crust frozen pizzas are trans-fat-free. Additionally, The crust is made with flaxseed, all-natural cheeses are used in all the pizzas, the roasted garlic chicken pizzas are made with only all-natural white meat chicken, and the pepperoni on that variety and on the Supreme pizza is uncured. The Supreme Pizza variety contains sausage, uncured pepperoni, green, red, yellow peppers, onions and cheese.

There are no artificial ingredients or colorings in any of the Newman's Own frozen pizzas, according to company marketing chief Mike Harvard.

Newman's Own is on a new product introduction rampage.

The food marketer recently introduced a new line of ready-to-eat breakfast cereals, Newman's Own Sweet Enough breakfast cereals. As is the case with the frozen pizza category, the new cereal line is the company's first entry into the shelf-stable ready-to-eat breakfast cereal category.

It's not an accident the food marketer's two newest product lines are both in the ready-to-eat and ready-to-heat segments.

Mike Harvard says a major segment focus of the company's new product development efforts is in the meal solutions sector. These are food products of various types that are ready-to-eat with either zero or only a slight (like adding milk to cereal or baking a frozen pizza) effort needing to be added by consumers. In other words, most of the value has already been created and added by the products' manufacturer.

Prior to introducing the new breakfast cereal line, Newman's Own introduced a new line of shelf-stable marinades named Dress Up Dinner Marinades, along with a new line of salad dressings in sprayer-style bottles called Newman's Own Natural Salad Mists.

These two new lines fit into the meal solutions strategy from the opposite end in that they are convenient, value added products that can be used by consumers to aid in the preparation of and to enhance a meal with very little preparation -- marinading chicken with the marinades and then simply baking or grilling, and spraying the salad dressing misters on a packaged salad mix and simply eating, for example.

Newman's Own was founded on a lark by Paul Newman and his buddy, the writer A.E. Hotchner, in 1982 in the kitchen of Newman's Westport, CT USA home. Newman and Hotcher, who wrote a best selling biography of Ernest Hemingway and the famous memoir King of the Hill about his life growing up in St Louis, Mo. during the Great Depression, along with many other works, made up a batch of Newman's favorite salad dressing -- the company's first commercial product sold at retail stores -- and gave it away to friends and family members for Christmas, creating a label that said "Newman's Own" in part as a tongue-in-cheek joke.

From there as is often said -- the rest is history. The company was launched by the pair with one key proviso -- that all of its profits after expenses would be donated to charity.

Newman and Hotchner followed up the salad dressing line with popcorn, ready-to-drink lemonade and pasta sauce. Today Newman's Own produces and markets 175 different varieties of food products in the U.S. and internationally.

And of course Newman's Own has even produced its own food company offspring, Santa Cruz, CA-based Newman's Own Organics, which was founded by and is run by Paul Newman's daughter, Nell Newman.

Still based in Westport, Conn., the charitable mission of Newman's Own is expressed in its Company motto: "Shameless exploitation in pursuit of the Common Good."

The food company's charitable mission is reflected in the following statement that will appear on every package of Newman's Own products: "The Newman's Own Foundation continues Paul Newman's commitment to donate all after tax net profits from this product and related royalties for educational and charitable purposes," says company marketing chief Mike Harvard.

The statement is being added to every Newman's Own product package to reflect Newman's wishes and plans that the company and its charitable mission live long after his death.

The Newman's Own Foundation, which is the charitable arm of the food company, have given over $250 million to thousands of charities since its founding in 1982. That's impressive. And a wonderful legacy for Paul Newman to leave.

Retail Memo: Natural Grocers Joining Sunflower Farmers Market in Opening First Stores in Whole Foods Market's Home City of Austin, Texas USA

Fast-growing Lakewood, Colorado-based Natural Grocers by Vitamin College plans to open its first natural foods and products store in Austin, Texas USA, the city where Whole Foods Market, Inc. was founded, is headquartered, and operates numerous natural foods supermarkets. The store will be located at 39th and Guadalupe streets in the hip Texas city who's residents have a strong appetite for natural foods.

The Austin, Texas store, which Natural Grocers says is scheduled to open in January, 2009, will be the natural grocer's first Austin unit and its third store in Texas. Currently there is one Natural Grocers store in Dallas, at 7515 Campbell Road, which opened just last month. A second store is scheduled to open next month in Amarillo.

At about 11,000 square feet, the Austin Natural Grocers market is far smaller than the typical new Whole Foods Market store.

However, it's not much smaller than the small-format natural foods stores being opened by two other fast-growing chain's -- Sunflower Farmers Market and Sprouts Farmers Market. The stores of these two natural products retailers average about 15,000 -to- 20,000 square feet. The Dallas Natural Grocers store that opened last month is about 14,000 square feet.

Sunflower Farmers Market also plans to soon open a store in Whole Foods Market's home city of Austin, joining Natural Grocers in its backyard invasion of Whole Foods' home turf. In June of this year, as we reported, Sunflower Farmers Market announced plans to open its first store at 1901 W. William Cannon Drive near the intersection of Manchaca Road. We also reported Sunflower said at the time it plans at least three stores in the Austin area.

Natural Grocers also says it plans to open at least two more stores in Austin if the first store performs well. Those stores would be in the city's Arboretum area and in South Austin, according to Kemper Isley, who is the co-president of Natural Grocers by Vitamin Cottage.

Asked why the retailer is going to locate a store right in the heart of Whole Foods country, Isley says "Austin's demographics fit well with the company's model of a traditional natural foods store." He also says he's not concerned about going into the backyard of Austin-based Whole Foods Market, Inc.

The Austin Natural Grocers' store will be located across the street from Central Market, the upscale natural-specialty format banner of 310-store Texas-based food and grocery chain H.E. Butt (H-E-B). Central Market stores are popular in Texas. The markets feature lots of natural, organic, specialty, gourmet, international and fresh, prepared foods in an upscale setting.

"We've always considered ourselves synergistic with Whole Foods and I think we’ll be the same way with Central Market," says Isely.

In other words, Natural Grocers by Vitamin Cottage believes being located across the street from the Central Market and not to far away from a Whole Foods Market unit in Austin will actually help the store's sales rather than hurt them. At least the Colorado-based natural retailer is betting on that premise.

The Natural Grocers' stores are a bit more traditional or orthodox natural foods markets.

For example, the stores offer only organic produce items, no conventionally grown. Additionally, The company's product ingredient standards tend to be stricter than those of Whole Foods Market and other chain natural products retailers. The stores also put a heavy emphasis on selling natural supplements, devoting about 20% of the store's square footage to the category.

Natural Grocers' stores are modern though. In addition to selling natural and organic food, grocery and non-foods products, the stores also offer specialty and gourmet items as long as those products meet its standards, for example. The store design also is modernistic in look and approach.

Like Sunflower Farmers Market and Sprouts Farmers Market, Natural Grocers puts an emphasise on price, trying to offer everyday retail prices lower than those at Whole Foods' stores and other competitors.

Natural Grocers by Vitamin Cottage currently has 28 stores. All but three of the stores -- the current Texas store open in Dallas and stores in Santa Fe and Albuquerque, New Mexico, -- are in Colorado.

But like Sunflower Farmers Market and Sprouts Farmers Market, Natural Grocers is in a fast-growth mode. Company co-president Isely says the natural products retailer is looking at four locations in North Texas beyond its existing Dallas store and will look at other locations elsewhere around the state.

Additionally, he says the retailer is looking to potentially open stores in Utah, Wyoming, Arizona and Oklahoma. All four of these states would be brand new markets for Natural Grocers.

The retailer first ventured outside of its home base of Colorado in 2003, opening the two stores in nearby New Mexico. It wasn't until five years later that it opened its first store in a third state outside of Colorado, opening the Dallas last month. Now another store follows in Austin in January, 2009 -- and Natural Grocers' store count and new market growth appears to be in rapid-development gear.

Related Stories from Natural~Specialty Foods Memo:

>October 19, 2008: Retail Memo: First Two Sprouts Farmers Market Stores Sprout in Colorado; Another Challenge to What The FTC Says is Whole Foods' Category Hegemony

>October 21, 2008: Retail Memo: H-E-B Set to Open 127,900 Square Foot Hybrid Mega-Store in Houston, Texas Suburb; Aisles of Organics and Premium Delights

>Click here to read a selection of past posts about the FTC/Whole Foods-Wild Oats acquisition issue.

Retail Memo: H-E-B Set to Open 127,900 Square Foot Hybrid Mega-Store in Houston, Texas Suburb; Miles and Aisles of Organic and Premium Delights

San Antonio, Texas-based regional supermarket chain H.E. Butt Grocery Company (H-E-B) plans to open one of its biggest stores yet on November 7 in Bunker Hill Village, Texas, which is a suburb of Houston.

The new 127,900 square foot store will be called H-E-B Bunker Hill Market. The mega-store will be a hybrid of the grocery chain's H-E-B supermarkets and its upscale Central Market formats.

H-E-B debuted its upscale Central Market format and first store in 2004. The stores are a combination traditional supermarket (in terms of product offering) with an upscale flair, along with being a natural and specialty foods store. Central Market stores also feature a vast array of in-store-made fresh, prepared foods, along with specialty wines, craft beers and international food and grocery products.

H-E-B's other banner and format are its H-E-B supermarkets, which are large full-service super or mega stores with an upscale flair.

The new H-E-B Bunker Hill Market set to open in three weeks in the city of the same name, will be a combination of both of these two formats.

The store will offer a full selection of supermarket essentials along with lots of non-foods and general merchandise products in its nearly 128,000 square feet.

The hybrid new mega-market in Bunker Hill will feature all of the upscale, natural and specialty departmental and products focus of its Central Market format. H-E-B has opened a number of such stores already in Texas.

For example, the store will feature a massive produce department featuring nearly 1,000 varieties of fresh fruits and vegetables. The fresh produce store-within-a-store also will feature fresh juices and sampling stations, among other upscale twists.

There will be an in-store artisan bakery which will include scores of varieties of in-store baked breads, pastries, cakes and other premium baked goods. The bakery also will include a coffee bar/cafe and other upscale touches.

The store's natural, organic, specialty, gourmet and international food and grocery products selection across all shelf-stable and perishable product categories will rival anything Whole Foods Market has in the market and most likely surpass what any other competing supermarket offers in the natural-organic products category.

The huge market also will have a wine cellar within its massive liquor department. That wine cellar will offer over 2,000 varieties of wines, according to an H-E-B spokesperson. The beer selection will feature everything from the big domestic and import national brands to craft beers from throughout the U.S. and the world.

There's also an in-store sushi bar and a huge gourmet cheese department ofering over 400 varieties of domestic and imported cheeses.

These are just a few examples of the upscale, natural-specialty and fresh foods focus the 127,900 square foot Bunker Hill Market will borrow from the company's Central Market format. Because of the store's size, it's really a full Central Market and H-E-B supermarket combined into one.

The mega-market, which the company spokesperson said will staff with a whopping 430 associates, also will feature a full-service pharmacy, a complete store-within-a-store floral department with delivery service, a gas station, car wash and a huge grilling-accessory shop featuring everything a consumer needs for backyard cooking and entertaining, which is big in Texas.

H-E-B just opened one of these mega-markets (about 128,000 square feet) in San Antonio last Friday in fact.

One of the key features of these stores is that the product mix is customized to the immediate trade area where the stores are located.

For example, the San Antonio store, called H-E-B Alon Market, has the largest kosher foods selection of any of the chain's stores to date because the affluent neighborhood ($90,000 in average annual income) it's located in and around has a high percentage of Jewish residents. The market also is located right across the street from the Jewish Community Center. According to an H-E-B spokesperson, the retailer consulted with members of the Jewish Community Center in picking its kosher foods product selection for the store.

H-E-B is one of the largest privately-held retailers in the United States. The 100 year old company has about 310 stores. of the 310 stores, 282 are located in Texas and 28 are located across the border in Mexico, which actually makes H-E-B one of the few U.S. based supermarket chains with an international presence. In Texas, its stores are in about 150 cities throughout the state. H-E-B currently has over 56,000 employees, according to the company spokesperson.

In its 2008 ranking of the top 75 food and grocery retailers in the U.S., the supermarket industry trade publication Supermarket News ranks H-E-B as the 14th-largest food and grocery retailer in the U.S., estimating the family-owned chain's sales at $13.5 billion annually. All but about 7.5% of those annual sales are in Texas. The 7.5% being from the grocer's 28 stores in Mexico.

H-E-B and the FTC's Whole Foods' category hegemony argument

To put things in perspective regarding the power of this 310-store Texas grocery chain, it's fellow Texas-based food retailer, supernatural grocer Whole Foods Market, Inc., ranks number 24 in the 2008 Supermarket News ranking, with annual sales of $6.6 billion and nearly the same number of stores, about 285 compared to 310.

This is impressive. After all, unlike Whole Foods Market, H-E-B benefits sales-wise from selling basic food and grocery products in all of its stores, while Whole Foods focuses on the natural, organic and premium categories.

On the other hand, Whole Foods is a national grocer with stores throughout the U.S., while H-E-B's annual gross sales (except for the 7.5% from its Mexico stores) are in the main based on doing business in just one state -- Texas.

Further, one of the major contributors to H-E-B's sales growth in recent years has been its Central Market upscale, natural-specialty format stores, along with the expanded selections of natural, organic, specialty and premium departments and products its adding in all of its supermarkets in Texas.

In fact, the inside of a Central Market store looks very much like the inside of a newer Whole Foods Market store -- upscale, full of natural and organic products, and stocked with fresh premium foods at every turn of the aisle.

As we wrote about in this October 19 piece, "Retail Memo: First Two Sprouts Farmers Market Stores Sprout in Colorado; Another Challenge to What The FTC Says is Whole Foods' Category Hegemony," the U.S. Federal Trade Commission (FTC) persists in arguing Whole Foods Market, Inc. with its acquisition of Wild Oats last year, is in a monopolistic position vis-a-vis the retailing of natural and organic products. the regulatory agency has set a February, 2009 meeting to next discuss the issue.

As we argue in the October 19 piece, and have written about in numerous other stories in Natural~Specialty Foods Memo, this argument from the FTC is pure folly.

We talked about the competitive heat Whole Foods Market is facing in the Colorado market in the October 19 piece.

We also mentioned how various retailers -- including H-E-B and United Supermarkets via its Market Street format, along with others -- are putting the heat on Whole Foods in the natural, organic and premium foods categories deep in the heart of Texas.

Further, we mentioned how fast-growing natural foods retail chains Sprouts Farmers Market and Sunflower Farmers Market have no entered Texas with their respective stores, which put an emphasis on discounting natural and organic products across all categories.

H-E-B has been opening other hybrid mega-store's like the one in San Antonio that opened on Friday which are similar to its Bunker Hill Market which is set to open on November 7 throughout Texas, along with opening new upscale Central Market supermarkets.

H-E-B also recently started running television ads in the Texas market featuring the popular actress Eva Longoria, who is one of the stars of the television show Desperate Housewives and is a native of Texas. Mr. Longoria is a smart choice for H-E-B in that she appeals to the state's significant Hispanic or Latino population, as well as appealing to woman and men of all ethnic backgrounds, especially women (and men) who regularly watch the popular TV program.

The combination of H-E-B, United Supermarkets (Market Street), Wal-Mart (Supercenters, Sam's Club, Neighborhood Market supermarkets), Costco, Safeway Stores (Randall's banner) with its Lifestyle format -- all retailers with a major natural and organic products merchandising focus -- and a few others on the supermarket side, along with the new entries on the natural foods format side -- Sprouts and Sunflower -- promises to give Whole Foods Market more than enough competition in its home state of Texas.

Competitors throughout the U.S. markets Whole Foods Market is in are doing the same thing as we've detailed is happening in Colorado and Texas. This is the case in California, Florida, the eastern U.S. and on and on. National and regional supermarket chains and aggressive natural products retailers like Sprouts and Sunflower are providing more than enough competitive heat for Whole Foods.

In fact, contrary to the FTC's opinion, rather than Whole Foods Market, Inc. being in a category monopolistic position, the supernatural retailer is in the fight of its life.

And in the case of H-E-B, these combination mega-stores, which offer all the features of a supermarket, combined with the offerings of a natural and specialty foods store, are becoming a powerful force in Texas. Add in the in-store pharmacy, car wash, gas station and more, and they are one-stop shopping centers for consumers of all income levels and preferences -- from lovers of basic groceries to foodies.

That's a force to be dealt with by Whole Foods Market, Inc., particularly because these H-E-B stores have approached its natural foods emporiums in terms of product selection, design and overall offerings.

It's also another empirical example of why the FTC is wasting U.S. taxpayer resources by its continued focus on the fantasy that Whole Foods is a natural products category monopolistic retailer. Just ask the very busy natural, organic and specialty foods buyers over at H-E-B- if they feel the "Whole Foods natural-organic retail category monopoly" is hurting their category sales. The answer: Not in the least bit.

Retail Memo: First Two Sprouts Farmers Market Stores Sprout in Colorado; Another Challenge to What The FTC Says is Whole Foods' Category Hegemony

When Whole Foods Market, Inc. acquired rival Wild Oats in a friendly merger last year, the Austin, Texas-based supernatural foods retailer became a major player in Colorado, the state where Wild Oats' was founded, headquartered and had its highest per capita store count.

The Colorado market is in fact one example the U.S. Federal Trade Commission (FTC) sited in its arguments that post the Wild Oats' merger Whole Foods Market, Inc. is a monopolist in the natural foods retailing category. And despite every sign to the contrary -- Whole Foods' profits are down by 40%, its stock is at an historic low and it's been laying off headquarters employees just for starters -- the FTC continues to press its case, having set a hearing for February, 2009 to review the merger once again.

As we've argued, the FTC is not only wasting its resources and U.S. taxpayer money by persisting in this folly, it's demonstrating a total ignorance of one of the very industries it is supposed to regulate -- food and grocery retailing.

If the FTC wasn't ignorant of the market forces in the industry, it would drop its February, 2009 hearing immediately. Why? Because the facts are that rather than being in a monopolistic position vis-a-vis the retailing of natural and organic products, Whole Foods Market, Inc. is in reality fighting for its life. Of course, we've seen much ignorance, along with outright neglect, from U.S. Government regulatory agencies in the last eight years. The words "financial crisis" come top of mind.

Whole Foods, as we written about regularly, is being challenged on two retail format fronts throughout the U.S.

One the one front are the still small but fast-growing natural foods chains like Sunflower Farmers Market, Sprouts Farmers Market, Natural Grocers, Canada's Planet Organic (its Mrs. Green's Natural Market chain in the U.S.) and a couple others. These natural products retailers are rapidly opening new stores, including in Whole Foods Market's backyard market of Texas, where the grocer is headquartered.

The other format or sector front which Whole Foods is being attacked on is by the supermarket sector.

For example, mega-chains like Kroger with its Fresh Fare format and Safeway with its Lifestyle format are taking a bite out of Whole Foods' sales throughout the U.S. Both the Kroger Fresh Fare and Safeway Lifestyle formats put a major emphasis on offering expanded selections of natural, organic, specialty and gourmet food and grocery products, along with premium, in-store prepared foods offerings. These are Whole Foods' niches.

Along with the giants, regional supermarket chains such as H.E. Butt and United Supermarkets (its Market Street banner) in Texas, Publix in Florida, Wegmans in the east, Raley's in the west, as well as numerous others, all are stealing share from Whole Foods with their upscale supermarkets, which not only offer expanded assortments of natural, organic and fresh foods but sell basic groceries alongside them.

Instead of enjoying the luxury of a monopolistic position in the natural and organic products retailing sector post its Wild Oats' acquisition, Whole Foods finds itself challenged on multiple fronts. It's also being challenged by the sour U.S. economy in which even traditional natural foods choppers are trading down out of a need to do so rather than a choice.

In the case of the fast-growing natural products retailers mentioned earlier. Sunflower Farmers Market, which happens to be founded and run by Wild Oats' founder Mike Gilliland, as well as headquartered in Boulder, Colorado, is opening new stores throughout the Western U.S. Sunflower has thus far even opened two of its smaller-format discount natural products stores in Texas and plans to open more in the state where Whole Foods' is headquartered.

With its base in Boulder, Sunflower is becoming a natural foods retailing force in Colorado and the west; a force Whole Foods is having to take seriously. Sunflower Farmers Market currently has seven stores in the state. It opens Colorado store number 8 next week in the city of Arvada -- and more units are on the way.

Whole Foods market has 18 stores in Colorado. Four of those stores are in Boulder. The majority of the remaining 14 are in the Denver Metropolitan region.

Two of the four Boulder stores operate under the Whole Foods' banner. One operates under the Alfalfa's banner. The other goes under the Ideal Market name. Both of those stores are former Wild oats units, as is one of the two Boulder Whole Foods' banner stores.

Alfalfa's was a Boulder-based natural foods chain Wild Oats acquired. It kept that name on the one store, as has Whole Foods. Ideal Market was a popular independent store in Boulder that Wild Oats also acquired. It kept the historic name. Whole Foods plans to keep the name as well.

Lakewood, Colorado-based Natural Grocers by Vitamin Cottage also has become a serious player in the Colorado market, adding to Whole Foods' competition in the state. Natural Grocers now has 28 of its natural products stores in Colorado.

But another fast-growing natural products retailing force just hit Colorado as well. Arizona-based Sprouts Farmers Market opened its first two stores in the Rocky Mountain state on Friday of last week, in the Denver Metro region cities of Westminster and Parker. Sprouts says it plans to add at least eight more stores in the region by the end of 2010. It's next two units will be in Fort Collins and Aurora, Colorado.

Whole Foods Market has a store in Westminster which isn't located far from the new Sprouts Farmers market unit that opened Friday. Whole Foods also has a store in Fort Collins, which is where one of the next two Sprouts units will open. [Memo to the FTC: If Sprouts Farmers Market believed Whole Foods Market, Inc. was a monopolistic natural products retailer would it really be opening two of its first three Colorado stores in cities where Whole Foods Market has existing stores?]

Sprouts currently has 30 stores in Arizona, California, Texas and now Colorado. More Sprouts stores are planned in Texas, Whole Foods Market's base, as well. The retailer also says it will open additional stores in Southern California and Arizona (and of course in Colorado), along with perhaps entering additional states in the Western USA.

The two Sprouts stores that opened on Friday were jammed with opening day shoppers, according to the company's president and chief operating officer, Doug Sanders. Sanders said 6,000 opening day shoppers walked through the doors of the two new Colorado Sprouts Farmers Market stores during the first 6 hours they were open on Friday.

A Natural~Specialty Foods Memo reader who was at the Westminster store shortly after it opened on Friday says the aisles of the store were packed with shoppers looking to grab-up the numerous grand opening day bargains Sprouts' had advertised in advance for the two stores.

Among the bargains she says she picked up included some hot deals in the produce department: Bell Peppers at three-for-a $1.00; Cantaloupes for 88 cents each; and tomatoes for 69 cents a pound, along with numerous other grand opening specials in all store categories.

Like Sunflower Farmers Market, Sprouts operates on a discount price natural and organic category premise or philosophy. It claims overall prices across all food and grocery categories in its stores are at least 15% lower everyday than Whole Foods' prices, for example.

Sprouts also runs weekly ads in which it offers fresh produce, meats and natural and organic food and grocery products for deep discounts.

Sprouts like Sunflower also puts a major emphasis on offering an abundance of fresh produce items at affordable everyday prices.

Both Sprouts and Sunflower have been cutting into sales at Whole Foods stores in Arizona, Southern California, Colorado and elsewhere because of this price and value emphasis.

In fact, Whole Foods has been fighting back -- not just against the two fast-growing natural foods' chains but against all competitors -- by offering discounts and promotions under its "The Whole Deal" value program. For example, right now Whole Foods is offering an online coupon good for $5-off any total order of $25 or more in its stores. That's a 20% discount on a $25 purchase.

Additionally, Whole Foods has had to get much more price-competitive, as have all food retailers, because of the sour U.S. economy.

Sprouts Farmers Market is making a significant impact in the Metropolitan Phoenix, Arizona market and in Southern California where it has numerous stores. There's no reason to believe it won't do the same in Colorado.

Meanwhile, when you combine Sprouts, Sunflower Farmers Market and Natural Grocers on the natural foods format retailing end in Colorado, then add Safeway, Trader Joe's, Wal-Mart, Costco, Target and others -- supermarkets and mass merchandisers deep into the natural and organic foods category in the market -- not only isn't Whole Foods Market, Inc. in a monopolistic position, it's being squeezed in various ways from three sides -- by natural foods format grocers, supermarket chains and independents, and deep discounters like Wal-Mart, Target and Costco.

Perhaps the FTC should hold that February, 2009 hearing about the Whole Foods/Wild Oats merger after all. But instead of the topic being the commission's ongoing argument that Whole Foods' is a monopolistic category retailer since acquiring Wild Oats, it could change the topic to how since the natural grocery chain acquired Wild Oats a little over a year ago it has had its most difficult time in history.

Marketing Memo: Search Marketing is a Growing and Key Part of the Marketing Arsenal; Offers Great Opportunity For Natural~Specialty Foods Companies

Yesterday we wrote about how using social media Web sites offers the perfect opportunity for natural and specialty foods suppliers, marketers and retailers to interactively market their brands to consumers by communicating their company and brand message through various means in an online social and conversational environment -- the online social media site such as Facebook, MySpace, Twitter and others.

The Internet and Web offer players in all sectors of the natural and specialty foods industry additional opportunities along with the use of social media sites for communications and ultimately brand building uses.

Although it does require a small marketing budget because it is paid advertising, unlike social media sites, which have no cost to use, search marketing, using sites such as Google and Yahoo, also is an excellent means (and virtually untapped) for natural and specialty foods suppliers, marketers, brokers and retailers to create high impact, low cost marketing campaigns.

A chief advantage of search marketing is the ability to target your message using various search terms. It's niche marketing that reaches anybody who searches a topic related to your brand or product.

Big consumer packages goods companies like Coca-Cola, ConAgra and Kellogg have discovered the power of search, and each are using it extensively.

Coke, ConAgra and Kellogg all are players in the natural and specialty foods categories as well. Coke owns the Vitamin Water and related brands, ConAgra markets organic packaged goods products under different brands, and Kellogg is a major player in the natural breakfast cereal and snack categories.

The marketing publication Brandweek reports Coca-Cola has set up a marketing campaign on Google and Yahoo in which each time a user types in the search terms "Coke," Diet Coke," "Sprite," "Vitamin Water" or any other brand marketed by the beverage giant, the phrase "My Coke Rewards" comes up at the top of the search list as on of the options.

My Coke Rewards is the company's consumer loyalty marketing program. Coke's using it on the search engines makes thousands more consumers aware of the program compared to if the loyalty scheme was only advertised in traditional media and in-store.

This week Kellogg is using search to help kick off its new RiceKrispies.com Web site, which promotes the food company's Rice Krispies brand cereal.

Because Halloween (October 31) is such a big sales period for Rice Krispies (people make the famous Rice Krispies marshmallow snack treats for Halloween) Kellogg has bought search words like "Halloween" and "Recipe" on the Google and Yahoo search engines. When userers (read potential Rice Krispies' customers) types in these search terms and others, the RiceKrispies.com Web site comes to the top of the search answers list.

ConAgra has gotten into search marketing in a big way as well. The food company has bought up scores of search terms related to its brands and products, including "great tasting recipe" and "easy-to-prepare." Type those (and numerous others) search terms in Google.com and at or near the top of the results will be information about various ConAgra brands, recipes features the company's products and related brand information, according to Brandweek.

The use of search marketing by consumer packaged goods companies is expected to grow about 30% to $594 million by 2012, according to recent research by Forrester Research, Cambridge, Mass.

Additionally, both Google and Yahoo say the use of search marketing by consumer packaged goods companies is one of their respective fastest growing categories.

Search marketing and the natural and specialty foods industry

Search marketing using Google or Yahoo or other search engines offers numerous pluses for natural and specialty foods companies.

First, the cost of entry is low. Companies can get into search using a few key search terms to start for very little money. It's far less of a cost than producing a four-color brochure, for example.

Additionally, make this comparison. Natural and specialty foods suppliers/marketers often use in-store food sampling demos as a major aspect of their marketing and promotional campaigns. Doing a demo at just one store can run $100 or more today. That means if you do demos at 20 stores the cost would be about $2,000-$3,000 If you reach 1,500 consumers at those 20 stores that's considered a pretty successful conclusion.

However, from the standpoint of return on investment (ROI) reaching 1,500 consumers with a brand message for $2,000-$3,000 isn't great. It's true their is a certain qualitative aspect to in-store demos in that you get your product tasted. However the ROI is low.

By comparison, for $2,000-$3,000 a company can get into search marketing in a substantial way to start, including buying numerous search words or terms. And instead of reaching just $1,500 consumers with the investment, tens of thousands of consumers can be reached.

We aren't suggesting search marketing as a substitute for in-store demos per se -- although in these lean times it isn't something we advocate much . Rather we are suggesting search marketing can leverage a brand message in terms of ROI far more than a promotional tactic such as an in-store demo can.

Second, search marketing has a very good return on investment (ROI), as we mentioned above In fact it offers one of the biggest bangs for the marketing bucks currently available.

This is true not only compared to in-store demos but compared to numerous other marketing tactics as well, especially within the paid advertising segment.

Lastly, Search is a trusted tool for consumers. And consumers are increasingly turning to sites like Google and Yahoo to look up recipes, types of foods and other related information. Embedding your brand message within search offers not just an advertising message but also an informational one. food products and search go together well.

For example, say a user is looking to make some treats for the kids' Halloween party. She goes to Google, types in "Halloween treat recipes," and among the thousands of search results that come up there's Kelloggs Rice Krispies Treats right at the top, including the recipe. She sees this result, thinks about how her mother always made the marshmallow treats for Halloween, and makes a note to do so herself, adding Rice Krispies to her grocery list.

Such can be the power of search for consumer packaged goods companies of all sizes.

Search marketing is perfect for companies producing and marketing natural and organic food products since so many consumers are using search sites to research healthier food options.

For example, "organic foods" is one of the top search terms on Google and Yahoo. So is "food allergies."

The same is the case in the specialty foods segment. Consumers increasingly are using search sites to look for recipes including premium ingredients and products.

For example, let's say you produce and market a unique product such as a Key Lime cookies. We bet there are thousands of Key Lime cookie lovers out there who actually use Google or Yahoo to search the term in order to find out what's out there in Key Lime cookie world. A company that makes the cookies can buy a dozen or so related search terms for very little money and get a major impact, which also is measurable, using Google or Yahoo search. It's a specialty advertising for a niche, specialty product.

For natural and specialty foods manufacturers, marketers and even retailers that aren't using search marketing we suggest you look into it. It's not only fast growing but also becoming among the most powerful ways to reach consumers with a targeted message. It's also a level playing field. You need not be a Coke, Kellogg or ConAgra to get into search marketing. It's cost of entry is low and it potential impact as a marketing tool is high.

Independent Grocer Memo: Despite Two Tesco Fresh & Easy Stores and A New Wal-Mart Marketside Store, Gilbert, AZ USA Grocer is Ready to Rock Downtown

The Phoenix, Arizona suburb of Gilbert has recently been ground zero for new retail food and grocry store openings.

On October 4, mega-retailer Wal-Mart, Inc. opened one of its first four new small-format (15,000 -to- 20,000 square foot) Marketside combination grocery and fresh foods stores in Gilbert, along with opening three more on the same day in the cities of Mesa, Chandler and Tempe.

British grocery chain Tesco also recently opened its second small-format (10,000 -to- 13,000 square foot) Fresh & Easy Neighborhood Market convenience-oriented grocery and fresh foods market in the city.

Both Wal-Mart's Marketside and Tesco's Fresh & Easy formats offer an extensive selection of fresh, prepared foods. The Marketside stores have in-store kitchens and the Fresh & Easy stores receive their prepared foods from the company's huge central kitchen in Southern California.

All this new store opening activity in by the world's number one retailer -- Wal-Mart -- and the world's third largest chain -- Tesco -- hasn't scared off Gilbert's historic Liberty Market, an independent grocery store that's been open in the city since the U.S. Great Depression, though.

Liberty Market owner Owner Joe Johnston and his partners have just completed a major remodeling of the supermarket located in Downtown Gilbert's historic Heritage District, transforming the grocery store into what Johnston calls an "urban marketplace."

The inside of the historic market features a mix of the old and new. There are modern-style clear exposed bulbs hanging from ceiling beams built in the 1930s. On the same concrete floor originally poured in 1958 sit modernist tables with smooth black surfaces.

The remodeled market features an in-store demonstration kitchen where shoppers can see what the chefs are doing through two large glass windows. Among the modern equipment in the in-store kitchen is a Vulcan Oven in which artisan pizza's are baked for sale in the store.

A major part of Liberty Market's new urban flair includes lots of prepared foods from the kitchen. There are full ready-to-heat dinner entrees and side-dishes as well as ready-to-eat grab-and-go foods prepared right in the store.

The market also features an in-store espresso bar/cafe which owner Johnson says he wants to become a downtown Gilbert social hub as well as a place where the city's many commuters will stop off on there way to work.

Professional chef David Traina is Johnson's partner in Liberty Market. He will be running the in-store kitchen, creating what he says will be a combination of basic comfort foods along with more adventurous offerings such as sweet potato salad and authentic Sicilian pizza's, among other offerings. There are fresh baked goods as well.

The market also has a retail section offering shelf-stable, fresh and perishable food and grocery items with an emphasis on specialty products.

Johnson owns three successful restaurants in Gilbert. Therefore focusing on in-store prepared foods along with retail food and grocery items in the revamped Liberty Market is a natural for both him and chef Traina.

The historic market has had four owners since it opened in the 1930's. Johnson is the fourth and says he wants to be the last.

Although he has done extensive remodeling to Liberty Market, owner Johnson says it still retains its historic core. He's referring to the historic elements such as the concrete floor poured in 1958, the 1930's wood ceiling beams and other historic elements which have been retained in the store's remodeling.

The fresh food and grocery market is part of the revitalization of downtown Gilbert and its historic district.

Johnson and Traina say they fear not the big chain outlets that have recently opened in Gilbert. They believe their upscale yet historically-grounded Liberty market and its downtown location offer residents and shoppers not only food and grocery items but restaurant-quality prepared foods items supported by Johnson's reputation as a successful restaurant operator in the city.

Additionally, It's also the only market in the downtown which has been adding various new amenities like Water Tower Park, which is slated to open next month, and the Western Canal Trail which is being completed and is scheduled for an early 2009 opening, according to Johnson.

These new public features, along with a number of new retail shops that have opened in downtown Gilbert in the last couple years, are expected to draw local residents as well as residents from outside the city to the downtown core.

Johnson and Traina say they are prepared for those new customers when they come, along with serving the residents of the entire city of Gilbert.

We like that independent spirit.

Marketing Memo: 60% of Consumers Interact With Companies On Social Media Sites; Natural~Specialty Foods Companies Not Using Social Media Missing Out

Nearly 60% of U.S. consumers say they interact with companies on a social media Web site, and one in four interact more than once per week, according to the results of the 2008 Cone Business in Social Media Study which were just released.

The survey finds that 93% of Americans believe a company should have a presence in social media, while 85% believe a company should not only be present, but should also interact with its consumers via social media.

56% of American consumers feel both a stronger connection with, and better served by, companies when they can interact with them in a social media environment.

Mike Hollywood, director of new media for Cone, says about the results of the survey: "Social media... it isn't an intrusion into their lives, but rather a welcome channel for discussion."

Here is a sampling of what American consumers surveyed said when asked about specific types of social media interactions they said they preferred:

>43% say that companies should use social networks to help solve my problems.

>41% want companies to solicit feedback on their products and services.

>37% feel that companies should develop new ways for consumers to interact with their brand.

>33% of men and 17% of women interact frequently (one or more times per week) with companies via social media.

"The ease and efficiency of online conversation is likely a draw for men who historically do not seek out the same level of interaction with companies as women," says Hollywood.

Additionally, 33% of younger, hard-to-reach consumers (ages 18-34), believe companies should actively market to them via social networks, and the same is true of the wealthiest households (household income of $75,000+). Two-thirds of the wealthiest households and the largest households (3 or more members) feel stronger connections to brands they interact with online.

Additional, separate research shows similar findings.

Generation Y (those born after 1979) online buyers are more immersed in online and mobile activities than any other generation, according to 2008 research from shopping comparison site PriceGrabber. Some 85% of Gen Y respondents said they participated in social networking, and 57% reported involvement with blogs in a recent survey conducted by the online site.

The 2008 Cone Business in Social Media Study was an online survey conducted September 11-12, 2008 by Opinion Research Corporation among 1,092 adults comprising 525 men and 567 women 18 years of age and older. The margin of error associated with a sample of this size is ± 3%. Cone is a strategic marketing and branding consulting firm based in Boston, Mass. USA.

The social media opportunity

A number of food and grocery retailers such as Wal-Mart, Inc., Whole Foods Market, Inc., (Facebook, MySpace, Twitter.com) Trader Joe's (Twitter.com), 7-Eleven (Twitter.com), Tesco's Fresh & Easy (Twitter.com) are using various social media sites to promote their stores, interact with consumers and offer various information such as recipes, tips from buyers and related information.

Others, including some of the above, also are using Blogs on their own web sites as social networking and marketing forums as well. Whole Foods has a series of such Blogs at http://www.wholefoodsmarket.com/, and Wal-Mart has its "Buyers' Blog" at http://www.walmart.com/, for example.

Numerous food and grocery manufacturers and suppliers also are using social media sites to market their products. and interact with consumers.

But Far too few natural and specialty foods manufacturers and marketers are doing so however. This is a missed opportunity for category companies because social marketing fits well with natural and specialty foods companies which often are smaller, entrepreneurial businesses that have great stories to tell.

Social media sites like Myspace, Facebook, Twitter and others are great forums for story telling and networking with customers and potential customers. Natural and specialty foods companies often have great stories to tell because of their entrepreneurial origins or other aspects of what the company does. Social media fits all size companies though, from the one-person shop to the global mega-corporation.

Using social marketing sites like those above also is low cost. It costs nothing to use the sites generally. All that's needed is an employee -- hopefully one skilled in social marketing or willing to experiment and learn -- to maintain the site, post material and network with consumers.

The best practice if possible is to involve the entire company -- from the president to the marketing department to the warehouse staff -- in the site. The more social and interactive across the board a social media site is the more interesting it is to consumers in most cases.

Of course care needs to be taken regarding the content a company places on its social media sites since like in all marketing, company and brand reputation is at stake.

Over marketing is a good way to kill a social media site as well. What's needed is a blend of marketing and brand information along with lots of other information -- stories about the company and its employees, involvement of the company in charities, recipes, related news and the like.

Interactivity also is key -- and not just between the company and users but also between the various social media site users themselves. encouraging this can really spread word of mouth about a natural or specialty foods company and the products it produces and markets.

We believe natural and specialty foods companies not using at least one social media site such as MySpace, Facebook, Twitter and a few others are missing the 21rst Century marketing boat. The opportunities to connect with current customers, consumers, buyers of your products and potential buyers of your products -- and to link those people together around your brand --exist at present using these social media sites in ways never before imagined at marketing costs never before possible.

Natural~Specialty Foods Memo has a site on Twitter.com in fact. Just go to http://www.twitter.com/. Type in nsfoodsmemo in the search box, and you will be taken to our Twitter site or page.

If you want to view Whole Foods', Trader Joe's, 7-Eleven's or Fresh & Easy's sites on Twitter just type those respective names in the search box as well. You can also do a global search using say "food retailers" or "supermarkets." The same is the case with "natural foods companies" or "Specialty foods companies" and the like to see if any are using Twitter.com.

Meanwhile, we suggest those in the natural and specialty foods industry -- retailers, manufacturers/marketers, distributors, brokers and others -- who currently aren't using one or more social networking and marketing sites do so soon. It's an opportunity you can't afford to miss out on in our analysis and opinion.

Local Foods Retailing Memo" We Suggest the Next Steps in the Evolution of Local Foods Retailing Will Be 'Grocer Grown' and 'Store Grown'

By day Simon Richard is the produce department manager at the Bi-Rite Market in San Francisco, California's Mission District. Often by day he also is a farmer, growing a variety of fruits and vegetables, such as the heirloom tomatoes he's just harvested and is holding in his hand in the photograph above taken at his Sonoma County farm where he grows a variety of fruits and vegetables offered for sale in the store's produce department. We call it 'Grocer-Grown.'

Earlier this year Natural~Specialty Foods Memo coined the term "Local foods retailing 2.0" to explain a practice being conducted by a handful of retailers such as the upscale United Kingdom (UK) supermarket chain Waitrose, Wal-Mart's UK chain Asda and a few others that have taken the merchandising and sales of "locally-produced" food and grocery products to the next level by growing fresh fruits and vegetables on their own land, along with raising hogs, steers and other animals to be butchered and sold as fresh meat cuts and used in prepared foods items in their stores, as well as creating some specialty foods products from the produce they grow. We also call this phenomenon "Grocer-Grown." In the case of meats, we call it "Grocer-Raised. And in the case of value-added food and grocery products, "Grocer-Produced."

Waitrose is the pioneer and most aggressive retailer we've yet to find that is practicing "Local foods retailing 2.0," going from its own farm right to the supermarket shelf, offering numerous "Grocer Grown" fresh produce, fresh meat and value-added food products from it own large estate farm in England.

Wegmans experimenting with 'Grocer-Grown'

The innovative upstate New York USA-based Wegmans supermarket chain also is growing some of its own fruits and vegetables on a farm owned by CEO Danny Wegman and his family. The idea to do so came from one of Wegmans' daughters. So far, fresh fruits and vegetables grown on the Wegman family farm have been offered for sale at one of the Wegmans' supermarkets, a unit located nearby the farm.

Danny Wegman told Natural~Specialty Foods Memo earlier this year the family plans to produce more varieties (and increase production a bit) of fruits and vegetables on the family farm for that one nearby store, along with selling the produce at a few other stores in that same region. The retailer is experimenting with "Grocer-Grown" and doesn't want to over-produce because the idea is to offer a selection of seasonal, high-quality, artisan produce items grown on the family farm and sold at the company's supermarkets located in the region where the farm is in upstate New York.

Bi-Rite Becoming leader in 'Grocer-Grown'

Another innovative American grocer in the city of San Francisco, independent food retailer Bi-Rite Market, also is becoming a major player in "Local Foods Retailing 2.0" or "Grocer-Grown."

Bi-Rite Market, which is located in San Francisco's Mission District neighborhood, has a garden on the roof of the urban food store where it grows fresh herbs which are sold in the store's produce department.

Bi-Rite also locally raises and butchers its own hogs, which are then offered in the store in a variety of ways: fresh pork roasts and chops, sausage, bacon and other cuts of meat. The pork also is used by the food retailer in a variety of the numerous in-store fresh, prepared foods items it makes and sells in the upscale supermarket.

The independent grocer, which sells all sorts of natural, organic, specialty and prepared foods items (a great many which are produced locally) in its popular San Francisco market, along with a selection of basic food and grocery items, is now kicking up its local foods merchandising program into the 2.0 world. "Grocer-Grown" Bi-Rite Market has started growing a selection of its own fruits and vegetables and is selling the fresh produce in the store.

In Bi-Rite's case, the store farmer also is the store produce manager, Simon Richard. This spring Richard grew a variety of fruits and vegetables on land in Sonoma County, which is located about 45 miles from San Francisco.

His crop recently came in. Among the fresh produce grown by the farmer/produce manager being offered for sale in Bi-Rite's produce department include heirloom tomatoes, Romano beans, arugula and more.

What's unique and very interesting about what Bi-Rite is doing is that in this case the "locally-grown" fresh produce items being produced by the store to be sold in the store are being grown by the same person who then is in charge of how they are sold in the store. That would be produce manager turned farmer Simon Richard. Talk about not only a local but a personal touch as well. The produce at Bi-Rite Market isn't only "Grocer-Grown," its "produce manager-grown."

The San Francisco Chronicle recently wrote about Bi-Rite's newest entry into what we call "Local Foods Retailing 2.0," the offering of the first crop of "Grocer-Grown" fresh produce for sale in the store. You can read the story, "Food Conscious: S.F. grocery branches out into farming," by Chronicle staff writer Jane Tucks here.

"Grocer-Grown' more than a fad

Natural~Specialty Foods Memo expects to see more retailers, particularly innovative independent supermarkets and natural foods retailers, join the "Local foods retailing 2.0" movement by growing some of their own fresh produce, either on land they own or in special arrangements with small, family farmers in which the grocer takes a hands on role.

Numerous U.S. food retailers like Whole Foods Market, Inc., Raley's in Northern California, Wegmans, Publix in Florida and a others regularly contract with farmers to purchase 100% of a certain crop, such as melons, apples, onions and other fresh produce items; usually specialty crops. In some cases these retailers also have input into how the crops are grown.

This practice, although close, isn't quite "Local foods retailing 2.0" because there still remains a separation between the retailer and the grower rather than the retailer being the grower.

Whole Foods is getting much closer to becoming a "local foods 2.0 retailer" however. It's increasingly working in partnership with small farmers to grow crops just for the retailer as well as loaning money to a number of these farmers so they can expand there production.

The only thing keeping Whole Foods from being a "local Foods 2.0 retailer" like Waitrose, Wegmans and Bi-Rite is that it has yet to directly grow its own crops and then sell the fresh produce in a Whole Foods market store. At least that we are aware of based on our research.

Whole Foods Market and 'Store-Grown'

Natural~Specialty Foods Memo however has a way for Whole Foods Market not only to become a charter member of the "Local foods retailing 2.0" "Grocer-Grown" club but also to leap-frog over all the others and become the pioneer in what we call "Store-Grown" local foods retailing. Yes, we are coining another new term.

We would like to see Whole Foods Market include a good-sized organic hydroponic garden in one of its stores, along with an outdoor organic rooftop garden. Make the indoor hydroponic garden about 3,000 square feet to start (prototype store) and have it glassed in so store customers can watch workers tending the garden while they shop. This fits into Whole Foods educational mission as a food retailer very well we believe. Think of the glass-walled in-store garden as the store's version of a restaurant's open demonstration kitchen.

Why not skip the farm altogether and use the store as the farm? Single-store Bi-Rite in San Francisco is doing this in part with its small rooftop garden after all.

Additionally, we suggest devoting a substantial portion of the store's roof to the rooftop garden. The store needs to be in a geographical location -- California, Florida, ect. -- where there's lots of sunshine throughout the year.

There are a myriad of crops Whole Foods 2.0 could grow in this store rooftop garden and sell in the store below, including fresh herbs, tomatoes, greens, seasonal fruits and more. As is the case in any garden, Whole Foods' limitations would primarily be based on the climate, weather and the like. With modern, intensive farming techniques one can grow an abundance of different fruits and vegetables and achieve considerable yields in such a rooftop garden.

Between the in-store hydroponic garden, which has no climate or soil limitations, and the outdoor rooftop garden, that Whole Foods 2.0 store could produce a wide-variety and abundance of fresh produce to be sold in the store throughout the year -- putting an emphasis on seasonal fruits and vegetables. It would be a supplement to rather than a substitute for all the other fresh produce sold in the store.

We even have a name for this produce -- that which would be grown inside the Whole Foods store in the hydroponic garden and on the rooftop outside. That name -- and remember you read it here first -- is: "Store-Grown." We think that term would look rather impressive in the Whole Foods store's produce department alongside the other signs reading "Organic," "Locally-Grown," "Hand-Picked" and the like.

"Store-Grown" also would be a major point of differentiation for Whole Foods and that Whole Foods store. We think its an natural and logical progression for Whole Foods in terms of a "what's next" aspect to the natural products retailers innovation cycle. That's why we chose Whole Foods as the retailer we think would be best to do it right now.

Whole Foods Market, Inc. also needs to try something innovative to break out of its current malaise caused by its recent net profit decline and the significant drop in the value of its stock.

Creating the Whole Foods 2.0 store (it can be a remodel of an existing store as well) with the in-store hydroponic garden and outdoor rooftop garden (maybe toss in a garden on the side of the store as well if there is available land) also is a natural progression for the retailer in terms of its already extensive local foods procurement and retailing program. The "Store-Grown" aspect would merely be an addition to that and of course would be limited to the one test store for some time anyway.

Plus, you can't much fresher, higher-quality locally-grown produce than that which in the course of say one hour has been harvested from the store's rooftop garden and in-store hydroponic garden and stocked in the store's produce department bins and cases. That's why we call it "Store-Grown."

Retail Memo: Innovative Virginia Natural Grocer Ellwood Thompson's Local Market to Open New Store in Washington, DC USA in Fall 2009

Pictured above is an artist's rendering of the new Ellwood Thompson's Local Market natural grocery store to open next fall in Washington DC's Columbia Heights neighborhood. [Source: Elwood Thompson's Local market.]

Ellwood Thompson's Local Market, the largest independent natural grocery in Virginia, is expanding into the nearby Washington, DC market.

The currently single-store independent natural foods' retailer, which is now 20 years old, has signed a lease for a 15,000-square-foot store in the new DC USA development at 14th and Irving streets (the Columbia Heights neighborhood) in the U.S. capital city. The new store, the first in Washington, DC for the natural grocer, is scheduled to open next fall.

"We've been interested in the communities along (Washington D.C.'s) the 14th Street corridor as the home for our second store for quite some time," says Ryan Youngman of Ellwood Thompson's. "We walked the community and talked to the people. The overwhelming support we received from residents confirmed this is the perfect place to expand. Our commitment to environmental sustainability and conservation along with organics and clean local food is a perfect fit for these neighborhoods."

Putting an emphasis on locally-grown food and grocery products produced within a 100 miles of its current store in Richmond, Virginia has been a key point of competitive positioning and differentiation for the independent natural foods retailer. In fact Locavors, those consumers who try to purchase and eat only locally-produced foods, consider "local foods" those grown no more than 200 miles from where they live. Ellwood Thompson's does that official definition 100 miles better at its Richmond, Virginia store.

Natural and organic product offerings in the new Washington DC natural grocery store will include: naturopathic vitamins, supplements and personal care, products; local produce; bulk foods; fresh meats and seafood; wine; cheeses; and fresh baked goods, according to Ryan Youngman.

Prepared foods from "Ellwood's Kitchen" will be led by award-winning chef and vegan cookbook author, Jannequin Bennett, according to the retailer.

"The prepared foods offerings will cater to intentional eaters as well as provide a variety of natural, organic, and ethnically diverse dishes. Those who elect to eat vegetarian, vegan, gluten-free, and/or raw foods will find plenty of options in all departments," Ryan Youngman says. Additionally, the store will offer in-store and outdoor community seating with wireless Internet available so customers can use their laptop computers and other wireless devices while they sit at the indoor or outdoor tables having coffee or eating.

Ellwood Thompson's also plans to extend the "green" retailing practices it currently has at its Richmond, Virginia store to its second store in Washington, DC when it opens next fall.

Those pro-environmental practices include offering store employees and shoppers incentives for conservation and recycling in the form of monetary "envirocredits" for walking, biking and mass transit and for reusing shopping bags, water and food containers. The independent natural products' retailer isn't anti-automobile though. It will offer free parking in an underground parking deck located below the new store.

Ellwood Thompson's is an innovative, independent natural foods retailer. You can read about some of its innovations, as well as its prepared foods offerings and other merchandising and operational aspects, at its store Blog here.

Who says Whole Foods Market is a barrier to new retail entry?

Even though Whole Foods Market, Inc. plans to increase its store count in Washington, DC (although no new stores are set to open in the district next year) from its current three units, as well as Maryland-based 5-store My Organic Market (MOM) getting set to open a store in Washington DC (its sixth store and first in the district), Ellwood Thompson's decision to put its second store in DC shows there's still room in such competitive markets for natural products' retailers who create points of differentiation like the independent natural grocer does with its local foods program and numerous other unique merchandising and operations practices.

It also shows, as we argue regularly in Natural~Specialty Foods Memo, that despite the continued folly of the U.S. Federal Trade Commission (FTC)in claiming Whole Foods Market, Inc. is a monopolistic natural foods retailer (the FTC plans to hold a new hearing on the issue in February, 2009) post its acquisition of Wild Oats Markets, Inc. even though Whole Foods' stock took another beating last week and is now at least 55 -to- 60-% lower than it was when is acquired Wild Oats last year, reported a 40% drop in net income last quarter and laid off 42 headquarters employees last month, the marketplace says otherwise.

For example, Locally-based My Organic Market continues to expand in the market. Safeway Stores, Inc. plans to remodel its Georgetown neighborhood store, expanding it to about 60,000 square feet and adding thousands of new natural and organic products and numerous in-store prepared foods departments, using its expanded Lifestyle format which puts an emphasis on the natural, organic and specialty foods categories across all store departments. [One of Whole Foods' three DC stores is located in Georgetown.]

And of course innovative Ellwood Thompson's Local Market, which also offers specialty and gourmet food products along with natural and organic, now plans to build and open a brand new store in Washington DC. Rather than Whole Foods having a monopoly position in the Washington DC market, as well as is the case throughout the U.S., it's going to have to face even stiffer competition than it already has.

Washington DC is just one of the many examples of markets where independent multi-store natural products retailers such as Sprouts Farmers Market and Sunflower Farmers Market in the Western U.S., and other multi and single-store natural products retailers there and elsewhere, are challenging Whole Foods throughout the U.S. There's no Whole Foods Market, Inc. monopoly in the real world of main street.

Upscale supermarket chains are doing the same thing. Publix in Florida, Wegmans in New York, HEB and United Supermarkets' Market Street chain in Texas, Raley's in Northern California, Fresh Market in the South -- all of these supermarket chains and many more pose a competitive challenge to Whole Foods since their stores not only sell conventional groceries but put a major emphasis (and are designed similar to Whole Foods' stores) on natural, organic, specialty, gourmet and international food and grocery products, along with having a major focus on premium fresh, prepared foods.

Elwood Thompson's and DC's Columbia Heights

Ellwood Thompson's should find a warm reception when it opens its store in Washington DC's Columbia Heights neighborhood next fall. The neighborhood has lots of residents and the demographics are strong for natural and organic products retailing. [Whole Foods doesn't have a store in the neighborhood, nor is the DC My Organic Market store slated for the neighborhood.]

At 15,000 square feet the size and scale of the store also fits well into the neighborhood. It's big enough to be able to merchandise a strong multi-category offering but not so big so that it will look out of scale in the urban neighborhood.

The grocer's fresh, prepared foods offerings, along with the new store's indoor and outdoor seating with Wi-Fi, also should go over big in the neighborhood as it's residents like to spend time in neighborhood cafes and participate in urban street life.

Who knows, maybe even a U.S. Senator or two will stop by for some locally-produced fresh produce or one of Ellwood's ready-to-eat prepared foods dishes, along with offering a photo opportunity?

In fact, since it's true Michelle Obama likes buying natural and organic foods for her family, and has been known to shop at the Whole Foods Market store near where she and her husband, Democratic candidate for President Barack Obama, live in Chicago, Illinois, maybe if Senator Obama gets elected President in three weeks, he and the new first lady will do a little shopping at the new Washington DC Elwood Thompson's natural grocery store when it opens its doors next year in the capital city's Columbia Heights neighborhood?

The neighborhood isn't all that far from the White House -- especially if you have a car and driver at your disposal 24 hours a day and a secret service motorcade to speed up your trip to the store.

NSFM in the Media Memo: The '99-Cent Gourmets;' Specialty & Natural Foods and 99-Cent and Dollar Store Format Retailing

Prescott, Arizona Blogger, photographer and 99-cent store shopper Granny J. bought all three of the popular specialty food marinades above for 99-cents at the 'Amazing 99-Cent Store' in Prescot, Arizona. The store specializes in selling specialty, gourmet and natural food and grocery products for 99-cents. In this case, all three for 99-cents. By the way, all three of these specialty marinades are top sellers in the category. All three items sell in supermarkets at an everyday price of about $4.99 -to- $5.99 a bottle, depending on the store.

Korky Vann, the popular food writer for the Hartford Courant newspaper in Harford, Conn., USA, has an article in the food section of yesterday's edition about how shoppers are turning to alternative format food and grocery stores such as 99-cent and dollar stores as one way to save money during the current bad economic times in the United States.

In the article titled, "Shoppers Save On Food In Nontraditional Locations," Vann quotes Natural~Specialty Food Memo's (NSFM) March 27, 2008 story, " Food & Grocery Trends Memo: The 99-Cent Store Gourmets," in which we coined the term the '99-Cent Gourmets" for shoppers who are searching the 99-cent and dollar stores and finding bargains on natural, specialty, gourmet and premium food and grocery products, along with buying more of there basic grocery purchases in these format stores.

From Korky Vann's article in yesterday's Hartford Courant:

"According to the Natural Specialty Food Memo, an online food industry blog, 99¢ Only Stores, Dollar Tree and Dollar General, along with independent 99-cent stores, are reporting increased shopping traffic in their food aisles."

We enjoyed reading Korky Vann's well-written article about non-traditional format shopping. You can read the complete from yesterday's Hartford Courant here.

You can read our March 27, 2008 piece from which Korky Vann quoted by clicking on the title link here: Food & Grocery Trends Memo: The 99-Cent Store Gourmets.

Retail Memo: After All is Said and Done in Food Retailing it's the People Who Make the Difference

Novato Safeway nut counter clerk Imani Murphy adds flavoring to a batch of raw nuts (Photo credit: IJ photo/Jeff Vendsel)

Retail Memo Profile

There's an old saying in the retail grocery business that goes something like this: "If it doesn't happen at retail, it doesn't happen at all." We might add that saying has the added benefit of being true.

San Francisco Bay Area-based (Pleasanton, California to be exact) Safeway Stores, Inc. opened a new 50,000 square foot Lifestyle format supermarket in its Bay Area corporate backyard in August, in the Marin County city of Novato.

Marin County residents, among the most affluent of all Americans, take food and grocery shopping rather seriously. Sure they love a bargain as much as the next shopper. But price isn't the top item on their grocery store choice lists.

Rather, at the top of the average Marin County food shoppers are concepts like quality, variety, freshness, organic, gourmet, green and the like.

And Marin shoppers have lots of food store choices in the region to choose from, ranging from Safeway and Lucky supermarkets to upscale local grocery chains like Mollie Stone, United Markets and many others, including Whole Foods and a number of independent natural and specialty foods stores.

Safeway is well aware of this fact. That's why it's new Novato store is among the most upscale of its Lifestyle format stores.

The 50,000 square foot Novato Safeway also is service-oriented. The grocery chain hired 200 hundred employees to work in the store, many of which work at the various in-store full service departments such as service deli and prepared foods, the service butcher shop, fresh bakery and...the in-store service nut bar. No nut and berry Marin County jokes please.

And working that Safeway Novato in-store full service nut bar, which offers over 40 varieties of nuts, including many warmed to a customers desired temperature, is 31-year old Imani Murphy, who the Marin Independent Journal newspaper says is a big hit with the store's customers. He takes "service with a smile" to new heights, including not only greeting every nut bar customer with a smile -- but also with a handshake.

The Marin County newspaper profiled Imani Murphy, who also works as a store checker in addition to his nut bar duties, in Saturday's edition.

It's a short and interesting profile...and will make you smile just like Mr. Murphy does when he greats each nut bar customer.

Click here to read the profile, "Marin Snapshot: Novato Safeway nut bar clerk loves dishing out smiles, snacks." There's also a nice slide show of Imani Murphy and the Novato Safeway nut bar at the link.

Many decades ago Safeway Stores had a saying it would tell its employees. That saying: "There's the 'right way,' the 'wrong way' and the 'Safeway' of doing things."

Imani Murphy obviously knows the "right way" of customer service, regardless if its the "Safeway" or not.

Safeway Stores, Inc. should be nuts about Imani Murphy. After all it appears the Novato store's customers are. He's what you call "value added." And that's both the "right way" and the "Safeway" of doing things in our opinion.

Food Retailing & Society Memo: In Philadelphia Designers Create Supermarkets of the Future; Meanwhile A Local Food Retailing Icon is Lost

The proposed concept for the Brewerytown market above avoids the traditional big-box style for a design that fits into the urban street grid and camouflages the large expanse of parking.

Natural~Specialty Foods Memo Editor's Note: Two stories, published just six days apart in the Philadelphia Inquirer USA newspaper, paint an interesting picture of the dynamic nature of the food and grocery retailing business.

As the piece below by Inquirer architecture critic Inga Saffron describes, visionary designers are busy dreaming up the supermarket of the future for urban Philadelphia.

Meanwhile, the second story by Philadelphia Inquirer staff writer Vernon Clark reports on the closing of 100-year old Caruso's Market, a beloved, small-format neighborhood grocery store.

We offer no analysis or commentary this time around. The two articles speak for themselves.

Changing Skyline: Food for thought on supermarkets

By Inga Saffron
Philadelphia Inquirer Architecture Critic

If we are what we eat, then it follows that our cities are shaped by the buildings that sell what we eat. In that case, we're heading for trouble.

After a long absence, the neighborhood supermarket is making a comeback in urban places like Philadelphia. Only the new arrivals don't look anything like the friendly local grocers we once knew. In quick succession, a gang of boxy, suburban-scaled cornucopias has moved into the thick of Philly's rowhouse neighborhoods. They've laid claim to whole blocks at 56th and Market, 52d and Parkside, Columbus Boulevard in Pennsport. And more are coming.

You might assume that the more stores that sell fresh food, the better - especially given that Philadelphians struggle with their collective weight, at least according to certain out-of-town list-makers.

The problem is that these new supermarkets tend toward obesity themselves. It's hard to overlook all that bulk when the chains dock their flagship boxes in a marina's worth of parking. And once you breach the store's solid walls, you could as easily be in Fairbanks as Fairmount.

So a competition to encourgage architects to think outside the supermarket box comes in the nick of time. The Community Design Collaborative asked three Philadelphia architects to come up with more urban-friendly structures for our modern hunting and gathering.

To keep the exercise from devolving into the abstract, the collaborative identified three sites that have already been targeted for food stores, two in Philadelphia and one in Chester. It also partnered the architects with real clients. Even if none of the three gets built, the design exercise provides the food retailers with alternatives they can chew on.

The most exciting concept was developed by Interface Studio Architects, which pulled the most ambitious of the three projects. The firm was asked to design a new full-service supermarket for developer John Westrum at 31st and Girard, in the Brewerytown neighborhood.

Westrum had been trying to bring a supermarket to the three-acre triangular lot ever since he completed Brewerytown Square, a townhouse project. But it's been difficult because the site has only the tiniest bit of frontage on Girard Avenue, the area's commercial street. The property also sits on a steeply sloped bluff overlooking the east side of Fairmount Park and the Schuylkill. You can practically see the Philadelphia Zoo on the opposite bank.

Panoramic views are nice, but what supermarkets really need is to be able to broadcast their presence to passersby. The usual box, set behind a welcome mat of parking, would be nearly invisible to motorists and pedestrians traveling on Girard Avenue. In any case, that highway model is unworthy of a grand urban street that is still a mix of townhouses and independent stores.

Interface, led by partner Brian Phillips, solved the problem in a way that goes beyond just reimagining the utilitarian supermarket; its design has real architectural heft. The proposal clicks because it acknowledges the supermarket's dual nature as a car-oriented business that happens to be located in a multifaceted pedestrian neighborhood.

Since there is so little frontage on Girard Avenue, the designers bent the main commercial structure into two angled sections that wrap their wings around the corner of 31st and Girard. The section closest to Girard would provide small retail spaces for things like a bank, and the northern portion would house a midsize supermarket.

Though their angular form breaks from Philadelphia's street-wall tradition, it compensates for the deviation by offering the neighborhood a substanial plaza that works as a pocket park. At the hinge, where the two wings come together, the plaza slides down under the buildings, providing sight lines and walking ramps to the parking lot at the low end of the slope.

Because of that sharp incline, the supermarket floor would be below the level of 31st Street. Interface turns the problem into a virtue. An all-glass facade would enable arriving pedestrians to see into the store, while a sequence of switchback ramps would move them gently down to the store entrance. Since the parking lot is at the entrance level, customers who drive would have easy access.

This jaunty arrangement solves the site's problems in one stroke. The designers use the level change to screen the parking lot from the neighborhood. Meanwhile, the swooping roof becomes the building's can't-miss sign.

And by splitting the commercial structure into two sections, Interface avoids the bulkiness of the box. With their glass facades, the structures resemble park pavilions, which is what they are, since they overlook Kelly Drive.

Like Interface, the other firms that participated in the design exercise, Agoos Lovera and KSS, recognized that supermarkets are about more than just food. They're neighborhood anchors. Interface included housing at the north end of its site. The supermarket's sinuous roof winds around, jumping onto a third structure that would contain loft apartments.

Because the other projects involved retrofits of existing buildings, there was less opportunity for the designers to reinvent the supermarket form. Nevertheless, in its three-stage scheme for turning an Ogontz Avenue rowhouse in West Oak Lane into a satellite for the Weavers Way food co-op, Agoos Lovera sketched a plan that includes a meeting room, a demonstration kitchen, and a community garden. KSS came up with a nearly identical program for an old furniture store on Chester's Avenue of the States, purchased by a Chester food co-op. In the future, they believe, food stores will be community hubs.

At the moment, most people see supermarket shopping as a necessary chore. But who knows? If these designers can open the eyes of store operators, we just might start to look forward to the weekly shopping trip.

Caruso's Market closes in Chestnut Hill
By Vernon Clark
Inquirer Staff Writer, October 1, 2008

It was a boutique grocery that specialized in quality meats and produce, and that anchored the Chestnut Hill shopping strip for nearly a century.

Last month, Caruso's Market, 8418-24 Germantown Ave. (pictured above), closed abruptly, leaving many residents recalling bygone days of personal service and a family-friendly atmosphere, and wondering what will become of the property.

Fran O'Donnell, head of the Chestnut Hill Business Association, lamented the loss.

"I think the closing brought great concern to the community as far as being a fixture there, but also as a necessity," O'Donnell said. "It's not like another retailer. This is servicing what you put on your table."

Ellen Maher, 78, who has lived most of her life in Chestnut Hill, was a regular shopper there for decades.

"It was always a very nice market," Maher said. "They did delivery service. It was an alternative to the supermarket. My husband and I always walked to Caruso's."

Residents said the store's windows were covered with brown paper on the night of Sept. 15 and a sign posted that read, "Closed for repairs." A day later the sign was replaced with one saying, "Sorry for the inconvenience. Reopening soon."

The next day the sign was changed to "Sorry for the inconvenience. Closed until further notice."

CMS Cos., an investment company in Wynnewood, issued a statement saying that John Capoferri, the market's operator, "had terminated the Caruso's Market lease," making way for a CMS affiliate to take control of the property.

Capoferri did not respond to several phone messages left for him.

Capoferri bought the 10,000-square-foot building in the spring.

The market was operated for decades by the Marano family, owners of a South Philadelphia pasta business, said Joe Marano, who operates Marano's Fort Washington Garden Mart.

Marano said Caruso was the name of relatives who opened the market in the early 1900s.

"Despite attempts over the prior several weeks to work with Mr. Capoferri to help restructure his financial obligations at the property, we concluded it was in our investors' best interest to take control of the building," said Richard T. Aljian, a CMS official.

He also said the company was preparing the building for "re-leasing, with a grocery-store concept remaining a potential strategy."

O'Donnell said residents want another grocery at the site.

"I think in a community like this, there has to be an outreach to make sure that it stays just the same use," O'Donnell said. "Whether it's Caruso's or not, we want it to still be a food market."

Paul Dodge, owner of the French Bakery on Germantown Avenue, said the closure was a major blow to the community.

"So many older people really rely on the local businesses," Dodge said. "A loss like this is devastating. Who can open a grocery store?"

Dodge said that at the holidays, customers would flock to the store.

"On Thanksgiving they had hundreds of turkey orders," he said. "Caruso's Market was like a dinosaur in many ways."

Philip LeCalsey, an official of the Chestnut Hill Community Association, said that many in the neighborhood want the market to be replaced by one similar to Caruso's.

"Having a neighborhood grocery for such a long time . . . has been a big asset to Chestnut Hill residents," LeCalsey said.

He said he had been a regular customer at Caruso's.

"I was in there usually twice a day, getting coffee in the morning and getting lunch," he said.

Marie Chiodo, who has lived in Chestnut Hill for more than 50 years, worried about the future of the store.

"It was very convenient," Chiodo said. "Now, who knows what's going to happen? I hope they come back and reopen."

Standing outside the store with her infant daughter, Tessa, in a stroller, Katie Maier, a Chestnut Hill resident for about 31/2 years, also regretted the closing.

"I think it's a shame that it closed. There is nowhere else here where I can go to get a few things," Maier said. "I was here last week and ordered a roast. They said the butcher was going to call me, and the next day they were shut."

Artisan Foods Memo: Meet the Breadmakers' Guru; Michel Suas and the Quality Artisan Bread Movement in America

Natural~Specialty Foods Memo Editor's Note: After decades of which the definition of "good bread" in the United States meant puffy white sandwich slices and doughy french-style loaves (with a few geographical exceptions), today one can buy top-quality artisan-produced breads in America that rival those produced anywhere in the world. Yes, even France.

Many of the country's supermarkets (even the big chains), natural foods stores and specialty shops sell top-quality breads in their stores, as well as baking top-flight breads of numerous varieties right in the stores using wood burning hearth ovens.

In fact, breads such as San Francisco-made ACME brand, along with numerous others, are today considered among the finest examples of artisan-produced breads in the world.

And it's not just on the left and right coasts in the U.S. where top-quality artisan breads are available. You can find them at supermarkets, natural foods stores, specialty markets and bakery's throughout the country -- from the Midwest and South to the Canadian border states.

Michel Suas (pictured at the top), who's called the breadmakers' guru, is arguably the man most responsible for helping to create a quality artisan bread culture -- and industry -- in the U.S.

In the article below, San Francisco Chronicle food writer Amanda Gold profiles the breadmakers' guru, who makes his home in the San Francisco Bay Area (as well as operates his bread baking school there) but travels throughout the U.S. and the world spreading his quality bread gospel.

Guest Memo:
The breadmakers' guru
Amanda Gold, San Francisco Chronicle Staff Writer
Wednesday, September 24, 2008

When Tartine owner Chad Robertson opened his first bakery in Point Reyes Station more than a decade ago, he couldn't figure out how to get any sleep.

Baking bread 18 hours a day was proving untenable, and he needed help - stat.

He could have thrown in the towel; he might have looked for an extra hand or two.

Instead, he called Michel Suas.

Known within the industry as the guru of artisan bread, Suas has made a career out of responding to similar quandaries. The native Frenchman has worked with all the big names in the bread world. From local outfits like Acme, Grace Baking and Semifreddi's to La Brea Bakery in Los Angeles and Balthazar in New York, Suas has done everything from developing formulas for the perfect loaf to streamlining baking processes to designing bakeries worldwide.

In a little more than a decade, he's founded the San Francisco Baking Institute and equipment importing company TMB Baking, opened Thorough Bread (a retail bakery) and authored an impressive textbook on baking and pastry.

Suas is living proof that when it comes to dough, he's the go-to guy.

"He's the best in the business," says Robertson matter-of-factly. "You can ask him anything and he knows exactly what to do."

For Robertson's sleeping dilemma, that meant helping him figure out a way to slow down the bread rising so it could happen overnight. That way, he could catch some Z's while the dough worked its magic.

"I knew what needed to happen," says Robertson, "but I was 22 and I'd never done it before. Michel worked with me to figure it out."

Suas' expertise draws from a 40-plus year career that began in Brittany, France, when he was just 14.

At that time, kids would either stay on the same track in school, he explains, or, "If you were goofing off, they'd say, 'OK, we've had enough of you,' and they'd make you get a job."

Given his gentle, reserved nature today, it seems almost unfathomable that Suas would have fallen into the latter category, but he did, so he began an apprentice program in the kitchen.

The apprentice

"I started on my 14th birthday," he recalls with a grin, "and they made me peel potatoes and clean mussels all day, with my tender little hands."

It was a rough start, but he lasted in the program for the three required years, before moving his focus to pastry. Suas spent one year in training, received his diploma and moved around to build up his resume. With each new experience, his passion became clearer. It wasn't simply that he was drawn to the bread and sweets - that much was true. But a great deal of his influence also had to do with lifestyle choices and personalities.

Suas began working with a pastry chef named Hingouët - they only knew last names at the time, he says - who was educated both in and outside of the kitchen. "When the other chefs were all about chasing girls and fast cars, he talked about love, music and the arts. He had family values."

After that, he says, "I never stopped pastry."

Sitting across the table from the wiry, now 54-year-old man at the South San Francisco offices of the baking institute, it's hard to imagine that he would have chosen any other path. He gently brushes a lock of floppy gray hair from his forehead, and talks about his wife, Evelyne, who has been with him every step as his business has grown and is a co-owner of the San Francisco Baking Institute and TMB Baking. Their 12-year-old daughter, Julie Marie, conceived the name Thorough Bread for his retail bakery and designed the logo. Keeping his family close and involved is clearly a priority.

But focusing on life outside the bakery wasn't the only positive influence that Hingouët had on Suas. Under his tutelage, the 21-year-old Suas landed a job as head pastry chef at Barrier restaurant in Tours, France. The fact that it had earned three Michelin stars was just the cherry on top - the real draw was that at the time, it was the only three-star restaurant baking its own bread on site. But after three years of adding to his bread-baking repertoire, he was ready to move on.

"I was curious and I had nothing to lose," he says, "so I took my backpack and came to the United States. I didn't speak a word of English." Landing first in New York on his way to Chicago, it didn't take Suas long to find a job - word spread that there was a guy from France in town, and he was a good baker and pastry chef.

After a stint in the Windy City and a trip back to France to take care of his ailing mother, Suas and his then-girlfriend, Evelyne, returned to the United States for good.

Cross-country odyssey

The two piled into a VW van and drove all over North America, from Key West and Texas up to Canada, sightseeing and eating on a budget.

"We got lucky," he says. "We ran out of money in San Francisco."

Suas landed here in 1987, when the Bay Area was smack in the middle of an artisan bread revolution.

One afternoon, he popped into the office of Earl Lind, who, at the time, was the go-to equipment guy for bakers. Sitting across the desk from Lind was Steve Sullivan, who had opened a little bakery in Berkeley called Acme, and was looking to expand.

That began a 20-year acquaintance that would ultimately benefit them both.

"I had gone to a couple of these trade shows in Europe," says Sullivan, "and had seen a certain kind of mixer - all of the old bakeries there had it." Sullivan says that even though he didn't know much about it, he had already decided that his bakery should have this mixer. But he didn't know how to get it.

"I couldn't believe it when Michel walked in. He knew exactly what I was talking about."

Sullivan became Suas' first client, and the word spread from there.

Suas primarily helped Sullivan with equipment and planning, but Sullivan's word-of-mouth recommendations were priceless.

Nancy Silverton at Los Angeles' La Brea Bakery was Suas' second client, and others followed.

In the late '80s and early '90s, says Suas, "everything was being shaken up, and I was in the middle of that chaos. I was here at a time when people were looking for support and direction, and all I did was give my honest advice."

That advice went to bakers at Metropolis, Grace Baking, Boudin, Ecce Panis in New York, and Essential Baking Co. and Grand Central Bakery in Seattle, plus chefs like Thomas Keller - before opening Bouchon Bakery - to name a few.

"Almost anybody who has set up a bakery in the last 15 years in the United States has probably dealt with Michel," says Sullivan.

But for Suas, it was an education as well.

Intro to sourdough

"I was so amazed with what was going on here," he says of the artisan movement. "It was a thrill to be surrounded by so many people with that much talent." In fact, Suas explains, he never wanted to be that guy who came from France and said, "Here's how to make a baguette."

"When I came, sourdough was a discovery," he says. "At first I thought, 'Wow, that's a strange flavor,' but when you learn how it's done, you start to appreciate it."

In addition, the way bread was processed and handled was different. Liquid starters were not something that had been used in Europe. And bread with cheese or olives? That was completely new.

"I don't take credit for what was being developed," says Suas. "I just helped stabilize those formulas." The truth is, he says, as long as you have the basics, you can adapt and work with anything.

His helpful, honest advice and passion for the bread movement led enough people to his door, but what he really wanted was to start a baking school. In 1996, that's exactly what he did, opening the San Francisco Baking Institute.

"I was traveling a lot at the time, and one thing I realized was that a lot of young people were being left out. Small bakeries couldn't afford a consultant, and I couldn't be everywhere at once."

At the school, students come either for five-day seminars, or the 18-week professional training program (see sidebar, this page), and include everyone from serious bakers who have never had proper training to those who want to open their own bakery. Some even come as a gift to themselves on a vacation from another line of work - baking enthusiasts who consider it a hobby.

Suas is quick to assure that artisan bread can and should be baked in the home oven, and to that end, he has instructors give tips on how to do so.

To those heading into the professional arena, both Suas and the baking institute remain a resource long after students leave the school.

Though he doesn't have a hands-on role with the students, Suas keeps plenty busy. These days, he starts every morning with a trip to Thorough Bread, his retail spot on Church Street in San Francisco. He personally brings in the baked goods from the school, admitting that it forces him to keep an eye on things.

Bakers' resource

In addition, he has spent the last four years assembling a new textbook ("Advanced Bread and Pastry: A Professional Approach," Delmar Cengage Learning, 2008) that gives functional and technical advice on all aspects of baking and pastry. The book weighs more than a 5-pound bag of flour, but is surprisingly approachable. He hopes that it will become the standard instructional book.

It's fitting. At the end of the day, Suas is, first and foremost, a teacher. If he can help someone streamline the process to go from 50 to 5,000 baguettes a day, if he can equip a bakery to run efficiently or - perhaps most importantly - help a fledgling baker figure out how to get some sleep, he knows he's succeeded.

Note: Click here for some artisan bread recipes and other resources from the breadmakers' guru Michel Suas. [Photo credit: Craig Lee: San Francisco Chronicle.]

Food Show Memo: Record Attendance at World Food Moscow 2008 Show Demonstrates Russia's Growing Consumerism and International Opportunities

The emergence of Russia as a major food and grocery consuming nation was on display at the recently-ended World Food Moscow 2008 trade show, which featured over 1,300 exhibitors from throughout the world and was attended by thousands more food and grocery industry professionals, all focusing on how to do business in the country of about 143 million that's becoming flush with cash from its sales of oil and other natural resources, along with creating a growing higher-income consuming class, as well as the beginnings of a middle class.

The product exhibitions at the huge World Food Moscow 2008 show, which ran from September 23-27, ranged from basic food and grocery products, fresh produce, meats and other perishables, to non-foods and natural, organic, specialty and gourmet products from throughout the world, including Europe, Asia, the U.S., Canada and Latin-Central America.

Fresh produce, including organics, was a big feature of this year's Moscow food show. Produce suppliers and trade associations from Europe, Latin and Central America, Asia and the U.S. all had a major presence at the show. Many of these suppliers already do some business in Russia but want to expand their respective business in the increasingly affluent nation. Others are hoping to get into the Russian market as it improves its logistics systems and more larger and even upscale supermarkets open throughout the country.

The show also included a series of forums in which various speakers talked about how to enter the Russian food and grocery market, along with ways to increase business in the nation, discussions of Russian consumer behavior and other related topics. The annual Russian Agricultural Outlook forum also is a part of each year's Moscow food show.

Russia's food and grocery retailing industry is going through a rapid modernization process, adopting the western supermarket, superstore and hypermarket models in increasing numbers. Western chains like France's Carrefour (the worlds second largest global retailer) and Wal-Mart (the world's number one retailer) are currently in the process of entering Russia with their first stores.

As an example of the growing consumer affluence in Russia, this year's World Food Moscow 2008 show featured far more specialty, gourmet, natural and organic food and grocery products across all categories, according to the food show's organizers. This included specialty and organic fresh produce items and meats, gourmet, specialty and organic shelf-stable food products from throughout Europe and even the U.S. and Australia, and lots of higher-end premium products including beverages as well as food items.

As is the practice in Russia, foreign companies in any sector who are let in early tend to get preferential treatment by the Russian government. This is the case with overseas food and grocery companies as well. Much of doing business in the food industry in Russia still relies on setting up various joint-ventures with Russian companies, along with going through various layers of government and quasi-government middle men, each who takes a cut of the action.

A new U.S-Russia cold war? "Nyet." Some analysts and pundits are suggesting the U.S. and Russia are on the verge of a new cold war over Russia's recent invasion (after Georgia's invasion) of two breakaway states of the Republic of Georgia, which the U.S. is allied with. No impending new cold war was evident on September 27 however when John Beyrle, the United States Ambassador to Russia , attended the last day of the World Food Moscow 2008 food show. Ambassador Beyrle, pictured above enjoying a slice of apple, greeted Russian officials at the show as well as visted U.S. exhibitor companies and trade groups such as the California Grape Association and USA Pears, among others.

This system isn't in the main preventing European, American and Asia food and grocery companies --big, medium-sized and even small -- from wanting to enter the Russian market though, as was evidenced by the record attendance and number of exhibitors at the just-ended Moscow food show.

The natural and organic products categories, along with imported specialty, gourmet and ethnic food and grocery products, are in the infant stage in terms of category development in Russia. Therefore, Russia is a growing new market for western and Asian suppliers. The potential is very big and lucrative.

Additionally, with western chains Carrefour (based in France) and Wal-Mart (based in the U.S.) planning to soon open their first stores in Russia, the opportunity for western natural, organic, specialty and gourmet foods suppliers and marketers who already do business with these two mega-retailers should be enhanced.

More Russians than ever before also are traveling abroad, particularly those from the country's new upper-income class. As these and other Russians travel to western European cities and to the U.S. more frequently they will acquire an increased taste for and desire of the food products from these countries, just as Americans and Europeans who travel throughout the world do for foods from other lands. This fact will increase demand for imported foods in Russia, creating additional opportunity for western suppliers and marketers.

The organizers of the Food Moscow 2008 food show have a comprehensive photo and video gallery of this year's and last year's shows, ranging from pictures of various exhibitor booths and forum events to the trade show's product tasting events and award presentations. Click here to view that photo gallery.

Additionally, the Netherlands-based Web site Freshplaza.com took photos of the fresh produce exhibitors at this year's World Food Moscow 2008 food show. Click here to view the photo report.

The Food Show Moscow 2008 event is held annually in the fall, usually in late September or early October. According to the show's organizers, this year's show had the highest number of exhibitors and attendees in its history.

Despite a bit of a freeze in Russian western relations, especially with the U.S., American and European companies and food industry representatives attended this year's Moscow show in great numbers.

This fact reflects that despite a chilling of political relations between these western nations and Russia, trade between the west and Russia is still moving forward.

It also reflects the fact Russia is spending billions of dollars to improve its agricultural industries and is looking to U.S. and European companies for much of the expertise and technology to achieve that goal, as it is looking towards the west to help modernize its entire food distribution chain, from the farm and food processing plant to the supermarket.