Green Retailing Memo: Portland, Oregon USA-Based Natural Foods Grocer New Seasons Market Wins State's Top Award For 'Green' Leadership

Nine-store Portland, Oregon natural foods retailer New Seasons Market has won the State of Oregon's 2008 Best Practices Award in the large company category for its environmental sustainability programs and practices.

The award, which is sponsored by the Governor of Oregon, honors the "greenest" of the state's large, medium and small-sized companies for their overall programs, practices and efforts in the sustainability area.

New Seasons Market beat all of the Oregon businesses in the "large company" category that applied for the award, being named the state's sustainable leader in its category this year.

Below (the text in italics) are the primary reasons and sustainable practices the state of Oregon said earned New Seasons Market the top award this year as the state's leading sustainable large business:

"A locally owned and operated grocery, New Seasons Market is committed to promoting sustainable agriculture, community involvement, and a progressive workplace.

Their green practices are modeled from the top down and supported by a staff Green Team at every store. Examples of how they have incorporated sustainable operations are almost too numerous to mention, but here's a sampling of activities that we'd especially like to recognize:

Waste reduction: New Seasons has programs in place at every store to reduce waste through food scrap composting, internal recycling, paper use reduction, and avoiding the use of disposable tableware and flatware.

Alternative Transportation: Besides driving biofuel-blend delivery vans, they encourage both customers and employees to use mass transit, ZipCar and bicycles through the incentive programs and community activities like the BTA Bike Commute Challenge.

Renewable Energy: They use 10 percent wind power and reclaim waste heat from refrigeration systems to heat water.

Modeling Green Practices: Their stores are a model for the community through their display of green building elements, green purchasing practices, public education around nutrition and sustainable food production.

Promoting social equity: New Seasons encourages their employees to volunteer and provides health benefits for any employee who works at least one shift per week. They are also a breast-feeding-friendly employer.

Obviously, operating a green business isn't just a business model for New Seasons, it's a passion and a way of life. Bravo, New Seasons!"

New Seasons Market has a company policy that puts a major focus on the environment and local and community issues. All three areas of focus are part of what the natural grocer defines as sustainability.

For example, it gives preference to and offers incentives to local food producers and vendors in terms of doing business with its stores.

The natural foods grocer, which this year celebrated its 8th birthday as a company, also involves itself with a myriad of community organizations, local groups and businesses throughout the Portland Metropolitan region where it operates its nine stores. In 2007 New Seasons donated over $400,000 to local community organizations and charities, for example.

The retailer gives 10% of its after-tax profits to local non-profit organizations in the Portland, Oregon area.

One of the local charitable organizations New Seasons' is a major contributor to is Loaves & Fishes, the Meals-On-Wheels program in the region. Each of the nine New Seasons Market stores has a different delivery route lined up and volunteers get together weekly to bring food and conversation to senior citizens. The natural grocer also donates 50 cents from the sale of each loaf of its New Seasons Market store brand Organic Sourdough bread to Loaves & Fishes.

[You can read about some of the other local non-profit organizations New Seasons market is involved with in the Portland region here.]

It's interesting and ironic New Seasons Market is involved in the ongoing U.S. Federal Trade Commission (FTC) legal case to overturn Whole Foods Market, Inc.'s acquisition last summer of its friendly acquisition of Wild Oats market, Inc. by virtue of New Seasons' having been one of 96 natural products retailers issued subpoenas by Whole Foods in its legal defense against the FTC. As we've reported and written about, New Seasons Market has filed various motions with the FTC to "quash" the Whole Foods subpoena. Those motions are awaiting a ruling by the FTC.

The irony involved is that New Seasons Market, through its local and sustainable programs which are tied into its marketing and merchandising programs and the entire way it approaches local market natural foods retailing, is the reason it's able to compete strongly against Whole Foods Market stores in the Portland region. New Seasons is doing well, has a strong customer base, and in no way is being "monopolized" by Whole Foods in the Portland market, which just happens to be one of the 18-29 U.S. markets in which the FTC argues Whole Foods post the Wild Oats' merger holds a monopoly in what the regulator calls the "premium organic retailer segment."

As we've argued since last summer, the FTC is wrong that Whole Foods Market, Inc. has such a monopoly. It's premise, that a segment called "premium organic retailing" is relevant also is wrong.

The retailing of natural, organic and premium food, grocer and related products today in the U.S. is a multi-format, hyper-competitive business. Whole Foods holds no advantage in the natural and organic products' retailing business any longer in the U.S., in our analysis. New Seasons Market and hundreds of other independent natural grocers are proving this each day throughout the country, as our huge supermarket chains, regional chains that focus on natural, organic and specialty products, mass merchandisers like Wal-Mart Target and Costco, and natural products discount category killers like Trader Joe's.

In addition to the growing multi-format competition in the natural, organic and premium segments, you can bet once the current recession starts coming to and end, there will be the next new thing in category retailing -- either by an established player or a new one -- that will further challenge Whole Foods Market, Inc. This is something nearly everybody in the natural and organic foods business knows to be the case but appears to be something the FTC either is unable to understand or has chosen it doesn't want to understand.

We congratulate New Seasons Market on its leadership in environmental sustainability, and for winning the 2008 Oregon Governor's award. We also suggest the FTC take a closer look at the "premium organic retailing' category competition in the Pacific Northwest and those other twenty-some U.S. markets it argues Whole Foods Market, Inc. is monopolizing.

Green Retailing Memo: Wal-Mart Stores, Inc. to Make Major Purchase of Renewable Wind-Power to Supply 15% of the Power For its 360 Stores in Texas, USA

As we wrote about in this piece yesterday, "Retail Memo: Wal-Mart CEO Steps Down; Head of International Operations Mike Duke to Lead Retail Giant; USA Chief Castro-Wright Promoted," current Wal-Mart Stores, Inc. CEO Lee Scott stepped down on Friday, deciding to retire after three decades with the world's largest corporation and global retailer, including serving in the top spot as CEO for the last nine years.

Scott isn't leaving Wal-Mart completely however; or right away: He will be head of the company's executive board and serve as a consultant to Duke and the board until 2011, according to the company.

Wal-Mart's head of global operations, Mike Duke, will take over as the company's CEO in February, 2009, Wal-Mart announced yesterday. In addition, current Wal-Mart USA CEO Eduardo Castro-Wright was promoted on Friday to the position of vice chairman of Wal-Mart Stores, Inc., which is a strong indication he is in line to be CEO as part of the retailer's internal succession planning process.

On Thursday we wrote about two major corporate social policy initiatives outgoing (nobody knew he was outgoing on Thursday by the way) CEO Lee Scott made and Wal-Mart announced that day. Those two major initiatives are:

>A $2.5 billion donation to Feeding America (formerly America's Second Harvest Food Bank), along with a promise by Wal-Mart to donate 90,000 pounds (70 million meals) each year to the group that supplies food to organizations assisting the hungry throughout the United States for the next couple years;

>Guaranteeing a $12.5 million letter of credit to the group planning to build a memorial to the late civil rights leader martin Luther King Jr. on the National Mall in Washington DC USA.

Read our two stories from Thursday, November 20 at the links below:

~November 20, 2008: Food Retailing & Society Memo: Wal-Mart Steps in; Gives $12.5 Million Line of Credit to Group Trying to Secure Funding to Build King Memorial

~November 20, 2008: Food Retailing & Society Memo: Wal-Mart Donates $2.5 Million to 'Feeding America;' Will Also Give 90 Million Pounds of Food A Year to the Organization

Also on Thursday, Wal-Mart Stores, Inc. announced it would make the single-largest purchase of renewable wind energy by any U.S. corporation.

Wal-Mart said it will buy enough wind power from Duke Energy Co. to supply up to 15% of the retailer's total energy load in approximately 360 Texas stores and other facilities. The renewable energy will come from a Duke Energy wind farm under construction in Notrees, Texas, and is expected to begin producing electricity for Wal-Mart by April of 2009.

The project will provide roughly 226 million kilowatt-hours (kWh) of renewable power each year or the energy equivalent of washing 108 million loads of laundry -- enough for every household in Austin, Texas to do laundry for a year, the company said.

Texas currently is the leading wind power-producing state in the U.S. The new project by Duke Energy will solidify the state's position. Additionally, former oil barron T. Boone Pickens is planning a multi-billion dollar wind farm initiative, which would include major wind farms in Texas, as part of his "Pickens Plan" renewable energy initiative for the U.S.

One of Lee Scott's major initiatives during his nine years as head of Wal-Mart has been environmental sustainability. He's pushed suppliers to decrease product packaging sizes, launched "green" retailing initiatives across Wal-Mart's logistics system and stores, introduced "green" products under the retailer's store brands, pushed energy efficiency initiatives and numerous other programs that fall under the sustainability category.

It appears he wants to go out with a "green retailing" bang between now and when he leaves his CEO's office at the end of January, 2009.

Wal-Mart's wind power buy from Duke Energy is important in the larger, macro scale for wind power because its an endorsement in the U.S. of the renewable energy source by the nation's and world's largest corporation and retailer. The company's move will likely result in other corporations and retailers in Texas buying into the huge wind farm project being built by Duke Energy in the state.

A number of publications have written about Wal-Mart's major, new wind power initiative in Texas. Below is a sampling of those stories:

[CNN-Money: Wal-Mart To Buy Wind Power From Duke Energy For Texas Stores...Dallas, Morning News, Dallas, Texas: Wal-Mart buying power from wind farm...Associated Press: Wal-Mart buys wind energy supply...Wall Street Journal Business Blog: Wal-Mart: Wind Power’s Good for the Bottom Line, Even With Cheaper Gas ...Austin-American Statesman, Austin, Texas: Wal-Mart buying wind power for Texas stores...Houston Press, Houston, Texas: Wal-Mart Turns To Wind Power, A Little...

The Morning News-Arkansas: Wal-Mart Pushes Wind Power...Energy Matters, Australia: Wal-Mart Gets Into Wind Power...Clean Energy Update, New York, NY: Wal-Mart Makes Major Commitment to Renewable Wind Power...Environmental Leader: Wal-Mart To Buy 226 M kWh Wind Energy To Help Power 350+ Stores...Wal-Mart Stores, Inc. press release: Texas Wal-Marts go green with wind power.]

Our sources tell us CEO Lee Scott has a few more corporate social policy and environmental retailing surprises up his sleeve, which the company will announce before he turns over his CEO's office to Mike Duke at the end of January, 2009. If they are on the order of the three announcements we've written about -- all three announced by the company on Thursday, November 20 -- it should be an interesting remaining two months in 'Wal-Mart World.'

As the CEO of a $400,000 billion a year global corporation and retail empire, it appears Lee Scott, like a President or head of state does, also wants to leave a legacy. It appears he also wants to set a tone for the new, incoming CEO of a Wal-Mart Stores, Inc. that maintains its heavy involvement in corporate social programs and "green retailing" initiatives, both of which are needed even more strongly now in the current global recession and environmental and energy crisis than they were even before.

Retail Innovation Memo: The 'Econvenience Store' Will Be the Next New Thing, and is A Convenience Store Industry Green Retailing Trend in the Making

Alvaro Garza of Dallas, Texas is a retailing pioneer in a brand new green-oriented retailing concept which Natural~Specialty Foods Memo predicts will become a convenience store industry retail niche trend in the not to distant future.

Mr. Garza and a partner recently opened an "econvienece store" (the 'e' stands for eco) named the green spot market and fuels in Dallas, Texas, in a converted and remodeled Mobile gas station.

The two retailing eco-entrepreneurs' have turned the traditional convenience store, the product mainstays of which are gasoline, snacks (mostly junk food) and beverages (mostly soda and beer) on its head, creating a format which not only doesn't merchandise junk food but puts an emphasis on selling natural and organic foods, including grab-and-go prepared items, healthy snacks and generally good-for-you beverages that taste good too.

The green spot market and fuels also sells fair trade organic coffee rather than the traditional C-store java, and serves the organic fair trade brew in compostable cups made from corn, which also are used to contain the all-natural soda's from the store's soda taps. No Coke and Pepsi at the green spot.

The Dallas "econvenience store" also offers biodiesel fuel in its fuel pumps and is the only service station or convenience store in Dallas County (which is a huge area) doing so currently, according to co-owner Garza.

Garza has researched the "econvenience store" concept in the United States extensively and says other then his green spot market and fuels, he's found just one other similar comprehensive and fully-integrated "econvenience store" in the U.S. That store is in Portland, Oregon, he says.

Dallas TV station WFAA recently did a report on the Green Spot, which its customers are calling one-part Whole Foods Market, one-part 7-Eleven.

You can read WFFA's report here, as well as view the video of the piece the station aired in Dallas here.

Natural~Specialty Foods Memo believes Garza and company are onto something major with their "econvenience store." The C-store format, which has as its two main product categories fuel and food and drink, offers a perfect concept for green retailing in a niche manner.

We believe this to be particularly true for entrepreneurs who are looking for a way to differentiate themselves in convenience store retailing. Chains control the C-store arena in the main, and it's difficult for independents to compete in the retailing category.

However, the "econvenience store" format offers a real point of differentiation for independents. It also taps into something consumers already spend their money on in the billions of dollars annually in the U.S.--natural, organic and healthy foods and beverages. There's nothing radical anymore about selling these foods and beverages in any type of retail format store.

While its true biodiesel is in its infancy and therefore not a very lucrative proposition, start up "econvenience store" retailers can still offer gasoline alongside the biodiesel at the pump. Additionally, as electric cars become more common, we see a niche for having battery charging kiosks at the stations as well, which can provide an additional revenue stream.

Further, we would suggest having numerous pressurized air hoses (say at 25 cents for a certain period of time) so bicycle riders can fill their bike tires up at the store. Once they learn its availability, they will make it a regular stop, thereby also buying beverages and snacks at the store while filling their bike tires. In fact, anything that's an logical "eco-product niche" makes since for the "econvenience store."

Another idea is to hook up with a local group and hold weekly farmers' markets in the "econvenience store" parking lot. A farmers' market fits the format perfectly, as well as being a great way to introduce consumers to the store, along with generating lots of food traffic, which in-turn will generate even more word of mouth communications.

Today, natural and organic food and beverage items taste as good or better than conventional C-store fair. They also can be sold at a reasonable retail price by "econvenience store" retailers as long as they don't try to make Whole Foods Market gross margins.

Since convenience store format stores have much lower overhead (small and no frills) and have far less operating expenses than say a Whole Foods Market does, doing so is achievable. Further, "econvenience retailers" can make a higher margin on the products than traditional C-store retailers do in many cases and still do well in terms of volume.

Imagine the look on the face of the traditional C-store customer in Dallas when they go into the green spot for a six pack of beer, a pack of cigaretts (which the store doesn't sell at all), a couple of ham sandwiches on white bread, a cheap burrito and a couple of Cokes.

Of course, once they get inside, they will buy despite their startled look because they're hungry and thirsty.

Perhaps after they instead purchase a bottle of Vitamin Water, a delicious sandwich on whole wheat bread, a tasty organic instead of cheap, tasteless burrito, and a six pack of organic craft beer, they just might not only be happy, but also might go out and convert their pickup truck to biodiesel fuel, as well as stopping in every morning at the green spot for a fresh-brewed cup of organic fair trade coffee in a compostable cup made from corn, on their way to work.