4/4/2006
WILD OATS TAKES CHANCE
By MICHAEL SASSO msasso@tampatrib.com
TAMPA - Just as Neiman Marcus is known for catering to the rich, Wild Oats Natural Marketplace may be best described as targeting the high-IQ crowd.
Before Wild Oats or its rival in natural food retailing, Whole Foods Market, decide to enter a new region, they want to see a high density of college-educated adults. Such people are more likely to pay a premium for food made without pesticides or artificial preservatives, according to natural food industry analysts. Ranked No. 2 on their list of market criteria is a large base of affluent consumers.
The ugly truth: The Tampa Bay area historically hasn't made the cut in terms of educational attainment or income levels. While natural food superstores have popped up across Florida, they are conspicuously absent here. Now, for the first time, Wild Oats is betting that the area can support a natural food superstore.
If it succeeds, it could inspire Whole Foods to move here, too. Last week, Scott Van Winkle, an industry analyst with investment banking firm Canaccord Adams in Boston, summed up the risk that Wild Oats is taking.
"Tampa's a little more McDonald's than Panera Bread," said Van Winkle, who grew up in Lakeland. "And what I mean by that is clearly [Tampa's] demographics are not the same as Whole Foods - and to some extent Wild Oats - look for."
On Wednesday, Wild Oats Markets Inc. of Boulder, Colo., will open its first Bay area store inside the Walter's Crossing shopping center, at Interstate 275 and Dale Mabry Highway. Like grocers everywhere, Wild Oats has emphasized its perishable items, which tend to bring in greater profits and distinguish a retailer from cut-rate Wal-Mart Stores.
When people walk into the Tampa store, they first see a wall of organic and natural fruits and vegetables on the left. About 60 percent of the store's produce is organic, and the rest is natural, store director Jim Mason said. In general, organic refers to food that is grown without the use of artificial pesticides and herbicides. Natural food refers to food that has no artificial additives, preservatives or coloring.
Along the right side of the store is a row of fresh food bars, including stations for natural or organic smoothies and coffee, sandwiches, salad and sushi. The indoor dining area has seating for 24 people, and another 24 seats are on a patio outside.
Dry goods including paper products, bulk grains and nuts and vitamins occupy the south side of the store. Wild Oats has a large selection of products, such as gluten-free groceries, for people with dietary restrictions.
Like other natural food stores, Wild Oats' food selection skews toward gourmet items. In the fresh meat case, shoppers will find hamburger patties prepared with flecks of bleu cheese. Nearby, shoppers will pass an olive bar with 16 types of olives, including an olive stuffed with - once again - bleu cheese.
Such items don't come cheaply. Sonja Tuitele, director of communications for Wild Oats, said some organic and natural items might cost 10 percent or 15 percent more than similar mainstream items at a Publix or Kash n' Karry supermarket. Other items, say, an extra virgin olive oil from Italy, might cost 50 percent more, Tuitele said.
As a result, both Wild Oats and Whole Foods tend to attract a high-income crowd. Some people within the natural food industry jokingly refer to Whole Foods as "Whole Paycheck," said David Taylor, the longtime owner of Nature's Harvest Market, a natural food store on MacDill Avenue in Tampa.
At the moment, Wild Oats' nearest store is in Melbourne, and the company is building a store in Naples. Wild Oats has been trying to raise awareness of its brand, partly by making the rounds at health fairs and meeting with local nutritionists, said Tampa marketing manager Colleen Sowerby.
A big question for Wild Oats: Can Tampa support a natural food superstore, or a "supernatural," as they are known within the industry?
The willingness to buy organic and natural food is closely linked with education levels, said Jay Jacobowitz, a Vermont-based consultant to the natural food industry. Wild Oats and Whole Foods prefer entering markets where at least 35 percent of the adult population (people 25 and older) have a bachelor's degree or higher.
At least by that measure, Tampa doesn't appear to be a good fit for a supernatural store. According to 2004 U.S. Census figures, 30.1 percent of Tampa adults 25 and older have at least a bachelor's degree. In Hillsborough County, that figure is 28.7 percent. That exceeds the United States as a whole, where 27 percent have a bachelor's degree or higher, the census shows.
However, Tampa's education level trails that of such cities as Seattle (where 51.3 percent have at least a bachelor's degree), Washington, D.C. (47.7 percent), and Boston (40.9 percent), according to the census.
Karen Mathis, a Florida marketing coordinator for Whole Foods, wouldn't elaborate on why her company hasn't put a store in the Bay area, although it has one in Sarasota. She said Whole Foods continues to evaluate the Bay area. Whole Foods' Web site notes that a large number of college-educated residents is a factor in where it builds stores.
Tuitele, the Wild Oats spokeswoman, said that in the past, Wild Oats might not have looked at Tampa as a suitable site. However, in recent years organic and natural food has become more mainstream.
Publix Super Markets, of Lakeland, has launched a natural food store called Greenwise. The first stores are opening in South Florida. And Wal-Mart announced last month that it will double its selection of organic groceries.
"Perhaps Tampa before didn't fit all those criteria that maybe Boston or San Francisco or L.A. had," Tuitele said. "But the market maybe is evolving a bit."
THE 'SUPERNATURALS'
Wild Oats Markets Inc., which opens its first local store Wednesday, and Whole Foods Market Inc. are rivals in the natural and organic food retailing industry. A look at each company:
Wild Oats Markets Inc.
Headquarters: Boulder, Colo.
CEO: Perry Odak
2005 sales: $1.1 billion
2005 profit: $3.2 million
Stores: 111
Florida stores: Tampa, Melbourne, Miami (2 stores)
Whole Foods Market Inc.
Headquarters: Austin, Texas
CEO: John Mackey
2005 sales: $4.7 billion
2005 profit: $136.4 million
Stores: 180
Florida stores: Miami, Coral Springs, Fort Lauderdale, Plantation, Boca Raton, Palm Beach Gardens, Sarasota, Winter Park
Source: U.S. Securities and Exchange Commission documents, company Web sites
|
