57% of the shares of WFMI are owned by institutional investors
19% by employees and members of the BOD
There is no doubt that WFM has dependable dedication to the organic market.
Seeing a few "transitional' organic products can be dismaying, as well as big
supplies of conventional product, usually fruit, in the produce section. All
the greens are usually organic, with the exception of celery, which has
uneven delivery. Typically Cal-Organic, Alana, Pavich and that big
summertime Colorado player from Longmont fill the case, with some local (
cenTex) product, as well as Orange Blossom ( south Tex carrrots in season)
and Dennis Holbrook, in season.
Breaking out the dollar volumes, from their end, would probably not be in
their interest, for obvious reasons. The stockholder reports that I have seen
don't do it either. It would have to be an unreliable guess, but I imagine
that the total offerings in organic are 20-30%. Their house label, on the
other hand shows a definite trend to package organic product. But in dollar
value, there is too much conventional dairy, wine, beer, deli, to really
figure it out. The organic ballpark might be $300 million corporate, not half
of the total. And, while the increase is partly due to the take-overs of
1996, they have improved their position in Los Angeles, which was even up to
1993-94 the most poorly served market in terms of population and potential
customers.
Organic retail prices are the highest in town though, and WFM usually are
beat on the organic fruit by over a quarter. But this is in probably one of
the more competitive retail organic markets in the country, particularly
where the competition is on the top level ---full service supermarkets, not
just coops or neighborhood stores. The chief HEB Supermarket outlet posts
over 100 organic products daily, with a record of 150, in produce. And they
follow up on that with similar in coffee, grains, canned goods. Even with the
best competition in the US, WFM seems to hold its own against HEB, so I think
it is fair to say that the market in their own hometown has doubled or
better, and it is the competition that fueled that. A minor player in Texas,
Sun Harvest, out of San Antonio, is doing well ( here in an old WFM space).
Two new HEB stores will fill a local demand for organic products when they
open, one up in the mansions on the hill, and another in a middle class
neighborhood on an outbound thoroughfare to the suburbs, and one of those
stores is a slingshot away from the old WFM that Sun Harvest took over.....so
now it is new locations....and new customers....( and you should see the
traffic at Wheatsville Coop)......( and I see organic baby food, and hardware
like bagged organic carrots in stores where the demographic doesn't
fit...like HEB's in Victoria, Uvalde, Rockport.)
HEB is doing the same thing in Dallas and Houston as well ( where WFM has 5
stores ).
And with that presence, HEB has the volume edge in buying, so perhaps they
get better deals. HEB's truck fleet is immense.
The story could be told from the distribution end: Texas Health Distributors,
the WFM subsidiary that deals product to everyone but HEB. You see an awful
lot of certified organic produce in there. Three or four semis that all say
Watsonville on them, parked there every time I have been there.
The assumed trend would be for Kroger, Safeway et al, to do what HEB has
done, while the neighborhood stores, coops under pressure, re-invent their
image to serve the locality, since that is where this seems to headed: TIME
to shop. The downturn for the locals in new WFM regions has to be seen as a
little curve in the road, not a deadend.
Here the problem is that small farmers just don't have it together yet to
react appropriately to pallets of broccoli coming in uniformly injected with
hydrocooled ice and water....and the fact that the pallets never stop coming.
Since no one has more than 10 acres in cultivation and there is plenty of
tangent market at farmers markets, CSAs and restraunt/hotel trade, it is not
so huge a problem, just more work. But the growers can still sell to the
majors if they choose to and some do.
Locally, WFM created this market, and continues to set the pace with the
house label,
education, medicinal herb offerings, and a restaraunt upstairs at the HQ
store that wants to place organic on its menu permanently when all the
components are available at a price that can be relied upon.
Steve Sprinkel
Texas Organic Growers Association
OFMA
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