Lots More Than Bean Sprouts : Mrs. Gooch’s Health-Food Chain Targets Upscale Baby Boomers

Don’t tell Susan Terry that a whole-wheat Linzer torte sweetened with fruit juice tastes as good as the white flour and refined sugar version. Like others shopping recently at the Mrs. Gooch’s natural food store in Sherman Oaks, Terry knows what she likes--the sugary pastry--but she also knows what’s good for her.

Terry says of Mrs. Gooch, the stores’ namesake: “She’s done a fantastic job of upgrading the world of health food stores.”

Actually, plenty of Mrs. Gooch’s customers see organic pastries as an example of the elevation of health food stores to a gourmet trade. But if there’s a marketing strategy in that elevation, Sandy Gooch, 52, the founder and part owner of the six-store chain, doesn’t like to talk about it.

Gooch likes to talk about how she started her Sherman Oaks-based chain of natural food stores in 1977 after a near-fatal sip of a diet soda that laid her out with an allergic reaction to a food additive. She likes to talk about her mission and the Mrs. Gooch’s philosophy: no harmful chemical additives, no artificial flavorings, no refined sugar--basically, a big “no” to what most people eat.

What’s wrong with shopping at Vons or Ralphs or Lucky stores? “I don’t know that anything is really wrong with shopping,” at the big supermarket chains, Sandy Gooch said. “But if you’re concerned about your health, it’ll probably take a lot longer to shop at those markets.”

Gooch and her chief executive, John Moorman, aren’t running typical brown rice and wheat germ health food stores. Mrs. Gooch’s will do about $75 million in sales this year. Sure, they sell fresh wheatgrass juice, but the clean stores also have subdued lighting, a gourmet deli with barbecued chicken brochettes and whole-wheat croissants, and a high level of service--the upscale touches that have made Mrs. Gooch’s popular in Sherman Oaks, Beverly Hills, West Los Angeles and Hermosa Beach. There are also stores in Northridge, Glendale and one to open soon in Thousand Oaks.

For most supermarkets, it takes moving a mountain of meat and potatoes to turn a profit. The average profit for full-service supermarkets is a mere 1.5 cents per dollar of sales. Gooch claims her chain averages closer to 2 to 2.5 cents profit.

That may have something to do with the fact that natural foods are now more for yuppies than hippies. “The so-called ‘baby boom’ is growing up and realizing they, too, get old and are just that much more concerned with exercise and health,” said Anthony Harnett, the owner of Bread & Circus, a successful, $50-million-a-year chain of natural food stores in Boston.

Upscale Locations

Not too surprisingly, Mrs. Gooch’s stores are in the same places where there are plenty of well-educated, well-to-do people, aged 25 to 50, who are willing to spend top dollar on food.

But maybe talking about marketing doesn’t make for good marketing. Because if you ask Moorman and Gooch what they look for in store sites in Los Angeles County, the answer tends to be like this one, from Moorman: “Good traffic, reasonable exposure and parking.”

Only under further questioning does Gooch admit her company studies demographics closely. In fact, the average neighborhoods or cities where the Mrs. Gooch’s are located beat countywide average household income figures by about 33%.

Gooch also doesn’t like to talk about how much more it costs to shop at one of her stores than at a regular supermarket. In a highly unscientific test, a preselected list of groceries, from steak and broccoli to dish soap, recently cost about 30% more at a Mrs. Gooch’s store than at a Vons store just down the street.

Price Differences

But Gooch, asked about the difference, said it was a fluke, and estimated that a person buying basic brands at a typical grocery store would only have to pay 5% more to shop for natural foods at her stores.

Whatever the difference in price, obviously it doesn’t slow down the traffic at her stores. Conrad Steely, who shopped at the Sherman Oaks store recently, said prices were “a lesser factor than quality.”

For true believers in health food, Mrs. Gooch’s has much to offer--like wheatgrass juice (85 cents an ounce), a brew that Gooch claims is a mixer for drinks and that’s molecularly similar to human blood. “If somebody wants a high, I suggest they try” it, she said. But Gooch admitted that someone once told her the taste “reminds them of doggie breath.”

The trick to marketing natural food to baby boomers isn’t in preaching to the ranks of wheatgrass juice drinkers, it’s in striking a fine balance between what average customers think they should eat and what they crave.

Customer Rebellion

The lesson was driven home in 1987 to Anthony Harnett of Bread & Circus, when he tried to remove alcohol and caffeine from store shelves on the grounds that they are addictive drugs. He was faced with a customer rebellion. “There were not threats of assassination,” said Harnett, “but probably they were just around the corner.”

Gooch has avoided a similar rebellion by never selling alcohol or caffeine in the first place. But she’s well aware that she has to offer her customers products that at least simulate some of the junk food they are accustomed to eating.

“You don’t want people to feel deprived,” Gooch said. “We’re not saying people have to walk around with tofu and sprouts hanging from their mouths,” so her stores sell everything from ice cream and cookies (flavored with fruit juices, not sugar) to carob candy bars.

To avoid giving her customers that deprived feeling, Gooch opened deli counters at her stores four years ago. And she sells them household cleaners (environmentally safe, of course) in an attempt to make the store a one-stop shop. Finally she stresses service: chiefly in the form of demonstrations and nutritional information.

Imitation by Markets

Some big, traditional grocery chains have started imitating natural food stores, according to Patricia Heydlauff, executive director of the National Nutritional Foods Assn. Stuart Rosenthal, executive vice president of marketing for Vons, says that most Vons stores sell organically grown produce, and like Mrs. Gooch’s, Vons is trying to give customers more nutritional information--particularly about fat and cholesterol.

But Rosenthal admits that there are some problems in selling organic produce next to the regular variety at grocery stores. “You don’t want by implication to say that there should be skulls and crossbones on the other stuff,” he said.

And with a 23% share of the Los Angeles grocery market (according to Grocery Marketing magazine), Vons isn’t looking over its shoulder. “Are we threatened by Mrs. Gooch’s?” asked Rosenthal. “No.”

Soft-Drink Additive

It was a severe allergic reaction to bromelated vegetable oil--an ingredient in soft drinks--that started Gooch on a natural foods diet in 1974. After several years of lecturing on natural foods, Gooch opened a single West Los Angeles store in 1977 with her first partner, Dan Volland, who managed a health food store Gooch used to visit. Volland is in charge of choosing sites and opening new Mrs. Gooch’s stores.

Gooch put up about $30,000 in savings and Volland about $5,000 to get the store started. The two partners found Moorman, then head of the Natural Harvester chain of health food stores, to join Mrs. Gooch’s after about a year in business, after they discovered, in Moorman’s words, that they had “a lot of customers, a lot of products and a lot of confusion.”

Gooch said she’d like to add three more stores in the next five years. But at least one natural limit on the size of her chain is evident: too much success will attract the big boys. Vons’ Rosenthal said it’s really a question of the number of natural food shoppers.

Said Rosenthal: “If by chance that group becomes the dominant group, we’ll be in the organic produce business.”