From Gooch to High Gloss : Change Signals Shift for Natural Foods Industry
Goodbye, Mrs. Gooch.
The name of that Southern California pioneer of eating right, Sandy Gooch, disappears today from the signs of the natural food stores she sold three years ago to the fast-growing Whole Foods Markets chain out of Austin, Texas.
The name change signals a shift in direction after a restructuring of the Southern California operation, which has most recently been known as Mrs. Gooch’s Whole Foods.
Under Whole Foods, the stores carry somewhat different merchandise than they did during the Gooch days and are taking on a new look as showcased in a brand-new West Los Angeles market, opening today, that is being billed as the largest health food store in Southern California.
That store, in an old Westward Ho market completely done over, embodies what the natural products industry has become: big and hip, with that high-gloss sheen of profitability pretty much everywhere you turn.
In fact, Whole Foods Markets, the nation’s largest natural foods supermarket chain, with more than 40 stores, is a prime example of how the alternative foods industry is mushrooming in growth and, at the same time, consolidating and going corporate.
If that sounds like the old contradiction-in-terms joke (along with jumbo shrimp and military intelligence), the executives of this publicly held market leader don’t agree. Alternative has become mainstream, swelling into a $9.17-billion industry.
Whole Foods has discovered that size has its advantages. The company has grown partly by buying its competitors and partly by opening new stores. (Whole Foods last month announced an agreement to buy its largest competitor, 22-store Fresh Fields Inc. of Rockville, Md., in a stock merger valued at about $134.5 million.)
“Because of our size, we have been able to set up procurement and distribution systems throughout the company that ensure our quality,” said Peter Roy, chief operating officer of the 16-year-old firm, which grew out of a small health food store operated from a house in Austin.
Roy pointed to Whole Foods’ recent purchase of a seafood distributor on the Eastern Seaboard that contracts directly with fishermen and then overnights the fish to Whole Foods stores.
“Something like that is beyond the reach of small retailers,” he said.
Plenty of small operators remain and thrive in the industry, said Danny Wells, a retail consultant based in Pleasant Hills, Calif., specializing in the natural foods industry. But the growth of the big chains has raised the visibility of healthy food, persuading more consumers to try it, he said.
“It comes down to more people that are getting educated in the area of nutrition,” Wells said. “They’re taking more responsibility for what goes into their bodies, and they’re seeing an effect . . . in increased health and higher energy.”
Concerns about food safety and the environment have also contributed to the growth of the industry.
Whole Foods has thrived because “they have been able to identify what people want, and they give it to them,” Wells said. They have taken Sandy Gooch’s “strict code of standards” and relaxed it to appeal to a wider audience, he said.
The folks at Whole Foods are the first to admit that they are not as tough as Sandy Gooch was. (Gooch, who is now involved in a nonprofit organization dedicated to improving school menus, was out of town and could not be reached for comment Tuesday.)
Whole Foods’ shelves carry such former Gooch no-nos as wine, beer, coffee and (can it be?) Haagen-Dazs and Cheerios.
The wine is largely from small wineries, the beers from microbreweries and the coffee is organic.
The Haagen-Dazs?
“This is a clean product,” said West Los Angeles store manager George Khoury, noting that it shares space with dairy-free frozen treats.
The Cheerios?
“A year ago, we couldn’t carry this--the No. 1 cereal that kids want--because it contained BHT as a preservative,” said Richard W. Cundiff, president of the Southern California region. “But even General Mills is getting the point. They took out the BHT and replaced it with Vitamin E.
“But this is a block for the old Mrs. Gooch’s customer,” he said. “They think this shouldn’t belong in the store, but it does.”
Lots of other well-known mainstream brands also make the cut, such as Wolfgang Puck’s line of frozen foods, Near East rice products, Pepperidge Farm cookies and crackers and actor Paul Newman’s line of Newman’s Own foods.
“We want to offer our customers as many choices as possible and let them make the decisions for themselves and their families,” Cundiff said.
But many rules are inviolate. Whole Foods will not sell irradiated foods or any products that were tested on animals. The chain features foods free of artificial flavors, colors, sweeteners and synthetic preservatives. It does not sell seafood, poultry and meat raised with artificial-growth stimulants.
The stores have bakeries, delicatessens and cafes. The Mrs. Gooch name lives on in the deli and the cafe at each store and in some private-label products.
The chain has been careful to pay homage to Sandy Gooch’s legacy, even thanking her in a newspaper advertising circular last week. At the entrance of the new West Los Angeles store, the chain has enshrined a small photo of the old Mrs. Gooch store in Mar Vista, which closed July 20.
But the nine-store region was not performing to Whole Foods’ standards, prompting a restructuring in January that resulted in layoffs of about 40 employees at the Sherman Oaks regional corporate office as well as the more obvious changes at the store level.
“Sandy Gooch was a pioneer,” Cundiff said. “She’s an example of one person making this world a better place.”
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A Natural Success Story
Sales of natural food products have mushroomed during the last several years as consumers have become more concerned about health and the environment. Most of these products are sold at natural/health food stores. Smaller chunks of the market go to conventional mass market supermarkets and health food chains that focus on vitamins.
Sales
In billions
1995: $9.17
Market share
Natural/health food stores (stores that devote all or nearly all shelf space to natural products): 66.7%
Health food chains (stores that focus on vitamins, supplements, herbs and personal care products): 13.8%
Mass market stores (traditional grocery and supermarket stores): 19.5%
Source: Natural Foods Merchandiser
