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What does a new Whole Foods mean for Greater Burlington?

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MICHAEL TONN
  • Michael Tonn

In the Greater Burlington area, shoppers don’t need to look far for local kale, organic eggs or steaks cut from animals that recently roamed Green Mountain pastures. Farmers markets seem to be cropping up in every burg, and some now weather the winter and accept EBT cards. Four high-profile natural-foods stores — City Market, Healthy Living, Sweet Clover Market and Natural Provisions — serve both suburbanites and city dwellers who rely on public transportation. That’s not even mentioning the bigger supermarket chains that currently carry a selection of organic and all-natural choices.

So when Whole Foods announced that it planned to take up residence in South Burlington on a currently undeveloped piece of land behind the Best Western Windjammer, it got everybody talking.

The big question: Does Chittenden County need another natural-foods store, and a corporate chain version at that? Barry Feldman, managing partner of Feldco Development Corporation in New Canaan, Conn. — which negotiated the deal to bring Whole Foods here — certainly thinks so. “People that live and work in Burlington are very environmentally conscious and take their nutrition very seriously,” he opines. “We have a site that we have control over that we thought would make a very good location for [Whole Foods].”

The bigwigs in Austin, Texas, where Whole Foods is headquartered, seem to agree. “We brought the site to their attention, and they liked it a great deal,” Feldman says.

But, not surprisingly, some local food purveyors have a different take on Whole Foods’ plans. Coming to an area already rife with natural-foods stores “seems predatory,” says Thomas Case, a partner in Arethusa Collective Farm, which sells produce to local shops. Clem Nilan, City Market’s general manager, concurs. “They’re basically going after the business that someone else has,” he says. “The general story line is that Whole Foods becomes the bright shiny penny” — luring customers away from local businesses.

Dean Nelson knows exactly what happens when a big chain homes in on your territory. The owner of two natural-foods stores in New Jersey, Nelson struggled when a Whole Foods set up shop just two and a half miles from one of his locations. “The first day they opened, we actually had a pretty good day,” he recalls. “I thought, ‘This won’t be that bad.’ Within three days, my store was like a desert.”

Nelson’s sales went down 40 percent, and it took nearly half a year for things to improve. “It was ugly for five months,” he recalls. “I’m not sure how we made it.” A handful of similar stores within a 5-mile radius closed their doors, he says.

South Burlington’s Healthy Living is located less than a mile from the proposed Whole Foods site. General Manager and co-owner Eli Lesser-Goldsmith knows he has a challenge ahead if the chain comes to town. He says he hopes residents realize that local shopping is “about more than just buying a tomato from the Intervale. It means supporting businesses whose money stays in Vermont and isn’t sent out of state.”

Despite the kerfuffle it’s causing among local merchants and shoppers, the opening of Whole Foods SoBu is at least a year away. Feldco needs to go through a three-part process to get municipal approval for the massive “lifestyle center” it’s proposing, which will include numerous stores anchored by a 45,000-square-foot Whole Foods. Beginning as a series of “sketch plans” submitted to the city, the development must make it through two additional reviews. Each stage comes with a public hearing.

South Burlington’s zoning administrator, Ray Belair, declines to hazard a guess on how long the whole thing will take. “There’s no ‘usual,’ because every project is different,” he explains. For one thing, “interested parties,” such as owners of abutting land, could appeal city approval of the complex. “Any appeal could delay it, possibly for years,” Belair says, noting that the panel will take “traffic, aesthetics, lighting and parking” into consideration.

Plus, Feldco will need to get stormwater and Act 250 permits from the state. But while the processes are rigorous, Belair says, “These people are pretty savvy … They know ahead of time what the requirements are, and they design [plans] to the standards.”

They’re also aware of the local competition they face. Says Feldman: “I’m sure Whole Foods knows that Healthy Living is already positioned in the marketplace, but they have obviously evaluated the marketplace with that knowledge and determined that they can actively compete.”

Nationwide, Whole Foods has succeeded in no small part by trading on its friendly image and eco-consciousness. The company trumpets its core goals of “satisfying and delighting our customers,” “caring about our communities and our environment,” and “selling the highest quality natural and organic products available.”

The first Whole Foods, in trendy Austin, opened its doors in 1980 with a staff of 19 and just 10,500 square feet. Now there are 273 stores “satisfying and delighting” Americans nationwide. Many were acquired when Whole Foods subsumed competing chains such as Bread & Circus and, most recently — after a battle with the Federal Trade Commission — Wild Oats.

Whatever its “core values,” Whole Foods is a business, and some critics claim it’s no model of socially responsible capitalism. According to Dean Nelson, who has hired several former Whole Foods employees, the company is “very challenging to work for. Most people who I hired said [being on staff at Whole Foods] wasn’t a pleasant experience. If you’re a team leader and you don’t hit your numbers, you’re in big trouble.”

“No matter how much they say they’re not cookie-cutter, they’re still responsible to corporate and to Wall Street,” maintains Clem Nilan. Last fall, Mother Jones ran a piece asking, “Are Starbucks and Whole Foods Union Busters?” Whole Foods cofounder and chief executive John P. Mackey famously compared unions to herpes.

Mackey has made other odd moves, too. For more than a decade, the self-proclaimed “free-market libertarian” posted comments about his company and his competition to the Yahoo Finance discussion board under a pseudonym. The New York Times reported that he went so far as to compliment his own hairstyle and attire. “Mackey looks like a model for Brooks Brothers,” he wrote in April 2000, comparing himself favorably to Whole Foods staffers with “tatoos [sic], piercings, unusual dress, and interesting haircuts.”

Other blemishes on the WF escutcheon? In February, Westchester County authorities found the store in White Plains, N.Y., to be carrying 156 items past their sell-by dates, including yogurt, cottage cheese and hot dogs. Forty-two of these products had expired more than a month prior. It was the second worst showing of the 46 area stores included in the inspection.

Last August, according to the Boston Globe, Whole Foods customers in Massachusetts were sickened with E. coli after one of the store’s natural beef suppliers began using a slaughterhouse that had received numerous health citations. Although the supplier documented the change, nobody at Whole Foods noticed.

Local merchants claim that sort of slip is less likely to happen at a smaller store. “I don’t think you could find another meat department around that’s more committed to the local movement than ours. We don’t have one piece of meat from the Midwest,” says Lesser-Goldsmith.

No business or product line is perfect, of course. But these incidents are a reminder that Whole Foods is a player in big-time industrial organics. With their own brands, and close to 300 stores in the U.S. alone, the chain has little in common with a small-time artisan purveyor. This is factory-farmed fare — sans pesticides, antibiotics or MSG.

But, thanks to those same economies of scale, Whole Foods can often sell natural foods at a lower price point than can smaller stores. Lesser-Goldsmith says, “When Price Chopper, Hannaford or Whole Foods buys Stonyfield [Farm] yogurt, they buy it by the tractor-trailer load. We buy it by the case.”

In addition, because it owns warehouses and its own fleets of trucks — which are slowly being converted to biodiesel — Whole Foods is less affected by fluctuations in the cost of oil. Local stores don’t have room to store massive quantities of nonperishables while gas prices are high, so they’re subject to the whims of trucking companies.

It wasn’t hard to observe those differences last week when I compared prices at the Whole Foods store in Hadley, Mass. — currently the location closest to Burlington — with those charged at Healthy Living. Most items cost from a few cents to a couple of dollars more at the smaller South Burlington business.

Allison Lafferty, whose parents own the Natural Provisions stores in St. Johnsbury and Williston, manages the Chittenden County location with her husband, Peter. Like Lesser-Goldsmith, she acknowledges that big stores “can get deeper discounts. Even though our mark-up might be exactly the same as a chain store, they got the product cheaper,” she says. Nonetheless, Lafferty maintains, “We never go above the suggested retail [price]. We try to honor those for all companies.”

Although Whole Foods representative Robin Rehfield declined to answer a handful of questions sent to her by Seven Days, she was willing to comment on one issue.

“With the abundance of farmers and producers in the Vermont area, we expect to have a large number of local products in our Burlington store,” says Rehfield. These days, participating in the localvore movement is a point of pride for the chain, though the definition of local food posted on its website — anything that has traveled “seven or fewer hours by car or truck” — may be stretching it a touch. According to that definition, a head of lettuce grown in Montpelier would still be “local” in Providence, R.I.

Would Vermont farmers supply Whole Foods? “My loyalties are to Healthy Living and City Market, because we’ve had long relationships with them,” says Arethusa’s Case. But he says the collective wouldn’t necessarily turn down a major new revenue source: “It’s a tricky spot. There’s the ethics of it versus another outlet for making money.”

Pete Johnson, owner of Pete’s Greens in Craftsbury, operates a farm stand and a thriving farm-share program and sells to all four of Chittenden County’s natural-foods stores. Asked if he would supply Whole Foods, Johnson can’t give a firm answer. “I don’t know if we’d sell there or not,” he says. “I don’t think we need them.” Although he’s wary of Whole Foods, he describes himself as “a big believer that virtually any kind of new access to quality food is a good thing.”

Dan Cunningham, CEO of Burlington-based Dan’s Chocolates, sells his truffle balls and chocolate bars locally, but also to a trio of Whole Foods stores in the Boston area. He echoes Johnson’s feeling that opening the organic and natural-foods realms to more consumers is important. “My hope is that it adds to those fields and doesn’t detract from retailers who are based locally,” he says.

Cunningham concedes he’s happy to get his product into as many local stores as possible, provided they’re stores known for carefully vetting the products they carry. For his own part, though, he plans to continue doing the bulk of his personal shopping at Healthy Living, Whole Foods or no Whole Foods: “I’m local here, and it matters a lot when local people support Dan’s.”

Mark Fasching of Jericho Settlers’ Farm, which supplies eggs to several local stores and pork to Healthy Living, takes a hard line when it comes to the planned superstore. “I would never sell to [Whole Foods],” the suntanned farmer says as he peddles fresh chickens and long stems of green garlic at the Burlington Farmers Market. “I have no need to support chains … Even if they were to pay us more for our product … I would still not be interested.”

Fasching, who grew up on the West Coast, says that every time he visits his hometown, he pops into the nearest Whole Foods to see if they’re carrying products produced nearby. His assessment: “They’re not walking the talk, and [Vermont’s] local stores are.”

For instance, Fasching says, Eli and Nina Lesser-Goldsmith and Katy Lesser from Healthy Living have visited his fields on at least three occasions to see where the stuff they sell comes from. He doubts Whole Foods CEO John Mackey will be frolicking with Jericho Settlers’ heritage-breed pigs anytime soon.

Unlike Fasching, local shoppers are on the fence. Though “Buy Local” sometimes seems like Vermont’s unofficial motto, that philosophy doesn’t negate other concerns, such as variety and price. While some are adamant in their opposition to the foreign competitor, many foodies say they would consider shopping at the new store.

Erika Parker graduated from Champlain College in 2006 and is the planning assistant for April Cornell’s online store. Though she’s never visited a Whole Foods, she speculates, “If they opened, I’d probably want to check it out. I’d want to see what they offer consumers.” But Parker doubts she’d adjust her regular food-procurement habits — which currently include gardening, frequenting farmers markets in the summer, and getting the rest of her groceries from City Market and Shaw’s. “We already have so many good options in Burlington,” she says.

Tim Curtin, an engineer at IBM, and Adam Bluestein, a freelance writer and father of two, share Parker’s habit of spreading the wealth around. Both frequent several area stores and the Burlington Farmers Market.

“I prefer to support the little guy,” says Curtin. “Having said that, I will shop [at Whole Foods] for some things.” His sister works at the Whole Foods in Hadley with no complaints. Curtin figures he’d go to the superstore for hard-to-find items: “The one that I’m used to is huge, with an enormous selection of just about everything.”

Although Bluestein plans to continue buying produce and local meats at the farmers market and City Market, he also expects to hit up Whole Foods for the kinds of packaged goods he currently picks up at Price Chopper. “I think that the Whole Foods private-label brand offers a lot in those categories: things I get for the kids, like granola bars, healthy snack-y things, or even cereals,” he says.

While Bluestein values the idea of supporting local stores, he admits that he finds the prices at Healthy Living too high. As a family man, he knows every penny counts. “I’d feel conflicted about … shopping [at Whole Foods], because in principle I like to support the sorts of local businesses that are here,” he says. “But I’m not dogmatic about that.”

Price is a major concern for consumers in a recession. But, of course, as Allison Lafferty of Natural Provisions points out, it’s not the only point of comparison. She believes small stores like hers can offer a level of customer service that larger chains can’t match. “We can get to know our customers and their likes and dislikes,” Lafferty says. “They have the opportunity to give feedback to an owner, so change can happen very quickly. We can make on-the-spot decisions.”

Lesser-Goldsmith says that customer service is a priority at Healthy Living, too. “We try to go above and beyond when it comes to special orders. We’ll get in anything people want,” he explains. When it comes to addressing requests and problems, Lesser-Goldsmith says, “I answer emails from customers pretty much 24 hours a day.”

And, at member-owned City Market, Nilan and Co. work hard to make wholesome fare affordable through a variety of membership options, careful pricing of staple items and a 10 percent discount for customers with food-stamp benefits. Nilan notes that membership has grown from 2100 to 4000 individuals and households.

Although Ray Belair says Nilan and Lesser-Goldsmith would be welcome to speak at the public hearings, neither plans to lobby against Whole Foods coming to town. “One of the things we do is promote choice … We’ll provide education around [Whole Foods], but you choose what suits you,” Nilan says. He continues: “They’re not to be taken lightly … but they’re not going to put us out of business. I just hope they’re as far away from us as possible.”

If all goes as planned, Healthy Living won’t have the luxury of distance. But Dean Nelson — who met Lesser-Goldsmith at a convention several years ago — believes the store will survive if it can weather the initial spate of consumer interest in the shiny new establishment down the road.

After all, his did. “Here’s the analogy that I’ve used,” Nelson says. “It’s like going to the doctor, and they say you’re going to live with this ailment for the rest of your life, but it’s not going to kill you.”

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