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Organic invasion looming?

Grocery wars get a whole lot more interesting as U.S. giant aggressively expands across the country

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Whole Foods Market locations come in a variety of sizes and often take over spaces that used to house grocery stores.

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Whole Foods Market locations come in a variety of sizes and often take over spaces that used to house grocery stores.

Is Whole Foods Market preparing to enter Winnipeg's grocery wars?

The Texas-based retailer, the largest natural and organic supermarket chain in the U.S., is considering some aggressive expansion north of the border -- its co-chief executive John Mackey said this summer it could open more than 40 stores across the country -- but Winnipeg isn't on its radar screen. Yet.

Company spokesman Keith Stewart said it doesn't have any firm plans outside of Toronto and Vancouver but it is "definitely" looking at other cities across Canada.

"We're flattered any time a community comes and asks us to open a store. We're always on the lookout for sites," he said.

"We're looking for a community where we think we can be of service. We look for people who appreciate natural and organic foods."

Whole Foods has more than 350 locations in North America and the U.K. and annual sales of nearly US$12 billion. It opens about 30 locations per year.

An industry source told the Free Press Whole Foods is reportedly developing a property in Edmonton and another in Calgary isn't far behind.

"Whether they come to Winnipeg will depend on how well they do in those other markets," the source said, adding Seasons of Tuxedo, the south Winnipeg development anchored by IKEA, would be the likely destination.

'We're flattered any time a community comes and asks us to open a store. We're always on the lookout for sites'

-- Whole Foods Market spokesman Keith Stewart

Derrick Chartier, president of CBRE Winnipeg and leasing agent for Seasons of Tuxedo, wouldn't comment on any possible negotiations with Whole Foods.

"There is probably a number of developers that would be very happy to have them at any of their projects. Would the owners of Seasons of Tuxedo be interested in having a tenant like Whole Foods? They certainly would be very happy with that. Would it be a good fit? In our opinion, it would be a great fit," he said.

If any of these rumours and questions surrounding Winnipeg as a home for a world-class retailer sound familiar, remember that the local IKEA store will celebrate its first anniversary in November.

A big portion of Whole Foods' offering is perishable items, including produce, fresh seafood and meat, as well as specialty and prepared food items. It also carries traditional grocery items such as cereal, juice, snacks and body care products.

Winnipeg has a small but growing organic food market but is it big enough to support an industry giant?

Matt Holtmann, president of organic retailer Vita Health, which has seven stores in town, thinks so. He believes the more attention given to the sector, the more people will be educated about the benefits of healthier eating and the more mainstream it will become.

"The organic market is growing quickly in Winnipeg but it's behind more progressive parts of North America, like California and the West Coast. It's much larger in Toronto and New York, too," he said.

Organic food has also become increasingly popular in traditional grocery stores. Sobeys, Safeway and Superstore have all increased their organic offerings in recent months.

Holtmann said he's confident Winnipeg can support his chain as well as Whole Foods, which he describes as the industry's "gold standard."

"I know a lot of retailers in Toronto and Vancouver were initially concerned with (Whole Foods') big marketing blitz. Business might be a little slow at first because everybody wants to check them out. But in the long run, good retailers have thrived and continued to do well," he said.

Stewart believes Whole Foods and other organic providers can compete alongside traditional grocery stores, too.

"More of them are carrying items you would find at Whole Foods Market. That's good because it provides customers access to these types of (natural and organic) products," he said.

Stewart admits distribution is one of the company's challenges. Its Toronto stores are serviced from Michigan, approximately four hours away, while Vancouver is serviced from Seattle, which is about a three-hour drive. The biggest cluster of stores closest to Winnipeg is in Minneapolis, about seven hours away.

Whole Foods locations range in size from 18,000 square feet to 70,000 square feet. In some cases they take over space that used to house a grocery store and in others, they build from the ground up.

"It's important to build one that's right for the community," he said.

Mackey -- whom the New Yorker called a "right-wing hippie" in a 2010 profile -- is a big fan of Canada, especially our universal health care system, declaring on a recent trip to Montreal: "I'm very impressed with Canada. Canada is a country that, in many ways, is one of the most rapidly evolving countries in the world in terms of the overall consciousness of it. You've got a good, obviously good social welfare safety net. At the same time, you're entrepreneurial. You're creative. Your taxes make more sense than American taxes."

The United States would be very well served to pay a lot more attention to Canadians, he said. "You're doing a lot of things right. And Americans are doing a lot of things wrong. So the problem in America, Americans are too arrogant to want to look at anybody else. It never ceases to amaze me."

Mackey, who says he travels with a rice cooker, came to Montreal's C2Mtl Conference, a gathering of business and creative people curated by local advertising agency Sid Lee, largely to talk about his recent book Conscious Capitalism. The main idea of the book is that business should have a higher purpose than simply making money.

Food in the United States has never been cheaper than it is today, Mackey said, representing only 8 per cent of a family's disposable income spending. And yet Americans have among the world's highest obesity rates because they are buying the most expensive foods -- processed and animal-based products, he noted.

"The healthiest food you can eat is not expensive," he said. "But it requires you know how to cook." The multi-millionaire said he spent about 30 cents on the raisins, oats, and almond milk he ate for breakfast that morning.

Many high-profile investors are bullish on Whole Foods because they believe the younger millennial generation want their food "vetted and verified," as CNBC business broadcaster Jim Cramer put it recently in a column.

Mackey believes the company can deliver exactly that.

geoff.kirbyson@freepress.mb.ca

-- with files from National Post

Republished from the Winnipeg Free Press print edition August 31, 2013 B8

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