Canada: Home to the Mounties, maple syrup, free health care and a relatively new retail chain, Planet Organics.
Husband-and-wife entrepreneurial team Mark Craft and Diane Shaskin were once independent retailers, as owners of the Terra Natural Foods Market in Edmonton, Alberta. But now, they?re the president and vice president of marketing of Planet Organic, a multistore natural supermarket chain.
?We were kind of the ?mom-and-pop? owners of Terra Natural Foods, but we had also developed the store into this fairly sophisticated company,? Shaskin says. ?We had devised system manuals, dress codes and guidebooks, all of that kind of thing. We really worked at developing the store as a business.?
This approach workedâand then some. The couple transformed Terra from a decent market into what retail consultant Danny Wells calls one of the leading stores in North America. ?[Shaskin and Craft] do a great job with overall presentation,? Wells says. ?For one thing, they?ve got a great color palette that makes their store a very striking, fun place to shop. They?re very good at executing the basics of retail.?
Since 1993, when Craft and Shaskin purchased Terra, formerly known as the High Level Natural Foods Co-op, it saw a steady increase in sales, with revenue approaching $2 million per year. Terra also achieved an annual average growth of 13 percent for the three-year period ending in 2000. For Shaskin, the store offered a chance to explore a new industry.
?I had been a television producer, but wanted to try something different,? she says. ?And when we saw that there was this business for sale, I thought, very simply: ?I like food, why not try that?? Within six months, I discovered that I really liked the industry. I?ve always loved good, real food.?
Shaskin?s husband, however, had much deeper roots in the industry. He founded a natural foods store in 1978 in a small town in the Peace River region of northern Alberta and has remained in the business ever since.
A few years ago, however, Craft and Shaskin began thinking about moving on. ?At some point, we hit the ceiling with [what we were doing at Terra],? Shaskin says. ?We decided we either wanted to do something new entirely or we wanted to do something bigger.?
?Something bigger? was exactly what Planet Organic founder Darren Krissie had in mind. ?Darren Krissie came along with the idea of starting a big public company, which hadn?t really occurred to us,? Shaskin says. Krissie?s vision was to consolidate the Canadian health food industry through the acquisition of independent natural foods stores across the country. Planet Organic Health Corp. is an investor-owned company dedicated to this goal. Terra Natural Foods, with its retail savvy and business-minded approach to the industry, was the model Krissie wanted to use. In 2000, the store moved to a larger location and became the first Planet Organic Market.
?Darren started selling us on the idea, and it started to seem like it could be really fun,? Shaskin says. ?We could take all of these systems we had come up with for Terra, and take what we know about the business and the industry, and apply it to a bunch of other stores all over Canada.?
Through analysis of the industry and acquisition of several natural foods markets, in just five years Planet Organic has become one of the largest natural foods retailers in the country.
In 2002, Planet Organic acquired two new markets: one in Victoria, British Columbia and one in Calgary, Alberta. A store in Port Coquitlam, B.C., became the fourth Planet Organic location in 2003, and in 2004 the Planet Organic family added Great Ocean Natural Food Market in Halifax, Nova Scotia, another pioneer store of the Canadian natural food business. Last year, Planet Organic also acquired Sangster?s Health Centres, a multistore chain of vitamin shops across Canada that will retain its name.
Planet Organic applies the same business approach to every store it acquires. It implements a centralized purchasing system, which makes it easy to establish product standards and provides a methodology for product selection and pricing, as well as a means of seeking out new products. The system also enables the company to negotiate discount arrangements with distributors and manufacturers. Planet Organic also introduces a marketing program focused on education and information delivered through a variety of methods, including a direct-mail newsletter program, regular in-store demonstrations and in-store educational brochures and recipes. Finally, Planet Organic brings in its private label products.
?Everything can be integrated into a store fairly easily,? Shaskin says.
And it?s not a one-way process either, she adds. ?We learn from the stores we buy, too. We see what the stores are doing and incorporate many things from them into our overall plan. With the new Halifax store, we basically kept 99 percent of the staff. We also adopted their in-store newsletter and have begun using a modified version of it in all of our stores,? Shaskin says. ?Additionally, we?ve handpicked some of their most popular grab ?n? go and full-prep recipes and introduced those to other stores.?
Wells thinks this tactic is a wise one. ?When you acquire a store, you?re not just acquiring their physical assets, you?re acquiring their intellectual capital as well,? he says.
Many independent retailers, Shaskin says, are interested in selling their businesses. Others are looking to retire. Planet Organic offers natural foods store owners an exit strategy. Shaskin says that as a large public company, Planet Organic is able to make good offers to purchase those businesses. The company?s most recent acquisition in Halifax took place just as the owners were planning to retire. The changeover has been very smooth, Shaskin says.
?When we?re taking over an existing store, we always want to keep their employees and management team intact,? she says. ?Buying a store and rehiring an entire staff is just too much. So we keep them on board and send some people over to help ease the process.?
She says that employee response to these acquisitions has been extremely positive. ?Because we?re not a private company, employees are very excited. They know that they can invest in the company and be a real part of it. And we want them to be involved on that level.?
Tyler Wilcox is a Boulder, Colo.-based freelance writer.
Natural Foods Merchandiser volume XXVI/number 11/p. 50