Natural Foods Merchandiser

Four friends follow their hearts to natural retailing success

Michael Besancon, Spencer Windbiel, Bob Goldbert and Paul Lewin of Follow Your Heart Natural Foods and CafeIn 1971, four friends pooled their resources and bought a 1,300-square-foot health food store in the metro Los Angeles city of Canoga Park, Calif. They called the store "Follow Your Heart," a name that summed up their business philosophy to always remain true to their ideals—even if doing so flew in the face of conventional retail wisdom. Two of the original founders, Michael Besancon and Spencer Windbiel, went their separate ways in 1985 (Besancon is now president of the Southern Pacific region for Whole Foods Market), but two others, Bob Goldberg and Paul Lewin, continue to run the company today.

Almost 35 years, one major move, one violent earthquake and a Whole Foods-dominated generation later, the store is still governed by the same principles, offering proof that following your heart can indeed lead to both personal and financial success. "It was the perfect name for the store because we were just doing what we were already doing," Goldberg says. "The fact that it grew into a business and survived—that's the surprising part."

The four founders of Follow Your Heart Natural Foods and CafeThe first ideals-based decision the four founders made was to eliminate meat, poultry and fish from the store's offerings, a move that was controversial at the time. The idea for a meatless grocery evolved from the seven-seat vegetarian café that Besancon had been operating in the store before the founders bought the entire space. "All four of us were vegetarian, and the idea of selling meat for profit was not following our hearts and was out of sync with what we believed," Goldberg says. "A lot of people warned us that this would cause the store to fail, but it turned out to be just the opposite. It actually created a niche that we hadn't even perceived. It turns out there was a large amount of people who actually preferred to shop at a meatless store."

Follow Your Heart remains meatless to this day, and Goldberg says this is one of the many ways the store distinguishes itself from other area natural food stores—including a Whole Foods that moved into the neighborhood in 1997.

Another store hallmark is the café. The menu alone—with entrée names that hark back to the '70s like The Love Plate and The Om Lette—is a testament to its enduring popularity. By 1976, the small eatery had grown to 22 seats and was one of the reasons the store made the move to its current location, a 7,200-square-foot space two blocks away. The popular destination restaurant has since grown to 72 seats.

"Our restaurant has always been at the core of our business. It was one of the things that made us really unique," Goldberg says. "We decided the smart thing to do would be to continue to strengthen our unique and strong suits and also to play up the advantage of being small, which really allowed us to deliver a level of personal service and customer contact that is much harder for larger companies."

Goldberg says that establishing this personalized and nurturing atmosphere has nothing do with advertising—which Follow Your Heart rarely uses—and is based instead on providing a quality customer experience that is then communicated almost entirely by word of mouth.

"We get to know our customers. We don't objectify them. We focus on creating an inviting environment," Goldberg says. "I think more than anything what Follow Your Heart has is a palpable feeling when you're in there. It's just the accumulated energy that's been put into it over the years by so many people. It's not pretty. It's got plenty of funk. But it feels comfortable." Also essential to the store's consistent and positive aura: its employees, who are often hired from Follow Your Heart's loyal customer base.

As for merchandising, Goldberg and Lewin always keep their eyes out for departments that can further distinguish the store. In recent years, this has meant focusing increased energy on the gifts and housewares section. "This was an opportunity for us to carve out a specialty niche, something we could do a really good job of," Goldberg says. Some of the best-selling gifts include puppets, books, massage tools and handmade crafts from Guatemala and Indonesia.

Along with capitalizing on its unique offerings, the store has fine-tuned another business tool over the years: sound financial management. After the 1994 Northridge earthquake devastated the store and the neighborhood, sales went down 30 percent and Goldberg and Lewin took a thorough look at their finances. "We examined all expenditures, line item by line item. Discretionary expenses were slashed or eliminated. Fixed expenses were renegotiated or refinanced," Goldberg says. "In addition to cutting expenses, we also began to focus intensively on our margins." Particular attention was paid to payroll as the largest single controllable expense, and the store took measures such as adjusting schedules to keep payroll in line during months with lower sales, and cross-training grocery staff so they could jump back and forth between stocking and running a register. After perfecting the art of operating in lean times, Follow Your Heart was then able to quickly recover from the subsequent 15 percent dip in sales brought on by the arrival of Whole Foods three years later. "Today, we have grown back to where we were before any of that, and we're actually a more profitable business than we've ever been," Goldberg says.

This process of financial fine-tuning is indicative of Follow Your Hearts' ability to evolve while also remaining consistent in its offerings. In 1988, Goldberg and Lewin started Earth Island, which manufactures Follow Your Heart proprietary products like Vegenaise, an egg-free, dairy-free mayonnaise alternative, and Vegan Gourmet cheese alternatives, now found in grocery stores and restaurants across the country. "We wanted to keep our retail operation small. But we also had a need to pay our bills and send our kids to school," Goldberg says. "So we kept the one store [a second store in Santa Barbara was sold in 1997], and right here in the neighborhood we set up Earth Island, where we're able to take our product to a much greater market without having to spend our lives on an airplane and change our lifestyle."

Even in this venture, Goldberg and Lewin continue to follow their hearts: Earth Island's manufacturing plant is powered by solar energy. Goldberg's words of wisdom to other retailers: "Our advice is our name. Passion is absolutely at the center of success. And you can't be passionate about something you don't care deeply about. I think that's why Follow Your Heart has had the measure of success that it's had. Our objective was never to be a megastore, but a gem. Gems don't have to be big to be really beautiful."

Follow Your Heart Natural Foods and Café

21825 Sherman Way
Canoga Park, CA 91303

Owners: Bob Goldberg and Paul Lewin
Employees: 75
Retail space: 7,200 feet (includes 1,500 feet of restaurant space)
2005 store and café sales: $4.2 million
Projected 2006 sales: 10 percent increase
Sales by department: café, 36.6 percent; supplements/health and beauty, 21.5 percent; grocery (nonperishable), 15.5 percent; gifts, 9.5 percent; grocery (perishable), 11.7 percent; produce, 4.2 percent; and grocery (bulk), 1 percent
Fastest-growing department: gifts—up 26.9 percent in 2005

Natural Foods Merchandiser volume XXVII/number 3/p. 170

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