Natural Foods Merchandiser


Kermit Was Wrong—It?s Easy Being Green
Formerly an exotic concoction, green tea has moved squarely into the mainstream, according to a new report from market research publisher Packaged Facts. Its success puts tea in a market position that Packaged Facts postulates could be similar to coffee?s tipping point a decade ago, when it moved from a 79 cent cup of nondescript hot liquid to a $4 latte and beyond.

In 2003, the retail tea market reached $5.5 billion in sales, up nearly $1 billion from 2002. Three-fourths of sales come from ready-to-drink tea beverages, with the balance mostly loose and bagged teas. Green tea appeals to consumers because it contains high levels of antioxidants and packs a smaller caffeine jolt than black tea.

What else is brewing in the tea world? White tea came on strong last year, and chai concentrates make up almost all the sales in tea mixes. Meanwhile, yerba mate, red tea, herbal and fruit flavors, and functional teas appeal to consumers looking for something new to drink.

?The fact that the tea market passed the $5 billion mark is significant,? says Don Montuori, acquisitions editor for Packaged Facts. ?But I think even more interesting is the innovation and creativity tea marketers are displaying with the flavorings, product lines and varieties. In that respect, tea is a lot more dynamic than coffee—as a marketer and retailer, you can offer more choice to consumers.?

Whole Foods To Enter 15 New Markets
Buoyed by the best financial quarter in its history, Whole Foods Market Inc. plans to build 41 stores representing more than 1.9 million square feet, including placements in 15 new cities, executives of the Austin, Texas, natural grocer said Feb. 11.

?We?re just stuffing the real estate pipeline,? Chief Executive John Mackey told investors. ?We used to think our stores had to be located at least five miles apart. Now it?s more like three miles apart, and maybe soon it?ll be two miles. It?s certainly a much larger market than I ever thought.?

For the first quarter ending Jan. 18, Whole Foods increased net income 51 percent year-over-year to $38.7 million on $1.1 billion in sales. Same-store sales were up 14.3 percent; excluding 19 stores that were directly affected by Southern California labor disputes, same-store sales still increased 12.8 percent.

Mackey said he expects the California strike to have a permanent positive impact on Whole Foods. Customers ?get used to a level of service and get used to a quality level,? he said. Even after the strike ends, ?there?s going to be a lot of tension and bitterness [at Vons, Ralph?s and Albertsons], whatever compromise they reach,? he said. ?There?s permanent damage occurring in those stores.?

On another front, Whole Foods plans to ?proceed judiciously? with its newly acquired Fresh & Wild stores in the United Kingdom, said Chief Operating Officer Walter Robb. To show what the company envisions for urban markets like London, Whole Foods invited real estate developers from the U.K. to the February debut of its 59,000-square-foot Columbus Circle store in New York City. ?We really opened the eyes of the U.K. developers,? said Jim Sud, executive vice president for growth and business development.

Mackey said that in the United States, new stores in the chain have been posting average weekly sales of $472,000. Besides Columbus Circle, other new stores include a second San Francisco store and one store each in Louisville, Ky., and Colorado Springs, Colo. Nine to 10 store openings, including one Fresh & Wild store and a relocation of an existing store, are due in the second half of 2004.

Coming Soon ... Near You
Alabama: Birmingham
California: Glendale (relocation), Hollywood, Long Beach, Oakland, Redwood City, Thousand Oaks, Valencia
Canada: West Vancouver, B.C.; Oakville (Toronto), Ont.
Colorado: Denver, Fort Collins
Connecticut: West Hartford
Florida: Coral Gables, Palm Beach Gardens, Sarasota
Georgia: Atlanta
Illinois: Chicago (2)
Louisiana: Baton Rouge, Metairie
Maryland: Chevy Chase
Massachusetts: Boston, Hingham, Swampscott
Nebraska: Omaha
New Jersey: Middletown, Princeton
New York: Brooklyn, Jericho, Manhattan, White Plains
Ohio: Cleveland
South Carolina: Charleston
Texas: Austin (new flagship store)
United Kingdom: Crouch End, London
Virginia: Alexandria, Charlottesville
Washington: Bellevue

Natural Foods Merchandiser volume XXV/number 4/p. 18, 22

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