Whole Foods' Pricey, Personal Formula Could Put Pressure On N.H. Farmers

Sep 22, 2014

Credit Sheryl Rich-Kern for NHPR

Whole Foods opened its first New Hampshire store in Nashua last month. It plans to add stores in Bedford and Portsmouth by 2016.

It’s an open question whether the Texas-based chain known for high-end natural and organic products can compete with farmers markets on the one hand and with the reopened Market Basket, or the grocers that saw their business grow as the Demoulas family feuded.

Whether or not you’re a foodie or a locavore, the Whole Foods market in Nashua treats you like one. Crates are piled high with gleaming fruits and vegetables, and signs are posted with details on animal welfare ratings and sustainability.

All give customers assurance they’re choosing foods wisely.

So too, do the cameo appearances by local suppliers, like Dennis Chesley of the New Hampshire Mushroom Company.

"We grow them. We try to make them feel like they're still out in the woods. So we grow them on bags full of hardwood sawdust along with some wheat and a little bit of water."

Whole Foods promotes its offerings, including beer on tap.
Credit Sheryl Rich-Kern for NHPR

  Creating a health-conscious consumer who connects with its community is a formula that’s worked well for Whole Foods. In fact so well, plenty of competitors have jumped in. Supermarkets like Hannafords and Shaws now sell products from New Hampshire farms, and promote local causes.

And big box retailers are also getting into the grocery business.

"Wal-Mart has become the number one food retailer in the country, basically overnight."
 

That’s Kevin Griffin of the Griffin Report of Food Marketing. He says while almost every retailer is selling food, Whole Foods still stands apart.

"The average consumer that goes into Whole Foods is looking for a premium product and they're not as focused on price as much as the average consumer."

Phil Lembert disagrees with that assertion. Lembert’s a columnist with the trade publication, Supermarket News.

"Everybody is looking to save money, which is why we've seen the Whole Foods' market value - their stock price - drop."

Lempert says all markets -- Whole Foods included --will need to appeal to a broader customer base to keep the cash registers ringing. And with more and more farmers markets , dozens in New Hampshire alone and eight thousand nationwide, people seeking fresh food have more options.

Adrien Lavoie steps down from his tractor on his 250-acre farm in Hollis.

"There are real sweet like a Fuji..."

Lavoie’s been selling his locally grown produce since the 90s.

"The biggest change I've seen is people moving away from buying baskets of tomatoes, multiple dozens of corn, buying ingredients to make their meals as opposed to buying little bits of something or more prepared things."

Lavoie says he loses out to retailers that offer pre-cut and prepared items. And he’s watching his new neighbor warily.

"As the crow flies, they're two miles from my farm. They're awful close. It's hard to compete. If [the customers] find fairly local food they like over there, they may come away from the farm stands and go to more convenience over there."

That’s certainly what Whole Foods is banking on. And on this late afternoon, more than a few customers are kicking back in the lounge with sandwiches and beer.

The lounge in Nashua's Whole Foods
Credit Sheryl Rich-Kern for NHPR

  In-store cafes and are a growing trend in supermarkets. The added revenue stream improves margins and helps a high-end grocer like Whole Foods compete on price.

Right now the chain has about 400 stores.

Laura Derba leads Whole Foods North Atlantic Region. She suggests that’s only the beginning.

"Twelve hundred stores is our long-term goal. So our volume alone brings down the cost of those goods."

Whether Whole Foods will ever shed its "Whole Paycheck" image remains to be seen. But in the meantime, New Hampshire food shoppers – at least those near Nashua – have new options for kale, almond milk, wheat berry salads – and beer.