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HEALTHFUL CONNECTIONS

ASHEVILLE, N.C. -- Earth Fare, the independent food retailer based here that specializes in organic and natural groceries and health and beauty care items, has been growing -- thanks to its dedication to the burgeoning natural and organics lifestyle.By emphasizing nutritional education and leveraging its expertise in natural and healthful offerings, the seven-store operator has carved out a niche

ASHEVILLE, N.C. -- Earth Fare, the independent food retailer based here that specializes in organic and natural groceries and health and beauty care items, has been growing -- thanks to its dedication to the burgeoning natural and organics lifestyle.

By emphasizing nutritional education and leveraging its expertise in natural and healthful offerings, the seven-store operator has carved out a niche for itself as a trusted leader in providing products that appeal both to devotees of that lifestyle and an increasing number of mainstream consumers.

"I think we definitely try to meet the needs of the hard-core natural-foods customer, but the wonderful thing about where we are as a culture is that natural and organic are growing tremendously," said Troy DeGroff, director, sales and marketing, Earth Fare.

Prompted by abundant media attention, more and more mainstream consumers have become aware of natural and organic foods, he said, expanding Earth Fare's appeal beyond the "hard-core" organics set, and helping it compete against traditional supermarkets that offer only token natural/organics departments.

"Given that we've focused on this for a very long time, it's just a decided advantage as culture starts to change and people start to realize that there's a connection between how they eat and how their health is," DeGroff said.

As an example, he cited that Earth Fare ran an advertising campaign touting the fact that the stores sell no products containing hydrogenated oils long before the recent publicity surrounding the negative effects of eating foods with hydrogenated oils emerged. The campaign, which centered around the theme "un-hydrogenate your heart," emphasized that Earth Fare doesn't offer any products that contain those oils.

The chain was founded in 1975 as a single health-food store under the name Dinner for the Earth. Ten years ago, it changed its name to Earth Fare, and soon after began expanding with the backing of private investors. Michael Cianciarulo, president and chief executive officer, came on board in 1997, and oversaw the company's growth into several new markets in the Carolinas and Georgia.

New stores are planned for spring 2004 debuts in Charlotte, N.C., and Knoxville, Tenn. Earth Fare operates its own distribution center in Fletcher, N.C., that supplies organic and local produce, as well as Earth Fare's own brand of food products.

Earth Fare doesn't just offer its customers products that can help them manage their health, however. It also focuses on education by hosting lectures on health, cooking classes and other events centered on teaching people about the virtues of a natural/organic lifestyle. In most of its stores, it has a "community room" where it offers these sessions, but in one new store that was too small to house such a facility, the company plans to hold the lectures on the lawn outside the store. Another store will gain a community room when the building is remodeled this spring.

In addition, at the company's flagship Asheville location, Earth Fare earlier this year added a reading library with a fireplace, couch and chairs where customers can leisurely browse through the store's collection of books and literature. About 60% of the books are health- and nutrition-related, while the rest are natural-foods cookbooks, according to DeGroff.

"The library is there to sell books, but it's also to give our customers a place to sit down in front of a fire when the weather's bad," he said. "They can learn about some diet, or learn about what nutritional we have that can help them with some new ailment."

All its stores offer books, but the Asheville site is the only location to offer a fireside reading area.

Earth Fare also takes steps to ensure that its stores are staffed with knowledgeable workers. All employees are required to attend at least one educational session per month, many of which are provided in partnership with vendors. To gear up for a recent store opening, new hires were given two weeks of extensive training both in store operations and in health and nutrition issues related to the chain's offerings.

Earth Fare also ties its natural positioning into its community involvement. Each store has a community coordinator, who has responsibility for finding a local charity to partner with each month. To support the charity, the store donates 10 cents each time a customer brings in a grocery bag. That program has been in place for about eight years.

With its tagline, "Earth Fare, the healthy supermarket," the company also distances itself from its limited-assortment roots as a small health-food store. Several years ago, a marketing consultant with experience in the traditional-supermarket segment suggested that Earth Fare begin calling itself a supermarket to show that despite its relatively small footprint -- stores average about 25,000 square feet -- shoppers can still find just about everything they need, from household cleaners to fresh-cut meats.

"That was the first step in broadening the audience as far as it can go, and letting mainstream shoppers know through our advertising that yes, we are a supermarket, but our focus is on health," DeGroff explained.

The average basket at Earth Fare runs about $25, DeGroff said, but he noted that the company generates a lot of small-ticket sales from prepared foods. The chain attracts a lot of breakfast business for coffee and baked goods, and also offers a hot and cold salad bar and a full-service deli. Food-service sales, he said account for about 15% of the company's total sales.

Annual revenues are estimated at $43 million.

Earth Fare competes against traditional operators like Ingles, which also is based in Asheville, N.C.; Food Lion, Salisbury, N.C.; Bi-Lo, Mauldin, S.C.; and Harris Teeter, Matthews, N.C.

This spring, it will get its first competition from a large natural-foods chain when Whole Foods Market, the Austin, Texas-based leader in the category, is scheduled to open a new store across town from Earth Fare's newest location in Mt. Pleasant, S.C.