Another Boulder-bred natural grocery chain could be getting a second life.
Two years after local businessmen resurrected the Alfalfa’s name and opened a reboot of the Boulder natural foods chain that operated in the ’80s and ’90s, speculation is swelling within the grocery industry that Alfalfa’s Boulder-bred brethren Wild Oats Markets also may make a return.
That talk seemed to gain steam Tuesday when British grocer Tesco announced plans to exit the U.S. market and sell its Fresh & Easy chain to the Yucaipa Cos., the Los Angeles-based investment firm of billionaire and former Wild Oats investor Ron Burkle.
Yucaipa will acquire more than 150 of Fresh & Easy’s nearly 200 smaller-format stores as well as distribution and production facilities, Cheshunt, England-based Tesco said Tuesday. Fresh & Easy operates in Arizona, California and Nevada.
Yucaipa expects to complete the purchase within three months, the company said Tuesday in a statement to Bloomberg News. “In the meantime, it is business as usual for most Fresh & Easy stores.”
The purchase will “give us a solid starting point to complete Tesco’s vision with some changes that we think will make it even more relevant to today’s consumer,” Burkle said in the statement.
Earlier this year, publications such as Bloomberg News and Financial Times — citing unnamed sources — reported that grocery magnate Burkle was in talks to not only acquire the Fresh & Easy chain from Tesco, but also convert the stores to the Wild Oats brand. The reports indicated that Burkle planned have Jim Keyes, former CEO of 7-Eleven and owner of the Wild Oats intellectual property, head up the new venture.
Additionally, Wild Oats Marketing LLC — an entity that shared Yucaipa’s Los Angeles address — filed several trademark applications for Wild Oats Marketplace names.
Bloomberg reported Tuesday that Frank Quintero, a Yucaipa spokesman, was not immediately available to comment about Wild Oats.
“The pieces do seem to add up logically to lead one to that conclusion,” said Mark Hamstra, editor of Supermarket News’ retail and financial section. “But it’s also possible that the (Wild Oats) could come back under the Fresh & Easy name as a section within the store or a private label-brand within a store.”
Wild Oats Marketing’s wildoats.com features products such as pretzels, mayonnaise and pasta sauce that bear the Wild Oats Marketplace brand name. The “about us” section highlights Wild Oats’ history in Boulder and a mission of healthy and affordable.
Wild Oats, founded in 1987, had more than 110 locations across two dozen states in 2007 when competitor Whole Foods announced plans to acquire the local grocer.
The proposed $565 million acquisition proposal from the nation’s largest natural grocer came a year after Burkle increased his stake in Wild Oats, becoming the largest shareholder.
Whole Foods’ proposal also came months after Wild Oats did not renew the contract of CEO Perry Odak. Greg Mays, who had ties to Burkle and Yucaipa, was appointed interim CEO.
The acquisition did not come easy as the Federal Trade Commission contested the combination and eventually forced the divestiture of some Wild Oats stores and intellectual property.
Wild Oats’ name has been absent from the market for nearly seven years, but the brand recognition should be strong within certain pockets of the United States, said Sonja Tuitele, a Boulder-based natural products industry consultant and longtime Wild Oats spokeswoman.
“People still have very fond memories; the brand recollection, it means something to people particularly in this (Colorado) market,” she said. “If the speculation about Fresh & Easy is true, I’m not so sure those markets have as high of brand awareness.”
Wild Oats’ operational presence in the southwestern U.S. primarily came through its Henry’s Farmers Market subsidiary, she said.
If the Wild Oats brand were to return along with a dedication to the company’s founding ethos of high product standards, Tuitele said the industry could benefit.
“I think that would be very welcome; it would give consumers other choices where to spend their food dollars,” she said. “The vendor community would embrace (another option).”
Bloomberg News contributed to this report.
