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Ike, We Hardly Knew Ye

Ike, We Hardly Knew Ye

Friday the 13th came a week early for the natural products industry, with the news that two retailers were closing stores that exemplified the new thinking about health and wellness.

First, Elephant Pharm [3], the three-store integrative pharmacy chain in Berkeley, Calif., declared Chapter 7 bankruptcy. A day later, Bashas’ announced it was shuttering its first (and only) Ike’s Farmers’ Market [4] on the northern fringes of Tucson, Ariz.

ikes.jpg [5]The common denominator, of course, is the economy. “It has not been possible to raise the capital required to continue the business,” said Kathi Lentzsch [6], Elephant’s CEO, explaining that the company just couldn’t attain critical mass beyond the three units to attract what little growth capital is floating around out there.

From Bashas’ president Mike Proulx [7]: “Arizona went from first or second fastest growth in the nation, to practically no growth,” he told my SN [8] colleague Mark Hamstra, describing the need to lower costs in order to stay competitive in a market teeming with new formats like Tesco’s Fresh & Easy [9] and Wal-Mart’s Marketside [10], as well as Whole Foods Market [11] and Sprouts Farmers Market [12].

Bashas’ was happy with the concept, but concedes the prototype just didn’t click with the locals in Oro Valley, a community adjacent to Tucson that’s home to tech firms and progressive attitudes.

“Contrary to all our research and studies, it just wasn’t the right place for that store,” Proulx said, a comment that echoed what Supervalu said [13] about the five Sunflower Markets it closed just over a year ago.

It’s unfortunate that going forward, we can expect fewer — any? — natural/organic fold-outs within the mainstream supermarket channel. It's been exciting to see retailers introduce unique formats and Take a Chance. But the bottom line is that, for all their experience, conventional operators still seem to be missing a critical page from the natural/organic marketing playbook. Until that mystery is solved, they'll have to keep tinkering with the sales formula within the framework of their traditional formats.