It's all-organic vs. the store with more in Rockville's health food fight

TOFU WARS

December 30, 1991|By Michael Pollick

Imagine how you'd feel, if you were Rod or Barbara Escobar.

You and two other families pool your savings and open the prettiest and biggest health food store the Baltimore-Washington region has seen -- with 7,000 square feet-plus of all-organic veggies and fruits, hundreds of cosmetics that have never been tested on animals, and fresh muffins made on premises with whole grains, no sugar.

You open B. Gordon's Market in one of the state's most prosperous commercial districts -- just off Rockville Pike in Montgomery County -- and things are going great. Then BAM! The first health food store chain started by grocery store professionals opens its premier store, more than twice as large, across the street from you.

Called Fresh Fields, it is even more beautiful, with piped-in music, incandescent spotlights bathing the fruit, and a bakery where everything is made from scratch.

It may not be all-organic, but it is set up for one-stop shopping. Health food purists who balk even at having a seafood section will be startled to see the huge selection of meats and cheeses at Fresh Fields.

Fresh Fields, in sum, is a "category killer" -- a store that changes the retail landscape by eliminating the need to go to one or more smaller specialty stores.

The owners, meanwhile, are aggressive, tough-skinned, and able demand large discounts from big health food distributors because of their huge volume.

We're talking about loss leaders like Veggie Pockets -- various vegetarian fillings wrapped up in an organic wheat crust. Fresh Fields is selling these nouveau fast-food items for $1.29, vs. $1.89 at some of the smaller stores. It has been enough to bring some dedicated organic customers down from Baltimore.

B. Gordon's is nice, it's friendly, and it's currently the state's only certified organic retailer.

But Fresh Fields gives new meaning to the word slick.

Its founding force is Leo Kahn, who started, built and sold a major New England grocery store chain, Purity Supreme. At the same time he is revolutionizing health food, Mr. Kahn is building category killers in the office supply field as co-founder of the Staples chain.

"You look at that store, and you don't think, 'Here's a guy who probably got taken by his general contractor,' " said Moses Brown, owner of Village Market Natural Grocer in Pikesville. "You know he knows what he's doing."

Does he. Just look at the traffic pattern. Grocery stores in general put their perishables -- produce, cheese, meats, deli, bakery -- around the perimeter of the store to ensure that you'll enter these departments and buy, no matter on which side of the store you start.

At Fresh Fields, you are irresistibly led through the perishables. Except by going backwards through a checkout lane, there is no way to get to the bakery directly from the entrance. To get there you have to go through produce, and before you reach the checkout you're likely to go through cheese, meat, salad bar and deli as well.

What's beginning to happen to Maryland's natural foods industry has already happened in other well-off urban areas such as Los )) Angeles and Boston.

The mom-and-pop health food store is being jostled aside by the natural foods supermarket, a store three to 10 times larger than what used to be called large: the 4,000-square-foot health food store.

So far, this growth has been relatively steady, but it's possible Fresh Fields may set a faster pace.

These are "guys who are used to dealing in really big quantities," said Frank Lampe, editor of the industry's leading trade journal, Natural Foods Merchandiser, published in Boulder, Colo.

For starters, he says, there is no way you could put up a store like Fresh Fields for less than $2 million. That easily puts the investment for the first four stores at $8 million to $10 million, he says.

Each Fresh Fields store, with more than 100 employees, will have to gross at least $200,000 a week just to break even, Mr. Lampe said. That works out to a minimum of $10 million a year per store, and he figures a gross between that and $15 million per store would be about right.

In contrast, Mr. Brown's 2,200-square-foot Pikesville store did $1.7 million in sales in 1990.

Fresh Fields President Mark Ordan will not say how many stores the company intends to build, but Mr. Lampe said he has heard the company plans at least 40, fanning out from the Washington base. And while Fresh Fields' Chairman Kahn denies he has his eyes on Baltimore, Mr. Lampe advises not to believe it.

Whether Fresh Fields comes to Baltimore or not, it clearly is moving quickly to claim the greater Washington area as its turf -- making it nearly untouchable by any other health food chain. Only seven months after the May 27 opening in Rockville, the company has already opened a similar store a few miles away in high-rent Bethesda. And it will soon have two suburban Virginia stores -- a 17,000-foot standard model in Tyson's Corner in February and a 32,000-foot giant in Annandale in April.

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