Could mother Nature's give birth to a new natural-foods
market?
Given the mass exodus of top talent from Nature's Fresh
Northwest since Wild Oats Markets Inc. bought the local
chain from GNC in April, the prospect isn't so far-fetched.
Although the first group of employees to leave the
company could be termed layoffs ("Natural Selection,"
WW, June 2, 1999), nearly a dozen top Nature's
staffers have recently quit voluntarily, citing philosophical
differences with their new boss, a publicly traded company
that runs 71 stores in the United States and Canada.
Former Nature's owner Stan Amy has heard about the internal
turmoil at his old company and is clearly troubled by
it.
"It's made clear to me the value of being local and
private," Amy says. "I think things are real average
now," he adds, "and what we had before was real superior."
Although he and other Nature's alumni are being coy
about their plans, it's obvious that with his money
and their combined expertise, opening another version
of Nature's would hardly represent a stretch. Even prior
to the Wild Oats deal, the strategic plan at Nature's
called for having up to 12 stores in the Portland area;
the old team still thinks that number is realistic.
Analyst Laura Richardson of Pacific Crest Securities
says the Portland market does have plenty of room for
expansion, but points out that most of the industry
is focusing on consolidation rather than startups. But
then, the old Nature's team never aspired to be like
the rest of the industry.
"What Nature's was offering was very special," says
Amy, who sold Nature's to GNC three years ago. "If it's
lost, there'll be a vacuum, and the market abhors a
vacuum."
Amy hasn't lost his taste for the natural foods business.
"As soon as I found out GNC wanted to sell [Nature's],
I called GNC," he says. By that time, however, Wild
Oats already had the deal pretty well done--at what
Amy considered a premium price: $57.5 million.
At 52, Amy says he has no interest in going back into
day-to-day grocery operations, but he won't rule out
participation. He still owns the building that houses
the Southeast Division Street store and those that house
the former and existing Nature's stores on Northeast
Fremont Street, and he's presumably still sitting on
a bundle of cash from his sale to GNC.
News of the Nature's defections, bubbling for several
weeks, was first reported in the Sept. 24 Business
Journal. The exodus included General Manager Brian
Rohter, Marketing Manager Kate Bell and the meat and
produce buyers.
It's not as if Wild Oats is passing off chemical-laden
apples as organic or forcing Nature's to carry Kool-Aid;
instead, the problem seems to be a clash of cultures.
Interviews with several former employees suggest that
longtime Nature's staffers have trouble with Wild Oats'
focus on the bottom line.
Employee health benefits have been scaled back a bit,
but staffers seem more concerned by the relationship
with vendors.
There have been relatively few changes in product offerings
so far, employees say, but as Wild Oats buyers begin
supplying local stores, employees expect the selection
of produce and other items to shrink. Nature's has been
a major buyer of specialty items ranging from white
nectarines to heirloom tomatoes, employees say, and
such products don't fit in Wild Oats' large-volume,
price-sensitive buying strategy.
"Stan Amy had a very strong and admirable vision for
the company and the vendors we worked with," says Bell.
At least one supplier agrees with that assessment.
"They knew what they wanted, and they were willing to
pay for it," says Mary Wurdinger, co-owner of Harry's
Hog Haven, a pork producer near Woodburn. Harry's sold
Nature's whole live hogs and got paid weekly, says Wurdinger.
Wild Oats, by contrast, wants Wurdinger to sell boxed
pork parts and only pays monthly, which causes difficulties
for Wurdinger. "It's a whole different atmosphere,"
she says. "Everybody we knew is gone. My phone calls
don't always get answered, and checks don't arrive on
time."
Although some of the Nature's crowd isn't wild about
Wild Oats, investors love the company. Over the past
two years, Wild Oats' stock has quadrupled.
Company president and chief operating officer James
Lee downplays the significance of the Nature's departures.
"You always hate to lose good people," he says. "But
morale is good, and it's given us a chance to promote
others."
Lee, who has spent 20 years working for mainstream
grocery stores, concedes he's in a different world now.
"In natural foods you find people who have tremendous
passion," he says. "There's almost a magical quality
about the industry."
The irony is that the discontent is coming now.
When GNC took over the stores three years ago, many
observers, including WW, wondered whether Nature's
idealists could find happiness working for shopping-mall
supplement peddlers. But compared to Wild Oats, former
employees say, GNC was a match made in heaven. "GNC
was an unbelievable partner," says Bell. "They let us
run our business."
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Willamette Week | originally
published September 29,
1999
