Store's move into Florida was a natural

TAMPA - Wild Oats Markets Inc. opens its first store in the Tampa Bay area today. It proably won't be the last.

"We see this as a multistore market," said Perry Odak, chief executive officer of the nation's second-largest natural and organic foods retailer. "Penetrating Florida is a high priority and we are actively looking for more sites."

With sales of natural/health foods growing three times as fast as conventional fare, the chain that, with Whole Foods Markets Inc., has become synonymous with the movement has become a hot property among developers and investors willing to pour cash into more store growth.

Odak sees an opportunity big enough that his 112-store Wild Oats will bid for up to 30 Albertsons or Winn-Dixie stores around the country that are or will be on the market in those grocers' restructuring. Some of the stores are in Florida.

The chain's Tampa debut has been marked by a welcome mat not usually put out for a lone supermarket opening. About 150 prospective shoppers called daily asking when the doors open.

Rival Publix supermarkets matched Wild Oats' $10 grand opening celebration coupons in a neighborhood mailing. Meanwhile, Nature's Harvest, a local retailer in Tampa that just expanded by 20 percent to keep up, staged a 20 percent discount sale over the weekend hoping regulars would fill their cupboards before checking out the new guys.

"I'll keep going to Nature's Harvest because I support local business," said Rikki Voss, a 28-year-old Eckerd College student who works at Progressive Insurance. "But I'm checking out Wild Oats."

Inside, shoppers will find a huge mix of organic and natural foods sold with all the environmentally correct packaging. The Holistic Health department is the size of a mall vitamin store and loaded with a library, information kiosk and computer for product information downloads.

Brimming with theatrics such as an exhibition food prep kitchen, the typical Wild Oats gets 62 percent of its business from perishables and fresh foods prepared on site to be eaten there or on the run.

At 37,000 square feet, the store is about half the size of the biggest Publix, but it carries twice the produce, 175 items, virtually all of it organically grown.

Most foods are priced at a premium, but not as high as at rival Whole Foods, which has become more of an upscale gourmet grocer.

Still, Wild Oats has doubled its gourmet offering to about 2,200 items in the past two years. The artisan cheese case ($17.99 for 7 ounces of a French cheese made from goat milk) stretches 50 feet. All the fresh chicken is free range, but the organic steaks only go up to the USDA select grade at $11.99 a pound for sirloin.

Research found no natural food brand has much name recognition. The biggest was 7 percent for Kashi cereal. So Wild Oaks created 1,100 private-label products to sell the store as a brand.

It's a much flashier layout than when Odak took over five years ago while Wild Oats was flirting with bankruptcy.

"This is not an '80s style co-op anymore," he said. "We cater to a broad cross-section of the population that's interested in healthy food."

A turnaround artist who cut his teeth in the mass-market, packaged-goods arena, Odak may seem an odd choice for a chain with a New Age vision. At one point, he ran riflemaker Browning and Winchester. But he grew up on a dairy farm, married a holistic health practitioner and was hired to straighten out Ben & Jerry's Homemade, which was founded by two Vermont, peacenik ex-hippies.

"My first day (at Ben & Jerry's) I was asked how I could have a social conscience working for a company that made guns," he said. "I told them saving 1,000 jobs should qualify."

The culture shock took some adjustment.

"They considered ice cream making an art. One batch might taste different," he said, "To ensure consistency, I insisted it is a science."

He standardized business processes at loosely organized Ben & Jerry's enough that Unilever bought the company in 2000.

He was confronted with a similar mission at Wild Oats. The founding vitamin store operators grew by acquiring small natural foods stores. But they delegated many decisions to the store level. The company operated under 18 types of stores, had a dozen conflicting information technology platforms and sourced half its products locally at the store manager level.

"We even had the same products priced and displayed differently in the same town," he said.

Odak centralized buying, cut store types to two, spent $20-million on a single computer system and dumped poor locations. He cut annual employee turnover from half to less than 40 percent.

The 2004 annual report was headlined: "To bake a cake you have to break a few eggs."

The company opened 33 stores in the past two years, but closed 28. After running up a $40-million loss in 2005 thanks to store-closing costs, Wild Oats had net income of $3-million in 2005.

"The turnaround is complete," Odak said. "But we still have work to do building up our selection of prepared fresh foods even more."

There are big distractions. Analysts have speculated Odak was preparing Wild Oats for sale. Now the company is caught up in rumors about dealmaking that's reshaping the supermarket industry.

Wild Oats chairman Robert Miller resigned two weeks ago to become chief executive of the 655-store unit of Albertson's - 105 of them in Florida - that was taken private while its more profitable parts were sold to Supervalu Inc. and CVS Corp. Meanwhile, Ron Burkle, whose Yupaica Hedge Fund has acquired and sold grocery chains about the size of Wild Oats, recently doubled his stake in the company to 15 percent. Wild Oats lifted its poison pill defense to a 20 percent threshold should Burkle buy more.

"I've only spoken to him twice, and he said he liked what we are doing and the business we're in," Odak said. "We consider him a friendly investor."

Mark Albright can be reached at albright@sptimes.com or 727 893-8252.

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