Visions of Organic Grandeur

Anyone who still argues that natural and organic are the bailiwick of aging hippies and young tree-huggers probably hasn't set foot recently in a grocery store; most mainstream supermarkets now have a bumper crop of natural and organic foods and other products. In the next few years, such items will be filling even more Southwest Florida shopping carts.

Two of the big three retailers in the natural and organic sector, Whole Foods and Wild Oats, are opening stores in Naples. And aiming to take them on is local retailer Ada's Natural and Organic Food Supermarket.

"We hope to do a public offering in about three years. To reach that plan, we have to open our 15 stores [throughout the state]," says Nick Bonadies, 61, who owns Ada's with his two sons, Louis, 35, and Eddie, 36. "We think the revenue from those will be very significant and will allow us to go public."

Fifteen stores in three years? "It sounds pretty high-reaching, but maybe they've done their homework," says Marcia Mogelonsky, a senior analyst in Chicago for Mintel International Group Ltd. market research firm. She says achieving success with such fast growth could be an uphill battle, especially in an industry rife with competition from other independent grocers as well as national chains, including mainstream grocers.

Whole Foods and Wild Oats don't necessarily put smaller competitors out of business when they enter a new market because local stores typically have the benefit of customer loyalty, says Mogelonsky. "People love Whole Foods and Wild Oats when they don't have another option. When they do, there tends to be more loyalty to the old guy," she says. "[But] as soon as they start to do well, they get absorbed," she adds. "Whole Foods and Wild Oats have done a lot of absorbing and amalgamation and overtaking."

The national chains might be able to beat them in product selection or price, however, and Ada's won't have that local loyalty when it opens stores in other parts of the state, she says.

Judging by the growth of the natural and organic sector, the Bonadies might be tilling at just the right time. In the United States, retail sales of natural and organic foods and beverages surged to about $28.3 billion, according to a report by Packaged Facts, a division of MarketResearch.com. That's a 39.4 percent increase since 2002, and by 2010 it's expected to grow by another 63 percent to $46.1 billion.

HealthFocus International, a St. Petersburg-based research and consulting firm, found in a 2004 survey that a third of shoppers buy organic products at least once a week-up from about a fourth of shoppers in the 2002 survey, says Rohit Vaidya, vice president of research and analysis. The firm has been conducting biannual surveys nationally on health, wellness and nutrition for about two decades.

"When you have 30 percent of shoppers, that represents a critical mass at which larger mainstream companies will start paying attention to it," he says. "Even Wal-Mart is paying attention to organic."

Surveys show that more people in lower income brackets are buying organic foods nationally, says Vaidya. But local shoppers indicate that high prices continue to be an obstacle. "It's a pretty cool store, but it's too expensive. To eat healthy is very expensive," says Ada's shopper Peter Taylor. Herb and JoAnn Miller of San Carlos Park had a similar response. They would like to eat more natural and organic foods, but find them too pricey for people on a fixed income.

Fertile Ground

Industry leader Whole Foods, of Texas, and Colorado-based Wild Oats are both seeding new stores throughout the country, including Naples.

Wild Oats, which recently launched a Tampa store, is planning a 30,000-square-foot store in a new center at Airport-Pulling Road and Naples Boulevard, slated to open by early 2007. Whole Foods, which has a Sarasota store and is looking for additional Southwest Florida locations, is slated to occupy about 50,000 square feet of the proposed Mercato mixed-use development at U.S. 41 and Vanderbilt Beach Road. Opening is expected by early 2008. Both stores plan to hire 130 to 150 workers locally.

Ada's owners say they don't worry about competing with national players.

"They have to worry about how they're going to compete against us," Nick Bonadies announces. "We're a family-run enterprise, we care about the customer; we don't look at the customer as another dollar for the register."

Ada's employees, some of whom have been with the store for 20 years, give Ada's an edge against the big dogs, say the Bonadies.

"It's all about service; give the customers the best service with the most knowledgeable staff we can find. You can ask my staff anything [about the products]," says Eddie Bonadies.

Jana Lampe, a 33-year-old chiropractor, buys 30 percent to 40 percent of her groceries at Ada's. "They have all the organic stuff, they have fabulous produce, meats and fish," she says. "I refer a lot of my patients here if they have digestive issues. The helpers here can direct them to the supplements that will really help them out."

Healthy Growth

The Bonadies have lofty visions for Ada's, although contracts and leases had yet to be signed and finalized by press time.

Nick Bonadies comes from a Wall Street background, where he says he held senior executive positions with companies including Prudential Securities, John Hancock Clearing Corp. and Jeffries & Co., and subsequently bought and sold a customs brokerage firm. His sons led him into the health and nutrition industry.

At 13, Eddie was diagnosed with ulcerative colitis and had an allergic reaction to medication prescribed for it. "I was supposed to have colon cancer by 15," says Eddie. "That's when my family started getting into vitamin stores."

His father remembers well how hard it was to find foods Eddie could eat. "I was very rarely home, but when I was, I used to spend all my time going store to store trying to find milk that he needed, the products without the dairy that he needed. So [the health food business] was a natural fit for us, and eating healthy pretty much cured my son," says Nick.

When Louis moved to Lehigh Acres, his knowledge of nutritional products earned him a job at Ada's Natural Foods, a 1,500-square-foot health food store on Fowler Street that had been around since the late 1950s. His father bought it in 1995, moved it to a 7,500-square-foot space on Cleveland Avenue, then opened in 2005 in its current 28,000-square-foot space on Cleveland Avenue at Colonial Boulevard. They are now eyeing a second location in 65,000 square feet in an as-yet-undeveloped shopping center across from the emerging Coconut Point Town Center.

The Bonadies won't reveal sales or revenue figures, but the current store carries about a half-million items and employs more than 60 people, says Eddie.

"With the new store we will probably have 210 [employees] with both stores. If everything goes according to plan, we should be at 300 employees by the end of next year," says his father.

Beyond Groceries

Except that everything is organic or natural, Ada's carries all the kinds of items that you'd find in a mainstream supermarket, plus extras, such as an air-controlled room with nuts, candies and machines to grind your own almond or peanut butter. An entire aisle is devoted to vitamins and supplements, with a staff at the ready to help customers identify their needs and find the products.

Ada's has its own label in this area, and vitamins and supplements account for about 42 percent of sales, says Eddie. They plan to expand the label to include items ranging from soups to breads, and eventually to distribute nationally. First up will be Ada's specially formulated bottled water, says Nick.

At the restaurant and deli, shoppers can buy pastries, beverages or prepared entrées ranging from vegan to vegetarian to gluten-free, prepared daily by a chef and staff.

Like Ada's, Whole Foods and Wild Oats also have personal products, prepared foods, dining areas and offer classes.

What they don't have are themed stores.

"Each store we open will have a different theme," says Eddie. "[Nick] wants something unique that people will talk about and get people to come in and check it out."

The existing store's décor is based on a rainforest, with a fountain and pool that greet people as they enter, decorative plants and trees, animal tracks painted across the cement floor, and tiki hut-like manager stations.

The proposed Bonita store's design will be based on the Hanging Gardens of Babylon, complete with aviaries for exotic birds.

Eddie, who studied architecture, has come up with themes for some future locations-Atlantis for Sarasota, a pirate shipwreck in Tampa, the "land before time" in Orlando.

Plans for future stores go far beyond health food and nutritional supplements.

Eddie describes the three-story Bonita complex with a fitness center, space for acupuncturists, massage therapists, chiropractors and similar practitioners. He talks about a playground for children, a beauty parlor, computer-equipped library, pet center, candy and ice cream parlor, a gift store and restaurants-all featuring only natural and organic products-as well as classrooms and a television studio.