Whole Foods Supermarkets & Farmers Markets: Complementary or Competitive?

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A grocery chain opens near a farmers market, with New York's natural foods in the balance
By SAM DOLNICK Associated Press Writer
April 16, 2005, 10:02 AM EDT

NEW YORK -- The Greenmarket farmers at Union Square stood behind their bins of vine-ripened tomatoes and organic spinach and eyed their colossal new neighbor.

On the other side of the park, a brand-new 50,000 square-foot Whole Foods grocery store opened its doors recently, proudly displaying fresh vegetables and farm-raised chickens of its own.

With honking buses and one of the city's biggest subway stations between them, the grand opening provides an urban stage for a natural food battle between a New York institution and an international chain. The winner stands to claim New Yorkers' gastronomical appetites and wallets as the prize, but each side swears this town is big enough for both of them.

Farmers markets have flourished nationwide in the past decade, with the number of markets in the country increasing 111 percent from 1994 to 2004, according to the U.S. Department of Agriculture.

Last year's National Farmers Market Directory counts over 3,700 across the U.S.

Charlie Touchette, executive director of the North American Farmers' Direct Marketing Association, attributed the rise to a combination of farmers looking for new income in order to survive, and consumers looking for locally produced food.

The Greenmarket Farmers Market at Union Square provides an outdoor venue for farmers within a 170-mile radius of New York City to sell their goods directly to the public. Established in 1976 by the Council on the Environment of New York City, the Union Square market sees 60,000 customers a day during its summertime peak, including many of the city's top chefs, said spokeswoman Gabrielle Langholtz. Greenmarket operates markets in 33 locations throughout the city, but Union Square is the biggest.

Whole Foods Market, a supermarket chain founded in Austin, Texas in 1980, is the self-proclaimed "world's leading retailer of natural and organic foods." It preaches freshness and sells everything from pistachios to poultry to pomegranates in 169 stores in North America and the United Kingdom. The store buys from local farms _ including farms that also sell at Greenmarket _ and imports food from vendors across the country, and the world.

The Union Square branch is their third store in New York City, with several more to open next year.

While rumblings of a corporate giant muscling in on the turf of a local competitor may sound ominous _ think of Wal-Mart's effect on mom-and-pop shops throughout the country _ Whole Foods swears it's a different kind of company.

Christina Minardi, Whole Food's regional vice president, said it works with, not against, local markets.

"We're not trying to go in and put people out of business," she said.

"We're trying to partner with people. We don't look at a farmers market as competition, we look at them as really exciting and we ask what can we do with them?"

Whole Foods buys apples, pickles, milk and eggs from several Greenmarket farmers to sell in their stores, and plans to buy even more during the spring and summer.

Touchette said supermarkets like Whole Foods aren't of special concern to farmers markets.

"Competition is generally good," he said. "It makes us all better.

Whether it's a farmer or a produce manager in a supermarket, you're only allowed to get away with what the competition allows you to get away with." Most Greenmarket farmers and organizers are equally optimistic.

"We're excited that this could bring more shoppers to our area," said Gabrielle Langholtz, a Greenmarket spokeswoman. "I have no doubt that you will see lots of customers with Whole Foods shopping bags walking around the Greenmarket and lots of people with Greenmarket shopping bags walking around Whole Foods."

Product prices and quality vary widely for each Greenmarket farmer, where a quarter-pound of arugula and kale can sell for as much as $5 and as low $2. At Whole Foods, the same salad ingredients sell for $2.49 per pound.

Most of the Greenmarket farmers are confident they'll survive, but several admit they're wary.

"I wouldn't say the playing field is exactly even," said Stewart Borowsky, who for 12 years has sold wheatgrass that he grows in Brooklyn. "But my wheatgrass has traveled 16 miles, and theirs has traveled 400 miles."

On the Net: Whole Foods Markets: http://www.wholefoods.com

Greenmarket Farmers Market: http://www.cenyc.org

Copyright 2005 Newsday Inc.