The following discusses trends in the "natural foods" market.
It is not intended as advertising. I have no financial interest in
the matter, and present the material for discussion only.


Trends in the US often start in California, so a new store in Berkeley
(San Francisco area) may be of interest. The store is called
"Elephant Pharmacy" and is a combination of a conventional drug store
and allopathic (drug) pharmacy, with an herb store and the supplement
and body-care products found in most large "natural foods" or
"health foods" stores in the US.

As an example, the soap section includes the "Dial" brand (a staple in
most conventional drug stores and supermarkets in the US), plus a wide range
of more "natural" soaps ranging from Dr Bronners (the liquid soap with
a weird label :-)) to boutique hand-made and imported soaps.

There is a food section, but it is small and is mostly junk: chips,
crackers, chocolate, etc. The store also has a 1-hour photo lab and
also sells candles, greeting cards, magazines, and yoga props.

I'm told (verbal info) the store will have alternative health professionals
(TCM doctors, Ayurvedic professionals, etc.) available at scheduled times
for in-store consultations.  This service has not started yet, as
the store just opened.

The two primary investors in the store are 1) an ex-dot.com executive
(a local newspaper once dubbed those who worked in dot.coms as "dot
commies"  :-)), and 2) one of the founders of Bread and Circuses,
a chain of Boston-area natural foods stores, which I believe
was bought by Whole Foods, the largest natural foods retailer
in the US.

Comments:

1. The store centers on the high-profit items in natural food stores.
If it succeeds, it will siphon high-margin business away from Whole Foods
and similar stores. Given their capital, Whole Foods might launch
imitation stores.

2. If the store succeeds, will it draw business from existing conventional
drug stores? (Within a 1 kilometer radius, there are 2 existing conventional
drug stores and a 3rd in the planning process.) Most conventional
drug stores in the US are part of chains, and are selling so many
non-drug items that their shelf space for health care items is often
limited. The new Elephant Pharmacy is not so crowded, and a more
pleasant place to shop than a Walgreens or Eckerds (chain drug stores in
the US).  It has a wider variety of brands of many products than one
would find in a chain drugstore. If Elephant succeeds, the conventional
drugstore chains may be reluctant to compete as they will have to shift
shelf space back to health/body care items. This is the exact opposite of
their strategy in recent years.

The store may be a very savvy marketing idea -- fill most of the shelf
space with the higher-markup items from natural foods stores AND
conventional drug stores (avoiding low-margin items like food and the risks of
the seasonal merchandise carried in the drugstore chains), and build business
via alliances with local alternative health professionals.  Time
will tell if this strategy will work.

Comments are welcome, especially from food/drug marketing professionals.

Note: I'm not an insider, don't know their strategy so cannot answer
questions about strategy. The above are only my observations and
opinions.

PS permission is granted to cross-post this to other relevant lists.
However, please don't cross-post my email address. I get enough
spam/junk email as it is.  :-)

Tom Billings