In the past five years, East Oahu has not only welcomed three natural food stores but has championed the cause towards supporting local agriculture and products through farmers markets. The trend continues to grow as stores like Kale's Natural Foods and Umeke Market expand their square footage to accommodate various product lines and increasing consumer demand.
The newest of the three, Whole Foods Market has created mixed concerns within the community and has forced a different type of competition for local business: competition with "big-box" chains. Kale Gibb, owner of Kale's Natural Foods in Hawaii Kai Shopping Center says, "Once we became aware that Whole Foods would be entering the market, we planned accordingly. Our expansion was planned with the knowledge of its entrance."
For both Kale's Natural Foods and Umeke Market, sales did initially drop with the opening of Whole Foods but have since leveled out. Kale's Natural Foods experienced a 15 percent sales decline when Whole Foods opened, but Gibb says that it is unknown whether it can all be attributed to Whole Foods or coupled with the slowing economy. Overall, Gibb anticipates closing out 2008 12 to 13 percent above 2007. "Our leverage is our responsiveness to our consumers," says Gibb. "A lot of what we carry is based on our customers' needs and wants. What we carry is directly related to our customers." Local products and produce, pricing and freshness are at the top of consumer demands.
Kale's Natural Foods, Umeke Market and Whole Foods Market have been proactive in seeking and carrying locally-made products and produce. According to Community and Vendor Relations Coordinator for Whole Foods Market, Claire Sullivan, "Thirty percent of what we carry is local and everything is natural and organic. Our top-selling product line is from the Indigenous Soap Company, made locally only a few miles away. For the holidays, our poinsettias will come from Leilani Nursery in Waimanalo." Larry Hoover, Store Team Leader for Whole Foods Market Kahala, says there was an overwhelming interest from the community but they too have experienced a slowdown due to the economy.
Umeke Market has created a more "grassroots" way of supporting local produce. "Our neighbors bring us fruit from their trees, we buy it from them and sell it in our store," says Alisa Lum, Manager on Duty for Umeke Market. Lum says, "Customers were curious of Whole Foods Market across the street, but overall their customer loyalty has continued." According to a cashier at Umeke Market, "The opening of Whole Foods did not cause Umeke to lower prices, only adjust its product line and variety."
Pricing viewpoints are different depending on whom you speak to. Whole Foods Market says that customers respond to their pricing as being "lower than expected," and Umeke Market and Kale's Natural Foods' customers responded, saying Whole Foods Market's pricing was more expensive.
What is the true differential in prices? Organic Fuji Apples: Kale's $3.65/lb. and Whole Foods $2.49/lb.; Kettle Salt & Pepper Chips (5 oz.): Kale's $2.95, Whole Foods $3.99 and Umeke $3.69; Organic Red Delicious Apples: Kale's $2.99/lb. and Umeke $1.79/lb. The pricing difference depends on the product. There are many factors that go into setting a price like location, rent, resources, suppliers and economies of scale. A single store tends not to have the operating leverage or economy of scale that a multi-store chain does.
Though there is an overwhelming trend towards a healthier lifestyle and businesses are not limiting sales to within the four walls of the store. Sales have moved to open spaces with produce and product vendors, restaurants, musicians, and even coffee shops. This consumer movement and preference has given life to the Open Market or Farm Market industry in East Oahu.
Elenor Nakama-Mitsunaga, Director of Community Relations for the Hawaii Farm Bureau says that the Kapiolani Community College Farmers Market was Oahu's flagship market and now with markets across the island, it is the most popular.
"We have seen no negative changes or impacts since the opening of Whole Foods. There continues to be a steady stream of local customers with a mix of tourists. There has been a dramatic change in the last three years. We started with only 12 vendors and have 60 today and more still knocking at our door." Mitsunaga says approximately 75 percent of the KCC market are farm vendors with the rest being food and value-added items like jams and jellies. "We want our food vendors to commit to buying as many local products as they can. If they are selling breakfast plates, we want the eggs to be local," says Mitsunaga. She also says that the Farm Bureau does not allow large chains or franchises to participate. Mitsunaga feels that Whole Foods has been complementary to the open market in that it supports the same ideals and Hawaii's local farmers. She does comment that pricing does appear to be higher but that it is expected with that type of store.
Mitsunaga attributes the growth of open markets to community support that grows through the maven influence, which is generated from the value and quality that the markets offer.
At the end of the day, both consumers and businesses understand the importance of supporting local agriculture and products. The hopes among all are that there is a place for everyone to co-exist and be successful.