'Natural' grocers promoting local foods

LAKEWOOD, Colo. — The 113-year-old Morning Fresh Dairy Farm didn't even use barcodes on its bottles when a Whole Foods Market in Fort Collins, Colo., asked about offering the dairy's all-natural milk.

Dairy general manager Matt Lucas began bringing the glass bottles himself from the Morning Fresh farm in Bellevue, Colo., 60 miles north of Denver. Until then, Morning Fresh had long made its name on home deliveries.

Since his Whole Foods deliveries began in 2004, Lucas estimated, his dairy's sales have increased 20 percent. Morning Fresh now sells at least 1,000 gallons a week to supply a Whole Foods distribution center serving 10 stores.

"It's a breath of fresh air to get involved with a group like that. They were so excited to get our product in their stores," Lucas said.

By strengthening — or, as some farmers say, returning to — their commitment to local products, Austin, Texas-based Whole Foods and Boulder-based Wild Oats Markets Inc. are fending off big chains like Wal-Mart Stores Inc., Kroger Co. and Safeway Inc., which have expanded their own organic offerings and put pressure on the smaller "natural" grocers.

"With Wal-Mart barging into the lower-end organic sales, this is a way these other retailers can differentiate from what Wal-Mart is doing," said Dan Hobbs, a cooperative development specialist with the Rocky Mountain Farmers Union.

Nutrition Business Journal valued the natural foods market at $23 billion in 2005, up 14 percent from the year before. Whole Foods Market Inc. is in the process of a takeover of Wild Oats and expects to close its purchase this month.

Chains have long sought local suppliers to keep distribution costs down. But the influence of top chefs, farmers markets, Michael Pollan's book "The Omnivore's Dilemma," and concerns about the environmental effects of shipping food long distances have raised shoppers' interest in buying local. The U.S. Department of Agriculture listed 4,385 farmers markets nationwide in 2006, up 18 percent from 3,706 in 2004.

Small local growers often cannot offer lower prices than large-scale operations that benefit from economies of scale and cheaper labor.

But fuel costs for shipping food are less for shorter trips, which in turn often require less packaging to preserve food. Buying local also shortens the time it takes produce to get to market, preserving nutrients and freshness, the Center for Food & Justice said in a December report. The center is part of the Urban & Environmental Policy Institute based at Occidental College in Los Angeles.

Farmers say there are other benefits, too.