Market Study

With the opening of the new Whole Foods, the grocery business in Austin and elsewhere is at its apex

Market Study
Photo By John Anderson

When the new Whole Foods Market opened its doors a few weeks ago, it did so with plenty of anticipation, an attendant media buzz, and a party. The opening shindig – a benefit for KUT – was attended by Whole Foods staff, invited guests, volunteers for KUT, the media, and roughly 3,000 Austinites who had each paid $25 a ticket to see the store before its official opening on March 3. Inside, the store was a human roil. In every corner, well-heeled guests waited to sample wines, chow on nuts, or nibble smoked fish, barbecue, imported cheeses, and wood-fired pizzas. In between the aisles, old friends hugged and caught up on the latest gossip. Families scrambled for floor space to spread out with the kids. Meanwhile, outside on the upstairs plaza, Grupo Fantasma, Austin's best local party band, were whipping up a crowd of dancers moving inexorably to the Latin-fusion rhythms. It was an event not unlike an art opening, an awards gala, or some other benefit, except in scale. This was much, much larger. And the party facility was ... well ... a supermarket.

Now, I don't know about you, but a supermarket is not my intuitive first choice for a party.

The supermarket grew in tandem with the rise of America's suburbs. Designed for convenience in the sprawling automobile-centered landscapes that transformed the nation during the mid-20th century, these one-stop-shopping outlets at first resonated with the needs of increasingly demanding schedules. In a little over an hour, mom could buy and load into her car all the food and cleaning supplies needed to keep the household running for a week. By 1955, 60% of all American grocery shopping took place in supermarkets. But even as they made suburban grocery shopping easier, supermarkets also depersonalized the experience. Mom no longer knew the butcher's name, and the brisket she bought now came in a plastic package, instead of trimmed to order the way she liked it. The fluorescent aisles, the rows on rows of packaged foods made shopping drudgery.

But in Austin these days, it seems as though food shopping is anything but drudgery. Supermarkets like Central Market and Whole Foods (with assistance from Wheatsville, Sun Harvest, and Fresh Plus) have raised the bar for consumer expectations. With their aisles of perfect produce, gleaming fish, crusty artisan breads, scented oils, and prepared foods representing just about every country on the planet, a trip to these stores is like visiting an amusement park for foodies. At the meat counter, the butchers can trim that brisket exactly the way mom wants it; in the wine department, there's always a buyer on hand to make an educated recommendation to go with that seared skate wing Dad's planning for Saturday's dinner party.

But the real ingenuity of Central Market and Whole Foods, in particular, is not necessarily in the products they carry but in the way they have helped redefine the role of supermarkets in our community. Almost organically, these supermarkets have become recreational and community spaces. More than just grocery centers, they are destinations in themselves, where people go to hear music, take classes, meet for children's play dates, or eat lunch. Residential real estate flyers now advertise proximity to Central Market as an amenity, while Austin city officials participate in bread-baking ceremonies to inaugurate a new Whole Foods store.

This wasn't always the case. At the time the HEB corporation conceived the idea for Central Market in the late 1980s, the supermarket industry was largely dominated by the price game: about who could sell toilet paper and toothpaste the cheapest. In response to these trends, HEB decided to shift its attention onto perishables, preprepared meals, and service, rather than trying to beat the competition through pricing. They wanted to make grocery shopping fun. They designed a supermarket that concentrated almost exclusively on food. They chose Austin as a pilot location because of its unusually educated population and because of the successful precedent for independent groceries like Whole Foods, Sun Harvest, and Wheatsville, all of which were moving international foods, perishables, and organic produce in quantity.

At the time, their idea contradicted all the conventional models in the grocery business. After all, supermarkets were supposed to be about quantity and convenience, not eclecticism. But the HEB corporation did its research and found that while most consumers claimed to do their grocery shopping in nearby supermarkets for convenience, they still made side trips to specialty stores for things like coffee, fish, wine, and olives. They found that by 1990 more than 50% of American meals were being purchased from or eaten outside the home. Central Market was initially designed to capitalize on these trends. The first store opened on North Lamar in 1994. Although reactions were at first mixed, by the end of the year, the store began to generate real buzz among foodies dazzled by the store's edible curios.

The stunning success of Central Market in Austin, however, can be traced to its adaptability, and its ability to respond to growing local trends. Without a doubt, the original Central Market crystallized around the manufacture of community space. Though the cafe and cooking classes were always a part of the master plan of their first location on Lamar, the huge outdoor playground, the live music, and the well-known community events the store sponsors have evolved almost naturally. "We recognized we had a gift with the park and the huge shady oak trees, and we figured there'd be a good lunch business," says John Campbell, one of the minds behind Central Market. They took advantage of those unique features to create an outdoor dining patio with an adjacent playground. "That was the best investment we ever made," says Campbell of the massive playscape built adjacent to the outdoor patio. The cafe and adjoining playground are practically a parent's meat market, and they regularly host crowds of families.

Brent Huestess, a software programmer who admits to being finicky about food, says that Central Market has broadened his tastes in terms of cuisine. Both the store (the North Lamar store) and the cafe are a big part of his life, not just because they carry the foods he likes, but because he sees Central Market as a neighborhood place. Like so many Austinites, he eats at the restaurant while his 5- and 2-year-old children play on the playscape: "I never go to Central Market without seeing at least one person I know." Alan Altimont and his wife, Dee, go to Central Market because the cafe features live music on weekend nights. The music happens on the patio in a family-friendly environment where the kids can play and parents can enjoy a decent meal, a glass of wine, and some live entertainment.

The idea of community space was certainly a major aspect in the design concept behind the new Whole Foods. The Whole Foods Corporation designed the outdoor areas to resemble a city park. "We wanted to create a spontaneous space for everyone, where everyone wants to be," says Bruce Silverman, Whole Foods' vice-president in charge of marketing, merchandising, and purchasing. Both indoor and outdoor eating areas contain wireless connections. The awning-shaded outdoor patio has a playscape on the upper level and even a stone-lined stream at the street level.

The new store is organized around a series of "villages." Each village has its own theme: seafood, cheese, or produce, for instance (see "It Takes a Village: Inside the New Whole Foods," starting on p.46). Like Central Market's, the typical Whole Foods consumer is not one who buys a week's worth of groceries at a time. Rather, they come for specialty items, prepared foods, and last-minute produce. The store was designed with these shopping patterns in mind. Indeed, in some ways, the new Whole Foods resembles a huge European covered market wherein a loose conglomeration of specialty vendors converge under a single roof. There's an outdoor farmers' market where local produce and products are sold, and there are the aforementioned villages that specialize in roasted nuts, smoked seafood, fresh pastas, and wine.

As with its competition, Whole Foods' ability to respond to local consumer interests is part of its success. For its new store, the Whole Foods Corporation has actively sought what Silverman calls "partnering" opportunities with local businesses. They are reaching out to growers, chefs, and food vendors to bring in local products and sell them in the store. They are partnering with locally owned Waterloo Records to host all of their in-store performances. This sort of regionalism is unusual for a big corporation, but it's precisely what makes Central Market and Whole Foods so successful; they combine the financial backing of a huge corporation with the flexibility of a local business. And despite higher prices and inconvenience, people like going there because they feel a community connection.

The question on everyone's mind now is whether all of Austin's funky groceries can co-exist with these corporate giants. The rivalry between Whole Foods and Central Market is obvious. Just months before Whole Foods completed its greatest effort to date, Central Market finished its own $6 million renovation of the North Store: opening up its space to improve flow, expanding its prepared foods section, its body products, and adding a wine- and cheese-tasting bar. When asked if they worried about the competition, representatives from both Whole Foods and Central Market delivered the same reply: "Competition makes us all better." For neighborhood groceries like Wheatsville or Sun Harvest, the statement seems slightly counterintuitive. However, according to Jim Robertson, a member of Wheatsville Coop's board, the store's business has actually risen through an increase of public awareness of organic and healthy foods. The awareness is due in part to huge corporations like Whole Foods, who can get the message across at a national level. The smaller stores have also benefited to some extent from a backlash response to the glitter of corporate money. But the biggest beneficiaries of all this posturing for community involvement are Austin consumers. end story

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