New Seasons Market

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New Seasons Market

5320 NE 32nd Avenue
Portland, Oregon 97211
U.S.A.
Telephone: (503) 288-3838
Fax: (503) 292-6280
Web site: http://newseasonsmarket.com

Private Company
Incorporated: 1999
Employees: 900
Sales: $24.8 million (2004)
NAIC: 445110 Grocery Stores

New Seasons Market has carved a niche for itself in the Portland grocery store market, carrying a wide range of natural and organic products, grown or produced in the Northwest, alongside basic brand-name products. Approximately two-thirds of each of its six stores' product mix is natural or organic, while the remaining products are conventional brands. About 11 percent of its product mix is produced locally. New Seasons also has a socially responsible ethic that permeates every level of its business.

1999: A New Kind of Food Store

In 1999 Brian Rohter, Stan Amy, and Chuck Eggert, with the backing of their families and about 50 friends, opened the first New Seasons Market in Portland, Oregon. Their mission was to make people aware of healthy food and the benefits of sustainable agriculture. Their plan was ambitious: To become a key player in the Portland grocery field with five stores serving Portland neighborhoods by 2001. The three wanted to create a company that had a "true commitment to its community, to promoting sustainable agriculture, and to maintaining a progressive workplace," according to the company's web site.

All three men were veterans of the grocery business: Amy had owned another Portland-area chain called Nature's Northwest until he sold it to General Nutrition Corporation in the mid-1990s. Eggert was the president of Pacific Foods, a manufacturer of soup and soy drinks, located in nearby Tualatin, Oregon. Rohter had worked as a consultant for Nature's and, once the store became an independent subsidiary of General Nutrition Corporation, as its executive vice-president for three years. Rohter left that job when Wild Oats of Boulder, Colorado, purchased Nature's then seven-store chain in the spring of 1999. "My heart wasn't in it anymore," he explained in the Oregonian in 2000, referring to the fact that General Nutrition Corporation had allowed him the authority to make decisions he deemed appropriate, while Wild Oats set policies at headquarters.

Following retailing trends, the first New Seasons store had a bakery, a delicatessen, and a salad bar and take-out meal area, including a "Hot Wok," where customers picked from fresh ingredients for a meal cooked especially for them. The deli did not get its food from offsite industrial commissaries; instead, New Seasons hired a well-known local sous chef to make everything from scratch. The atmosphere of the new store was friendly and interactive with well-labeled aisles and shelves, eye-catching displays, and countless signs instructing customers to "Smell me!" or informing, "We tried this one on vacation—it's great!"

Joining the trend led by Nature's Northwest and later embraced by Whole Foods out of Austin, Texas, and Trader Joe's of California, New Seasons was part of a new generation of grocery stores. Unlike the mega-supermarket, according to The Hartman Group, a Washington-based market research and consulting firm for the wellness industry, the new groceries sold an experience as much as they did food or other products. "[W]hen we talk to consumers who get a babysitter so that they can spend a couple hours roaming around Whole Foods, it's a whole different scenario than when grocery shopping was a pain, and you wanted to spend as little time there as possible …," offered the president of The Hartman Group in a 2002 Oregonian article.

But what set New Seasons apart from the other markets in its category was that it refused the label of either traditional supermarket or health food store. "We're not a natural foods store. We have everything from free-range chicken to Frosted Flakes," Rohter explained in a 2000 Oregonian article, referring to the store's philosophy to have locally owned stores serving local people and to cater to all food preferences. New Seasons also made a point of promoting local economic and ecological sustainability by showcasing community vendors and farmers as well as national producers.

In keeping with their emphasis on community, New Season's founders chose sites for their planned stores that had the potential of becoming commercial and social centers for neighborhoods. They settled on a smaller store footprint than other supermarkets, with doors that opened onto sidewalks and streets, and added a second story for storage and offices. They planned benefit events, such as bento barbeques and slice-of-cake days, to raise money for local nonprofits.

New Seasons was also different from most other markets in its emphasis on customer service. Every employee at New Seasons had the authority to make whatever decision necessary to keep the customer happy. These employees, also viewed as part of the New Seasons community, were well taken care of; anyone working 20 hours or more received full-time benefits, which included medical and dental insurance for the employee and his or her family.

Of course, not everyone was as happy with New Seasons as those who shopped or worked there. After many Nature's Northwest employees joined the exodus led by Rohter and other higher-ups, Wild Oats Markets Inc. sued Rohter in November 1999 for "misappropriating Wild Oats' confidential and proprietary information," using inside knowledge to unfairly compete with Wild Oats, stealing away Nature's managers, and acquiring leases for store locations that Wild Oats had targeted. Rohter filed his own legal action, and eventually both companies dropped their claims.

2000–01: Three New Stores in Portland

New Seasons opened its second store in Portland in 2000, and then its third and fourth stores in 2001. At 29,000 square feet, stores three and four were bigger than the first two, but were still small compared to other supermarkets, which averaged 50,000 square feet. The new, larger size was required to include more conventional products, such as cereals, diapers, and over-the-counter cold remedies. "To truly be a neighborhood store, we really needed to expand the center of the store," Rohter explained in Gourmet News in 2002. Onsite bakeries baked 17 different kinds of organic breads daily (a portion of which were donated to local Meals on Wheels programs) and offered in-store dining. The third store also housed the company's new corporate headquarters.

Neighborhood leadership participated in lobbying for the fourth store, which included gaining approval from the Portland Planning Commission for permanently closing one block of a city street. A local committee also weighed in on the store's exterior design, its lighting and maintenance, hours of delivery and operation, landscaping and parking, prices, and security. Situated on a lot that had been vacant since 1994, this new store featured the then standard deli bar with soups, salads and sandwiches, "Hot Wok," as well as an in-store bakery. There was also a store nutritionist available daily for free consultations and tours of the store, which employed 110 workers, many from the surrounding neighborhood.

Some neighbors voiced reservations about the fit between New Seasons and the area's working class community. One community member, quoted in a 2001 Oregonian article, said, "I wonder sometimes how well that store, being the kind of store it is, is going to serve some of the poorer people." Some of the banks from which New Seasons sought to borrow money for the project also wondered. However, according to Rohter in the Seattle Skanner, "Completion of this project is a real tribute to the strength of the Concordia Neighborhood Association in this community. Those folks had a vision of what they wanted to see happen here—they wanted a full-service grocery store, and they just dug in and wouldn't let go until it was accomplished."

With the addition of its fourth metro store, New Seasons became able to spread the costs of doing business across more operations, making it easier to achieve profits. "We have a lot of overhead for a business our size," Rohter explained in the Oregonian in 2001, referring to the number of employees on the store floor and the large number of buyers New Seasons employed to negotiate with local vendors as well as national suppliers.

2004–05: Leading the "Slow Foods" Movement in Portland

A fifth store in 2004 added to the company's economies of scale and created an additional 120 jobs. This store, like the last, opened in a neighborhood that had no local supermarkets and drew criticism from those worried that the building was too big and would lead to gentrification of another working class community. In addition, supporters of an established neighborhood grocery coop protested that it would steal business away from that store. But the $3 million, 25,000-square-foot market, with a 12,000-square-foot office and storage space, was under construction in December 2003 and reached completion as planned. Store five was the first New Seasons Market to include an onsite pharmacy.

Company Perspectives:

We'll do whatever it takes to make New Seasons the best shopping experience in town.

By 2004, New Seasons had become one of the cornerstones in the "slow food" movement in Portland. This movement celebrated groceries that were fresh, local, and peddled in a progressive workplace. An article in the Oregonian in 2004 quoted legendary environmentalist Paul Hawken, who in Grist Magazine had hailed New Seasons as "successfully forging new, sustainable corporate practices … a model of what a grocery store can do to help farmers and citizens and communities." A year before in the Oregonian, Rohter himself had acknowledged, "We're pleased because our social mission and our business mission are aligned. There is growing interest in the origin of foods. People want their dollars to support local farmers."

In 2005, New Seasons hired Lisa Sedlar as its new president when Brian Rohter became the company's chief executive officer. Sedlar had been the former vice-president of sales and merchandising for Colorado-based Pharmaca Integrative Pharmacy. At the close of the year, New Seasons had 900 employees and was planning to add another two stores in 2006. The company's continued growth, attributable in part to smart marketing, in part to maturation, in part to the fact that people had begun spending more money on premium food and less on dining in recent years, now seemed well assured.

Principal Competitors

QFC; Wild Oats Markets, Inc.; Whole Foods Market, Inc.; Zupan's Markets; Trader Joe's Company; Fred Meyer Stores, Inc.

Key Dates:

1999:: Rohter, Amy, and Eggert open the first New Seasons grocery store.
2000:: New Seasons opens its second store.
2001:: The company opens its third and fourth stores.
2004:: The fifth company store is opened.
2005:: Lisa Sedlar becomes the company's president and Brian Rohter becomes the chief executive officer.