Upscale grocers find the Capital Region ripe for the picking.
Two natural food markets plan to build new stores here in 2010, after years of strong sales of organic and natural foods.
Honest Weight Food Co-op of Albany is replacing its current digs with a larger facility, while North Carolina-based The Fresh Market chain is building what will be its first store in New York state, in Latham.
While the specialty foods sold at both stores are usually pricier than mainstream alternatives, consumers kept buying them last year even as they cut back on other purchases.
“I think part of it was more people were eating and cooking at home,” said Cindee Lolik, operations and administrative coordinator of Honest Weight Food Co-op. “I don’t think restaurants fared quite as well.”
Honest Weight reported 17 percent sales growth in 2009 — to $12.6 million total. It expects a 10 percent increase in sales this year.
The co-op saw the biggest surges in meat and bulk food sales, Lolik said.
“We only carry grass-fed, locally raised meat,” she said. Despite the higher cost, consumers are concerned about problems in the meat industry — Honest Weight’s meat sales increase every time there’s a meat recall at supermarkets.
“I think people really want to know that the retailer has visited the farms, knows where the meat is coming from, that it’s local, that it hasn’t gone through a food-processing facility,” she said.
The cooperative expects to break ground this spring at 100 Watervliet Ave. on a new store about twice the size of its longtime home at 484 Central Ave.
While the Central Avenue store has 8,500 square feet of retail space, the new store will cover 18,000 square feet. It will cost between $5 million and $6.5 million to build.
It will offer a full deli and bakery, juice and coffee bar and community room. Customers will be able to gain easier access in a bigger parking area, and the cooperative plans to make the structure as environmentally friendly as it can afford.
Completion is targeted for the spring of 2011.
“We were going to start last spring, but due to the economic climate it became more difficult to put together the loan packages that we needed,” Lolik said.
Honest Weight aims to borrow about $2 million from company shareholders and the rest of the money from banks.
The co-op couldn’t wait until the new store was built to complete a 3,000-square-foot expansion last year, taking out a wall and converting a former warehouse into retail space.
“It was becoming so uncomfortable for customers to shop in the store and for staff to work in the store,” Lolik said.
first new york store
Not too far away, in Colonie, an upscale natural food chain is forging ahead with plans to open its first store in New York state this fall.
The Fresh Market, based in Greensboro, N.C., has 92 stores in 18 states and is expanding its reach into the Northeast, said spokeswoman Drewry Sackett.
The 23,000-square-foot store will anchor the newly named Fresh Market Commons at the site of the former Shaker Loudon Plaza, at the corner of routes 9 and 155.
“Locating a store in the Albany area is a natural part of our expansion into the Northeast,” Sackett said in an e-mail.
“Our research found that it is an area with a significant population that enjoys good food and entertaining and is currently underserved by the specialty grocery segment.”
Benderson Development Co. of Buffalo is developing the property, reducing the size of the 129,700-square-foot shopping center by about 25 percent.
The Fresh Market opened stores last fall in Westport, Conn., and Normal, Ill. It will open stores in Louisville, Ky.; Annapolis, Md.; and Hingham, Mass., in the next few months, Sackett said.
Honest Weight isn’t worried about the new competition.
“We think that there is enough business for all of us,” Lolik said. “Competition will definitely make us better.”
Organic and natural foods are strong sellers in mainstream grocery chains as well, said a spokesman for Hannaford Supermarkets.
“The motivations for why people look to an organic and natural product, they’re pretty powerful. They’re thinking about the health of their family,” said Michael Norton, spokesman for the Scarborough, Maine-based grocer.
“The perception sometimes is that the price is higher, but there are more private brand options that are very good value,” Norton said.
He said Hannaford’s natural brand, Nature’s Place, has consistently done well in sales.
Hannaford and Price Chopper have constructed special sections for organic food and natural products in many of their Capital Region stores, but a trend in recent years has been to integrate those products with the rest of the store because some shoppers find that more convenient, Norton said.
“Increasingly, you’ll see more of those foods move throughout the store,” he said. “You’re not finding those products exclusively in the organic and natural section of the store.”
Reach Gazette reporter Tatiana Zarnowski at 587-1780 or [email protected].