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Whole Foods' Wild Oats deal keenly felt in Boulder

The Colorado town is home to the takeover target and is an organic movement focal point.

August 21, 2007|From the Associated Press

boulder, colo. -- The Flatiron Mountains jutting , Barry Milner sips a beet-and-carrot juice in the shade outside a Wild Oats Marketplace, hoping to ward off a slight summer cold.

Milner, 63, travels the country teaching Shambhala meditation. He's an easygoing preacher of the virtues of a healthy mind and body who fits this haven of holistic living as much as it fits him. "I think the spirit of Boulder is health, but of course there's fanaticism everywhere," he says.

Home to the Wild Oats chain, this liberal college town is a proving ground for the fittest among organic retailers as Wild Oats prepares to be swallowed by its Austin, Texas-based rival, Whole Foods Market Inc.

"It is the leading area in terms of the aggregation of natural food companies and entrepreneurs and even trade journals," said Organic Inc. author Samuel Fromartz, who describes Boulder as "ground zero" of the natural and organic food industry.

Whole Foods is seeking to buy Wild Oats for $565 million, a deal that piqued national interest in the organic grocery industry because of opposition from federal regulators and the internal e-mails and online postings of Whole Foods CEO John Mackey.

A federal judge Aug. 16 rejected regulators' antitrust concerns and gave the go-ahead for the acquisition, although the Federal Trade Commission appealed that decision. A federal appeals court said Monday that it needed more time to consider whether to block the takeover.

Wild Oats Markets Inc. started in Boulder in 1987 with the purchase of a single natural foods store. The concept grew into the nation's second-largest natural and organic foods supermarket chain, with more than 110 stores in 24 states and British Columbia, and annual sales of more than $1 billion.

Other companies that call Boulder home include Hain Celestial Group, which makes Celestial Seasonings teas; Horizon Organic dairy products; Izze Beverage Co., which manufactures sparkling juices; and, until recently, WhiteWave Foods, makers of Silk soy milk.

Boulder's population of 83,432 includes many of the key demographics that natural foods retailers target: an educated workforce, a higher income base and people who care about the environment and about what they eat. About three-fourths of Boulder residents have at least a bachelor's degree, and the median income was $46,000 in the latest U.S. Census Bureau statistics.

At the foot of the Rockies about 30 miles northwest of Denver, Boulder puts more value on open space than square footage and requires motorists to share roads with cyclists and joggers.

"Everyone you meet is either a semipro bike rider or rock climber or runner or ultra-marathon runner," Wild Oats spokeswoman Sonja Tuitele said.

On a recent weekday morning, shoppers gathered on wire patio chairs and benches outside both Whole Foods and Wild Oats. Milner, the Shambhala teacher, said he considered both stores a meeting place as well as a resource for "a healthy shot of food."

Some shoppers who were loyal to one store or the other said their shopping habits probably wouldn't change, but others were concerned about higher prices.

"At first I was OK with it, but after thinking about it and reading in the paper that they were actually planning to close 30 of the Wild Oats stores, then you lose your competition and that's going to affect the prices," said Jennifer Congedo, 44. "I know the prices will get jacked up."

With a family at home, teacher Kathi Imperi of Lafayette is price-conscious, getting most of her groceries and some organic products from Costco and Safeway but also frequenting the two organic grocers for fruits and vegetables.

"I'm thinking if they combine, they actually should make [prices] lower, but I know it's kind of a concern," Imperi said.

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