Is New Seasons the Next Whole Foods?

By Gabriella Bishop ’14

 New Seasons Market has expanded its reach in the Portland community. (Photo: Christina DeFrisco)

New Seasons Market has expanded its reach in the Portland community. (Photo: Christina DeFrisco)

New Seasons Market, with 13 locations and four new stores currently under construction, has seen major growth over the past few years. After a major share of the company was sold to Portland-based buy-out firm Endeavour Capital, New Seasons’s growth path starts to resemble one the natural foods scene has seen before: the story of Whole Foods Market. New Seasons may grow out of its local name, but perhaps it would not be a bad thing.

New Seasons opened its first store at Raleigh Hills in 2000. Founded by Chuck Eggert, Stan Amy, and Bill Rohter, the natural foods store prided itself on being locally owned and supporting local and sustainable agriculture. The company grew into a chain, and in 2009 Endeavour capital bought 55.44 percent, a $31.1 million deal. Rohter was left with less than one percent, and retired from his board position, and shortly after Eggert sold his stake to Endeavour and left the company, leaving the firm with 69 percent, according to Willamette Week.

Current board members include original co-founder Stan Amy, and two Endeavour Capital representatives. On its website, Endeavour characterizes the transition as friendly: “Endeavour developed a relationship with the three primary owners over many years. In 2009, Endeavour invested in New Seasons to facilitate a transition to the next generation of leadership, provide partial liquidity to the existing shareholders, and ultimately broaden the employee ownership of the company.”

Their goals are clear: According to the website, “Endeavour and the founding shareholders, together, intend to continue investing in the company for long-term growth and sustainability while preserving the company’s unique local and community-oriented strategy.”

After five years, the employee ownership has indeed been broadened – a 10 percent stake (previously zero) – and New Seasons has made its first merger, by acquiring New Leaf Community Markets in Santa Cruz, California, last year. Scott Roseman, New Leaf’s founder, said to the Santa Cruz Sentinel that there are no plans to re-brand New Leaf.

Accusations that New Seasons is “going corporate” have already surfaced – words that Whole Foods’s co-founder John Mackey has had to deal with for years. He said to the New Yorker that to “the people that really dislike us, Whole Foods is a big corporation, so they think that we’ve crossed over to the dark side.”

Whole Foods was founded in 1980 in Austin, Texas, by Mackey and three others as a small natural foods store. Starting in 1988, Whole Foods made a series of acquisitions and mergers, a whopping 13 in total, and is now a Fortune 500 company on the NASDAQ stock market. At the end of the 2013 fiscal year, Whole Foods had 362 stores in operation, 32 of which were new that year. The chain’s net income in 2013 was $551 million, and Mackey was the only original co-founder listed on the annual stakeholders’ report for 2013.

New Seasons has acquired only one other chain so far, but it’s hard to not compare their growth to Whole Foods’s.

Mackey admitted to the New Yorker that, “Whole Foods itself is a market-based solution. We’re a corporation. We are in capitalism. We have to compete with Safeway and Wal-Mart and Kroger and Wegmans and Trader Joe’s. What’s odd about it is that that’s what we’ve always been. We’re not a co-op.”

However, Whole Foods still strives to preserve its values. Mackey says he calls it “conscious capitalism.” “We’re trying to do good. And we’re trying to make money. The more money we make, the more good we can do,” he said to the New Yorker. The employees are still treated extremely well, and practices like organic farming, supporting local producers, fair trade, sustainability, and environmental stewardship are still very much a part of the mission of the chain.

New Seasons has expanded into Washington with its Vancouver store, but since it doesn’t plan to change the New Leaf chain into more New Seasons locations, it seems that for now the company is going to stay local. However, their growth path could be beneficial.

 

Stephen Babson, one of the Endeavour members on New Seasons’s board, commented that “if an organization isn’t moving forward, it’s likely moving backward … you can expect to see more of New Seasons here in Portland and elsewhere.”