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The Honolulu Advertiser
Posted on: Sunday, July 16, 2006

Marketing gourmet

By Andrew Gomes
Advertiser Staff Writer

New crop of stores promises to appease high-end appetites with organic and specialty products.

Photo by DEBORAH BOOKER | The Honolulu Advertiser

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Whole Foods

Location: Ward Centers, O'ahu

Opening: Early 2008

Size: 67,000 square feet

Operator: Texas-based Whole Foods Market Inc.

The Market at Mauna Lani

Location: Mauna Lani Resort, Big Island

Opening: First quarter 2007

Size: 10,000 square feet

Operator: The Sullivan Family of Cos. subsidiary Kalama Beach Corp.

Island Gourmet Markets

Location: Waikoloa Beach Resort, Big Island

Opening: Spring 2007

Size: 20,000 square feet Operator: ABC Stores and KTA Super Stores

Ohana Farms

Location: Lahaina Gateway shopping center, Maui

Opening: May 2007

Size: 14,645 square feet

Operator: The Sullivan Family of Cos.

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Upscale grocery stores such as Whole Foods Market offer everything from artisan cheeses, above, to wine-tasting rooms, below. At least four of these types of stores are expected to open on O'ahu, the Big Island and Maui in the next two years.

Whole Foods Market photos

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FANCY FIXINGS

A sampling of items found at Whole Foods:

  • 250 artisan cheeses

  • Italian-made vinegar aged in French oak barrels

  • flowing chocolate fountain

  • wood-fired pizza oven

  • organic lemonade

  • salad bar

  • range-grown turkey

  • made-to-order sushi

  • organic beer and wine

  • wine-tasting room

  • nitrate-free meat

  • bulk grains, nuts and pasta

  • organic flowers

  • yoga apparel

  • custom-made gift baskets

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    Hawai'i consumers may want to begin stretching their taste buds and wallets, because local and national supermarket chains plan to open at least four upscale grocery stores and introduce Island residents to a finer form of everyday food shopping.

    The fancy food stores — slated for O'ahu, Maui and the Big Island in the next year or two — will largely target tourists and well-to-do residents with items such as Adriatic fig spread, $15 jars of sun-dried salt from Portugal and organic European-style butter.

    But operators also say they expect significant business from a broader spectrum of local shoppers interested in higher-quality produce, meats and other foods.

    Of the four planned upscale grocery stores for Hawai'i, the largest and most recognized is Whole Foods Market.

    The Texas-based retailer with about 180 stores plans a two-story, 67,000-square-foot market it hopes to open in early 2008 on O'ahu at Ward Centers.

    In addition to providing more choices for consumers, the gourmet food stores also will create more opportunities for local producers of organic and specialty foods, while generating new competition for smaller, mostly mom-and-pop health-food stores.

    The upscale trend for supermarkets on the Mainland is about 20 years old, but picked up in the '90s and has continued strong, according to Charles Cerankosky, a food marketing analyst with investment banking group KeyBanc Capital Markets in Ohio.

    Hawai'i has seen limited aspects of the trend in the form of a few renovated supermarkets, including the Mo'ili'ili Star Market and a growing number of Safeway Stores that have introduced fancier displays and more gourmet products still dominated by traditional items.

    The upscale breed of grocery stores tends to stock a wider variety of higher-quality items, organic foods and specialty products, plus a more limited selection of name-brand items.

    The stores also are typically big on service, offering to smoke meat, fry fish, make sushi and cook pasta in the store for customers.

    Some elements in a typical Whole Foods include a wine-tasting room, wood-fired pizza oven, hot and cold seafood bars, made-to-order sushi and a flowing chocolate fountain for dipping anything from fruit to cookies.

    Whole Foods also dry-ages beef, sells more than 250 artisan cheeses and will smoke seafood on request.

    Emi Noguchi, a 25-year-old special education teacher from Kaimuki, said she's excited about the Whole Foods planned for Kaka'ako.

    "They have a great salad bar, which you don't really find at Foodland," she said.

    Noguchi, who was a regular Whole Foods customer as a University of California-Berkeley student, said she's willing to pay more for healthier and organic foods, though she said the store can be pricey.

    "You're not going to get the buy-one-get-one-free shopping there," she said. "I didn't buy some stuff because it was crazy expensive ... but (in general) I would say you're paying for what you get."

    Lorenzo Perillo, a University of Hawai'i graduate student, said he's impressed by the produce and special trail mixes at Whole Foods, and believes the store will introduce more consumers to better foods.

    "It adds to making healthy eating more mainstream," he said.

    Whole Foods, however, isn't for everybody.

    Roy Enos, a Punchbowl resident in the golf industry who has visited Whole Foods in California, said he won't likely shop at the planned store, and believes it will have little appeal to residents outside million-dollar condominium owners in the area.

    "The locals are not going to go for it," he said.

    Niu Tiumalu, a 21-year-old cook from Kalihi, said he's more of a Times Super Market or Star Markets customer. But he would at least see what the store has to offer. "I would check it out," he said. "It's something new."

    Supermarket industry operators say the general public is becoming more aware and supportive of higher-quality foods that cost more.

    The owner of the state's largest grocery chain, Foodland Super Market Ltd., has responded to the trend with plans to open two gourmet food markets.

    One will be called Ohana Farms, and is scheduled to open in May 2007 at the Lahaina Gateway shopping center under construction on Maui.

    Ohana Farms will be about 15,000 square feet, or roughly half the size of an average Foodland, and is designed to highlight organic, natural and local foods.

    Shoppers won't likely see Foodland's private-label brand Best Yet on Ohana Farms shelves, but there will be free-range meat and poultry.

    Other Ohana Farms elements include a refined selection of best-selling conventional grocery items, plus restaurant-quality prepared foods, specialty bath and body products, homeopathic remedies and an extensive selection of bulk spices, grains and coffees.

    "It's an atmosphere that speaks to health and well-being," said Sheryl Toda, spokeswoman for Foodland parent The Sullivan Family of Cos.

    Sullivan Cos., through affiliate Kalama Beach Corp., is planning a 10,000-square-foot gourmet market on the Big Island at Mauna Lani Resort.

    The store, called The Market at Mauna Lani, is expected to open early next year and feature organic foods, prepared meals, a gourmet deli, bakery, floral shop, convenience items and hard-to-find wines and foods.

    "It's a hybrid store," said Eric Smith, a leasing agent who landed the market as a tenant at a retail center under construction at the resort.

    "It seems like it's a growing trend," Smith said. "I think it's going to do great."

    Also on the Big Island, ABC Stores — the local convenience retailer more known for merchandise below gourmet grade — is partnering with Big Island supermarket chain KTA Super Stores to open Island Gourmet Markets next spring at Waikoloa Beach Resort.

    Paul Kosasa, ABC president, said the 20,000-square-foot store will set a new standard for Big Island shopping, with finer groceries including a wide selection of wines and cheeses.

    "The trend is to offer a mixture of organic and gourmet products as the consumer gets more conscious of health and quality," Kosasa said. "Our plan is to make this a unique shopping experience that captures the senses and creates a feeling of fun and excitement for shoppers. It will appeal to local residents and fit perfectly with the Waikoloa lifestyle."

    The planned gourmet grocery stores will create new competition for health food stores and traditional supermarkets, but local farmers and specialty food manufacturers see new opportunities in the trend.

    Dean Okimoto, who heads Nalo Farms on O'ahu and is president of the Hawai'i Farm Bureau, said upscale grocers will provide more opportunities for his industry, especially growers of organic products.

    "Organic plus local — that's the trend, and the glitzy buzzwords," he said. "I think that's a good thing. We're going to do some organic growing ourselves."

    Kimberly Ino, office manager of Volcano Island Honey Co. on the Big Island, said upscale grocery stores allow artisan food producers like Volcano Island to expand their market beyond gift shops, health-food stores and the Internet.

    "The presence of gourmet markets creates a great avenue for the sale of our products," she said.

    There are no immediate plans for Whole Foods or other gourmet grocery store operators to open additional Hawai'i stores, though Toda of Sullivan Cos. said Ohana Farms will be a test to determine whether expansion is viable.

    Roger Godfrey, president of Times Super Market Ltd., said Times has explored the gourmet grocery concept, but finding available, well-suited real estate is difficult.

    "You can't put that kind of store in the middle of Waipahu or Kalihi," he said. "It takes the right location.

    "We're interested, but you have to have the right circumstances. We are still looking."

    Reach Andrew Gomes at agomes@honoluluadvertiser.com.