The natural wonder of boulder: 'we're going to revolutionize the way people eat'.When Mark Retzloff and S.M. "Hass" Hassan opened Pearl Street Market Pearl Street Market was the oldest public market in Cincinnati, Ohio. It was founded in 1816. The Market sat in the middle of Pearl Street between Broadway and Sycamore Streets. Famous visitors included President Monroe and General Lafayette. in Boulder in 1979, they could look across the street and see Steve Demos in his tiny vegan vegan /veg·an/ (ve´gan) (vej´an) a vegetarian whose diet excludes all food of animal origin. ve·gan n. deli and tofu tofu Soft, bland, custardlike food product made from soybeans. Believed to date from China's Han dynasty (206 BC–AD 220), tofu is today an important source of protein in the cuisines of East and Southeast Asia. shop, stirring a tub of soybeans to make into tofu blocks. Four years later, Retzloff and Hassan opened a bigger natural-foods store that they named Alfalfa's, setting the stage for natural-foods supermarkets that are still spreading across the country today. But the early 1980s were still days of struggle in the natural-foods business. Demos couldn't afford his own delivery truck back then, so he and Alfalfa's shared one. One side of the truck advertised "Alfalfa's," the other side touted "White Wave," the name Demos gave his tofu enterprise. "It worked very well," Demos says of the arrangement. "I made them put curtains--literally canvas covers--on the sides of the truck. When we drove into a Safeway parking lot, I told the driver to drop the covers because I didn't want anyone to see Alfalfa's advertised on the side. It worked. Saved me half my costs in trucking." It's not surprising these three entrepreneurs ended up in Boulder, a magnet for counterculture coun·ter·cul·ture n. A culture, especially of young people, with values or lifestyles in opposition to those of the established culture. coun , new-age thinking, healthy outdoor living, and on top of that a college town vibrating vibrating, v using quivering hand motions made across the client's body for therapeutic purposes. with creative ambition. Retzloff and Hassan were followers of the Indian "Guru Maharaj Ji" and had met in 1973 at a gathering in Houston for the guru's Divine Light Mission The Divine Light Mission (DLM) was founded by Shri Hans Ji Maharaj in northern India in 1960 and registered in Patna. Its Hindi name was Divya Sandesh Parishad. , which was headquartered in Denver. Demos himself had embraced Buddism while hitchhiking Hitchhiking (also known as lifting, thumbing, hitching, autostop or thumbing up a ride) is a means of transportation that is gained by asking people (usually strangers) for a ride in their automobile to travel a distance that may either be a short or long distance. around India for four years. He came to Boulder to study Tai Chi Chuan Tai Chi Chuan Chinese taijiquan or t'ai-chi-ch'üan Ancient Chinese form of exercise or of attack and defense. As exercise, it is designed to provide relaxation in the process of body conditioning, which it accomplishes partly by harmonizing the , a combination of meditation and yoga, but also to prove that a business model built on environmental stewardship The integration and application of environmental values into the military mission in order to sustain readiness, improve quality of life, strengthen civil relations, and preserve valuable natural resources. , social responsibility and authentic food could work better than pure capitalism. These three, and many others like them in the late 1970s and early 1980s, would help make Boulder into what it is today--the epicenter, or Silicon Valley, of the natural-foods industry. Once largely a cottage industry cottage industry: see sweating system. , the natural-products category nationwide now accounts for $43 billion in annual revenues, and Boulder businesses have been at the forefront of that growth. Companies like White Wave, Alfalfa's, Celestial Seasonings Celestial Seasonings is a tea company based in Boulder, Colorado, United States that specializes in herbal tea but also sells green and black tea (as well as white and oolong blends). They account for over $100,000,000 in Herbal Tea Blends Sales in the United States annually. , Horizon Organic Dairy and New Hope Natural Media have merged or been acquired and become publicly owned Publicly owned can refer to:
intr.v. grav·i·tat·ed, grav·i·tat·ing, grav·i·tates 1. To move in response to the force of gravity. 2. To move downward. 3. to Boulder where they have the support system of natural-organic industry veterans and a receptive consumer base on which to test their new products. A BREWING MOVEMENT Celestial Seasonings, the herbal tea maker, is generally regarded as Boulder's first enduring entrant into the natural-products industry. Now known as the Hain Celestial Group The Hain Celestial Group is a food company whose main focus is natural and organic foods and personal care products. Their products range from herbal teas, offered through their Celestial Seasonings brand to organic free range chickens from the FreeBird brand. after merging with the Hain Food Group in 2000, Celestial started in 1968 with Mo Siegel picking wild herbs for tea in the Boulder foothills. Siegel joined forces with John Hay
John Milton Hay (October 8, 1838 – July 1, 1905) was an American statesman, diplomat, author, journalist, and private secretary and assistant to Abraham Lincoln. in the tea enterprise, and they found a steady buyer for their herb harvests when Green Mountain Grainery opened in 1970. In the ensuing three decades, Boulder has been the launching pad and the home to all kinds of natural-product ideas and enterprises. Following soon after Alfalfa's, Boulder convenience-store owners Mike Gilliland and Libby Cook, a married couple, bought Boulder vegetarian natural-foods store Crystal Market in 1987, and from that launched the first Wild Oats Market. A year later, Doug Greene's New Hope Natural Media, publisher of six natural-product magazines and host of the natural-product industry's two major trade shows, relocated from Pennsylvania to Boulder, adding to the city's claim as the center of the natural-products industry. Demos regards himself along with Retzloff, Hassan and others from the late '70s as the "second graduating class" of the Boulder natural-products movement, following Celestial Seasonings and Green Mountain Grainery. On one hand, it's a wonder so many natural-food visionaries would find themselves in Boulder around the same time. On the other hand, it's not surprising at all. "I think we all moved there for the quality of life and adventure," says Demos, whose White Wave soy enterprise blossomed in 1996 when he took "bean juice" and created Silk, the first-ever refrigerated re·frig·er·ate tr.v. re·frig·er·at·ed, re·frig·er·at·ing, re·frig·er·ates 1. To cool or chill (a substance). 2. To preserve (food) by chilling. soy milk Soy milk (also called soya milk or soybean milk) and sometimes referred to as soy drink/beverage and even soy latte) is a beverage made from soybeans originating from China. , packaged just like regular milk and positioned in the dairy case. "I'll be honest. I don't know Don't know (DK, DKed) "Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. if I would have made it in a whole lot of towns other than Boulder. Because who was buying tofu in 1977?" Twenty-four years later Dean Foods was buying. The Dallas-based corporate food giant fought off initial resistance from Demos and acquired White Wave in 2001 for a reported $194 million. Demos also got Dean Foods to pay to convert much of White Wave's operations to run on wind power. GOT ORGANIC MILK? Horizon Organic Dairy--initially known as Horizon Organic Yogurt--was born in 1991 in Boulder when Retzloff left Alfalfa's to launch the dairy with friend Paul Repetto, an MIT MIT - Massachusetts Institute of Technology grad from Boston who had gotten into the natural-foods business accidentally. In 1978, Repetto and a partner bought a company called "Natural Protein Products," thinking it was a snack company. "It was in what was called the 'health-food' industry, which we didn't even know existed at the time," says Repetto, who by 1991 knew enough about the food industry to see the potential that an organic dairy held. "Dairy products dairy products dairy npl → produits laitier dairy products dairy npl → Milchprodukte pl, Molkereiprodukte pl accounted for just a bit under 10 percent of all the money people spent on food," Repetto says. "And there were no organic dairy products. It was on the one hand an exciting business opportunity and on the other, because cows eat a lot, it was an exciting opportunity to expand organic agriculture, too." One enterprise with cows that didn't hail from Boulder but factored in the Boulder natural-foods movement was the Coleman Ranch in the southern Colorado town Saguache. In 1979, Coleman became the first company to earn a USDA USDA, n.pr See United States Department of Agriculture. label for hormone- and stimulant-free beef. Alfalfa's was one of the first natural-organic stores to sell beef, and Coleman supplied it. In the earliest days of the natural-food movement, Mel Coleman and his son Mel Coleman Jr. were striking symbols of Colorado natural foods--tall, broad-shouldered western men walking around national food expos in their cowboy hats and boots, mingling with hippies hippies 1960s “dropouts of American culture” usually identified with very long hair adorned with flowers. [Popular Culture: Misc.] See : Hair and other natural-food zealots Zealots (zĕl`əts), Jewish faction traced back to the revolt of the Maccabees (2d cent. B.C.). The name was first recorded by the Jewish historian Josephus as a designation for the Jewish resistance fighters of the war of A.D. 66–73. . One of the seminal moments of the natural-foods movement occurred the same year Horizon was born, but outside Boulder. In 1991 Austin, Texas-based Whole Foods Market went public, triggering the consolidation of retail natural-foods stores and the flow of public money into the natural-products industry. Seeing Whole Foods' rapid expansion nationally, Wild Oats followed the same path to public money in 1996 by acquiring Alfalfa's, resulting in a combined 40 stores and giving Wild Oats the critical mass to go public. "When Whole Foods went public in 1991, that really changed the situation because it started to consolidate retail," says Barney Feinblum, who has been involved in the Boulder natural-products scene since 1976, including stints as CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and president of Celestial Seasonings and later at Horizon, as an investor in natural-product startups, and currently as president of Organic Vintners, which he founded in 2002. "Before Whole Foods went public, it was more of a cottage industry. With the money Whole Foods had, they consolidated the retailers and made a national retail chain that's now approaching $5 billion in (annual) revenue." Wild Oats grew, too--to 100 stores by 2001. But with the nation's two largest natural-food retailers publicly owned, some of the chumminess between Wild Oats co-founder Gilliland and Whole Foods founder John Mackey John Mackey can refer to:
"I used to send my profit-and-loss statements to John Mackey of Whole Foods every month, just to get his advice," Gilliland recalls of the cooperative spirit that once characterized the industry. "Whenever we'd find a (new store) site, we'd call up John and ask him what he thought about it. But that stuff has to change when you become public. You can't really do that stuff anymore." Gilliland decided in 2001 he wasn't the right person to oversee the rapid and sometimes unwieldy expansion of Wild Oats, so he stepped down as CEO of the company he co-founded. "We were close to a billion dollars (in annual revenues) when I left, and it was certainly past my abilities and my desires to manage 10,000 people and manage 'The Street,' Gilliland says, referring to the pressure that comes from Wall Street investors. "I wanted to get back to a more entrepreneurial environment." By 2002 Gilliland and Cook were back in business. They chose Albuquerque as the site of their first Sunflower Market Sunflower Market is a grocery store chain with four stores in the Midwestern United States. The company is a wholly owned subsidiary of Eden Prairie, Minnesota-based Supervalu. Sunflower Market which operates four stores plans to open fifty stores in the next five years. , a store model they conceived as a combination farmers market and Trader Joe's Trader Joe's is a privately held chain of specialty grocery stores headquartered in Monrovia, California. As of September 2007, Trader Joe's has a total of 284 stores.[1] , the latter a popular small-store retailer in California and the East Coast. Based in Longmont, Sunflower Market now has stores in Fort Collins and Denver and is due to open a 10th store this month in Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. . The store caters to what Gilliland calls a more "middle America Middle America 1 A region of southern North America comprising Mexico, Central America, and sometimes the West Indies. Middle American adj. & n. " demographic than Whole Foods or Wild Oats. He even discourages use of the word "natural" in favor of the "farmers market" description. "My wife probably wouldn't shop at our store unless she had to, just because she's a hard-core natural-foods shopper, and we don't appeal to that demographic," Gilliland admits. Sunflower Market's emergence didn't appeal to Wild Oats either. Gilliland's former company filed two lawsuits against him, Cook and several others in 2002, charging breach of a non-compete clause A non-compete clause, or covenant not to compete (CNC), is a term used in contract law under which one party (usually an employee) agrees to not pursue a similar profession or trade in competition against another party (usually the employer). in Gilliland's contract and misappropriation misappropriation n. the intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person's estate, or by any of trade secrets. The suits were settled for "zero," according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Gilliland, "after a half million dollars in attorney's fees. "I'm not on the (Wild Oats) Christmas-card list anymore," he says. "There's definitely some tension over there." '10,000 ZEALOTS AND A COUPLE SUITS' The effect of money moving into the natural-products industry might best be illustrated by those who attend the industry's two annual expos, the biggest one taking place in Anaheim, Calif., and the other in Washington, D.C. Both are put on by Boulder-based New Hope Natural Media. "It used to be 10,000 zealots and a couple suits," Gilliland says of the Anaheim gatherings. "Now you go there and there's 10,000 suits and a couple hippies. It's kind of fun--I don't know if it's fun or disturbing--to sit in the bar and just listen to the conversations around you. There's a lot of money at stake, a lot of people with interests." A lot of money, indeed. Natural-product sales nationally topped $42.8 billion in 2003, an 8.1 percent increase over the previous year, according to The Natural Foods Merchandiser, a trade publication of New Hope Natural Media. In Colorado alone, sales of natural products are about $2.1 billion, according to estimates by Boulder-based Compass Natural Marketing. Repetto, one of the co-founders of Horizon Organic that was acquired by Dean Foods in 2003, says the industry's movement from alternative to the mainstream has accelerated the rate of entrepreneurial activity. "More and more young people and others see it as an opportunity, therefore more of them have ideas, more of them want to get something started," Repetto says. "So the pace has considerably increased." One example of such activity is supplied by Repetto's former Horizon partner and Alfalfa's co-founder Mark Retzloff, who last year launched Aurora Organic Dairy about 30 miles north of Boulder in Platteville. Unlike Horizon, which is essentially a virtual dairy with operations in other states and about 250 independent farmers, Aurora Organic's cows are all in Platteville. Already Aurora provides the private-label organic milk to five of the top 10 grocery chains in the U.S. INVESTING IN THE FUTURE Putting money behind their belief that there's ample room for natural-product development and innovation, a number of Boulder's natural-foods pioneers--known humorously by some as the "Boulder Natural-Foods Mafia"--got together last year to create Greenmont Capital Partners, a $16 million private-equity firm that focuses on emerging companies in the natural-organic and sustainable business A business is sustainable if it has adapted its practices for the use of renewable resources and holds itself accountable for the environmental and human rights impacts of its activities. sector. Partners in Greenmont Capital include Feinblum, Hassan, Repetto and Retzloff. In January the firm teamed with Sherbrooke Capital of Massachussetts and another Boulder-based private investment company, Tango, to raise $6.35 million for Boulder-based upstart IZZE Beverage Co., a maker of sparkling juice. The stakes for natural-products players are exponentially higher now than they were 25 years ago, back when Demos once held a benefit concert at his White Wave tofu plant to raise bail money for three employees jailed for picketing Rocky Flats nuclear facility. Demos, 55 and still a Buddist, now heads the White Wave division of Dean Foods that's projected to generate $1.4 billion in revenues this year. Along with Silk, he oversees Horizon Organic Milk, International Delight International Delight is a brand of specialty creamers found in many North American coffee shops and delicatessens. The product is distributed by the Dean Foods' White Wave Foods. coffee creamer and Hershey's chocolate milk. When the division's factories are moved to the White Wave headquarters in Broomfield in June, Demos will oversee 1,200 employees. He doesn't mind having more than tofu and soymilk soy·milk n. A milk substitute made from soybeans, often supplemented with vitamins. Noun 1. soymilk - a milk substitute containing soybean flour and water; used in some infant formulas and in making tofu on his plate. "I like playing in the big leagues, and I'll quarterback any team they give me," he says. "That's the truth." He doesn't expect White Wave's culture to be compromised by its huge corporate parent, mainly because he's proved that his approach of "taking idealism out and selling it inside our economic model" works. Back in the mid 70s when young Demos returned from India, he fully expected to change the world, "to demonstrate that a values-based business model was superior and more financially productive than just a capitalist approach to opportunity." He gives the sense that he's in the best position he's ever been in to do so, heading up a $1.4 billion company. "The world was never changed by somebody sitting in a sky box writing plays," Demos says. "It's changed by people on the playing field. The world doesn't listen to you about your ideas and about your intent to change things unless you are out-profiting them. When you out-profit the current model, they'll give you anything you want, and they listen to what you're saying." Demos figures he went 20 years without ever making more than $35,000 in a year. He nearly went bankrupt twice, and his house was on the line to creditors for 18 to 20 years as he leveraged it to prop up his soy business. "I actually believed that this would be a billion-dollar business, and would take a long, long time to get there," he says. "It took a lot longer than I thought, actually. But I did believe we were going to revolutionize the way people eat, and I still believe we are going to revolutionize the way people eat." RELATED ARTICLE: Natural-products industry Estimated annual Colorado sales: $2.1 billion ALTERNATIVE PRODUCTS BOULDER GROWTH: 2000: Celestial Seasonings merges with the Hain Food Group to become Hain Celestial Group 1988: Celestial Seasonings management and Vestar Capital Partners buy company back from Kraft in leveraged buyout leveraged buyout, the takeover of a company, financed by borrowed funds. Often, the target company's assets are used as security for the loans acquired to finance the purchase. . 1984: Kraft Foods Kraft Foods Inc. (NYSE: KFT) is the largest food and beverage company headquartered in North America and the second largest in the world after Nestlé SA. The Philip Morris Company (now known as Altria Group), a company that produces tobacco products, acquired Kraft for acquires Celestial Seasonings. 1983: Celestial Seasonings' first public stock offering; cancelled after product recall. BOULDER ROOTS: Celestial Seasonings, Boulder 1968 Kroeger Herb Products, Boulder 1978 PUBLISHING/TRADE SHOWS BOULDER GROWTH: 1999: New Hope Natural Media acquired by Cleveland-based Penton Media Penton Media, Inc. (OTC: PTON.OB), founded in 1892, is a diversified business-to-business media company. Penton Media is a mass media corporation that publishes and produces over 40 magazines, 80 trade shows, and 47 web sites. Inc. New Hope division remains in Boulder. BOULDER ROOTS: 1988: Doug Greene's new Hope Natural Media, established in New Hope, Pa., relocates to Boulder RETAIL BOULDER GROWTH: 2004: Greenmont Capital Partners, a $16 million private equity firm, is formed. Partners include Boulder entrepreneurs Barney Feinblum, Hass Hassan, Paul Repetto and Mark Retzloff. 2002: Wild Oats co-founders Mike Gilliland Libby Cook launch Sunflower Market, based in Longmont. 2001: Mike Gilliland leaves as Wild Oats CEO after building company to more than 100 stores. 2001: Barry Perzow launches Pharmaca Integrative Pharmacy in Boulder. 1996: Wild Oats issues IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. after it acquires Alfalfa's, gaining 17 stores to push it past 40 total stores. 1995: Capers Natural Grocery, founded by Barry Perzow in 1984 in British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography , is acquired by Wild Oats. 1991: Whole Foods Market of Austin, Texas, goes public, sparking the consolidation of retail natural foods stores and the flow of public money into the natural-products industry. 1987: Husband and wife Mike Gilliland and friend Randy Clapp purchase Boulder vegetarian natural foods store Crystal Market and launch Wild Oats markets Wild Oats Markets is the operator of natural foods stores and farmers markets in North America. The stores offer dry grocery, meat, poultry, seafood, dairy, frozen, prepared foods, bakery, vitamins and supplements, health and body care, and household items. . 1983: Pearl Street Market founders open new store in Boulder with double the space (12,000 square feet) in Boulder and name it Alfalfa's. 1979: Pearl Street Market founded in Boulder by former Rainbow co-op managers Hass Hassan and Mark Retzloff and other investors. BOULDER ROOTS: Green Mountain Grainery health-food store, Boulder, 1970s Rainbow Grocery co-op, Denver, 1960s Vitamin Cottage, Golden 1955 NATURAL/ORGANIC PRODUCTS BOULDER GROWTH: 2004: Mark Retzloff steps down as president and CEO of Rudi's Organic Bakery and launches Aurora Organic Dairy in Platteville, Colo. 2003: Dean Foods acquires Horizon Organic Dairy. 2002: Barney Feinblum, former president and CEO of Celestial Seasonings and of Horizon Organic Dairy, launches Organic Vintners in Boulder. 2002: B.C. Natural Foods, Golden, acquires Coleman Natural Beef. 2001: Dean Foods, Dallas, acquires White Wave. 1996: White Wave introduces Silk, the first refrigerated soy milk. 1991: Mark Retzloff leaves Alfalfa's, and with Paul Repetto founds Horizon Organic Dairy in Boulder. 1985: Cohn Sells The Brewing Market and launches Allegro (operating system) Allegro - The code name for the major Mac OS release due in mid-1998. http://devworld.apple.com/mkt/informed/appledirections/mar97/roadmap.html. Coffee Co. in Boulder. 1979: Coleman Ranch in Saguache is first company to earn USDA label for hormone-and stimulant-free beef. BOULDER ROOTS: 1976: Rudi's Organic Bakery launched in Boulder 1977: White Wave tofu founded in Boulder by Steve Demos 1977: The Brewing Market coffee company launched in Boulder by Jeffrey Cohn. WRITTEN BY MIKE TAYLOR |
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