The End Of Earth Fare And Why Organic Went Industrial

Feb 5, 2020

Credit Frankie Leon

Earlier this week, Earth Fare suddenly announced Chapter 11 bankruptcy, surprising its 3,000 employees who are still awaiting the details of their severance packages. The closure was unexpected even for founder Roger Derrough, who sold the company in 2007.

In 1975, Earth Fare, then Dinner for the Earth, opened the doors of its first store in Asheville. In subsequent decades it expanded into 10 states, with roughly 50 stores by 2020. Alongside Wellspring Grocery, the Asheville chain was a pioneer in offering organic grocery products, which now comprise more than four percent of the total retail food market in the U.S. Host Frank Stasio is joined by John Boyle, a reporter for Asheville Citizen-Times, to discuss what the prospects are for Earth Fare’s employees and customers. And, Stasio turns to scholar Kathryn Boys to ask: How does national consolidation affect organic food production and retail? Boys is an assistant professor of agricultural and resource economics at North Carolina State University.
 

The Krogers of the world now account for over 35% of organic sales.

INTERVIEW HIGHLIGHTS:

Boyle on local reactions to the announcement:

I heard from employees and shoppers, and the word we kept hearing over and over again was shock — "I'm in shock." We had heard some rumors last year about them financially struggling, but I think the liquidation announcement and the closure of the stores really was a shock to folks who kind of wondered: they filed for bankruptcy, but why not try to keep it afloat? … People have very strong sentimental attachments to the store.

Boys on how the organic movement left behind smaller grocers:

Initial sales of organic products were typically done through farmers markets, co-ops, and in various specialty retailers at the time. And initially, these were fresh farm products, not a lot of processed products. With time though, the markets have certainly changed. ... Mass retailers have joined this space, and actually the standard grocery stores now — the Krogers of the world and such — now account for over 35% of organic product sales. ... Regional stores, similar to Earth Fare, are important but sales through that channel are actually declining and have been for the last number of years. ... The largest growth, though, has been in our club and wholesale stores, so at Costco and Sam's Club.
 

There's a large and growing push for meat production to convert to organic.

Boys on the continued growth of organic farming:

For our farmers, indeed, there's a large amount of acreage being transitioned to organics. Importantly, as well, there's a large and growing push for meat production to convert as well as aquaculture production. And so certainly there's lots of opportunity. ... In the 2018 farm bill, there was an additional $200 million injection explicitly laid out for organics to improve production practices [and] increase related technologies and the like. So I think the industry as a whole is still in good shape, despite this particular retailer and others in the regional organic [and] natural space not faring as well.