Retailers respond to Northwest Austin customer demand for more organic, natural products

Store Manager Shellie Hayes-McMahon heads down an aisle at the Natural Grocers store near the Arboretum, straightening jars, cans and other products along the way.

She greets customers by first name, teasing one to stay out of trouble and assisting longtime shopper Grethe Wik with choosing a vitamin. Because Hayes-McMahon knows her customers, she can respond to their needs through the products she orders for the store.

"We have more autonomy than some of the larger chains do," she said. "So I can increase our vegan products if I want to."

With 11 grocery stores and other retailers with grocery departments, such as Sam's Club, within 2 miles of the Arboretum, this autonomy allows Natural Grocers to stand out in a crowded market. So far in 2014 two grocery stores—Trader Joe's and Whole Foods Market—have opened new locations in this area, marking it as one of the most saturated areas in Northwest Austin for grocery options.

The five-county Central Texas region of Bastrop, Caldwell, Hays, Travis and Williamson counties has seen a 20.9 percent growth between 2003–13 in the number of supermarkets and grocery stores. In Travis County that growth was 28.8 percent during the same period, according to data from the U.S. Bureau of Labor Statistics.

Many retailers said they do not see this as more competition. Instead they focus on the customer experience, which now involves offering more organic and natural products.

Customer experience

In January, Whole Foods opened its Domain location a mere 2 miles from its Gateway Shopping Center store. Lindsay Mucha, The Domain store team leader, said many Whole Foods customers shop at both stores.

"Gateway is their weekday store, and they can just pop in and out," she said. "Domain is their big shopping on Saturday and Sunday. Gateway has this real family, very intimate feel."

Mucha said the company's core values—such as selling high-quality natural and organic products—are one reason shoppers choose Whole Foods. The Domain store offers the Draft Shack with 45 beers on tap and a community room that organizations may use for events. In addition, Whole Foods sells organic and sustainable products and hires employees who care about the core values, Mucha said.

"It's more than a grocery store and grocery shopping," she said. "You're helping to push forward issues in the world you care about."

Mucha said Whole Foods' concierge team provides quality service by answering questions, taking special orders and even grocery shopping for customers. This allows Whole Foods to support two stores in the burgeoning Northwest Austin market.

"I really feel the community is growing, and with that the demand grows," she said. "It's getting more dynamic and fun to watch."

Trader Joe's Store Captain Tim Krzeminski said the company prioritizes a fun environment for shoppers. Its second Austin store opened June 20 at 9722 Great Hills Trail. The store's walls feature murals of well-known Austin destinations such as the Arboretum.

"We're trying to capture the neighborhood," he said.

The store has more than 3,000 products, 80 percent of which are from the Trader Joe's private label, including health and beauty items to beer and wine, Krzeminski said.

Focus on organic

The number of grocery stores in Northwest Austin is not the only trend on the rise. More stores are responding to customer demand for organic and natural products.

Krzeminski said Trader Joe's does not sell anything with artificial flavors, colors or preservatives or with genetically modified organisms, also known as GMOs.

"We've been ahead of the fads," he said.

Sprouts Farmers Market spokeswoman Donna Egan said the company is seeing an increased demand for organic, vegan, gluten-free and non-GMO products. The company's target shopper is the traditional grocery shopper who is looking for a great deal.

"Years ago people felt that being able to purchase natural and organic foods was expensive, out-of-reach and only for the affluent," Egan said. "The perception of the natural foods industry is changing. Sprouts brings value to those products."

Sprouts opened its Research Boulevard store in 2010, and its fifth Austin-area location will open in Cedar Park on Aug. 27. To reach new customers, Sprouts mails 12 million fliers weekly about its deals and promotions.

"We're highly promotional, which is fairly unique to the natural foods industry," Egan said.

Nancy Flynn, Natural Grocers spokeswoman and marketing director, said the company has set strict standards on products it may sell, such as implementing a new standard on requiring dairy products to come from dairies where animals have access to pastures and are fed a natural diet of grass and forage. Flynn said Natural Grocers is an industry leader in quality control.

The company has three Austin-area stores. The Shops at Arbor Walk location opened in 2010. Even with new competition in Austin, Natural Grocers is considering contributing to Austin's grocery store growth.

"We believe that the Austin market could support several more of our stores," said Kemper Isely, co-president of Natural Grocers by Vitamin Cottage.