I think most people in the natural products industry were surprised with the FTC’s action to block the proposed merger of Whole Foods and Wild Oats. Perhaps the FTC is taking too small of a view of the natural products industry.

According to NBJ’s most recent research, Whole Foods sales make up 20% of total natural health food/specialty retail channel sales. Wild Oats contributes just over 4%.

However, the devil is in the details and it’s all about how the FTC defines the market in their case. NBJ narrowly defines the natural health food/specialty retail sales channel to include:

• Whole Foods
• Wild Oats
• GNC
• Vitamin World
• Independent Natural Food Stores
• Independent Health Food Stores
• Independent Specialty Vitamin & Supplement Retailers
• Other specialty/gourmet, personal care (Body Shop, etc), gyms, herb shops, mall stands, delis, bakeries, salons, gift/boutique stores, etc.

Sales include foods, supplements and other products (natural & organic personal care, books, household goods, etc.)…nothing out of the ordinary.

At most the merged Whole Foods/Wild Oats entity would makeup 25% of sales and 285 of 35,876 natural health food/specialty retail outlets. That’s less than 1% of the total natural health food/specialty retail outlets for you math geeks.

So you have to ask yourself…does the proposed merger squash competition and narrow consumer choice? Debatable.

Now ask yourself….if total natural health food/specialty retail outlets only contribute 51% of total natural products industry sales, is there enough choice out there for industry and consumers? Seems pretty clear.

Here are my favorite articles/resources on and related to the merger:

• The Natural Foods Merchandiser Market Overview
• The Slate comments on the merger
• NFM covers the merger
• Nutrition Business Journal’s natural retail data & analysis
• Steve Hoffman of Naturally Boulder weighs in

The power dynamics of the natural retail market are changing. Depending who you are, you are either pleased/disappointed with the…

- Proposed merger of Whole Foods & Wild Oats
- Action of the FTC to block the Whole Foods & Wild Oats merger
- Rise of Costco as a player in natural products retail
- Rise of SPINS as a purveyor of data on the natural retail market
- Increased value of the independent natural retailer - otherwise known as the “”core”" of the natural products industry

For 8 years, NBJ has partnered with The Natural Foods Merchandiser to complete a research project that forms the basis for NFM’s Annual Retail Market Overview.

The findings of this largest and most complete rendering of the independent natural retailer market appears in the pages of this month’s issue of NFM…but will also be broadcast live (& free) on the Internet (via a webcast) on June 12th at 2pm ET.

NFM & NBJ team members (including myself) will lead this interactive discussion and Q&A about independent natural retail trends in the United States. Register now and be part of an essentially free consulting session on natural retail. We’ll accept all questions and answer all that we can.

Here’s the registration link. See you on Tuesday!

eventRegistration

-Patrick