Holland: new business concepts inspire the market

After average growth of 7 % per annum, the indications are now that the Dutch wholefood industry’s consistent performance over a number of years is about to be transformed into more rapid expansion. The driving force behind this development is the new business initiatives emanating from wholesalers, chain stores and individual wholefood store owners. What the customers want plus the pressure of competition are resulting in accelerated growth in the wholefood sector.

Picture: Nieuwe Weg in Groningen in Holland

For the first time for ages, a totally new business concept appeared on the market in 2005: “EkoPlaza” (picture).  This initiative of the wholefood retailer Jos Kamphuys, in collaboration with the project developer Manpro, has been a wake-up call for the industry. The EkoPlaza organic supermarket in Alkmaar is oriented mainly towards new customers and aims to operate in its own region. The size of the first store is unprecedented in the wholefood world: around 1500 m². “EkoPlaza” has made quite an impact. The media were very interested in the new appeal to consumers, particularly in a sector that is ripe for renewal. In the immediate vicinity, established wholefood retailers reacted quickly with a communal initiative called the “Groenhof Passage” (picture below).

The new challenge for the wholefood sector is to appeal to new potential customers without putting off existing customers. Big wholefood stores like “Gimsel Rotterdam” and “Naturwinkel Utrecht” expanded in 2005 with the intention of reaching more customers. In 2005 and 2006, the Estafette business concept has also paved the way for innovations and more stores. In 2005, the “Organic Oasis” concept was launched in Amsterdam in a number of wholefood stores belonging to the Does chain. On the 5th October 2005 the new NOW business concept was opened in Emmelo. The objective was to roll out tried and tested innovations for application in other wholefood stores. In the middle of November, “Biotop” opened its first store in Uhden, similarly at the initiative of the Does chain.

Quite apart from the new concepts being introduced by specialist stores, independent wholefood retailers are now taking action. What is needed is at least a thorough renovation of existing shops, and this year a growing number of independent retailers are refurbishing and expanding their premises. Winterswijk opened a new wholefood store in September: two stores in the town centre were put together to create a new building with 350 m². In Nijmegen, a store has just been extended from 130 m² to 350 m², and in Amsterdam too wholefood stores are currently being extended. A new store with 500 m² of retail space is being opened in Den Haag in the autumn and in Hertogenbosch another store in Vughterstraat is shortly going to be extended from 80 m² to 300 m². During 2007 a new wholefood store will be opened in Amersfoort (Julianaplein), and in other locations negotiations are underway to find suitable premises for independent retailers.

Gert-Jan Smits is acting as consultant in all of the named projects. He operates within the state-funded task force of the PBS Foundation that supports organic marketing with the aim of setting up and completing as many projects as possible with new and established wholefood businesses in order to optimise organics. In 2006, he assisted ten projects, mainly in their search for premises, finance and planning permission. He also helps wholefood businesses to find appropriate people to take over existing stores in order to ensure continuity. The number of these people is increasing rapidly, since there is plenty of opportunity for new entrepreneurs. Many are actually entering the industry, but there is a great need for even more.

The PBS Foundation is reacting to the situation with the training project: “Specialist Stores for Wholefood”. Six course participants have just received their certificates, and a short time ago a group of ten began the two-year training to become managers and entrepreneurs. At the same time last autumn, an intensive 6-day course, “Organic Farming and Wholefood”, was launched in which store owners and entrepreneurs were taught the basic concepts of organic agriculture and produce, and were supplied with information on products and diet.

The time when you could say of the wholefood store that the one-eyed man is king in the land of the blind seems to be over. The State is promoting the sale of organic products with campaigns and advice for food stores and is strengthening the management in chains via the PBS task force project. The coordinator, Geert-Jan Smits, is financed both by the Ministry of Agriculture and seven wholesalers in the specialist trade: Verbeek Bakery, Van der Westen Bakery, Kroon, Natudis, TerraSana, Udea (picture) and De Zaai-Ster. The wholesalers are the beneficiaries of the growth of wholefood stores and are taking much more interest now in the developments at the retail level. In some cases, this has resulted in extending their own store chains. Others support independent retailers financially. As a consequence, existing store owners are experiencing more pressure from two directions to undertake new developments. In places where the current owners have not been quick enough to embrace change, there is the danger of outsiders taking over. This is what happened in Alkmaar (EkoPlaza) in 2005 and a short time ago in Amstelveen, Zutphen and Eindhoven where big new stores have opened that are challenging established retailers. In short, pressure on the market is increasing and wholefood shop owners now have to be prepared to take decisions more readily than in the past. This is a very positive development for the market as a whole.