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Frazier Farms, Windmill Farms lose grip on specialty produce

Boney family profits cut

Two years ago Frazier Farms and Windmill Farms had a tight grip on produce and natural food retailing in San Diego County. The two companies sold fresh fruits, vegetables, bulk grains, breads, vitamins and supplements, and some meats and fish in 15 stores from Escondido to Chula Vista to Santee. Today only 4 outlets are still in business. Frazier Farms and Windmill retain their separate names, but they are owned by the same company.

Their niche in specialty grocery retailing appears to have disappeared, usurped by giant supermarket chains which offer a larger selection of natural foods and bulk products, and by a handful of independently owned, carefully managed neighborhood stores specializing in produce, dairy, and bakery goods. Industry professionals cite the quick growth and eventual decline of Windmill Farms as evidence that Windmill and Frazier expanded too quickly and overestimated the market for their products.

The Boney family opened the first Windmill Farms outlets in Del Mar, El Cajon, and on College Avenue in the 1970s. These stores attracted retirees and health-conscious adults by offering fresh produce at lower prices than competing supermarkets. Unlike the large supermarket chains, which buy produce and set prices weeks in advance, the Boneys had flexibility, says Jeff Cooper, who formerly worked for Windmill Farms. "They could buy wherever they found good deals and mark down their prices at the last moment," he explains. The Boneys also defied an old rule of supermarket retailing: instead of making big profits off produce, they made their money off canned, packaged, and bulk goods, which are traditionally discounted by supermarkets. (Neither the Boneys nor Michael Crowley, current owner of the Windmill and Frazier Farms stores, was available for comment.)

Flushed with success, the Boneys opened other stores, but Cooper and other natural food retailers say the profit margins at these outlets were disappointing. In early 1984 the Boney family sold to Hadley's fruit and nut company, though family members still run Boney's Markets in El Cajon, Vista, and Del Mar. Hadley's meanwhile brought new products to its Windmill Farms stores — nuts, honeys, pickles, olives, a variety of no-preservative trail mixes — but one former employee says the firm neglected the importance of fresh fruit and vegetables. "I felt like produce was a new line [of merchandise] for them," says Fred St. Michel, who worked at Windmill's College Avenue store. St. Michel says the infusion of some commercial products prompted some natural food purists to look elsewhere for their grocery needs. "When they brought in the Pepsi Cola, that's when I had to get out," says St. Michel, who is now an assistant manager at People's Food Store in Ocean Beach.

Supermarkets were at the same time chipping away at the Windmill/Frazier customer base by offering bulk grains, natural breads, carob candies, and vitamins. St. Michel says the Windmill Farms on West Point Loma Boulevard couldn't withstand the competition from Ralphs and Safeway outlets located a short walk away. "Safeway has one-half an aisle devoted to natural foods and Ralphs has a good selection, too," says St. Michel. "That just wiped them out."

Other natural food retailers say they've learned a lot from the Frazier Farms/Windmill experience. "If I tried to duplicate what I'm doing here five times throughout the county, I'd starve," says Jack Healy, president of Greentree Grocers, a supermarket-size "gourmet natural food" store in Clairemont. (Greentree was half owned by Frazier Farms with Healy and a member of the Frazier family purchased the chain's interest.) Healy says marketing surveys show that 57 percent of his clientele comes from outside the Clairemont area to purchase Greentree's eclectic selection, which includes produce, meats, fresh pasta, and roasted coffee. "There's room in the county for another store or two like this, no more," he says.

Jeff Cooper, the former Big Bear and Windmill Farms employee who now owns Seacoast Natural Foods, is equally cautious. Though he says his store on Adams Avenue in Normal Heights is doing "reasonably well," Cooper deliberated at length before expanding a second location in Imperial Beach to include produce and dairy items. He says North County is the only area ripe for a new full-line natural food store such as Greentree or the successful Community Market in Encinitas, and predicts that neighborhood shopping needs will be filled by smaller stores such as Seacoast and Jimbo's in North Park. Natural food shoppers also are becoming more discerning in their buying habits Jimbo Someck says he offered equal amounts of commercially grown and organic produce when he first opened his North Park store this year Today he carries 70 to 80 percent organic produce.

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