Ward to add specialty grocer

Whole Foods Market will open its first store in Hawaii in 2008

» The store's arrival could benefit isle farmers.

Marking the consummation of a five-year courtship with the Aloha State, Whole Foods Market Inc., the nation's largest retailer of natural and organic foods, has announced plans to open its inaugural store in Honolulu in early 2008.

The 67,000-square-foot store will anchor General Growth Properties' Ward Village Shops in Kakaako, located between Queen and Auahi streets near Kamakee Street. Construction is scheduled to begin this month with a store opening in early 2008.

Founded in Austin, Texas, in 1980, Whole Foods Market has grown in the past 25 years into a specialty food mammoth, with 181 stores in North America and the United Kingdom and sales of $4.7 billion in 2005.

The company has produced such staggering sales by selling not just the items normally associated with health-food stores -- organic produce, hormone-free beef, eggs laid by free-ranging hens and obscure grains sold from bulk bins -- but also by filling demand for handcrafted specialty items, such as European cheeses, artisanal vinegars, gourmet coffee and prepared takeout foods.

Jeff Dinsmore, vice president of development at General Growth Properties, said the store will be an attractive amenity for residents of Kakaako, including owners of the new condominiums that appear to be sprouting in the neighborhood like mushrooms.

"I think it's going to be a real destination," he said. "What Whole Foods brings is not only the grocery components, but they also have a lot of prepared foods that will appeal to a lot of professionals and young families."

The 67,000-square-foot size makes the store significantly larger than the typical grocery store in Honolulu, Dinsmore said. It is also the second largest of 10 new locations Whole Foods announced yesterday during a conference call with analysts.

At the core of Whole Foods' corporate persona is the image of a green corporate citizen that cares about the communities where it operates. The company recently announced it had acquired enough energy credits from wind farms to offset 100 percent of the electricity used in all of its stores and other facilities, including regional and national headquarters. Whole Foods ranked 15th in Fortune magazine's list of the 100 best companies to work for in 2006, the ninth year the company has made the list.

A catalyst for bringing Whole Foods to Hawaii was David Cole, chairman, president and chief executive of Maui Land & Pineapple Co., who has had a long relationship with Whole Foods from his years in the organic and natural foods business. Cole said he worked closely with Michael Besancon, regional president for Whole Foods Market's Southern Pacific region, whom Cole has known for years.

The MacNaughton Group, a Honolulu real estate consultancy, helped match Whole Foods with the Ward location, Dinsmore said.

Jeff Arce, chief financial officer with MacNaughton, said the store will provide added value for the Ward-area Hokua condominium project, which MacNaughton developed in a joint venture with the Kobayashi Group and A&B Properties Inc.

"As the developers of Hokua, we are really pleased to be able to bring Whole Foods to that community," Arce said.

Eric Tema, director of development for MacNaughton, said that MacNaughton and General Growth executives worked closely with their counterparts at Whole Foods to convince them that the Ward site was the right one.

"The challenge was there's no such thing as a 5-acre site in downtown Honolulu where you can have a parking lot and a single-layer store," Tema said.

The store will occupy two levels, anchoring the Diamond Head end of General Growth's redevelopment project on Auahi, Dinsmore said. It will include cafe tables for indoor and outdoor dining.

"Whole Foods is really so much more than a grocery store," Tema said. "They're a grocery store with a giant restaurant attached to it."

Whole Foods expressed interest in opening a 40,000-square-foot store at the same location in 2000, but that deal ultimately stalled, Dinsmore and Arce said. About a year and a half later, Whole Foods came back with another attempt at establishing itself in Hawaii. After a long search, the company ended up at the same site it had considered previously, but with plans for a store more than 50 percent larger than first envisioned, Dinsmore said.

Whole Foods executives could not be reached for comment late yesterday.

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Maui executive sees gains for isle farmers

To the top executive of one of the state's major agriculture companies, the arrival of Whole Foods Market in Hawaii could mean more than a supply of handmade organic sausages and smelly cheeses from France.

It also could mean a step toward Hawaii producing more of its own food.

"One of the real travesties about being in Hawaii is that we have 490,000 acres of land that is fallow, and at the same time we're importing over 90 percent of our food calories," said David Cole, chairman, president and chief executive of Maui Land & Pineapple Co. "We need somebody to connect those dots."

That somebody, Cole said, could be Whole Foods, which is known for supporting small, local farmers by buying produce and other products from them.

That is a contrast to many large grocers, who often opt to buy in mass from purveyors on the mainland and have goods shipped here. That system, Cole said, leaves small farmers having to take on the risk of expanding their operations, hoping that the retailers will be willing to buy their products. The result is a lack of growth.

Whole Foods, Cole said, could become a "market maker" for local food producers, including farmers and artisans who add value to the raw goods, such as by making cheese from locally produced milk. That would encourage the return of fallow lands into diversified agriculture lands.

This vision, Cole said, is more than a pipe dream. "That's why we put so much energy into making this happen," he said.

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