It’s always great to hear from independent natural and organic retailers. Many of them are passionate, uncomplicated operations that have their finger on the pulse of their community and the movement. We recently spoke with Cassie Green, owner of Green Grocer Chicago, a 900-square-foot store that opened last week in the windy city’s West Town neighborhood, and got her insights on what it’s like to be a small store in the big city.

Describe the location and the neighborhood. Why is it ideal for your store?
Within a square mile of our store location, there are 44,000 residents. So it’s a really concentrated group of people, especially when you consider that the closest grocery store is a mile away. It used to be a rough neighborhood, but in the past two to three years the housing prices have gone up 30, 40, 50%, which is kind of insane. But it’s still a mixed neighborhood. There are a lot of people who take interest in the social aspect of our store and our mission, as well as people with a lot of money. In both cases, they’re willing to spend more on groceries. It’s interesting to see who comes through the door.

How are you getting the word out about Green Grocer?
We’re operating on a shoestring budget, so we had to be creative. We had our friends go around the neighborhood and tape our coupons to people’s front doors. We also give coupons to every customer that comes in, and we often ask if they have friends in the neighborhood who’d like to stop by. Then there’s the owner of the video store across the street — her name’s Tootsie, and she’s this 5-foot-tall sassy blond who grew up in the neighborhood, knows all the gossip — and she sends all her customers over. So we’ve had a lot of our customers do the marketing for us, and they’re all for it.

Your store makes a point of selling local products — what are some interesting examples of these and the relationships that come with them?
One of our best selling brands is Tomato Mountain Farms, owned by a guy up in Wisconsin named Chris. We also source from a company that’s three blocks away that makes roasted beet chips called papalenas. They’re so good. We sampled those, and we ran out in the first three cases within a few days. So I walked up there and grabbed a couple more cases. There’s also a pasta sauce that we get from about a half-mile away, from a company called Coupla Guys Foods. I work with the owner Joe and his wife.

Do you offer prepared foods, a salad bar, things like that?
The store is tiny, but we do have some stations. We do a drip coffee so people can come in and grab a cup real quick. We have an area with prepared foods. There’s a local guy who does organic and seasonal catering, so we have him to make sandwiches and salads so people can grab and go. There are a couple businesses in the area, so we actually do a pretty decent lunch business.

Why is now a good time to open a local-and-organic store like this?
The awareness is there now, and that’s a huge benefit to a small store like ours. People are beginning to understand what terms like organic and local actually mean. I also think that people are appreciating more of a personal experience while shopping. Having a store that’s 100,000 square feet is not as appealing as having a store where you have that personal connection, where people know your name.

Natural and organics retailing has come a long way from wide-plank floorboards and bulk bins of brown rice. It’s a multibillion-dollar industry that’s constantly evolving, and you need a lot more than good intentions to stay afloat.

We were reminded of this fact late last week with the news that Mike Cianciarulo had resigned as CEO of Asheville, North Carolina-based Earth Fare. Appointed to the post back in 1998, Cianciarulo wielded an authentic approach to health and wellness that, in many ways, set the tone for the natural and organic industry. Under his guidance, Earth Fare implemented outreach programs with local farmers, introduced organic fresh meals, and banned certain unhealthful ingredients like high fructose corn syrup, which it did in 2004. The fact that Cianciarulo had previously worked at the much larger Publix Super Markets made his journey all the more interesting.

“Prior to Mike coming on board, we were a little bit disorganized and not quite as stable as we needed to be,” said Troy DeGroff, Earth Fare’s director of sales and marketing, who noted that Cianciarulo left the company for personal reasons. “Mike really put in the practices and the foundation to help us get to where we are today. I think he’ll definitely be remembered as the person who helped Earth Fare continue its solid growth.”

When Monitor Clipper Partners bought out Earth Fare in 2006, some in the industry feared that the emphasis would turn more to extracting profits, and away from building on the authenticity Earth Fare nurtured during Cianciarulo’s tenure. During his nine years, the retailer grew from two stores in North Carolina to thirteen across three states.

As a food retailer first, Cianciarulo had the good sense to respect expansion as a double-edged sword. It can help build the shopping experience, or it can compromise it. One can only hope that the new CEO, Fresh Fields veteran Jack Murphy, remembers his roots, too, as he leads “the charge to accelerate growth and increase Earth Fare market share throughout the Southeast,” as the press release announcing the executive change so succinctly put it.

Late Friday Supervalu announced they would be shuttering the Sunflower Markets concept it introduced with fanfare just about two years ago. There are five stores currently operating: three in Ohio, and one each in Chicago and Indianapolis. All will close the week of Feb. 18, according to a brief story in the Ohio publication, Business First of Columbus.

While a surprise, it’s not really a shock. During Supervalu’s July 2007 quarterly conference call, president and CEO Jeff Noddle alluded briefly to Sunflower’s performance, and seemed less than enthusiastic about it.

“We certainly like the concept, but the playing field has changed a little bit, and we have to evaluate whether a separate, distinct format is the right way to address it or if incorporating it more into traditional stores is a better path,” he told analysts.

Well, management has evaluated the situation, and the decision dovetails nicely with the company’s new enthusiasm for its Premium Fresh & Healthy remodeling program, which Noddle touted during the most recent call just last week.

“We are pleased with our early remodel performance and plan to maintain our commitment to the important remodel program, increasing our major remodels in fiscal 2009 to 165 stores, up from fiscal 2008’s 125 store remodels,” he said.

We don’t know exactly what management’s expectations were, though Supervalu spokeswoman Haley Meyer said the Sunflower wasn’t meeting company expectations. It’s a shame the Sunflower concept didn’t work. It represented an unprecedented commitment to the idea of a stand-alone wellness format, and marked an exciting departure from conventional retail thinking. Supervalu took a big chance. Publix has been moving much more slowly in opening its long-delayed GreenWise units, and Bashas’ has christened a single Ike’s Farmers’ Market.

We’ll leave the discussion over why this happened to you, but be assured shoppers will be seeing the more profitable elements of Sunflower in new and remodeled Supervalu-owned stores going forward.

A few entries back we wrote about an East Coast supermarket operator who made the tough, but correct, decision to stop selling tobacco in all its stores.

Well, another independent retailer has announced a similar ban. Andronico’s Markets in California will eliminate sales of all tobacco products after Feb. 4 — joining Rochester, N.Y.-based Wegmans Food Markets, which made an identical announcement last week.

Bill Andronico, the 8-store-chain’s president and CEO, sounds like he has quite a list of resolutions for 2008 (it’s still January, right?). “We are making some important changes this year and this is just the beginning,” he stated in a news release. He’s referring to environmental and health issues, and cited the Bay Area retailer’s recent switch to cage-free eggs as another example of its new emphasis on health and wellness.

“It’s all part of a rising consciousness at Andronico’s,” he added.

Cigarettes are profitable, there’s no doubt about it. Figures compiled by Information Resources Inc. and featured as part of our annual SN category review issue showed sales of cigarettes in the supermarket channel topped $4.9 billion last year, down 3.1% from the year before. Even taking into account the impact of state and federal excise taxes, tobaccco remains No. 1 in nonfoods sales in the supermarket channel.

So what about these two retailers? Maybe they’re onto something. Perhaps they are discovering that — as conventional supermarkets delve deeper into wellness marketing — they need to reconcile their business goals with the personal aspirations of their customers.

In a speech yesterday to more than 7,000 store managers, Wal-Mart CEO Lee Scott spoke of a future where solar panels and windmills might greet customers as they drive into a store parking lot. Considering where the world’s largest retailer stands right now, with more than 3,100 stores and a history of breakneck expansion, that’s wishful thinking — Scott channeling Don Quixote, if you will.

But Wal-Mart has been making tangible strides toward sustainability of late — like the recently launched packaging reduction program, among other things — and so the lofty statement mainly underscored this progress as well as similar plans for the future.

And those plans are substantial. Within the next three years, Scott said, the company will work to become 25% more energy efficient, primarily through leveraging its considerable influence with suppliers.

“We will only work with suppliers who maintain our standards throughout our relationship,” said Scott. “So we will make certification and compliance part of our supplier agreements, and ask suppliers to report to us regularly.”

In addition, the company wants to pass the energy saving habit on to these suppliers, as well as to customers. Scott said Wal-Mart will expect suppliers to reduce their energy use by 20%. The retailer would also like to “double the sale of products that help make homes more energy efficient,” according to Scott.

On the healthcare front, Wal-Mart plans to drive down prescription costs, saving more than $100 million for customers and employers. The retailer also plans to increase the number of electronic prescriptions it fills by 400%.

“E-prescribing will be more convenient for our customers,” said Scott. “But more importantly, it will be safer.”

Scott’s goals for Wal-Mart are admirable, and perhaps they should be. The company didn’t become number one by being environmentally sensitive and nice to neighbors. They changed a lot of communities and paved over a lot of trees. That was savvy business at one point, but now that’s changing as companies and consumers grow more environmentally conscious.

Considering all of this, you have to wonder: Could this be Wal-Mart’s way of saying sorry?

Well, congratulations to Whole Foods Market again for turning what could be interpreted by consumers as a big inconvenience into a Happening. I’m talking about the company’s plan to phase out plastic bags from all its stores and — this is pure genius — to do it by Earth Day 2008.

Perfect.

We’re truly impressed that WFM continues to demonstrate a deep willingness to change, and in this case, lead. We’re also in total awe of their marketing department and its ability to connect all the dots. Public awareness of plastic bags and plastic water bottles has grown tremendously over the past year, and the idea of taking this step and banning plastic from a store was an idea ripe for the picking (And it’s still a hot issue. We’ll have two bag-related stories in our next issue of SN Whole Health coming out in February).

But again, John Mackey and company have beaten conventional retailers to the tree. As a result, they get all the publicity, their reputation as a progressive, ethical retailer is reinforced and, well, they get to start saving big bucks by eliminating this line item from their annual budget.

This type of “message marketing” (my term) is yet another wake-up call to mainstream retailers. Health and wellness is an ideal vehicle for such initiatives because it makes people feel good. Let’s face it. It’s a lot easier to convince shoppers to sacrifice convenience when you tell them it’s for the sake of the environment.

This isn’t the first time WFM has trumped the conventional industry. Remember lobsters? The chain announced it was phasing out live sales in June 2006 because the whole process of catching them and getting them to the stores amounted to animal cruelty.

Here’s something I bet you did not remember: The month before, Safeway said it was phasing out its live lobster tanks. Why? Because… “business was in decline” (their words).

Same idea, different message. Who do you think got the press?

The Food and Drug Administration’s approval this week of food from cloned animals drew a storm of reaction from the food industry and beyond. It would appear that the closer the issue gets to the consumer level, the more likely there will be outright opposition or — at the very least — caution and heavily qualified approval. We’ve provided a rundown of several that you should find interesting:

Retailers: Although the Food Marketing Institute stated last year that retailers trust the FDA’s ability to determine what’s safe, some retailers said they flat-out refuse to sell cloned meat or milk. Kroger said as much in an LA Times story, as did Whole Foods in a statement earlier this month.

Government: The U.S. Department of Agriculture supports the FDA’s report, but asks that suppliers uphold a voluntary moratorium to keep cloned animals off the market for right now. Then there’s Senator Barbara Mikulski (D-Md.), who forwarded an amendment in this year’s farm bill to delay the FDA’s cloning decision. She said the FDA acted “recklessly.”

Industry Organizations: The Organic Trade Association again emphasized that cloned animals will not make their way into organic products. Meanwhile, the American Meat Institute said it will review the issue further, and the National Milk Producers Federation voiced its support for the USDA’s call for moratorium.

Watchdog Groups: The Center for Science in the Public Interest is satisfied with the safety of cloned animals, but believes ethical and environmental implications are still a question mark. The Center for Food Safety, on the other hand, believes the FDA has opened “Pandora’s Box.”

Consumers in Pennsylvania will still be able to examine containers of milk to see if it was produced without artificial growth hormones.

In what one consumer advocate called “a complete backdown,” the state’s department of agriculture issued revised rules this week concerning on-pack mentions of hormones in milk. The old rule, issued last October and to take effect Feb. 1, banned any statements from appearing on cartons or jugs. Officials argued consumers could be led to believe hormones were bad.

Why is this case important? It was the first time a state had pursued such a policy, and would set a precedent. Opponents quickly voiced their concerns, characterizing the debate as a “right to know” issue which, in turn, attracted the interest of average shoppers. They caught the ear of Gov. Ed Rendell, who ordered a review of the proposed standards (read: Fix this!).

If anything, the new regulations bring Pennsylvania in line with other states’ policies. Labels can still highlight the absence of recombinant bovine growth hormone, manufactured by Monsanto and approved for use by the Food and Drug Administration in 1994. However, such assertions must now be accompanied by a disclaimer stating there is no difference between milk from rBGH-treated cows and rBGH-free cows. It basically amounts to little more than a pain in the asterisk.

Dairy is one of the gateway categories to health and wellness. Retailers should be extremely wary of any measures that cloud the transparency essential to the vitality and success of the entire whole health movement. When you look at it in those terms, Pennsylvania is making the right decision.

This afternoon the Food and Drug Administration gave its official approval of food coming from cloned animals and their offspring. In its final report, totaling nearly 1,000 pages, the agency stated that it had taken all moral, religious and scientific factors into account, and concluded that food from cloned animals is just as safe as food coming from ordinary animals.

There are currently 600 or so cloned animals in the United States, and officials note it may be several years before milk or meat from cloned animals even is ready for the consumer market. Because they’re so expensive to produce, most of them right now are only used for breeding purposes.

“Many farmers and ranchers are already using other assisted reproductive technologies, such as artificial insemination, embryo transplant, and in-vitro fertilization to produce superior animals,” said Bruce Knight, under secretary for marketing and regulatory programs with the USDA, which supported the FDA in its announcement. “Cloning is another breeding technology that has evolved and has now been demonstrated to be safe.”

Let’s see how consumers demonstrate their support.

Last week saw two very different answers to a question that’s on the minds of many retailers and consumers: What to do about all those plastic bags?

For New York City, the answer is recycling. The city council there passed a resolution requiring supermarkets 5,000 square feet or more in size, or with five or more locations in the city, to provide in-store recycling bins for plastic bags.

China on the other hand — not exactly renowned for its environmental stewardship — imposed a ban on ultra-thin plastic bags and a fee on all other varieties. The state department there urged citizens to instead use cloth sacks and baskets to carry groceries.

The benefit of recycling is that it allows retailers to continue using low-price plastic bags. But critics argue it won’t keep most consumers from continuing to trash the bags they use (also, plastic never gets fully recycled). A total banning seems to address the problem at its root, but some groups say that just shifts the burden — often to paper bags, which require tons of petroleum to produce.

Last March, San Francisco imposed a plastic bag ban for all large-scale supermarkets and drug stores, at the same time giving these retailers the option to use compost-friendly bags or bags made from recycled paper. Environmental groups lauded this decision, but others say the shift to the more expensive biodegradable bags amounts to an unfair hidden tax on consumers.

Retail advocates like the California Grocers Association believe San Francisco missed the boat by failing to address consumer behavior.

“It’s about attacking the problem at its root,” said Tim James, local government relations manager with the CGA. “Just by banning a certain type of bag, you don’t necessarily change bag-use behavior.”

Many would argue, however, that behavior isn’t the issue. It’s cutting down on the 84 billion plastic bags that Americans use every year, and the 12 million barrels of oil used to produce them.

This is a lively, ongoing debate, and we’d love to hear your side of it. Should retailers have to recycle plastic bags, or ban them outright? Or should they institute usage fees? Let us know what you think.