The Profitable Earth

Recipe for a business boom: take the hip lifestyle, add a pinch of nostalgia and stir in generous helpings of Ralph Nader. That unlikely combination has created one of the nation's fastest-rising businesses, the merchandising of organic foods. Basically, these are the foods that great-grandma used to eat. They are grown without the aid of chemical fertilizers or pesticides, and processed without the use of emulsifiers, mold inhibitors, bleaches, preservatives, binders, buffers, drying agents or any other test-tube additives.

A few years ago, the market for such products was fed by a scattering of faddists, who patronized a handful of "health food" shops. But that was before the back-to-nature spirit roused the young, and much of the rest of the nation was shaken by the cranberry scare, the mercury-in-tuna scare and the cyclamate scare. Says Marshall Ackerman, executive vice president of Rodale Press in Emmaus, Pa., which publishes books and magazines about the movement: "I've been in this business for 16 years, and nothing happened for the first 13. Since then it's become phenomenal." Last year the organic food shops had sales of about $200 million.

Welcome to Babbitt. At latest count, 2,500 organic food stores were operating in all 50 states. In Florida, stores are opening at the rate of one a day. The largest concentrations are in the capitals of hipdom: New York and California, but organic food stores have also reached Ozark, Ala., Longmont, Colo., Penacook, N.H., and Babbitt, Minn.

Fred Rohe, president of New Age Natural Foods, a San Francisco-based chain, plans to sell stock to the public and start a franchising operation. Some New Yorkers are talking of organizing an organic foods mutual fund for investors. The newest wrinkle is the organic food supermarket, with well-stocked aisles and fleets of shopping carts. In Manhattan, at least, their customers come from all walks of life: long-haired young men with backpacks, wealthy parents with children, a few blacks and a sprinkling of the elderly. Many of them are operating in suburban shopping centers. Conventional supermarkets are also setting aside space for organic food departments, but most of the business is controlled by private entrepreneurs. One of them, Mrs. Mary Hatch, 65, left a job as a mortuary organist to open a store in San Ramon, Calif. Says she: "I saw so many dead young people when I worked in the mortuary--so many who would have lived if they had realized that you are what you eat."

The foods sold in organic shops can reach for the exotic: carrot cupcakes, sunflower-seed cookies and countless varieties of honey, including alfalfa, avocado, tupelo blossom, eucalyptus, mesquite and thistle. Manhattan's Good Earth market offers 13 varieties of dates (among them Halawy, Khadrawy and Zahidi*), three types of yogurt, including goat, organic ice cream and pizza and 125 types of herbal teas. The strawberries, lettuce, tomatoes and chicken can hardly be distinguished from those in conventional markets--except, aficionados insist, by healthfulness and taste. The most striking difference is price: 25% to 50% more than regular foods.

Residue of Worries. The premium results not from production expenses --manure is no costlier than chemical fertilizers--but a shortage of supply. Merchants have trouble finding farmers to produce as much as their customers want to buy. Farmers tend to be wary of the new market and are reluctant to go back to growing without chemicals. One consequence is that rumors are going around that residues of pesticides have been found on some supposedly organic foods. Worried entrepreneurs are talking about the need for a nationwide system of standards and inspections. Recently, there was a minor scandal when some discarded labels from chemically processed food were discovered on the floor of an organic foods emporium in Greenwich Village.

* Three varieties that originated in Iraq but are now also cultivated in California.

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