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Competition heats up among Des Moines specialty grocers


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DES MOINES, Iowa (AP) — Three new specialty food stores have opened in the Des Moines area since last fall, joining an already competitive grocery market and a string of established grocers in Iowa that sell ethnic, gourmet and health-conscious food.

Shoppers are demanding healthier and diet-sensitive food options, prompting national specialty grocery stores to seek out metro areas such as Des Moines, according to the Des Moines Register (http://dmreg.co/23gvNul ).

Newcomers include The Fresh Market and Fresh Thyme Farmers Market and Natural Grocers in Clive. They join established grocers Whole Foods and Trader Joe's in West Des Moines and Gateway Market and Campbell's Nutrition in Des Moines.

"I am not sure the market can support all these places," said Paul Rottenberg, president of Orchestrate Hospitality, the Des Moines company that owns Gateway Market and several area restaurants and hotels. The nine-year-old combined specialty grocery store and cafe near downtown Des Moines has been building a customer base that will help Gateway withstand additional competition, he said.

Retail sales of natural and organic food in the U.S. totaled $54.9 billion last year and are expected to grow to $61.1 billion in 2017, according to Statista.com, a company that collects and evaluates statistics.

"It's too early to tell if these new markets have had an effect on us," Rottenberg said.

Rottenberg said he realizes shoppers can be tempted by a nationally known retailer new to town. When Whole Foods opened in 2012, Gateway sales took a 10 percent hit that Rottenberg said took a year to regain.

Fareway, a Boone-based grocery chain known for its signature fresh meat counter, recently opened a store in West Des Moines.

Consumers hungry for organic and specialty foods also are price-conscious. Thirty or more years ago when companies such as Whole Foods started offering healthier alternatives, they were able to command premium prices.

Now, with more organic and natural food stores opening, "it's not just an upscale phenomenon anymore," said Jim Hertel, senior vice president of Williard Bishop, an Inmar analytics company. "Having natural and organic offerings are not enough to sustain premium prices."

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Information from: The Des Moines Register, http://www.desmoinesregister.com

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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