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Seattle Organic Food Delivery Business Targets Office Workers

>From Seattle Post-Intelligencer
urday, January 15, 2005

Retail Notebook: Eastsider launches into lunch wars

By KRISTEN MILLARES BOLT
SEATTLE POST-INTELLIGENCER REPORTER

Eastsider Jason Brown wants to take ready-to-eat organic food out of its
niche and into your home and office.

Organic To Go, a delivery and take-out service, is opening its second store
in Seattle, a market teeming with brand-name competition such as Briazz
Inc., Gretchen's Shoebox Express, Ingallina's Box Lunch and Jackrabbit.

It isn't easy to succeed here in Washington for businessmen, like Brown,
with an eye on nationwide expansion. Just ask Briazz Inc., a homegrown
sandwich-and-soup shop that filed for bankruptcy protection in June after
expanding as far as Los Angeles and Chicago.

Brown is hoping he has the key to success: organic foods at prices that are
on par with the competition.

"The organic angle could be the difference between making it and not making
it, but the business climate in Washington is very tough for restaurants,"
said Gene Vosberg, the president and chief executive of the Washington
Restaurant Association. "We have high costs, so it is a challenge to be
profitable and remain profitable."

Brown's next move seeks to increase Organic To Go's brand recognition with
his target customer -- the corporate worker -- via a second store in the
Bank of America Tower in downtown Seattle, opening by Jan. 31. The
425-square-foot space will be retail only, stocking sandwiches and salads
from the kitchen of the 3,000-square-foot Issaquah location. The menu is 70
percent organic, a shift from Brown's original concept of serving only
organic foods.

He changed his mind after his young son said of an organic hotdog, "This
tastes good, but it doesn't taste like a hot dog."

Organic To Go's beef and pork, though not organic, are all natural (feeding
on non-organic corn and grains). Staffers will craft an organic-only meal
when asked.

Brown, who first founded a company when he was 19 years old, may have found
the right formula -- some industry analysts say the time is ripe for
combining convenience with specialty foods.


"The organic food market in the retail sector has been growing 20 percent a
year," said Bob Goldin, the executive vice president of Technomic, a
Chicago-based research and consulting firm that specializes in food and
restaurants. "It will always be a niche market, but it is a growing one."

Organic food and beverage sales accounted for $10.4 billion in 2003,
according to the Organic Trade Association. Ready-to-eat products, however,
made up only 2 percent of that figure.

"There seems to be a trend, small but growing, of having organics
delivered," said Holly Givens, a spokeswoman for the Organic Trade
Association. "Those businesses tend to be on the coasts, and they do better
in metropolitan areas because of the ease of delivery routes and the higher
consumer education."

Brown plans to open six stores in Seattle, then expand into Chicago, where
Briazz's line eventually failed, and Boston. Unlike Briazz, Organic To Go
doesn't offer sit-down dining -- it is grab-it-and-go and delivery only,
whether for lunch or dinner.

Brown has some heavy hitters on Organic To Go's board of directors --
Newman's Own Organics Chief Executive Peter Meehan and Dave Smith,
co-founder of garden tool retailer Smith & Hawken, to name some.

Brown sold his last business, Custom Nutrition Services, to Bellevue-based
Drugstore.com for $5.3 million in April 2003, just three years after
founding it. He said he's in talks with a "strategic partner in the food
industry" for further investment in the 42 stores he wants to open by 2007.
So far, private investments in the company total $1.5 million, a third of
which is Brown's own money.

"Jason picked a good area to start his business, and he knows that it has
to taste good above all other things," said fellow investor Meehan. "Briazz
didn't reach the right people with consistent product, but Jason is smarter
than that."

A 2004 study of organic food trends by Bellevue-based The Hartman Group,
which conducts market research on health, found that a lack of knowledge
about organic food and consumer concern about prices were top reasons for
not buying organics.

The study showed that 66 percent of shoppers, however, buy the occasional
organic product, and 27 percent of consumers buy organic on at least a
weekly basis.

"In Seattle and along the coasts, people know what organic food is about,"
Smith said. "The next step for organics was taking it down to a lower-priced
level and getting it delivered to your door."

Organic To Go's current prices are the same as, or slightly less than,
those of some rival retailers. A bacon gorgonzola sandwich, with organic
Washington apple slices, a homemade cookie and a bottle of water, runs
$9.49. Each delivery costs $3.95, no matter if one sandwich or 50.

Though Organic To Go's success in Seattle is yet to be proven, Brown is
already measuring his plans for the business's next steps: 42 stores in
three years, and then his own graceful departure in 2007.

"You have to regionalize the store's offerings to the local palate," he
said. "Every town has its own BBQ sauce."

IF YOU GO

Organic To Go's first store is at 5610 E. Lake Sammamish Parkway S.E.,
Issaquah, WA 98029. Orders can be placed in person, by calling 425-837-9922,
or at www.organictogo.com.


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