The Wild Oats Layoffs in Boulder: An Economic Development Opportunity for the Natural Foods Cluster

I am excited to finally write a blog entry about my hometown of Boulder Colorado which has been neglected to date by A View of the Rockies. Boulder, with the University of Colorado, high tech and bio tech employers, numerous scientific facilities, a highly educated population and a tradition of attracting entrepreneurial and innovative activities, is a key part of the Metro Denver Economy.

Note the two images in this blog entry are from the Naturally Boulder Web Site (http://www.naturallyboulderproducts.com/).

The article in the November 14, 2007, Daily Camera (http://www.dailycamera.com/news/2007/nov/14/wild-oats-layoffs-coming-boulder-cuts-to-come-in/ ) about layoffs at the former corporate headquarters in Boulder of the natural and organic grocer Wild Oats, resulting from its acquisition by Whole Foods, got me thinking about Boulder’s industry cluster of natural foods companies.

An industry cluster can be defined as the spatial concentration of a group of horizontally or vertically related companies which benefit from their proximity to each other due to spillover effects such as access to suppliers, customers and business partners, knowledge transfers, the availability a well trained labor pool and other factors. Classic examples of clusters include the advertising business on Madison Avenue in Manhattan and software and Internet companies in Silicon Valley in the San Francisco Bay Area.

Clearly Boulder’s loss of the Wild Oats’ corporate headquarters and roughly 250 well paying jobs is an economic blow to the local and regional economy. Employees, residents and local officials would all have preferred to see Wild Oats remain an independent corporation based in Boulder. Having been laid off myself, I understand the stress, uncertainty, and adverse financial and emotional impacts that an unanticipated job loss can have on employees and their families.

However, these layoffs can ultimately plant the seeds of future growth and innovation. Boulder has a well established natural foods cluster with a rich, ground breaking history stretching back to the 1970s and earlier. This cluster has been recognized by the Boulder Economic Council (BEC), a local community and business-based non-profit, as one of the City’s “Key Industries” (http://www.boulderbusiness.org/index.php?task=view&option=content&id=15 )

According to the BEC, the natural and organic products cluster in Boulder County consists of 65 company’s employing 2,100 workers at an average salary of $42,000 per year. I believe this data is from 2004 but the exact date is not clearly specified on their web site.

The local cluster includes retailers, wholesalers, restaurants, manufactures and other types of companies. Well established companies like Celestial Seasonings, Horizon Organics, White Wave Inc., as well as start-ups like Fiona’s Natural Foods, Inc., and Justin’s Nut Butter are part of the group.

I believe that the talented headquarters staff from Wild Oats will generate new natural foods businesses and make powerful contributions to existing young businesses in Boulder. Clusters are notoriously hard to start from scratch and they tend to evolve based on specific localized economic, demographic and geographic characteristics but existing clusters such as the natural and organic foods cluster in Boulder can be supported and promoted by local governments and non-profits. To date, I think that Boulder has done a solid job of promoting this cluster. To maintain and strengthen the cluster and help redeploy laid-off Wild Oats staff, civic leaders should:

--Continue to fund the existing city business incentives through the Economic Vitality Program including the Flexible Rebate Program and the Employee Training Assistance and target a substantial portion of these funds to natural and organic foods business.

--Expand the innovative and successful Naturally Boulder Task Force, including the annual Naturally Boulder Days and related events (http://naturallyboulderproducts.com/). Add a formal mentoring program to Naturally Boulder which connects established industry professionals with emerging entrepreneurs.

--Establish additional classes and workshops at the Boulder Chamber of Commerce specifically designed to assist natural food entrepreneurs.

--Collaborate with the University of Colorado to establish a business case competition for natural food products where the winner receives financial and operational assistance in launching their business in Boulder County.

--Develop additional forums to connect natural foods entrepreneurs with local business incubators, angel investors and venture capitalists in the Denver Metro Area.

While the loss of Wild Oats is undoubtedly a set back, Boulder has proven to be fertile ground for natural and organic food companies. I believe the cluster is strong enough to rejuvenate itself and it will continue to play a dynamic role in the local economy. With ongoing support from the public, private and non-profit sectors, Boulder will maintain its place as a leading edge innovator in the organic and natural products sphere.