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'We started as hippie kids with a dream'

Joyzelle Davis, Rocky Mountain News

Published February 22, 2007 at midnight

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Lyle Davis remembers when his natural foods market used to trade marketing, financial and merchandising information with an upstart Texas company called Whole Foods in the 1980s.

"We all started as hippie kids with a dream and suddenly found ourselves in the role of entrepreneur," said Davis, who co-founded Boulder-based Alfalfa's Markets in 1979. "Those companies all grew up together."

By the 1990s, there was big money involved. Whole Foods went public and began buying out rivals, including the two other companies in that old information-sharing group: Mrs. Gooch's Natural Foods in California and Bread & Circus in Boston.

Alfalfa's, under pressure from investors, sold itself in 1996 in a bidding war between Boulder crosstown rival Wild Oats and Whole Foods. Wild Oats ended up buying Alfalfa's 11 stores for an undisclosed sum.

Davis wasn't surprised by Wednesday's announcement of Whole Foods' purchase because speculation had swirled about a Wild Oats buyout for a long time and the deal fits with Whole Foods' strategy of taking out rivals.

"It's something inevitable, so now that it's happened we can get on with life," said Davis, who still owns Wild Oats shares from the 1996 buyout.

The end of Wild Oats means that more smaller, independent natural foods markets might pop up, Davis predicts, while larger supermarkets and discounters such as Costco and Wal-Mart will continue to ratchet up their organic offerings.