Los Angeles billionaire Ronald Burkle announced that he had bought a seven percent stake in Whole Foods over the past few months, news that saw the share price rise almost 23 percent to $12.27.

Burkle, who also bought a similar stake in Barnes & Noble book chain via his Yucaipa Co investment arm, believes shares in the United States’ leading organic retailer have been undervalued

Filing with the Securities and Exchange Commission, Burkle said “there are substantial opportunities for the company to improve operations and its pricing image while maintaining its high-quality product offering”.

Sometimes nicknamed Whole Paycheck for the perception that the chain is overpriced and therefore only for those with high disposable income, Whole Foods has certainly been feeling the pinch as the American recession bites deeper.

Shares dropped more than 75 percent in 2008 and net income fell $1.5 million to the quarter ended September 28, down from $34 million in the same period a year earlier.

The Austin-based company has also been embroiled in expensive legal battles with the Federal Trade Commission over its acquisition of rival Wild Oats.

Colorado company Natural Grocers by Vitamin Cottage, which has 27 stores in the US, will open two more in Texas in coming months and Planet Organic, the UK’s largest retailer of organic food and products, has already branched out in two more areas of London.

Natural Grocers, which sells 100 percent organic produce as well as supplements and speciality items, is due to open its latest store in Amarillo in November and another is slated for Austin early next year, bringing the total in the Lone Star State to three.

The chain’s co-president, Kemper Isely, told the Austin Business Journal that he is not worried about the prospect of moving into the heartland of organic and natural foods leader Whole Foods Market, describing their relationship as “synergistic”.

And if the store does well, Natural Grocers will consider opening another two in the city. Isely said the company is also looking at four more outlets in northern Texas, as well as locations in Utah, Wyoming, Arizona and Oklahoma.

Planet Organic, the UK’s first fully certified organic supermarket, now has five outlets in London, after opening a branch in Muswell Hill in August and another in Islington in September, and hopes to have 13 stores within a few years.

The company, which sells all natural, mostly-organic foods and guarantees products free of additives, hydrogenated fats and genetically modified organisms, launched in 1995 in fashionable Notting Hill. It has since won many awards, including several from the well-regarded Soil Association. 

“We think long and hard about what we sell; how it has been grown and how far it has travelled. Taking care of these things helps us all to take better care of ourselves, our families and our environment,” says founder Renee Elliott.

Of Planet Organic’s 9000 products more than half are food items, and while the company states its aim is to be wholly organic some food items are still not available organically. In these instances, Planet Organic stores stock natural alternatives which meet their strict product standards and phase them out as organic becomes available. Its 100 percent organic categories include fruit and vegetables, British cheese, and bakery items.

Customers can also eat at the in-store bistro, or break their shopping expedition with an organic tea or coffee, or fresh juice or smoothie.

Land of plenty: Cattle producers reap rewards of organic practices. Picture: obebeef.com.au

It can be a challenging game running cattle on the rangelands of Australia. There is the extreme isolation, the heat and dust, the seasons are unreliable and even when the rain comes, there isn’t much of it.

But Scott Fraser, along with a couple of his fellow cattle producers in the channel country of far west Queensland and New South Wales, realised that with organic beef production, all those negatives could be turned into positives.

“One of the problems is isolation, but now it is a positive because we are away from industries and intensive agriculture,” he says. “Then we are in a dry zone which is good because we have no persistent pests like worms or buffalo fly and weeds, And the soil is very arid but once it does get wet, it’s very fertile and grows natural grasses that are very high in nutrients, this is recognised as the best natural fattening country in the world.”

The irregular seasons also mean the land is stocked at very low rates and much of it is naturally in fallow so feed is mulched back into the soil. “You dig into it and up comes an organic production cycle,” Scott says.

Hiqh quality exports

And so Organic Beef Exporters (OBE) was born, a grower-owned company that now supplies high quality grass-fed beef to markets throughout Australia, Asia and the United States with the highest standards of organic certification. Driven by a desire to have greater control over the price he received for his high-quality beef cattle, Scott was one of the founding directors of OBE, set up in 1996. “We knew we had a good product and we were sick of bundling it up into everyone else’s boxes,” he says.

OBE now has 32 shareholders and three directors, a company manager and two marketing managers. CEO Simone Tully says with a combined herd size of between 80,000 and 100,000 cattle, it is a multi-million dollar business, one of the biggest organic beef producers in the world.

Early taste testing exercises convinced them they had a ready market for their organic beef and they quickly got orders from Australian restaurants, but to get the sales volumes they needed to make the company viable they realised that had to find export markets.

They now send four containers a month to the US and two containers a month to various markets in Asia, Simone says this also ensures there is a market for all the various cuts of beef. OBE also sells frozen hamburger patties and pre-cooked meatballs direct to catering firms in Australia and overseas.

From dry to big wet

Scott and his wife Paula run Nooyeah Downs near Thargomindah in the Bulloo Shire. The property has been in Scott’s family for more than 50 years and he was born and bred there. Located 1100km west of Brisbane, the station spreads over 84,000ha (208,000 acres) in the floodplains of the Bulloo River, part of the unique channel country of central Australia.

This vast inland delta is patterned with small creeks and rivers that are dry for most of the year but flood in the summer wet season when tropical rains to the north drain down through central Australia towards Lake Eyre. While rainfall is only 250mm a year (10 inches), around 70 per cent of Scott’s property is regularly flooded.

“The cattle are all right, they are pretty smart and they can swim out or get up on to high ground,” he says. His organic prime lambs can need a little more help to get out of the floodwaters.  “We keep them in the home paddock so we can keep and eye on them, but this year I had to get out on a horse and push them out of the water,” he says.

As the waters recede the once-arid soil is soon covered in lush grasses, perfect of fattening livestock quickly. The cattle are a cross of santa gertrudis, shorthorn and black angus breeds, especially selected for the conditions.

Keeping stock numbers down

Scott has a very low stock rate of one head to 40ha (100acres), partly due to the drought that has ravaged much of Australia for the past seven years, but also due to a deliberate strategy by OBE producers to look after the country by keeping stock numbers down – a long way from the traditional approach to running cattle which is usually “the more, the better”.

“When my father was here, I shudder at the stocking rates now, it was unbelievable,” Scott says.“You know, it’s not cheap to grow grass, but if you don’t overstock it, you can have a consistent through-put and ride the seasons a lot easier, with paddocks to spare.”

Scott says when the season is good, the temptation is there to restock but I just say: “No, just leave it there, it will come in handy, and it does. It is very satisfying, it is very exciting.”

And it is all possible because consumers are prepared to pay a premium for good quality, organic beef, he says. These days when he occasionally sends a conventional load of cattle off, “Oh, gee it hurts,” he laughs. “But we need a premium because you can’t just go and buy more organic cattle to restock when you want to, it is a slow process, breeding up again.”

Taste of the Outback

The fact that the beef comes from such splendidly remote and exotic country, on the edge of the Simpson Desert, is also integral to the attraction of OBE beef, which is billed as “the taste of the Australian Outback” and used to promote far western Queensland.

OBE’s founders were keen to ensure their enterprise benefited their community and future generations as well. It has a social justice policy that outlines a commitment to community and equal opportunity employment. Scott explains that both he and OBE chairman David Brook, had served time as their respective shires’ mayors. “So we came at it from a different point of view,” he says. “There was a commitment made that if we can do local, we will.”

Being a part of OBE also offers shareholders and their family members career opportunities in an agricultural business beyond the paddock. Scott says several are employed in OBE already and his own son and daughter are studying marketing – one at university and the other from a more ‘hands-on perspective’ at home – with a view to getting involved in the family business.

“I used to travel 30km, but these days the kids have to travel 200km to socialise. We have taken a view that if we move them further down the food chain they can still get out and get some social contact,” he says. “It helps to broaden the kids, there are aspects of farming which are really exciting. There is a bit more enthusiasm for farming, rather than just selling the cattle up the road at the saleyards, you can go overseas and see the product in LA or New York and then you can come home and enjoy working on it, you can see where your efforts are going.”