Meet the Billionaire Who Wants to Crush Whole Foods

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Meet the Billionaire Who Wants to Crush Whole Foods
Duffy-Marie Arnoult/WireImage/Getty ImagesBusiness magnate Ron Burkle.
Who doesn't love a battle royal among titans? Ali vs. Frazier in the Rumble in the Jungle? Hulk Hogan taking "Rowdy" Roddy Piper downtown in the War to Settle the Score? Or Thor using his mighty hammer to smite Radioactive Man, Malekith the Accursed or some other Scandinavian-based super-villain?

But all these conflicts pale in comparison to the war brewing in the world of gluten-free pizza and hibiscus tea –- the organic food industry.

For almost a decade, the de facto leader in this arena has been Whole Foods Market (WFM), a company founded in 1978 by co-CEO John Mackey. His strategy has been to grow the Whole Foods brand by acquiring and "rolling up" smaller players, a task that seemed complete with 2007's purchase of rival Wild Oats.

At the time of the $565 million sale, billionaire Ron Burkle -- famous for friendships with former President Bill Clinton, Sean "P. Diddy" Combs and Leonardo DiCaprio, among others -- was the biggest Wild Oats shareholder. The word on the street is that Burkle is planning to strike back against Whole Foods. Though Whole Foods bought out Wild Oats as a company, it didn't buy the intellectual property or the brand name, which was sold to food distributor Luberski Inc. in 2010. And now after seven years of silence, the Wild Oats brand is being revived with Burkle's help.

The Empire Maker Strikes Back

In 2013, Burkle's investment vehicle, Yucaipa Cos., bought all 150 Fresh & Easy stores in the the U.S. -- a failed experiment by U.K. behemoth Tesco. Wild Oats branded products are being introduced into these Fresh & Easy stores, mostly in the Southwest, and industry experts expect that eventually, the stores themselves will convert over to the Wild Oats name.

Burkle -- currently estimated by Forbes to be worth $3.2 billion -- earlier handled the leveraged buyouts of several supermarket chains, such as Food 4 Less, Ralphs, and Fred Meyer. In 2011, Yucaipa was part of a group that financed Great Atlantic & Pacific Tea Co. to the tune of $490 million, allowing the chain to emerge from Chapter 11 bankruptcy.

%VIRTUAL-article-sponsoredlinks%Without any serious rivals, Whole Foods has had the luxury of unconstrained pricing power. The emergence of a serious new challenger can only drive prices down for consumers. However, Burkle's strategy is far from clear. The mogul may decide to convert the A&P and Pathmark brands, which he has controlling interests in, to "Whole Foods-style" stores.

"That's Ron Burkle's modus operandi, to combine companies into clusters and brand them under one name," says Sam Hamadeh, head of research firm PrivCo. "It's one plus one equals three, and he's done it over and over again in his career."

But no matter what the plan, there seems to be no doubt that Whole Foods is his target. "I think he is serious about it," says Hamadeh. "These are his roots. Supermarkets are how he made his fortune."

Brian Lund's blog offers more on small business, the stock market, investing and the secret to eternal life.

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Meet the Billionaire Who Wants to Crush Whole Foods
This may seem distasteful, as many Americans believe it unsafe to eat marked-down meat close to its sell-by date. The truth is, supermarket chains mark down meat up to 75 percent several days before the sell-by date. If you're prepared to cook (or freeze) the meat as soon as you get it home, there should be no problem. Naturally, look at it and smell it when you get home. If you have any doubt, toss it. And don't buy meat after the sell-by date. I have been buying meat this way for several years with nary a problem. Two good websites can help quell your unease about this: (which also has an iPhone app) and
 Before Thanksgiving is the best time to pick up frozen turkeys. I always buy two, one for Thanksgiving and one for Christmas. Just before St. Patrick's Day is often the best time to buy corned beef, and hams are rarely cheaper than before Easter.
As well you know, after a holiday, stores mark down the Easter candy, the Christmas gifts and the Passover and Hanukkah fixings. These are great opportunities to pick up foodstuffs that usually only grace holiday tables, to enjoy at other times.
Often, stores anticipate greater demand for ethnic foodstuffs than their patrons deliver. Take advantage of your neighbors unadventurous palates by exploring the world of flavors available at the local grocery store. Alternatively, if you are lucky enough to have an ethnic grocery store near you, many unusual foods will be substantially cheaper than at chain supermarkets. I love to go to ethnic grocers; not only do they offer samples of unfamiliar foods, but people are generally willing to explain what to do with these new (to me and you) items. Also, seafood can be considerably cheaper. Last weekend, live Maryland blue crabs were $3.99 a pound -- that's cheap even in Maryland. And you can buy fish heads and other cuts of fish to flavor stocks and chowders.
Most stores with bakeries bake more than customers will buy. One store near me always has a section of not-as-fresh breads and sweet items 50 percent off. At these prices, those are often more cost-effective than homemade.
At the back of the store, groceries hide shelves of dented or unlabeled cans and smushed boxes -- but there's nothing wrong with the contents. A few months ago, I bought a case of pasta at 11 cents a box. In some towns, small stores buy the dented and older inventory of the chains. The main caveat for dented cans is never buy a can that is bulging or that is punctured or pierced; both can signal dangers such as botulism.

Free, of course, is the ultimate savings option. Some rare stores will give you an item for free if it rings up on the register at a different price that that listed on the shelf. Just a few weeks ago, I found frozen stuffed cabbage, originally $18 for $3.99. However, it still rang up at the higher price. The clerk checked, found I was right, and it was taken off my bill for the inconvenience. This doesn't happen often, but it pays to keep a rough idea of what prices items are marked at so you can dispute the register if a price comes up wrong.

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Milk or butter are rarely marked down, but sometimes stores have gourmet cheeses at half-price. With good cheeses often going for more per pound than high-end cuts of beef, this is a fine thing for cheese lovers.
With prices for some produce also running as high per pound as meat, it's good to know that some stores mark down their uglier, older fruits and vegetables. While those may not be pretty enough for a star turn at the table when you're entertaining guests, they're more than good enough for supporting roles in stews, sauces, soups, compotes and cobblers. You can also be bold and ask -- in a nice way -- what happens with this unlovely produce and see what that gets you.
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