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Wed December 5, 2012
Organic shop weathers the recession storm
On East Main Street in West Plains, Mo., a stone’s throw away from the quaint town square, Meadowbrook Natural Foods sits sandwiched between an insurance agency and a title company. When you step inside, the aroma of spices, herbs, and vitamins hits you.
This store is owned and run by Joe and Adele Voss, who met later in life as random partners at a square dancing lesson.
“We’ve got baking items and snack items and pastas and grains and flours and cereals and nuts and dried fruits and beans and spices and herbs...” says Adele Voss.
I have to wait a while before Adele can break away for a moment to speak to me. I ask her if her store is always this busy.
“Some days it’ll stay like this all day. Some days, we have some quiet time we can [use to] get some other things done, like placing orders to restock the shelves,” she said.
She says other than that first summer of the recession—the summer of 2009, when they saw a dip in sales—the store has maintained steady profits throughout the economic downturn.
I ask her why she thinks her business hasn’t felt the recession more than it has.
“No matter the economy, they’re still going to want their natural supplements and their natural health foods,” she said.
“Because people need to eat, and people who want natural stuff, want natural stuff. It’s that simple,” says Joe Voss, co-owner of the store.
“And my mother used to say, ‘During the Great Depression, if you had a job, there was no depression,'” he said.
Joe’s a retired chemistry and biology teacher—he taught in O-Fallon, Missouri, for 27 years before buying this store.
“When you know about physiology, you know about amino acids and all that stuff. So, it just kind of fell together,” he said.
It’s true that specialty food stores, like organic food stores, have been pegged as one of the few
“Recession-proof” industries. But for the most part, nationwide, that’s because the people buying these products had above-average incomes and weren’t hurting that much from the recession—and incomes in the rural Ozarks tend to be way below average.
It was time to consult the experts to explain this phenomenon. Ardeshir Dalal is the chair of the economics department at Missouri State University.
He says two things to consider on pinpointing recession-proof industries are: 1. Whether income is a factor, and 2. The extent to which people view those goods as being substitutable.
So, a quick economics lesson: what we’re looking at here is what economists call goods for which there’s a relatively “inelastic” demand. “That is where people want to buy the commodity and will probably continue to buy those commodities…Even if prices were to go up, they wouldn’t reduce their consumption by too much,” he said.
Dalal says even though some people are very passionate about organic foods, money usually takes precedence over passion when it comes to substituting products like food. So, in a lower income area like south-central Missouri, he’s betting that the alternative medicines and supplements have significantly helped pull this store through.
“If the store were to sell only organic products, I would be quite surprised at the fact that it is so recession-proof, because there are so many substitutes for organic products. But if they do a substantial business in alternative medicines—things like herbal medicines, homeopathic medicines—then the demand for those tends to be very inelastic,” Dalal said.
He speculates that people may feel strongly enough about taking those medicines and supplements to keep them coming back, since it’s more of an acute health issue. Adele Doss, the co-owner, confirms that many people come here for medicine instead of going to see a doctor. Meadowbrook does offer a wide variety of herbal and natural health products.
Another curve ball in this case, though, is a clientele with very specific needs. Again, store owner Joe Voss.
“We have a large number of Seventh-Day Adventists who live in this area, and they tend to go toward the vegetarian approach. And that really works well with a natural food store,” he said.
Seventh-Day Adventists generally follow the Old Testament’s dietary guidelines: they don’t eat pork or any food considered “unclean.” Also, many members of the Sabbath-keeping Russian community just north of West Plains, which is about 500 people strong, frequent this store often.
Sue Baird, chair of the not-for-profit Missouri Organic Association, told KSMU she isn’t surprised to hear of a natural foods store doing so well in the recession, even though it’s in an economically depressed part of the country.
Her take on it is that people in this part of the Ozarks have been leaders for a long time in preserving the water supply and forestry, and it’s not a far jump from being concerned about those issues to being concerned about the purity of your food supply.
This story originally aired as part of Business Beat, a weekly program about business and economics in mid-Missouri.