Scowcroft | agribusiness suppliers | Food | Grimmway

What's left over when Whole Foods is done picking over the food is being funneled into an expanding processed-foods market.

"Whole Foods is given the best and the freshest," says Scowcroft. But producers always have a mountain of leftovers that don't make the cut. "So now you start developing secondary markets for mixed fruit juices, or perhaps start feeding your leftovers into a new market for organic processed foods."

But not everyone is happy to see the sector's success turn organic farmers into mainstream agribusinessmen.

Suppliers are quick to note the simmering tension that has long brewed between the small farms and the major agribusiness suppliers like Grimmway and Earthbound. As Whole Foods has swelled and lured other­ supermarkets into the business, buyers demand megasupplies of organic produce that can be delivered to stores as needed, year-round.

"There's tension with those 50-acre farmers who were making it but then lost their lettuce market," says Scowcroft. "Some are very unhappy about it, but others say that this is just the way it is. If you get a bigger market, somebody will do it bigger and better."
"Whole Foods used to have a lot of little suppliers," agrees Huckaby. "As they've grown and gotten bigger, they've had to have people who could provide produce for them year-round."

For its part, Whole Foods says it's up to each farmer as to how big they want to get.

"Oftentimes, a new source relationship will remain at the local or regional level," says Parker. "Sometimes, they don't want to grow beyond where they're at, and we're fine with that."

And plenty of those 50-acre farms that don't want to cater to big buyers like Whole Foods have been developing new, premium niches of their own, says Scowcroft. Some are catering to local communities only. Others have found ready buyers for fresh, high-priced organics among trendy restaurants.