Buy organic, shop local.

Those are the ideas behind small Chicago organic food stores, which rely on a local customer base. As consumers cut back spending these days, however, organic food presents a ripe target. It can cost up to 40 percent more than its conventional counterpart, according to those working in the industry.

At best, they report, the growth of organic food sales is slowing, but organic producers and grocers are hopeful that folks committed to the organic lifestyle will continue shopping organic.

“We’ve definitely seen revenues go down this year, especially since last November,” said Steve Parkes, owner of Newleaf Natural Grocery Inc., a small organic store close by the Loyola elevated station on the CTA's Red Line. But Parkes said revenues aren't down as much as he expected. “I figured that people would just bail on it,” Parkes said. “The message actually got through and [buying organic] is more than a trend.”

The Organic Trade Association says organics grew at a rate of 14 percent to 21 percent annually between 1998 and 2006, then reached an estimated $20 billion for 2007; the association's report of 2008 sales is due in two weeks. In comparison, sales in 1990 were only $1 billion.

In fact, according to Mintel International Group Ltd., which monitors certain aspects of the organic industry, the growth rate of organics began to flag in 2007, before the recession started in December of that year. But a Mintel report last October also noted that private label organic sales have “exploded in recent years.”

A Nielsen Co. report last fall stated that in a four-week period ended Oct. 4 sales of bar-coded organics grew at rate of 11.2 percent, compared with sales growth of 27.1 percent in the year-earlier period.

“We have a very, very loyal group of people,” said Cassie Green, owner of Green Grocer Chicago, at 1402 W. Grand Ave. “Loyal to, I think, this lifestyle and also loyal to us because they’re neighborhood people.” Green’s 900-square-foot store, open 14 months, uses mostly local suppliers, too.  Nevertheless, she said, even her loyal customers have been affected by the recession.

“But then the reality is, you know, I had customers who I used to see every week, and then I wouldn’t see them for like four weeks, they’d come in and be like, ‘I was laid off,’” Green said.

“Maybe some people are buying less, but they’re not dropping it altogether,” said Erin Petz, who works at True Nature Foods at 6034 N. Broadway. The store works with Farmer Tom’s Community Supported Agriculture and customers can buy a yearly membership for $60, entitling the member to purchase boxes of selected produce each week. “There’s relationships formed as a community,” Petz said.

“Like any industry, we’re concerned about the recession,” said Matt McLean, vice president of the Organic Trade Association and owner of Uncle Matt’s Organic, a Florida-based organic orange juice company.

While consumers these days may lean towards ingredients for meals rather than packaged food, McLean said “we do have a core organic consumer that is not going to stop purchasing organic.”

How much more organic food costs varies by category. McLean said some organic food, like lettuce and carrots, can be priced similar to its traditional counterpart. But dairy costs almost double and orange juice is about 40 percent more, McLean said.

Jodi Leamon said she used to go to Newleaf Natural Grocery every couple of weeks and spend about $20 but hasn’t been to the store in a couple months. She said the recession has had a direct impact on her shopping.

“I’ll eat more conventional stuff,” Leamon said, who’s a vegetarian and has been shopping organic for 15 years. “I would rather shop here [at Newleaf],” she said.

Whole Foods Market Inc., the Texas-based organic grocer, has brought organic to the masses, with more than 260 stores nationally, including 16 in Illinois, six of them in Chicago. The store was founded in 1980 and annual revenues in 2008 were $6.85 billion. Its huge volume enables Whole Foods to price organic foods very competitively.

At Whole Foods, 3640 N. Halsted St., a half-gallon of Organic Valley orange juice cost $5.99 last week. At Newleaf Natural Grocery, the same product cost $7.59 and at Green Grocer Chicago it cost $6.99.

Whole Foods' 365 Organic private label half gallon orange juice cost $3.39 at the store. At Jewel-Osco, 1224 S. Wabash, a half gallon of Jewel store-brand orange juice cost $2.99, or two for $4.50 with a Jewel preferred card.

Parkes, owner of Newleaf, said prices have gone up considerably for organic food, between 10 percent and 30 percent in the last two to three years. Green said Green Grocer Chicago has had to deal with 10 to 40 cost increases in the past 14 months. The owners say they work hard to keep prices low for customers.

“Really it’s not that much more expensive than if I was getting it [somewhere else],” said Brian Maggi, a customer who shops at Green Grocer Chicago two to three times a week. Maggi said he’s been shopping at the store since it opened and his spending – which he estimates ranges from $5 to $30 per visit – hasn’t gone down. “It’s not just the organic stuff for me, I can get something else more interesting.”

The organic industry has taken note of an increasingly competitive landscape. On Feb. 26, the Organic Institute launched an advertising campaign called “Organic. It’s Worth It.” The national, Web-based campaign comes at a time when businesses are fighting for consumers’ dwindling dollars.

In this competition local stores say they offer a unique, personalized experience. Green Grocer Chicago holds free wine and beer tastings on Tuesday nights and free cooking classes on Saturday mornings. Newleaf Natural Grocery offers weekly produce boxes and home delivery. True Nature Foods is opening a juice bar in the coming weeks.

Kelly Larsen, production coordinator at Windy City Harvest, supplies Green Grocer Chicago and other local businesses with organic produce. “We definitely held our customers all season,” she said. “It never really faltered at all.” Larsen works with Chicago city college students, who help grow produce year-round. She said a lot of sales come from farmers markets, which were successful last year.

One of the stores Larsen supplied, Soy Organic Market located at 1700 W. 19th St., recently closed due to lack of business, Larsen said. But Green Grocer Chicago has been buying more than ever before as Larsen continues to look for new customers.

The current challenge, McLean said, is to grow the category with current customers and expand to cross-over consumers.

“When someone tells me, ‘I really want you guys to stay here,’ my answer has usually been, ‘Be here, shop with me,’” said Green, who knows many of her customers by name. “To a business like ours every customer matters.”

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