How Erewhon made luxury grocery store shopping a lifestyle9 min read
Fitness trainer Gregg Miele — @greggyhustle to his nearly 20,000 Instagram followers — is a creature of habit: Every day, he hits the gym and he goes to Erewhon.
At the upscale organic grocer, he might buy a cup of overnight oats (“the best”), replenish his stash of vitamins (“their supplement game’s incredible”) or grab a $12.49 bottle of his favorite Ophora water (“they implement an oxygen component to it — when you open it, you start seeing the bubbles”), which he was cradling like a football at the chain’s new Studio City location on a recent morning.
“It’s a Michelin-star standard for a grocery store, you know what I mean?” Miele, 44, said. “I tell all my clients: There’s no cutting corners with your health.”
Grocery shopping is not typically a daily activity, but Miele is not an anomaly among Erewhon’s extremely devoted and spendy customer base.
Vogue called the chain a “health-food holy site,” the New York Times said it’s “the unofficial hangout for the young, beautiful and bored” and Vanity Fair declared: “The hottest pandemic club in Los Angeles is Erewhon.” In this newspaper, a columnist said Erewhon is “the Whole Foods for people who think Whole Foods is a dump.”
It’s a cultural phenomenon (and occasional spectacle) that customers, critics and industry analysts joke could only exist in L.A. Company executives, in the midst of an ambitious expansion plan to bring Erewhon stores outside Los Angeles County for the first time in decades, to as many as 20 locations in all, hope that’s not the case.
Before it became the land of $21 superfood smoothies, mushroom tinctures and organic-raw-vegan-sugar-free-gluten-free key lime pie, Erewhon had dwindled to a single store on Beverly Boulevard, cluttered and wholly unremarkable in a city not exactly hurting for health food grocers.
It was 2011 and the eating-clean lifestyle had yet to go mainstream — even in Los Angeles — and Whole Foods was the default stop for the well-off, wellness-minded set. Erewhon, if you knew how to pronounce it (it’s air-uh-wahn), was just that run-down corner grocery in the shadow of the Grove.
Tony Antoci, then 43 and looking for something to break the monotony of early retirement, bought it anyway with his wife, Josephine. The couple figured they could add another location or two if things went well.
One decade and six more stores later, Erewhon has morphed into something far beyond successful regional grocer. It’s also a cafe, celebrity scene, tourist destination, date-night spot, post-workout hangout, selfie backdrop, seller of $150 branded merch sweatpants and obligatory stop on the way to or from Los Angeles International Airport (“off the plane and straight to the motherland @erewhonmarket,” self-described “micro micro influencer” Anna Nassery captioned a recent Instagram Story).
“I never envisioned seven stores and what it’s turned into. No. No way,” Antoci, Erewhon’s chief executive, said in between sips of a Regenerada smoothie from the Studio City store’s bustling tonic bar. (Among the dozen ingredients: chocho protein powder, reishi, chaga, mesquite, maca, organic bananas, organic almond butter and organic maple syrup.) “I was doing it just to keep busy; I didn’t have a hobby.”
Until now, the privately held company has stuck to a predictable slow-growth formula: smaller-format stores of about 10,000 to 16,000 square feet (the average Whole Foods is about 40,000 square feet) placed in affluent, aspirational communities not too far from its headquarters just south of the Arts District. In addition to the Beverly Boulevard store and the Studio City outpost, which opened last month in the high-end Shops at Sportsmen’s Lodge, there are Erewhons in Silver Lake, Pacific Palisades, Santa Monica, Venice and Calabasas.
A 2019 investment by New York private equity and venture capital firm Stripes, which has also invested in Seamless and Blue Apron, helped ramp up the pace.
A Beverly Hills Erewhon is next, with a scheduled launch date of summer 2022, and then Culver City later in the year; Pasadena is in the works for 2023.
I would never in a million years want to sell to Amazon. Because I mean, Amazon’s Amazon, they’ll always be there. But we’re unique. We can’t be on that road map.
Tony Antoci, Erewhon chief executive
After that: possibly downtown L.A. and Glendale, and then a wider Southern California expansion — Newport Beach, Laguna Beach and Santa Barbara are high on the list, though no leases have been signed — before moving up to the San Francisco Bay Area and, although it’s a long shot, maybe even to Manhattan, something fans have been pushing for in earnest.
“We are looking at New York City; it’s definitely on the plate,” Antoci said as he made his way past a vibrant rainbow-hued display of Erewhon immunity shots and cold-pressed juices. (Printed on the bottles: “Let juice be thy medicine and medicine be thy juice.”) “But we have our hands so full in our own backyard. It’s difficult enough right here — imagine what it would be on another coast.”
Antoci, who ran a food distribution company before Erewhon, said he is trying to avoid what happened to Whole Foods, which has seen its brand identity and cachet suffer after Amazon.com bought the upscale grocery chain four years ago for $13.7 billion.
Austin, Texas-based Whole Foods has since become more deals- and convenience-focused, a place where you can buy 10-for-$11 Greek yogurt cups while dropping off your Amazon return for that air fryer you impulse-bought. And industry data during the pandemic showed a steeper drop in store traffic and smaller overall revenue gains compared with competitors. Whole Foods did not respond to a request for comment.
“My biggest fear is what they’ve done,” Antoci said. “I would never in a million years want to sell to Amazon. Because I mean, Amazon’s Amazon, they’ll always be there. But we’re unique. We can’t be on that road map — that’s what makes us special — or we’re going to be just like them.”
Erewhon declined to release revenue and profit figures, but Antoci said same-store sales rose 15% to 16% last year — in line with overall grocery industry numbers — compared with annual increases in the low double-digits before the pandemic. The Beverly Boulevard store is the top performer, generating five times the revenue it was pulling in when the Antocis bought it.
About 40% of the company’s revenue comes from its private-label items and prepared foods (vegan buffalo cauliflower, salmon and breakfast burritos are among the favorites at the popular hot bar). Its bestselling product is water, followed by coconut water, in contrast to major supermarket chains where soda and milk are commonly the top items.
With its stylish stores and spacious patios, meticulous merchandise curation and emphasis on emerging brands, Erewhon has elevated a mundane errand into an elite event. Much of what customers find on store shelves reflect the tastes of Josephine Antoci, the company’s trendsetting president, who personally samples or tests every prospective product before selecting the ones that make it into the coveted Erewhon fold.
The grocery business is also notoriously difficult. Consumers have many options, and where one chooses to shop is often determined by distance, convenience and price. Grocers face even greater pressure now given supply-chain backlogs and steep inflation on top of historically low margins, said Chris Graff, co-chief investment officer of RMB Capital.
The most successful stores are “a destination — places you can go to for more than just milk and eggs,” he said. “It’s a very high-risk environment to expand in.”
He added a caveat: “Unless you’re a premium brand.”
Like, even when I ask people to go out and drink a beer, it doesn’t feel cool anymore. What feels cool is me going, “Hey man, let’s go on a sunset hike. I’m going to bring this cool tea with me from Erewhon. We’re gonna get high off the good stuff!”
Jason Widener, an Erewhon vice president
Erewhon didn’t start out as a luxury grocer. It was founded in 1966 by Japanese immigrants Michio and Aveline Kushi — pioneers of the natural foods macrobiotic movement — who began selling imported organic goods out of their Boston home.
Norio Kushi, one of the couple’s five children, recalled packaging brown rice, miso, soy sauce and umeboshi in the family’s basement as an 11-year-old before the operation was shut down by the health department. Undeterred, his parents rented a small storefront nearby and named it Erewhon, an anagram of “nowhere.”
Erewhon grew to three stores and a distribution facility on the East Coast, and in 1969, the company opened a location in L.A. a few doors down from its current Beverly Boulevard address. The stores changed owners several times over the years, and eventually the East Coast side of the business was folded into another grocery chain after a period of financial and management struggles.
Today Erewhon, with its paleo bagels and ox bile tablets and 20-somethings in cropped sweatshirts over skintight bike shorts posing in front of the kombucha wall, is not at all what his mother envisioned more than half a century ago, but “she would get a kick out of it,” said Kushi, 66, a truck driver who lives in Asheville, N.C. “I love that it’s still around.”
Besides the publicity from celeb enthusiasts — the Kardashians, Angelina Jolie, Miley Cyrus and Shawn Mendes among them — Erewhon has also profited from widening interest in healthy living and eating in recent years.
“Back then it was hippity dippity,” said Jason Widener, a former actor who was working behind the tonic bar at the Beverly Boulevard store when Antoci bought it. He is now an Erewhon vice president and its No. 1 hype man, appearing in many of the brand’s Instagram videos to tout its latest products, including new smoothie recipes he concocted himself.
“People now realize that it’s cool to be healthy,” he said. “It’s not cool for me to be sitting here smoking a cigarette with you, you know what I mean? Like, even when I ask people to go out and drink a beer, it doesn’t feel cool anymore. What feels cool is me going, ‘Hey man, let’s go on a sunset hike. I’m going to bring this cool tea with me from Erewhon. We’re gonna get high off the good stuff!’”
Large supermarket chains, big-box retailers such as Target and Walmart, and even dollar stores began to catch on to the ethos, making more room on their shelves for products that would appeal to shoppers who suddenly wanted bone broth and gluten-free bread — and intensifying the competition for those dollars, said Scott Mushkin, a longtime grocery researcher and chief executive of R5 Capital.
The pandemic, he said, “turbocharged the healthy-eating trend” by drawing even more attention to the importance of physical and mental wellness.
As demand for natural foods and holistic remedies has increased over the last year and a half, “we’ve benefited,” Antoci said of Erewhon. All of its stores are profitable, he said.
When the first shutdown went into effect, Erewhon put its entire inventory online in a matter of days and began offering local delivery, guaranteed within 90 minutes, and curbside pickup, moves that he said helped it get out in front of rivals at a crucial time.
One challenge for Erewhon, particularly as it moves into new markets, will be persuading people unfamiliar with the brand that it isn’t out of reach. A spokeswoman acknowledged that public perception of the brand has an “air of pretentiousness around it,” and Widener admitted that “to some people, it might not feel approachable.”
“I remember when James Gandolfini was shopping at Erewhon,” he said, “and I could tell he wasn’t comfortable at first.”
Antoci has vowed to keep Erewhon’s ambitions in check as the company widens and speeds up its new-store rollout: “It’s not going to be 100” locations, he said. “We’ve got to keep it true to what it is.”
Diehard fans like fitness trainer Miele, however, would love to see it go much further.
“I love the brand,” he said. “Hit the world with it.”