LUND TEAMS WITH HEALTH PROVIDER ON WELLNESS

KAREN RAUGUST

MINNEAPOLIS, Minn. -- Lund Food Holdings, Edina, Minn., has launched one of the most comprehensive and integrated whole-health programs for the grocery industry to date with the announced joint venture with Fairview Health Services, here, a health care provider specializing in running community clinics.

The partnership with Fairview will enhance Lund Food's "Living Wise" program to be rolled out throughout its seven Lunds and 11 Byerly's stores.

Announced at a press conference here this month, the initiative will involve products and services storewide and will lead to the launch of a clinic in a Minneapolis Lunds store next year.

"Hypocrates said, 'Let food be thy medicine and medicine be thy food,"' said Russell T. (Tres) Lund 3rd, president and chief executive officer of Lund Food Holdings, in explaining the partnership. "We know food and Fairview knows medicine."

Living Wise is being introduced in three initial phases. Several of the program's components, including the health clinic, echo Nature's Northwest format, Portland, Ore., which was launched by General Nutrition Cos., and sold to Wild Oats, Boulder, Colo., this year.

The first phase of Living Wise involves segmenting and grouping organic and natural products in food and nonfood departments throughout the store, and identifying them with the Living Wise logo on packaging and signage. Although the Lunds and Byerly's chains maintain separate store labels for other products, Living Wise will be used at both chains, as well as be co-branded with the Fairview name. The Living Wise umbrella will also identify ongoing community outreach activities, ranging from in-store flu immunizations to cooking school classes on diabetic meal preparation.

Lund Food introduced Living Wise last month with the opening of its new Byerly's store in Maple Grove, Minn. The program will be in place at the Lunds Uptown store here by Thanksgiving and in all Lunds and Byerly's outlets within a year.

The second phase of the program, focuses on the launch of a second-floor Living Wise area within Lunds Uptown. The section will include a juice bar operated by vendor/partner Sola Squeeze, Minneapolis; a Lifestyle Center featuring an assortment of whole-health products including earth-friendly items for the home, personal development merchandise and educational materials; and a Pharmacy/Supplement Center highlighting medically endorsed natural medicinals and supplements, as well as books published by Fairview Press.

Final phase plans call for the opening of an alternative care clinic, or Wellness Center, at Lunds Uptown. Located adjacent to the Pharmacy/Supplement Center and administered by physicians from the nearby Fairview Uptown clinic, the complementary care center will offer services including preventive primary care, chiropractic, acupuncture, massage and nutrition education.

The first two phases of the program are expected to be in place at Lunds Uptown by April 2000. Rollout to other stores will depend on results from the Uptown effort and on input from local community groups set up and overseen by Fairview's community health division, Lund executives told SN.

The partnership between Lund Food and Fairview came about for a number of reasons, they said. Both organizations have been increasingly focused on the growing whole-health care market, valued at $21 billion nationally and at $240 million in the Twin Cities area, where most Lunds and Byerly's stores are located. (Two-thirds of Twin Cities residents access alternative health care services, to the tune of $338 per average family annually.) Fairview partnered with the University of Minnesota this fall to open a Mind, Body, Spirit Clinic, while Lunds/Byerly's has seen its organic foods sales, which have increased 37% in each of the last two years, outpace the national growth rate of 20% per annum. (Lunds Uptown will face new competition in the category starting in December, when a Whole Foods store opens less than a mile away.)

"Fairview is one of the medical facility leaders in embracing alternative medicine as well as Western medicine," said Bea James, Lund Food's whole-health manager for Living Wise. "Not only do we have a partnership with a medical facility, but a unique medical facility."

The profile of the whole health customer also matches both Lunds/Byerly's and Fairview's target markets. Sixty-eight percent of whole health consumers are female, 80% are 25 to 65 years old (with a growing Generation Y component) and 53% earn incomes of $35,000 or more. Women, older adults, teens and families are the core demographic targets for both partners.

"There's a business angle as well," said Lund about the partnership with Fairview. "There's an element of supply. Their (Fairview) size and volume in pharmaceuticals and nutritional products creates advantages (in supply)." Under the agreement, Fairview will supply some of Lunds' needs in medical devices.

For Fairview, a key benefit of the partnership is access to potential health-care customers in new venues. "Fairview is in an industry that is changing tremendously. To meet our customers, to meet our patients and their families, we're going to have to move away from our traditional address," said David Page, Fairview Health Services president and chief executive officer. "There can't be any better way of accessing the community than in a place they go to every day."

James told SN that Living Wise represents an entire lifestyle, not just foods and pharmaceuticals. For example, the label will identify green cleaning products, stress-reduction items, yoga tapes, CDs and books, aromatherapy products, juicers and food mills, in addition to bakery, seafood, deli and dairy items. Educational materials are also an important part of the Living Wise equation.

Lund and Page pointed out that the partnership is still evolving. "There's so much yet to unfold," Page said.