Gourmet marketing - A Miami convenience store chain is in talks to buy one of the area's oldest gourmet businesses

A Miami mass-market convenience store chain is in talks to buy one of the area's oldest fine-food shops, Gardner's Markets.

If clinched, the deal between Farm Stores, which has more than 100 drive-through markets, and Gardner's, which runs four gourmet stores, would be highly unusual. Still, local and national retail experts said it could meet the needs of both firms.

Executives at both firm wouldn't comment beyond confirming that talks were taking place. Maurice Adams, one of Gardner's owners, said there was a letter of intent between the two firms. Carlos Bared, CEO of Farm Stores, cautioned that his company "frequently looks at transactions -- many that don't materialize."

The deal comes at a time of high interest -- and competition -- in the gourmet-food industry, with sales growth at gourmet grocers surpassing that of more traditional markets. National chains, such as Whole Foods and The Fresh Market, are expanding on what for years was the sole turf of a number of local specialty stores. Both Whole Foods and The Fresh Market have targeted South Florida for expansion.

In December, The Fresh Market opened a store in Coconut Grove, where Gardner's already has one. The chain now has six stores in South Florida. Randy Kelley, Fresh Market's vice president of real estate, said his chain's presence here could double over the next two to five years.

Whole Foods has four stores in Miami-Dade and Broward counties. But it has two under construction -- one in downtown and another in Coral Gables, according to a spokeswoman. The Coral Gables store, which is near Gardner's in South Miami, is scheduled to open next spring. Whole Foods has also signed a lease for a third store in Pinecrest.

Another chain, Wild Oats, which owns stores in Pinecrest and South Beach, is "actively looking for new locations," according to a spokeswoman.

'THE FAD'

David Livingston, a supermarket analyst at DJL Research, said natural foods "seems to be where the fad is right now."

Natural food stores in Miami still make up a tiny percentage of the overall grocery market -- Gardner's for example, has less than 1 percent of market share, compared to 56.5 percent for Publix. Wild Oats and Whole Foods both have more market share than Gardner's, and it has been "trending upward a little bit," Livingston said, citing data from industry research firm Trade Dimensions.

Across the United States, specialty food makes up only about 8 percent of the market, according to Lucia Moses, an editor at Supermarket News. But she said it grew at a 15 percent clip last year, while the overall food market in general is growing at "just a couple of percentage points."

Farm Stores comes from different stock. A Florida institution, the convenience store chain has tried to remake its image in the past but ended up in bankruptcy in the early 1990s. In 2001, it launched an initiative to convert its stores into "express markets."

Jeff Lenard, a spokesman for the National Association of Convenience Stores, said convenience stores were also trying to cash in on the upscale trend. Some, for example, are offering gourmet coffee.

EXPERTISE NEEDED

But Lenard said success was not automatic.

"If you're doing food, you have to make sure that you have the expertise," he said. Lenard said if Farm Stores bought an established gourmet chain, it might acquire that expertise and could thus expand its options.

For the moment, neither company is sharing its plans for Gardner's. But the upscale market has had its own run-in with drive-through. In June 2000, Gardner's tried to open a drive-through at its location on Southwest 57th Avenue. But it had to withdraw its application after it decided that the water and sewer requirements were too expensive.

Rumors of a possible deal have been circulating in local food channels. Simone Zarmati Diament, the publisher of SouthFlorida

Gourmet.com, said it was a defensive measure on the part of Gardner's. But Diament said she was concerned the quality of Gardner's products could suffer if Farm Stores purchases it.

"It means that Gardner's will not be seeking out the specialty foods it used to seek in the past," she said. "The heirloom tomatoes, the very special vegetables, the foie gras."