Planet Organics headquarters shifts from South San Francisco for North Coast growth

Planet Organics, an online grocery that delivers fresh produce and other natural food to homes across the Bay Area, has moved its headquarters from South San Francisco to Sonoma.

The company, run by longtime Sonoma residents Lorene Reed and Larry Bearg, began operating Monday out of a 9,000-square-foot warehouse on Riverside Drive formerly occupied by Nicholas Turkey Company.

With the new location, Planet Organics expects to expand both its contracts with local growers and its customer base, which stretches from San Jose to Petaluma.

"Now that we're up here, in this mecca of wonderful produce and artisan foods, we plan to expand our presence," Reed said. "We're starting a route immediately in Santa Rosa, where we already have some customers."

Reed and Bearg, then husband and wife, purchased Planet Organics in 1997 when the 2-year-old company had 75 customers and about $100,000 in annual revenues. Today, it has more than 3,500 customers and $5 million in annual revenues.

The company started out by offering a box of fresh produce that arrived with the season, similar to four Sonoma County ranches that sell boxes of fruits and vegetables to subscribers.

Gradually Planet Organics expanded as customers asked for eggs, milk and other natural or organic products. The company now contracts with 162 different growers and food producers. Customers can go the company's Web site -- www.planetorganics.com -- and select a standard box of seasonal produce or customize their order by choosing from among 2,000 items, including produce, dairy, bakery, meat and seafood, condiments, desserts, prepared meals and baby food items.

Despite Planet Organic's size and scope of offerings, owners of direct-to-consumer farms in Sonoma County said they will do just fine.

The farms reach a different customer base, said Deborah Walton, owner of Canvas Ranch outside Petaluma. Farms grow the produce they sell and work directly with their customers. Planet Organics brings together growers and delivers their goods to consumers.

"I'm not worried," Walton said. "Our customers want a relationship with the farmer. We pick in the morning and deliver the produce by 3 p.m. We have events at the farm, where we invite our members and they feel they are part of a community."

Planet Organics has been operating out of a South San Francisco warehouse for the past three years, but needed larger quarters. Reed and Bearg, who are now divorced, were delighted when the best choice for a larger warehouse turned up in their hometown.

"It's great to be here after 10 years," said Bearg, Planet Organics' chief executive officer. "We're ecstatic about moving our main operation to Sonoma, where Lorene, our children and I live. A quality facility like this is hard to come by and will significantly improve the quality of our operations."

The company's fleet of 12 trucks will continue to operate from a hub in Berkeley, but warehousing, production and administrative operations are now housed in Sonoma, Bearg said.

The company offered to move its 30 employees to Sonoma, and all but 10 accepted. Those 10 positions have already been filled, mostly by Sonoma County residents, Reed said. The company expects to add more employees as it develops new delivery routes. Immediate targets are Santa Rosa, Vallejo and Sacramento.

"We expect to be expanding by virtue of expanding our area. We will need more drivers and more warehouse crew," Bearg said.

Planet Organics currently contracts with about 80 growers in northern and central California, primarily small family farms, Bearg said.

"We feel by supporting small family farms we are also supporting safety in agriculture. A small family farm can be much more careful about their practices. In huge operations, one small contaminated batch can contaminate everything else," Bearg said.

Half of the company's growers and food producers are located in Sonoma, Napa and Marin counties, and the company will be reaching out to more, Reed said.

"We want to start focusing on stuff that's available here, like olive oil, special cheeses and breads. Eventually we'll carry some great Sonoma Valley wines," she said.

Local vendors that already supply Planet Organics include Amy's Kitchen, Clover Stornetta Farms, Petaluma Poultry, Cowgirl Creamery and Wolf Coffee.

Planet Organics is riding a surge in demand for online grocery shopping and for organic foods.

Sales of organic food have grown dramatically over the last decade, soaring from $3 billion in 1997 to more than $10 billion in 2003, according to the U.S. Department of Agriculture.

At the same time, more people are going on the Internet to shop for groceries. Forrester Research estimated that 14 million households shopped for groceries online in 2004, and annual sales are projected to reach $1.3 billion by 2008.

"Aside from all of our efforts, we're in the right place at the right time," Bearg said. "People are busier, they want to spend more time with family and less time shopping, and -- with all of these issues about food contamination -- people are more and more thinking about the sources of their food."

You can reach Staff Writer Carol Benfell at 52-5259 or carol.benfell@pressdemocrat.com.