distributors, of whom nearly half were out of business eight years later. Distributors were very financially unhealthy and this trend continued for several decades when weak distributors were long gone and new, mega distributors controlled vast portions of the health food trade. In 1961, Fearn’s leading distributors were: Kahan & Lessin, Akin’s - Tulsa, Health Food Jobbers, Sherman, Balanced Foods, Good Health, Health Food Distributors, Landstrom and NuVita. It was about this time that some of the leading distributors met together privately in an effort to collectively increase their margins from 20% to 25%. Elwood became aware of this and helped to publicize these illegal meetings to industry manufacturers and retailers. The Department of Justice looked into the matter and some manufacturers that sold through distributors tried to break free and sell direct to stores. The most visible and successful company was the William Thompson brand of vitamins, which became the #1 brand while mostly being sold direct to stores. Bill Thompson was a popular industry personality who was well liked and who was able to sell his brand direct to better stores, while using distributors for the smaller stores. HEALTH HOUSE BEGINS By 1962, Elwood decided to open his own health food store for three reasons: First, to learn more about the health food business from the retailer’s point of view. He knew enough about overall health from Fearn and his own family, but he didn’t have a connection with the public to see what they wanted and what would work. A retail store would be a convenient way to study the market, while building on Fearn’s small mail order division. Second, an independent store would be able to keep an eye on distributors, who had just started duplicating Fearn’s products in their own private brands. For several years Elwood kept his ownership of Health House a secret so that he could talk to representatives from distributors and manufacturers with their guard down. And third, Elwood felt that health food retailing would be a good business to make money, while at the same time helping people become healthier. Once again, Elwood, Lou and Bill were equal financial partners in the new retail venture, with Elwood leading the charge for day-to-day business. Elwood lived in Elmhurst, IL and found a retail site in town that looked ideal. He quickly signed a lease for the store, but soon discovered that the building was one inch over the correct property line and a legal tangle ensued. Nine months later, an alternate site was chosen, on Second street in downtown Elmhurst. Elwood operated as an absentee owner, hiring a Cuban refugee as the first manager. Elwood was desperate for anybody to fill this job and the young woman was equally desperate for a job. At that time, very few people were willing to take on this position in a store that didn’t show much promise, and even fewer were qualified with a nutrition education. The young woman was intelligent, personable and a ready worker, but she spoke broken English and knew nothing about health foods or retail management. Some days, sales were as low as $15 for the entire day! The health food movement was still very young, struggling financially and definitely not recognized as a bona fide industry. The term “health food nut” came to life and I recall my father being the subject of many “friendly” jokes. Somehow Health House began selling over $2,000 per month in 1964 and a new customer named Florence Shibley began frequenting the store. She started working on Saturday’s in late 1964 and became manager full time in 1965. Florence became such an 1960-1968 21
