Brea-based health drink and vitamin seller Nature’s Best has quietly built itself into one of Orange County’s larger private companies.
Now the company, which has yearly sales of about $300 million and is looking to consolidate under one roof, may have to scramble to find space in OC.
Nature’s Best currently operates out of three buildings totaling 340,000 square feet across the street from a massive Albertson’s Inc. distribution center in Brea.
The company started operations in 1969 with a 15,000-square-foot warehouse in El Segundo. It now employs close to 400 workers, most in Brea. The company’s lease with Newport Beach-based Alere Property Group LLC ends in 2008.
“Running operations out of three buildings and shuttling products back and forth is not the most efficient way to do business,” said Tim Groff, Nature’s Best chief financial officer. “We need more space.”
Nature’s Best is looking for a single distribution facility with about 500,000 square feet. There are few options for that size of space in OC.
None of the larger local industrial projects under development come close to having the space Nature’s Best is looking for.
At a Seal Beach site under development by Gardena-based developer Overton Moore Properties, the largest industrial building is 184,000 square feet.
“We would love to stay in Orange County, and our first choice is to stay here,” Groff said. “But the reality is that there’s a limited amount of offerings for the space that we need.”
The company is exploring other options, including having a building built, said Jeff Chiate, senior director for the Irvine office of Cushman & Wakefield Inc. The commercial real estate brokerage is working with Nature’s Best to find space.
The size and cost of industrial space here is proving to be a hurdle.
“It’s getting tougher and tougher to find (industrial) space, especially for larger properties,” Chiate said. “In the past two years, there has been increased competition for large warehouses.”
The elimination of close to 3 million square feet of industrial space in and around Anaheim’s Platinum Triangle has tightened an already shrinking market.
Developers plan to turn a big chunk of the industrial space in the Platinum Triangle into homes and condominium towers (see related story, page 48).
Meanwhile, a solid local economy has helped push industrial vacancy down to just 3.5%, with lease rates of 62 cents per square foot, according to CB Richard Ellis Group Inc.’s fourth-quarter report. Vacancy rates are down 3% from a year earlier, while lease rates are up more than 3% during that time.
Some companies needing more space have gone outside the county. The Inland Empire beckons with plenty of land and lower rents.
Huntington Beach-based surfwear maker Quiksilver Inc. this month signed a lease for a 683,000-square-foot warehouse in Mira Loma. The building is set to be used as a distribution hub for shoes.
Nature’s Best operates across the Western U.S. It sells protein and energy powders, drinks and vitamins to natural food retailers such as Whole Foods Market Inc. and Costa Mesa-based Mother’s Market & Kitchen.
The company’s main competitors include publicly traded United Natural Foods Inc. of Connecticut and Tree of Life Dis-tribution Inc., which is owned by a Netherlands-based company.
Sales Gain
Nature’s Best expects to post sales growth of at least 10% during the next few years, according to Groff.
The natural supplement industry has seen sales grow about 7% during the past few years, making it the fastest-gaining segment of the grocery business, according to The Natural Foods Merchandiser, an industry trade publication.
The challenge for Nature’s Best will be to maintain that growth while keeping operations in OC, Groff said.
