A Farmers Market Renaissance

Sprouts Farmers Market attracts customers with a welcoming shopping experience, and is our Retailer of the Year for 2013.

Written By:
Tim Person
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Sprouting up in neighborhoods across eight different states and counting, a relatively young chain of grocery stores trades on a decidedly old-time look and feel. “When you walk into a Sprouts Farmers Market, it’s supposed to feel a little bit different than your everyday grocery store,” says communications manager Lauren Rosenblum. With fresh produce and wholesome grains sold from wooden crates and barrels, and spacious aisles all brightly lit to evoke the feel of a sunny afternoon outdoors, the store makes quite the impression on first-time shoppers. There are a lot of those lately, as the chain expands rapidly and grand openings generate excitement in new markets.

Priding themselves on great prices, fresh produce and old-fashioned customer service, Sprouts also looks to add in a quotient of relaxation and enjoyment for its shoppers. “That’s what is kind of so unique and so great about Sprouts, that we don’t take ourselves too seriously. We like to educate people, but we also like to have fun. We like to build those relationships with our shoppers,” says Janet Little, director of nutrition. The keys to the chain’s success are in the aisles of every store. As the WholeFoods Retailer of the Year for 2013, Sprouts Farmers Market was kind enough to share with us a glimpse into its retail world.

Then and Now
It has been a quick ascent for the chain, headquartered in Phoenix. “Sprouts was founded in 2002. We’ve been alive and well for 11 years. We started with one store in Chandler, AZ, and today we have more than 150 stores across eight states,” says Rosenblum. Those states, beyond Arizona: California, Colorado, Texas, Nevada, Utah, New Mexico and Oklahoma.

 
  From humble beginnings, the family of Henry Boney built up the retail acumen that allowed them to found Sprouts Farmers Market.

The family of Henry Boney founded Sprouts, and though it is just 11 years old, the chain has roots that stretch back decades. Henry Boney’s experience in the food retail business began with a produce stand in San Diego about 70 years ago, according to Rosenblum. A series of successful grocery stores and chains later, Sprouts has become the latest iteration of the Boney family’s retail ventures to thrive. “Today, they still are very much a part of the company, and we’ve just taken all of their knowledge with us,” Rosenblum says.

A complex series of movements brought the family’s retail business saga full-circle. Ready? In 1969, the Boney family opened the second generation of its grocery stores, and in 1997, renamed them to Henry’s Farmers Market. Then, in 1999, the family sold Henry’s to Wild Oats Markets. Fast forward to 2007, when Wild Oats was sold to Whole Foods Market. Later that year, Whole Foods Market sold the Henry’s locations to Smart & Final, Inc., which had recently become owned by Apollo Management, LP.

In the intervening years, Sprouts was expanding and making a name for itself with its farmers market-style grocery store format. In 2011, when Apollo gained a majority interest in Sprouts, Henry’s was brought under the Sprouts banner, uniting the two separate chains the Boney’s had started. Most recently, in 2012, Sprouts welcomed Sunflower Farmers Market and its 39 locations into the fold. And that is how you get from one fruit stand to more than 13,200 employees! The most recent news to come from the world of Sprouts was of the company’s application for an initial public offering on the NASDAQ stock exchange in May.

The simple allure of the Sprouts format might be best conveyed through a narrated tour of a typical store. The average store size, according to Rosenblum, is between 25,000 and 28,000 ft2. The size of a given store varies depending on the market, and on if it was an acquired, preexisting space. “The nice thing is that the size of our stores affords us some flexibility in our site selection,” says Rosenblum, adding that whether the chain goes the new development route or works with an existing site, it never feels it is locked into one store format.

 
President and CEO Doug Sanders welcomes guests at one of the chain’s many recent grand openings.
 
 

But the setup, which the chain’s loyal shoppers clearly find both charming and effective, is largely the same from store to store. The food bins, the barrels and wooden crates and the mountains of fresh produce, Rosenblum says, all serve to create the old-fashioned farmers market feel that Sprouts strives for. The delight, for shoppers, is in the details of course.

50s and 60s music greets shoppers upon entrance, perhaps drawing certain demographics back to some fond memories. And, who doesn’t love oldies music? “We have PA systems that pipe that in,” Rosenblum says. “It makes for a fun shopping experience that’s a little bit lively, kind of a break from the outside world when you walk in.”

Once inside a Sprouts location, shoppers looking for a place to start often make their way to what Rosenblum calls the heart of every store: its farm-fresh produce section. “That’s the brightest, most vibrant part of our store, so I think people naturally navigate that way,” she says, elaborating on the special role produce plays for Sprouts. “I think if you walk into most grocery stores, it’s usually off to the left or the right, but for us, we really make a point to put it right smack in the middle. That’s really our bread and butter, that’s what our company is founded on. We want to make a point of showing we know produce.”

As customers roam around, they will also hit the bulk department, with its trademark barrels full of candies, wholesome grains, nuts, coffee, flour and more. “That’s really a fun place, where people can try new products, experiment with their recipes and grab what they need,” says Rosenblum. In addition to the giant wooden barrels, clear bins arranged in rows allow shoppers to scoop their selections into a bag, finish it off with a twist tie, write a PLU number on it and bring it to the cashier for weighing.

 
  Sprouts focuses on helping beginners find their footing in the supplements section.

When it comes to the thousands of dry and frozen food items available at Sprouts, catering to those with sensitive diets is a focus. Perusing the dairy section in the refrigerated cases at the back of the store, one will find special areas devoted to dairy-free products. “In our grocery aisles in particular, we really pride ourselves on being leaders in gluten free,” Rosenblum says. Blue bib tags indicate which products can be trusted to be gluten free, aiding the shopping experience for all those in need.

The lunch time ritual for many Sprouts devotees revolves around the deli, where made-to-order sandwiches are always a big draw, according to Rosenblum. She adds, “We also have full-service meat and seafood counters with skilled butchers who make homemade burgers and sausages. They grind it right there, and they custom cut meat any way you like it. So, it’s really a neat facet, where we have that human interaction, again, that brings you back to the farmers market.”

The bakery in each store supplies freshly baked breads, pies, cookies and muffins, and in many stores, there is an eclectic mix of beer and wine to be found, along with gourmet cheese sold at attractive prices. Then, there is that other important segment of every health-focused grocery store. “We have thousands of vitamins and supplements, and that’s a section that we really get a lot of loyalty in, too, because we have trained staff members who work in our vitamin department,” says Rosenblum.

The common denominator throughout each Sprouts store is quality and value. Rosenblum says, “From a customer’s perspective, Sprouts is really just their neighborhood grocery store. So, we try to make it bright and open and friendly, and fill it with their everyday staples.”

The Sprouts Experience
More than providing just another grocery store in town, Rosenblum says, “We’re trying to fill a void by offering healthy food at affordable prices. We try to be good neighbors who provide communities with healthy living for less.” “Healthy Living for Less” is a company tag line, and along with the distinctive farmers market style Sprouts is known for, it serves as a starting point for each customer’s relationship with their local store.

 
In every Sprouts store, dairy-free is a focus in the refrigerated section.  

People will, of course, gravitate to new shopping venues and supermarkets simply because of the novelty. So for Sprouts, is there more of an attraction than this taking place? Do shoppers get anything out of the store’s unique look and feel? A defining characteristic of each store is the low-slung shelving throughout, along with spacious aisles that allow plenty of room to maneuver comfortably, according to Little. The long sight lines resulting from the low shelving help make the store easy to navigate, and likely aid customer service by making shoppers more visible.

These things help create a laid back atmosphere, one more reminiscent of a farmers market than the modern chore of grocery shopping. Customers notice these differences, says Rosenblum, stating, “That’s why we have those bins and barrels, those wooden crates, and natural light to really evoke that feeling. And one step beyond that, our décor is supposed to remind customers that grocery shopping can be fun.” To top it all off, there are always friendly team members waiting to help with smiles on their faces, she says.

Equating shopping at Sprouts to a journey, one in which people are encouraged to try new foods, sample new products and learn about nutrition, Rosenblum emphasizes the free-flowing quality of each store. “I do think people relate to it on a deeper level. They come in and take time to explore our stores. That’s what we’re trying to create for them, this playfulness, this fun, this journey.”

The types of people who in engage in that journey run the demographic gamut, Rosenblum says. Sprouts caters to all, young and old, and those who ultimately become repeat shoppers do so because of the customer service they encounter. “I think that’s where we really hang our hat,” she says. There is an equal focus on value, quantity, quality and food safety, each of which Rosenblum explains in turn.

 

  Then and now, from Boney’s to Sprouts. Today, Sprouts stores are designed to mimic the feel of an open-air farmers market.

Value is achieved, simply, through proper pricing. Sprouts’ value proposition, Rosenblum feels, attracts a customer base that is broader than many traditional health or specialty stores. Quantity “means that all of our shoppers can choose from a wide variety of items, no matter where they are in their healthy lifestyle mission,” she says, adding, “Everything is of high quality, and is made by farmers and manufacturers that they can trust, and we try to tell those stories, too.”

As for the food safety element, Rosenblum explains that the chain utilizes three distribution centers for its produce, and a vigilant quality control team is housed within each. These are the people responsible for making sure shipments come in up to Sprouts standards for freshness, safety and quality. Sprouts, she says, makes sure it has its food safety pillars in place, which includes its relationships with farmers and growers, and making sure that its standards are understood and adhered to throughout the supply chain.

Those standards vary by department, but the set rules Sprouts has in place have allowed for the success of its private label line. “When you go shopping at Sprouts, you can find more than 1,000 items that are sold under the Sprouts brand,” says Rosenblum. These offerings are spread evenly throughout the store, and when customers see the colorful Sprouts logo on a product, it means that is has no artificial colors, no artificial flavors and no preservatives. “We go to great lengths to make sure that we are delivering the tastiest food possible. We bring them here into the support office, and work with a number of vendors to make sure that they taste great and they can go up against the national brands,” she says.

The overall product selection at Sprouts helps it gain a following with certain groups of consumers. “For people who need gluten free, soy free, dairy free, whether by choice or necessity, we’re a place where they can go to get those alternatives. That’s why we carry thousands of organic, raw, vegan, non-dairy, eco-friendly and functional foods, so we really accommodate all of those specialized diets,” Rosenblum says.

The chain’s dietary supplement and nutritional focus also helps set it apart. Little, who helps orchestrate Sprouts’  nutritional programs and outreach, says these efforts are designed to help customers more easily understand their options. She describes one such program that directly relates to supplement product offerings, called the Essential Four. “We feel that there are four basic supplements that people should be taking because our diets tend to lack them: multivitamins, superfoods, probiotics and omega-rich oils,” says Little.

 
The produce sold at Sprouts meets with high quality standards throughout the supply chain.  

Another is the recently implemented “Defy It with Your Diet” program. “We have shelf-talkers throughout the store that explain the attributes of certain products,” says Little, explaining that small “Did You Know?” panels highlight products that are high in fiber content, good for weight management, good for blood sugar and so forth. She has personally witnessed customers stopping to read these tags in stores, attesting the notion that customers value such shopping aids.

With over 4,200 choices in its supplement department, Sprouts staff members try to guide customers, especially beginners in the supplement world, toward the right choices for them. Training is an emphasis for workers in this department. “There is a lot of communication and miscommunication out there. Our customers come in and they have a lot of questions. We do spend a lot of time and energy educating our team members,” says Little.

She goes on to say, “We also spend a lot of resources educating our shoppers.” One way this is achieved is through in-store lectures. In Sprouts stores, experts are often brought in to speak to specific nutrition and health issues, such as “Controlling Blood Sugar,” and other educational efforts even cater to the store’s sizable body care department. Such events are held out on the store floor, which involves clearing a space (perhaps some of the beloved barrels get temporarily displaced) and placing enough chairs to accommodate listeners. A sound system is set up, along with a table to disperse handouts and coupons. After the lecture, customers are encouraged to come up and ask questions of these credentialed speakers.

Little says these educational events often draw in people that are in the midst of shopping, and to try to drum up interest for them beforehand, they use tools like Facebook and the company’s Web site.  “There’s so much information out there, you can just cruise the Internet forever and get all these mixed messages. It’s just really nice, that one-on-one. Here’s a real human being, someone they can communicate with,” she says.

 
  You never know what you'll find at your local Sprouts store, where fun and interactivity are the norm.

In the summer, Little plans on hosting a second Cyber Wine Tasting, and she cites this as an example of the interactivity and opportunity to connect that Sprouts offers its customers. She says that when she attends Sprouts functions or even away from work, the number one comment she hears is, “I just love Sprouts.” Rosenblum points to a significantly wider poll on the “Sprouts appeal” taken recently. “In March, we asked about 200,000 Facebook fans to describe Sprouts in one word. Some of the most popular answers were fresh, helpful, healthy, valuable, bountiful, quality, dependable and comfortable,” she says. “That was really great insight for us, to see what they feel when they walk into a Sprouts store.”

The Sprouts Team
The task of getting customers into the stores, and of extending the company’s reach beyond the retail realm and into the communities the stores inhabit, comprises the rest of the Sprouts story. The starting point for the chain’s outlook on marketing involves those qualities the store takes the most pride in. Rosenblum says they strive to master the P’s: people, products and prices. Then, the focus can shift to an area like promotions.

“When we host our promotions, the goal is simply to bring our shoppers extra savings on top of already low prices,” says Rosenblum. The Sprouts team gravitates toward exciting titles for their themed sales, which involve major savings for customers. A “Vitamin and Body Care Extravaganza,” for instance, is an event that sees every vitamin, supplement and body care product in the store go for 25% off. “Frozen Frenzy” lets customers save 20% on all of the frozen items they can fit into a Sprouts paper bag. With “Gluten-Free Jubilee,” customers save on…you get the picture.

 
Customers can scoop to their heart's content in each store's bulk department.  

The company likes to have lots of promotions like these throughout the year, and they are a true team effort. “When it comes to putting those on, everyone’s involved in the process. We have our marketing department that creates all of the logos and collateral, our operations department executes the strategy, our supply chain team ensures that we have enough product in our stores, our IT and schematics department makes sure that the registers and the pricing systems run properly…so there are a lot of moving parts, and it truly is a team effort to bring those promotions to life and make sure that they’re successful,” says Rosenblum.

Getting the word out about these promotions is its own ordeal, one that Sprouts is equipped to handle. Describing Sprouts in 2013 as a multi-platform brand, she points to their weekly ad circular (which goes out in newspapers, the mail and online), and the company’s ever-growing social media presence, as ways to promote the promotions, so to speak. The chain also has a monthly coupon magazine it can use to spread its message to customers, in addition to its customer mailing list, monthly e-mail newsletter and weekly e-mail blast.

In evolving its marketing operations, Sprouts has followed the same technological trends that all other successful, consumer-facing businesses have. “As technology grows, as different platforms are created, we try to figure out the best way we can have a presence on it that makes sense for our consumers, and that’s going to be of value to them,” says Rosenblum.

For example, in addition to the in-store experiences described earlier, Little finds ways to engage with the tech savvy among the Sprouts customer base. She hosts Web-based seminars at least twice a month on health and nutrition issues. In May of this year, for example, she hosted one that featured a doctor talking about the benefits of coconut water, while other editions have been headlined “Fat to Fit” or “Secrets of the Alkaline Diet.” Little says that after people join in and the speaker gives his/her presentation, the guests can type in their questions and she relays them to the speaker for all to hear.

Beyond the store walls and outside the digital realm, Sprouts places a heavy emphasis on plain old community involvement at both the local and corporate levels. “We do believe in giving back to the communities we serve. We support local, non-profit and educational institutions that really share our goal of improved health, nutrition and fitness,” says Rosenblum. In kind donations and planned contributions to worthy and relevant causes are two methods of choice. At the local level, for instance, if a marathon could use some water and bananas for the runners, Sprouts is often happy to provide them.

 
  Janet Little, director of nutrition
 
  Lauren Rosenblum,
communications manager

At the corporate level, she says, “we do all sorts of things to give back to our communities, like our Food Rescue Program.” At the chain’s produce distribution centers, and at stores, the company takes groceries that are still edible but not marketable, and gives them away to charity and area hunger relief agencies. “We have a Scrip fundraising program, and that is a place for 501(c)(3) non-profit organizations to purchase gift cards at a discount, and then sell them for their organization’s profit,” says Rosenblum. There is also the company’s “Grab ‘n Give” program during the holiday season. Individual stores create shopping bags full of groceries that people can purchase at checkout at a 10% discount, which the store then donates to the local community.

The company has been a proud supporter of Autism Speaks in recent years, says Rosenblum, including team member volunteer efforts. There is significant local leeway afforded when it comes to these kinds of outreach. “Our managers and our teams out there know their communities better than anyone else, so we want to make sure that they have the resources they need to best benefit their community,” she says. These examples of involvement are then shared with the rest of the company, so that they can serve to inspire. For example, “One of our stores hosts weekly breakfasts for their elderly community, so they can come in, have assisted shopping and have a hot breakfast,” notes Rosenblum.

Describing the employee culture at Sprouts, Rosenblum says, “To us, being a member of the Sprouts team is more than just a job, so you’re not just an employee or a member of our staff; it’s really something that you live every day, and you’re part of something bigger. You’re part of a team.” Hence the term “team member” for every employee, and the resulting atmosphere of mutual support and advancement.

She cited the statistic that from the beginning of 2013 through the time we chatted in May, nearly 700 team members, or 6% of the total staff, had been promoted into new roles. “That goes to show we take the well-being and advancement of our team members very seriously, and make sure that everyone has the opportunity to excel, achieve and thrive the way that they hope to,” Rosenblum says. Qualities and characteristics that Sprouts encourages its team members to embody include initiative, delegation, empowerment, transparency, respect and passion.

It’s easy to see why Sprouts has an exciting present and bright future. The reasons pour from every facet of the company’s operations and its people. But how has Sprouts dealt with any obstacles it has met during its tremendous growth? “No matter the challenges or hurdles we face, we always just try to stay true to who we are as a brand,” says Rosenblum. Keeping customer satisfaction and team member happiness at the forefront, and a focus on core values, hasn’t steered that brand wrong yet.

Similarly, what tools of the trade can be gleaned from its success? “We capitalize on our strengths and unique attributes. We know our brand is more than just a logo. It helps keep us on a mission and we live it every day,” she says. With a tagline like “Healthy Living for Less,” it’s no surprise that Sprouts is, as Rosenblum says, excited to be a part of the health food retail industry, as it leans into its collective future. WF

Published in WholeFoods Magazine, July 2013