Sprouts Farmers Market pivoted its business strategy before the pandemic to focus less on promotions and price sensitive shoppers and more on billing itself as a specialty health food store.
With store sizes ranging between 20,000-25,000 square feet, Sprouts is focusing on enhancing its customer service experience through its teams of knowledgeable employees on the floor. “We’re known for the associates in our stores who are very well educated. They’re super passionate about the product, about their lifestyle, so that makes them different in how they interact with our customers,” said Kim Coffin, chief forager at Sprouts Farmers Market.
She added stores are designed with an open layout and focus on healthy alternatives—“it’s basically a farmer’s market concept…with produce at the heart of what we do."
As the retailer builds it inventory around the health-conscious consumer, Coffin explained this risky but effective strategy is part of the company’s 10% growth plan, which includes adding more stores to the existing 400 across the country, namely the Mid-Atlantic and Florida. Coffin said that the company intends “get into more communities to give them healthier options” by opening 30-50 stores a year.
An opportunity for brands to soft launch in-store
In 2022, Sprouts launched 8,400 products and 70% of products sold have been attribute driven, highlighting consumers’ shifting attitudes toward health and wellness food claims—about 84% of consumers consider health and wellness when purchasing fresh foods.
Through its New For You Innovation Centers, Scott Romano, VP foraging, Sprouts, explained, “customers can look for new and innovative products, which are generally a first-to-market-exclusive at Sprouts.”
“Over the last 10 months, the display has become a destination for our customers,” he added.
The program is a 90-day trial period where select brands can receive customer feedback, sales data and general engagement insight. The idea is for brands to push a soft launch and adjust strategic details before committing to larger retailers.
Romano explained the program focuses on “how we can quickly move and figure out if something’s going to work…it’s really become a best-in-class launch situation for us because we see almost right out of the gate if it’s something that resonates or not. We’re able to learn from that and continue to evolve the program so that we can have a higher success rate with brands that we launch.”
Romano added that Sprouts also provides support to the brands through special in-store promotions, social media exposure and its workshop, Sprouts Ready Workshop.
“What do you stand for?”
Brian Albert, beverage CM, Sprouts, emphasized the importance of being prepared and differentiating oneself as a brand. He highlighted key factors for success, including product taste, packaging, launch strategy, financial planning and open-mindedness to feedback.
He explained Sprouts’ scorecard system which evaluates brands based on attributes like clean ingredients, shelf differentiation, suggested retail price, innovation, founder profile and social responsibility. More than 90% of S&P 500 companies now publish ESG reports according to a McKinsey report – although given the rapidly changing environmental landscape and its policies, it’s essential for brands to communicate clear and measurable metrics to both its retailers and consumers.
“What do you stand for, what makes you different? What category do you compete in? Let’s talk about your packaging. Does it pop? Does it tell a story you want to tell?” he emphasized.
