‘Neighborhood store’ helps regional retailers take advantage of local flavors

While mega-mergers and soaring demand dominate headlines for large grocers, regional retailers are focusing on personalized service—in both traditional and non-traditional ways.

“Our core strength is being the neighborhood store. We try to understand what customers want,” said Jeff Cady, vice president of produce and floral for Northeast Shared Services, a 300-store retailer with Price Chopper and Tops Markets throughout New York, Pennsylvania, Connecticut and Massachusetts.

Cady spoke on a panel during the recent Organic Produce Summit in Monterey, California. Additional panel members included Jim Sullivan, vice president of produce at Yoke's Fresh Market, and Owner and Founder of Nourish & Bloom Market Jilea Hemmings. The education session, How Regional Retailers are Growing Organic Fresh Produce Sales, was moderated by Scot Olson, president of FreshSource.

Being the “neighborhood store” means promoting local farmers, Sullivan said. Yoke’s Fresh Market operates 19 stores throughout the Pacific Northwest, Montana and Idaho.

“[Small, local growers] don’t have the product or capability to go into larger stores. When [large grocers] aren’t carrying the local blueberries, we get to,” Sullivan said. “We find the little niche farmers we can grab hold of and get into our stores.”

Hemmings agreed. “Local is something people are willing to pay for. We’re local first. We’ll take a local product before we take a national product and that has been helpful to our ecosystem.”

Hemmings’ Nourish & Bloom operates one location in the greater Atlanta area with three more planned nearby. The stores operate with smart shelves that measure the weights of items picked off a shelf and placed in the basket, delivering “frictionless grocery stores,” for 24/7 access to fresh food, Hemmings said.

While not a traditional supermarket, Hemmings said her stores maintain a “warm feel” with employees to help customers shop. The smart shelves are equipped with digital labels to help tell the story of a local farmer.

Integration and efficiency, an ongoing debate

However, there was some debate about how those shelves should be merchandised. Hemmings and Cady both choose to integrate organic products into the plan of the overall store. Cady said integration produced an immediate 40% growth for his Mid-Atlantic and New England-based stores.

Cady credited the increase with his customer’s desire to see all of their options in one place.

“We want to put [organic and conventional products] as close as possible so people can make their own decision,” he said. “I’m a believer. I would [integrate organics] everywhere personally.”

For its part, Yoke’s Fresh Market locations exclusively segregate organic products. “I’ve always believed that when an organic customer comes in, they are there to buy organics,” Sullivan said.

Both Cady and Sullivan said their store plans promote time efficiency for their consumers. But Nourish & Bloom’s frictionless shopping experience and fewer product choices makes efficiency less of a factor, Hemmings said integration helps her store promote healthier choices.

“We’ve seen a big uptick in organic being chosen first,” Hemmings said. “The popular brand is out of stock and now they’re going to the organic product.”

As for the future, all three retailers predicted organic produce will continue to demand a larger market share. Sullivan noted organic acreage is increasing, which will someday soon translate to more organic goods in grocery stores.

To increase availability of organic produce, panelists mused on eliminating the conventional version of a commodity in the future.

“Maybe I don’t need conventional HoneyCrisp apples anymore. Maybe I’ll just carry organic HoneyCrisp apples in the future,” Cady said. “Nobody will be offended. They’ll get value.”

Hemmings offered her perspective on the future, encouraging grower-shippers to analyze the weight of their packaging choices as smart shelves become industry standard.

“That’s how stores are evolving,” she said. “Is there a way to do smaller packaging? Because weight is extremely important to us. It’s critical.”