The rapid rise of national grocers in America coincides with the heightened consumer demand for food products that are free from partially hydrogenated oils (PHOs), artificial preservatives and other unwanted ingredients.
Grocery chains such as Sprouts Farmers Market and Natural Grocers by Vitamin Cottage are rapidly growing in store counts, joining Whole Foods Market and Trader Joe’s as popular grocers in the specialty food segment.
Educating shoppers about nutrition and offering clean-label bakery products go hand in hand at Natural Grocers by Vitamin Cottage., one of the fastest-growing grocery concepts in America. Less than 20 years ago, the company had 11 stores, all in Colorado. Today, it operates 109 stores in 19 states, and will add 23 new stores in fiscal 2016.
“In our grocery departments,” according to Natural Grocers, “we do not approve for sale grocery products that are known to contain artificial colors, flavors, preservatives or sweeteners or partially hydrogenated or hydrogenated oils. All products undergo a stringent review process to ensure the products we sell meet our strict quality guidelines, which we believe helps us generate long-term relationships with our customers based on transparency and trust.”
Thanks to an extremely receptive customer base that is hungry for nutritional knowledge and fresh products that meet their specific dietary needs, Natural Grocers is poised to head on a phenomenal growth track. “We believe the entire United States market can support over 1,100 Natural Grocers stores,” the company stated in its 2015 annual report.
Enjoying similar growth is Sprouts Farmers Market, which recently announced plans to add 12 locations to its growing roster of “healthy grocery stores” in early 2016. This comes on the heels of an impressive 5.8 percent comparable store sales growth last year.
In fiscal 2015, Sprouts opened 27 new stores: one each in Kansas, New Mexico, Oklahoma and Utah; two each in Arizona, Colorado, Missouri and Tennessee; three each in Alabama and California; four in Georgia and five in Texas. This led to unit growth of 14 percent. Sprouts added locations in three new states, for a total of 217 stores in 13 states as of January 3, 2016.
“As more and more Americans embraced our ‘healthy living for less’ model, Sprouts’ position of strength in the industry continued to grow in 2015,” says Amin Maredia, chief executive officer of Sprouts Farmers Market.
PHO-free, gluten-free and non-GMO are all key words that fully resonate with the growing numbers of nutrition-focused consumers who shop Natural Grocers by Vitamin Cottage. Their shoppers expect a lot, so Natural Grocers delivers in a variety of effective ways.
As part of a March 15 grand opening in Corpus Christi, the chain’s 16th location in Texas, the chain conducted food tastings, cooking demonstrations and nutrition classes with nutrition experts. Special promotions range from a Gluten-Free Tasting Expo and Health Fair on April 2 to a Paleo Fair on April 9. It’s this level of nutritional education that speaks so clearly to the customer base of Natural Grocers and contributes heavily to the chain’s continuing success.
The natural grocer movement in North America is also opening doors to the wholesale bakery business. One notable example can be found in St. Louis, where artisan bread baker Companion recently opened its shiny new headquarters in Maryland Heights, Missouri. The new $5 million facility houses the company’s impressive baking operations, a new cafe, a baking school and private event space. The company first announced it would be moving from its St. Louis headquarters into the new 41,000-square-foot facility in Maryland Heights last year.
This year, Companion is doing what many in the bakery business aspire to do, respond to an ever-changing end market and competitive environment.
“St. Louis is a wonderful city, but it is not growing,” Companion’s founder and owner Josh Allen says of his home city. “For every new restaurant opening, another is closing. We began to work with aggressively growing business with natural foods stores.”
Founded in 1993 with a vision to create wholesome European bread with simple ingredients, Companion has expanded into a multi-dimensional baking company with a growing wholesale grocery business, delivering bread locally, regionally, and as far as Montana and Florida. The company’s sales expected to reach $10 million in 2015. Companion employs a staff of about 75, but by the end of the year, Allen expects the number to grow to nearly 100.
“We are excited about this next chapter for Companion,” says Allen. “We were bursting at the seams where we were. We reached a maturation point where our newest oven was 15 or 16 years old.”
Bakery equipment manufacturer MIWE played an instrumental role in the new facility, says Allen, adding “they are a big part of this expansion.” The new facility features two MIWE cyclothermic deck ovens, four MIWE roll-in e+ rack ovens and a MIWE robotic loading system. “This has forced our hand upstream to be dramatically more efficient,” he says. “That’s been our primary focus here.”
Until recently, Companion had only dabbled in baking and distributing frozen par-baked breads and rolls on a regional basis. “It’s been the national grocer piece that changed that,” Allen says, adding they do business now with a national and regional grocery chain. “That whole industry is fascinating. We have formed some great relationships. Now we are big enough to take care of their needs. We are doing par-baked breads, rolls, sandwich rolls and limited pastries. We are not in the Southwest or Northeast, but we are pretty much everywhere else.”
Other modern equipment includes a MIWE low-velocity proof box (where they maintain 75° F with 70-75 percent humidity environment), two Rheon makeup lines for hoagies, torpedo rolls, baguettes and sandwich breads, and a Koenig line for 1-ounce to 4-ounce rounds. They also invested in a blast freezer running at 30° below zero and a holding freezer (5° F) with 190 pallet position capacity. Using a blast freezer ensures that product stays frozen throughout distribution to grocery customers.
They continue to use spiral mixers, but added a Genesi orbital mixer from San Cassiano, “which allows us to mix to a certain resistance and respond to that,” Allen says. Instead of stopping when a timer goes off, mixers mix until they reach desired dough strength. “It’s been efficient,” Companion’s owner adds.
In addition, Companion installed an indoor silo from Contemar. This system utilizes both standardized and standard-sized components that are specifically designed for bulk flour.
Follow the Business
Companion’s previous facility was not set up to handle frozen par-baked bread production. It housed one freezer with 20-pallet capacity, and they used Thermo King trailers to expand freezer space, as needed.
So two years ago, Allen decided it was time to move. A long and arduous process followed over the next 18 months, as they planned and thought outside the box, analyzing what type of equipment they needed and imagining how the production facility should be laid out.
Taking a page from the most celebrated bread bakery in Paris, France, Allen pondered the possibility of creating a work environment similar to what Poilâne did in 1983 when acclaimed baker Lionel Poilâne built a “manufactory” for bread production in the Paris suburb of Bièvres. Poilâne sought to create an atmosphere that married modern production with traditional techniques. Bakers in the manufactory could see out banks of windows as they worked alone, and in harmony with other bakers. It made them happy.
Allen set out to follow similar guidelines in constructing the new bakehouse with the most modern equipment, an efficient design flow, plenty of open space and even windows to the public. “The new facility will not only be a terrific place for our staff to work but also one that provides us the means to truly respect our craft,” Allen adds. “If we can build a place our companions are proud and excited to come to work at, imagine how much better our breads and our company can be? Bread responds to the temperament of the baker — and happy bakers do make better bread.”
Another purpose is to create a space that incorporates a teaching environment. The new baking school is set to open in late April, and chef Cassy Vires has been hired to head up the school, which features a combination of baking and cooking classes. “Community is a big piece of what we are,” Allen says. Classes will be scheduled five days/nights a week with curriculum for the serious home baker, professionals, children and families.
“Cassy brings an incredible level of professionalism along with an easy, approachable demeanor — exactly the kind of culinary talent we wanted to find to lead our teaching kitchen,” Allen says. “She joins a team that already includes nationally acclaimed chef Josh Galliano, and culinary instructors Price Barrett and George Guthier.”
The 16-person classroom features a small MIWE oven and a Globe mixer, work stations and a blackboard. Allen says he is confident people will want to come here to learn. “And they can leave here with up to a dozen baguettes per person or during the holidays they can leave with dozens of cookies. This will be a real school.”
Looking ahead, Companion’s owner says they built the new facility with growth in mind. “We could easily double our capacity with more equipment in the same space,” Allen says. “Today, fresh is still 70 percent of our business. We hope in a couple of years that percentage will be flipped.”
The Food and Drug Administration now will accept information and comments on the use of the term “natural” in the labeling of human food products until May 10, according to the Dec. 28 issue of the Federal Register. The previous deadline was Feb. 10, but the FDA extended the comment period by 90 days because of public requests.
The FDA initially asked for comments on “natural” labeling in the Nov. 12 issue of the Federal Register. The labeling could include foods that are genetically engineered or contain ingredients produced through the use of genetic engineering.
The FDA currently considers the term “natural” to mean that nothing artificial or synthetic, including all color additives regardless of source, has been included in or added to a food that would not be expected in the food normally. The current policy was not intended to address food production methods, such as the use of pesticides, nor does it address food processing or manufacturing methods, such as thermal technologies, pasteurization or irradiation. The FDA currently does not consider whether the term “natural” should describe any nutritional benefit or other health benefit.
The FDA requests information and public comments on the appropriateness of defining the term “natural,” on how the agency should define “natural” and on how the agency should determine the appropriate use of the term on food labels.