If a successful formula exists for how instore bakeries and delis can capture a greater share of the consumer food dollar, Haggen Northwest Fresh offers as good of an example as any supermarket chain in the country.  

Since 1933, Haggen has relied on premium ingredients in its own scratch baked recipes. From hand frying its popular donuts, to kneading and rolling the dough for its signature Cinnamon Swirl Bread, to pulling together extravagant cake designs, the Haggen bakery team is devoted to handmade excellence. The chain is dedicated to using local, sustainable, non-GMO flour in more than 40 freshly baked items.

Fresh baked scones, for example, are made from scratch using buttermilk, dairy fresh butter, local, sustainable, non-GMO flour, and sweet berries. Haggen pies are baked with local Northwest fruit and local, sustainable, non-GMO flour. For shoppers looking for gluten-free options, the chain offers a broad variety, such as local Flax-4-Life muffins and brownies, gluten-free chocolate chip cookies, and Essential Baking breads.

Now this Pacific Northwest gem is about to test the waters in a much bigger way, with the Dec. 19 announcement that Haggen has entered into an agreement to acquire 146 stores as part of the divestment process brought about by the Federal Trade Commission’s review of the Albertson’s LLC and Safeway merger. Haggen will expand from 18 stores to 164 stores and grow from 2,000 employees to more than 10,000. The deal will catapult Haggen from a Pacific Northwest company with locations in Oregon and Washington to a major regional grocery chain with locations in Washington, Oregon, California, Nevada and Arizona.

“With this pivotal acquisition, we will have the opportunity to introduce many more customers to the Haggen experience. Our Pacific Northwest grocery store chain has been committed to local sourcing, investing in the communities we serve, and providing genuine service and homemade quality since it was founded in 1933,” says John Caple, chairman of the Haggen board of directors and partner at Comvest Partners, a private investment firm that owns the majority of shares of Haggen. “We will continue our focus on sourcing and investing locally even with this exciting expansion.”

Valuable lessons for all

Haggen’s dedication to enhance the shopping experience for its customers offers valuable lessons to the entire industry. Across the country, supermarket bakeries and delis are tweaking product assortment and merchandising strategies to fit two of the most important trends in the business: grab-and-go and health/wellness. According to What’s in Store 2015, the 29th edition of the annual trends publication of the International Dairy-Deli-Bakery Association (IDDBA), people are increasingly cooking at home and looking to improve kitchen skills. The instore deli can bridge the gap by providing consumers with tools or kits to make cooking at home a bit easier, while still allowing for some skill development.

Deli operators have the opportunity to connect with shoppers by sharing more information regarding the health attributes and origins of the foods they offer. High quality and unique flavors are in demand for Millennials being exposed to an evolving food culture. On-trend deli products deliver innovative flavors reflecting regional, ethnic, and restaurant-inspired cuisine. Department menus need to highlight small plate ideas, add-ons, time-saving options, sides and other tie-ins to home meal solutions, and customizable options.

Further, with dieting on the decline, shoppers are seeking a more balanced approach to weight loss and management. Local foods and products that highlight a health and wellness benefit are hot. Sales of local food are worth at least $9 billion annually, with 40% of consumers stating they purchase food weekly and 28% buying local at least once a month, according to A.T. Kearney.

Rising in the Northwest

At Haggen, freshly prepared sandwiches, salads, soups and other meals “are so good you’ll feel like you’re in a restaurant,” according to the chain. All ingredients are free of trans-fat and MSG. The Haggen delicatessen, thus, becomes a go-to destination for healthy, fast dinners, as shoppers can choose from a variety of quick grab-and-go meals, healthful grain salads or freshly made take n’ bake pizzas, sushi or asian cuisine. In the deli case, Haggen displays 12 varieties of meats and five types of cheeses from Di Lusso Deli. 

After the close of the transaction in early 2015, Haggen will convert all of the acquired Albertsons and Safeway stores to the Haggen banner in phases during the first half of 2015. The new company will be led by CEOs John Clougher and Bill Shaner. Clougher, CEO, Pacific Northwest, will have primary responsibility for the northern division of Washington and Oregon. Shaner, CEO, Pacific Southwest, will have primary responsibility for the southern division of California, Nevada and Arizona.

“We warmly welcome these new employees and stores into the Haggen family. The stores are well run and very successful, thanks to the dedicated store teams,” says Clougher. “We want to retain these existing teams while allowing our growing company to build on their past successes. We plan to adopt the best practices of our new stores to offer a superior shopping experience for our valued customers in all of our stores.”

Founded in 1933, Haggen, Inc. is one of the Pacific Northwest's leading grocery chains. The Bellingham, Washington-based company operates stores in Washington and Oregon under the Haggen Northwest Fresh banner. It is the state's sixth-largest private company with the majority of shares owned by Comvest Partners. Haggen is dedicated to providing its guests with the best of the Northwest. For more than 80 years, it has supported regional farms, ranches, fisheries and other businesses, creating a lasting and sustainable local food economy.