Retailer Of The Year: Sprouts Farmers Market

Own Brand Growth

Jac Ross will tell you there are many reasons why Sprouts Brand products have grown and are resonating with shoppers. But the grocer’s vice president of Sprouts Brands, who earlier this year was named to the Private Label Hall of Fame as a Private Brand Champion, said it all starts with a focus on one thing.

“It’s all driven by what our customers need,” she said. “We hear from our customers all the time and they tell us what they want, what they need, and what they don’t want as well. And we need to react to that.”

With the needs of its customers top of mind, Sprouts uses this information as part of its category review process. This allows the grocer to decide whether a currently available national brand will work to meet a specific need, or if there is an opportunity to develop something new to be sold under the Sprouts Brand, which also provides an opportunity to offer shoppers something unique.

“It’s not as if we’re developing hundreds of products and hope some of them stick,” Ross said. “It’s a very thoughtful process to identify what we are missing in our assortment.”

Focus On Healthy Products

An important aspect of Sprouts’ product development process is the grocer’s focus on organic products. With about half of Sprouts’ own brand products classified as organic, product developers have some added pressure to offer items that meet this standard while ensuring they provide quality, taste, and value to shoppers.

Coffin said this focus on healthy ingredients does make developing new products more challenging at times, but the partnerships Sprouts has with its suppliers and the continual learning process have made bringing new items to market easier over the years.

“Our teams are focused on working with our suppliers to develop products that aren’t just off the shelf,” she said. “There may be some extra steps in the process, but for us, that is what we need to do to develop the types of products our customers expect from us.”

When walking through a Sprouts store, it’s easy to see the impact the Sprouts Brand has in all categories. Today, the grocer’s own brand assortment ranges from everyday staples to items that could be considered innovative specialty products.

As an example of this broad product range, Ross highlighted grocer assortment must-haves such as its private label frozen vegetables and a selection of nondairy frozen desserts made with cashew milk as some of the more interesting items shoppers can find in stores. 

And while the Sprouts Brand can be seen on a disparate selection of products across the store, the commonality among all items is the grocer’s commitment to providing shoppers with healthier products.

“We take pride in curating an assortment that resonates with our target customer, who is looking for better-for-you products,” said Coffin. “Across our stores, with branded and Sprouts branded products, more than 70% of what we sell is attribute-based products, whether they are organic, gluten-free, plant-based, grass-fed, and so on. Giving our customers the products they are looking for has been a differentiator for us.”

With Sprouts having a sharp focus on the needs of its customers, it is supported by what Ross said are “incredible supply partners.” Those vendors work hand-in-hand with the specialty grocer to develop items that meet various attribute-based needs shoppers are seeking to fill while ensuring products are sold at a strong value.

“We work with a lot of different suppliers, and they understand and buy into what our customers are looking for,” Ross said. “They know if we get it right, then we are rewarded by shoppers coming back over and over again to buy their products.”

When developing an assortment that is focused on healthy attributes, maintaining product quality is vital. But Sprouts also works to match that quality with price, to ensure its shoppers are getting a quality product at a good value.

“There’s not one specific answer to how we get the quality and value of each item right. It’s a balance,” she said. “We test our products multiple times before they reach the shelf, and what hits our stores is not just one person’s decision. It’s multiple people. We’ve had products that are a great value but did not hit the quality that we expect or we think our customers expect. Those products are not approved.”

In addition to its focus on providing quality products, Sprouts has also upped its game when it comes to how those items are packaged and presented in-store. Part of the work to raise and maintain awareness of its own brand assortment is the effort over the past two years to redesign product packaging, a trend seen more recently as retailers seek to position their private brands as brands that are equal to or better than national brands.

Ross said Sprouts has devoted time to redesigning and refocusing the look of product packaging. In addition to upping design aesthetics, the grocer has used the real estate on each item to highlight special aspects of it, allowing shoppers to more easily understand what they are buying and how a given product meets their needs. 

She also credits the work of store personnel in their efforts to raise the profile of Sprouts branded products. This includes the Discovery Days promotion in stores that spotlights the grocer’s private label products, allowing consumers to discover items they may not have previously seen when shopping. 

Moving Forward

While Sprouts Farmers Market as a whole, and more narrowly its private brands team, have enjoyed success in recent years, the retailer is not slowing down.

On the private label side, Ross said her team will keep doing what they have been doing, which is continuing to develop differentiated, attribute-led products that are sought after by Sprouts’ shoppers. An example of this is the recently released Real Root by Sprouts assortment of personal care and wellness products.

Unveiled in October, the new line includes more than 130 body care, personal care, and home fragrance products. According to the grocer, all items in the line are made cruelty-free while also being free from parabens, phthalates, artificial fragrances, colors, skin irritants, or potentially harmful ingredients, and many are vegan. 

The brand’s products were designed for customers to create their own restorative, relaxing wellness routines for daily use. Product formulas were developed with natural, effective ingredients such as shea butter, aloe vera, and essential oils that benefit the skin.

“I’m extremely excited about the launch of Real Root,” Ross said. “We’ve had many of those products before launching the new brand, but I think the brand really resonates with our customers. This is a line we’re going to keep building and expanding.”

From a corporate perspective, Sprouts also continues expanding its store count. As of October, the grocer had more than 420 stores in 23 states, and additional grand openings for the fourth quarter are planned. Coffin said Sprouts will open 35 new locations in the fourth quarter, with 16 of those stores celebrating their grand opening over six days. 

“Our new stores are from California to Florida, and we’re looking at filling in existing markets and moving into new markets,” she said. “There is a lot of white space for us, and our goal of 10% store growth annually is something that we’re very serious about.”