Fresh Thyme Farmers Market: ‘Food retail is in a state of flux' 

By Elaine Watson+, 02­May­2016

While some people plan a grocery shopping trip like a military campaign, many others are not thinking much beyond what’s for dinner tonight, says Mike Savage, VP Non Perishables at Fresh Thyme Farmers Market, and retailers are not making things easy for them.

For a start, Savage tells FoodNavigator­USA, many traditional grocery retailers still generate a large chunk of their revenues from low velocity packaged foods or high velocity 'center of store' categories experiencing declining volumes (canned soup, cereal, frozen meals), from stores that are too big and no longer meet shoppers' needs. In other words, the stores are designed to cater to pantry re­stockers, not to busy shoppers trying to eat fresh, but lacking the time, energy or inclination to spend hours preparing meals. He adds: “The industry is in flux right now and I think all of us are trying to find that secret sauce to try and unleash. How do I become a destination store for people that are heading home and looking for delicious food at a good price? “

People are time­starved, they want convenience, grab & go, but they also want to eat healthier, so they are buying fresher foods more often, and you can’t pantry load this stuff.” People are time­starved, they want convenience, grab & go, but they also want to eat healthier The most successful smaller store formats, he argues, have dispensed with the idea that they can be­all­things­to­allpeople, and are instead trying to focus on what they do best. And in the case of Fresh Thyme Farmers Market – a fastgrowing new retail chain originating in the Midwest– that is fresh (40­50% of sales from the 30,000 sq ft stores are from perishable products). “My background is actually in the traditional grocery stores,” he says. “I grew up with Coca­Cola, Frito­Lay, and Kellogg’s, so I’ve been on a learning curve. But the core of our business here is fresh. When you walk in the door you’ll a disproportionate amount of space dedicated to produce, deli, bakery and foodservice, and bulk. “So you’ve got fresh, foodservice and then bulk, which leaves you with not too much room for packaged goods, whereas you walk into a regular store and you see aisle after aisle of them. We’ve kind of flipped that whole model on its head." There is potentially more profit to be made on fresh, he says, "but you’ve got to get the offer right, manage waste, and manage your labor. “I admire the work Whole Foods is doing on its new 365 format, for example [the new format is apparently less labor

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CEO: Chris Sherrell (form e r C E O o f S u n flo w e r F a r m e r s M a r k e t, w hic h m e r g e d wit h S p r o u t s in M a y 2 0 1 2 ) C o n c e p t: ‘We ’ ve c o m b i n e d th e sp i ri t o f a w e e ke n d fa rm e rs m a rke t, a n d th e c o n ve n i e n c e o f a n e i g h b o rh o o d " Th e i n d u s try i s i n fl u x ri g h t n o w a n d I th i n k a l l o f u s a re tryi n g to fi n d th a t s e c re t s a u c e to try a n d u n l e a s h. H o w d o I b e c o m e a d e s ti n a ti o n s to re fo r p e o p l e th a t a re h e a d i n g h o m e a n d l o o ki n g fo r d e l i c i o u s fo o d a t a g o o d p ri c e ? "

O N R A N G I N G: “In th e e a rly d a ys , w e w e re b u i l d i n g th e fu n d a m e n ta l s ; n o w w e ’ re s a yi n g , w e ’ ve g o t th e b a s i c s intensive]. Foodservice really is trial and error, so we have to win out customers o ve r. We ’ re p a ti e n t a n d w e ’ re l e a rn i n g.” We ’ v e b e e n a m a z e d b y h o w m a n y p e o ple c o m e in t o o u r s t o r e s a n d s a y t h a n k g o o d n e s s y o u a r e h e r e “ Yo u th i n k a b o u t th e Mi d w e s t, a n d yo u d o n ’ t th i n k a b o u t n a tu ra l a n d o rg a n i c , ” s a y s S a v a g e. “You think of th e s e a s b i g tre n d s o n th e e a s t a n d w e s t c o a s t a n d yo u h a ve th i s vi e w o f th e Mi d w e s t a s a p l a c e w h e re p e o p l e l i ke m e a t a n d p o ta to e s a n d a g o o d s o l i d d i n n e r. B u t w e ’ ve b e e n a m a z e d b y h o w m a n y p e o p l e c o m e i n to o u r s to re s a n d s a y th a n k g o o d n e s s yo u a re h e re ; w e ’ ve b e e n w a i ti n g fo r yo u.” We o ff e r a n alt e r n a tiv e t o a c o n v e n tio n al g r o c e r y s t o r e B u t w o uld t h e c o n c e p t w o r k a n y w h e r e ?

A s wit h a n y g r o c e r y s t o r e, s a y s S a v a g e ­ w h o w o n’t s h a r e d e t ails o f t h e d e m o g r a p hic s t h e c h ain is t a r g e tin g ­ y o u n e e d t o h a v e a c e r t ain a m o u n t o f p o t e n tial t r a ffic wit hin a giv e n r a diu s a n d t h e rig h t fo o t p rin t, b u t F r e s h T h y m e h a s p r o v e d t h a t if y o u b uild a n a t u r al a n d o r g a nic c h ain in t h e Mid w e s t, t h e p e o ple will c o m e. ( T h riv e M a r k e t, fo r e x a m ple, w hic h s ells n a t u r al a n d o r g a nic b r a n d s o nlin e, s a y s it is c a p t u rin g a n e w c o n s u m e r in Mid dle A m e ric a : “N o t th e Wh o l e Fo o d s s h o p p e r, b u t m i d d l e ­ c l a s s , m i d d l e A m e ri c a … a l o t o f M o m s th a t h a ve h i s to ri c a l ly s h o p p e d a t Kro g e r, Ta rg e t a n d O l d N a vy a n d e ve n Wa l m a rt.”) A c c o r din g t o S a v a g e: “I th i n k w e h a d th e n o ti o n o f w h e re w e th o u g h t w e w o u l d b e s u c c e s s fu l , b u t w h e n yo u o p e n a s to re yo u l e a rn , yo u o p e n a s e c o n d s to re yo u l e a rn m o re.

o w w e h a ve 3 5 s to re s , w e ’ re d e fi n i te ly b e g i n n i n g to g e t a s e n s e o f w h e re w e g e t th e b e s t re s u l ts , b u t w e ’ re s ti l l s u rp ri s e d. We ’ ve g o n e i n to s o m e m a rke ts w h e re w e ’ re n o t re a l ly s u re th e y a re g o i n g to g e t w h o w e a re , b u t th e y d o. “We offer an alternative to a conventional grocery store a n d w e ’ re re a l ly p l e a s e d w i th th e tra ffi c w e ’ re s e e i n g s o fa r.” Wo n d e r f ul We d n e s d a y s S o h o w h a r d h a s it b e e n t o s e c u r e r e al estate that fits the brand’s needs (a 30,000sq ft footprint)? Fresh Thyme has met all of its targets o n t his f r o n t, s a y s S a v a g e, b u t it’s s till a c h alle n g e t o fin d r e al e s t a t e t h a t is n’t eit h e r t o o big o r t o o s m all t o m e e t it s n e e d s: “ S o yo u s e e fo r e x a m p l e th a t S e a rs i s c l o s i n g a l l th e s e l o c a ti o n s [ S e a r s H oldin g s r e c e n tly a n n o u n c e d t h a t 1 0 S e a r s s t o r e s a n d 6 8 K m a r t s t o r e s will clo s e t his s u m m e r ], b u t th a t fo o tp ri n t – 1 0 0 , 0 0 0 s q ft s to re s – i s n o g o o d fo r

5/3/2016 Fresh Thyme Farmers Market outlines its strategy http://www.foodnavigator­usa.com/content/view/print/1249528 3/4 store, with the nutritious offerings of a natural food marketplace to create a NEW and healthy shopping experience.’ covered, where’s my point of differentiation, where’s the exclusivity, where’s the fun? So we’re going to trade shows and talking to companies and we have the license to say I’m going to go and find a brand and make it the next big thing. It’s liberating.” us.”

As for pricing and promotions, says Savage, Fresh Thyme is “competitive day in day out, but we’re becoming known for our exceptional ads. Our ads drop once a week and on Wednesdays our ads overlap, so if you shop on Wednesday, twice as many things are on sale, we call it wonderful Wednesday.” Fresh Thyme also has a competitively priced private label range with 300 SKUs focused on products with the highest household penetration, he says. But he’s not keen on loyalty cards, which can exclude people, he argues. “You don’t have to be a member of a club to get the best prices day in, day out. There are other ways to build more intimate relationships with customers."

Buying structures Buying is centralized, but every store has a local assortment, which right now is defined as within that state, he says, although this may change in future. “The company has a fairly flat structure, so just the other day I was in Lincoln Nebraska at our new store there and a store associate said there is this brand that we don’t carry that everyone else is carrying, and I spoke to the category manager that day and they called the company the next day to find out what it would take to get that brand into distribution.

5/3/2016 Fresh Thyme Farmers Market outlines its strategy http://www.foodnavigator­usa.com/content/view/print/1249528 4/4 “Sowe don’t have regional buyers, but if store managers say we’re missing the boat with this trend and we need to bring this SKU in, we listen." On ranging more generally, he says, Fresh Thyme is at the very start of a journey. “In the early days, we were building the fundamentals; now we’re saying, we’ve got the basics covered, where’s my point of differentiation, where’s the exclusivity, where’s the fun? “So we’re going to trade shows and talking to companies and we have the license to say I’m going to go and find a brand and make it the next big thing. It’s liberating.”