Besting the Competition

“Best in class.” 

That is the experience Lunds & Byerlys aims to deliver to its shoppers. From its signature perishables department experiences and its private label offerings to its focus on local and ethically-sourced foods, to its team of expert employees, chain officials are confident that the company is bringing a “best in class” experience to the Twin Cities metropolitan area. 

Its “best in class” strategy is one that Lunds & Byerlys officials utilize to differentiate its stores from an increasingly crowded market of retail competitors. The Minneapolis-St. Paul grocery landscape has experienced significant growth in the past decade. Grocery square footage has grown by 51 percent, and the number of grocery stores has grown by 49 percent, says Phil Lombardo, chief marketing and merchandising officer for the company. 

Hy-Vee, for example, is one competitor hoping to gain steam in the Twin Cities. The company opened its first two Minneapolis-St. Paul area stores in 2014, with two more expected to open this year and plans to open four to five stores per year in the market over the next few years. Cub Foods and Whole Foods are also looking to expand in the Twin Cities. 

While the number of grocers has grown, the population in the Twin Cities has only grown by 11 percent over the last decade, Lombardo says. “Every retailer goes to market differently, and each is going after a share of the consumers’ stomach,” Lombardo adds. “Our ‘best in class’ categories are truly categories that will differentiate us in the market.” 

“Best in class” categories are defined by Lunds & Byerlys officials as categories that have helped the company historically set itself apart from its competitors through strategies like variety, merchandising and consumer education. The categories range from spices, coffees and olive bars to deli salads, artisan breads and artisan cheeses, to name a few.

“As the competition has elevated its offerings in these categories, we are raising the bar again,” Lombardo says. “Our category merchants are challenged to ‘break glass’ and make a true difference in each of these categories to excite and wow customers.”  

The company selects about eight to 10 “best in class” categories each year that will receive a spruce up with the goal being to outdo other retailers in those categories—either from a variety, quality, service or merchandising standpoint, Lombardo adds. 

For example, Lunds & Byerlys recently revamped its “best in class” beef category. One of the company’s executive chefs developed a new product that would further differentiate its meat department from competitors. “The result was a phenomenal, patent-pending beef that really sets us apart in the market,” Lombardo says. “Customer response has been fantastic.” 

Evaluating and updating its “best in class” categories yearly is just one way that Lunds & Byerlys attracts shoppers in its competitive marketplace. Its perishables departments, as well as its commitment to local and ethically sourced foods, are especially appealing to what the company calls its “inspiration seeking” shoppers. 

“Inspiration seeking shoppers can always find something new in our stores,” says Greg Mack, director of marketing. “Aspirational shoppers can always find ‘the best.’ Our reputation in the market for excellence in food, customer service, expertise, and an inviting, comfortable shopping experience also attracts more affluent shoppers. When looking for ‘the best,’ we can consistently meet or exceed their expectations.” 

“We continue to work hard to appeal to all shoppers because of our competitive prices and focus on quality, service and expertise,” Lombardo adds. “While we might not always have the lowest price on any given item, we do believe we’re offering our customers the best value when you factor in total shopping experience.” 

Signature Experiences 

From the bakery and deli to meat and seafood and its USDA-certified organic produce departments, Lunds & Byerlys offers a truly differentiated shopping experience, say company officials.  

The bakery department features more than 20 varieties of artisan bread that are baked fresh daily. The company’s bakery director, in partnership with a leading local baker, developed the recipes exclusively for Lunds & Byerlys. The bakery also features European pastries, decorated cakes made with high-quality ingredients baked by the company’s own bakers, and an extensive gourmet cupcake line—with nearly 30 varieties in many stores—made from its own buttercream. 

In the deli, shoppers will find an extensive selection of specialty cheeses—ranging from 200 to 400 selections depending on the store. “All of our cheese specialists go through an extensive internal training program,” says Lombardo. “Five of our staff are American Cheese Society (ACS) Certified Cheese Professionals. They are part of an elite group of Certified Cheese Professionals throughout the country. We are training 16 more to take this rigorous test.”

A few years ago, the stores’ service case salads were revamped. The company’s team of experts developed 20 new deli salad varieties, and removed a lot of mayo-based salads and replaced them with salads that boast cleaner ingredients like fresh herbs, grains, beans, vegetables and fruits. Additionally, the Lunds & Byerlys salad bar features fresh greens, in-store roasted vegetables, and chef-crafted composed salads like sesame kale and heirloom caprese, for example.  

 An olive bar includes varietals from Greece, Italy, Spain and France. “Our deli staff is very knowledgeable about each varietal and some have made trips to Greece and France to learn more about the olives they are selling,” Lombardo says. 

Lunds & Byerlys’ vendor partners help punch up the prepared offerings in the deli. The company partners with Lettuce Entertain You to provide customers at some stores with Big Bowl Chinese Express and Italian offerings from Tucci Italian. A partnership with Hissho Sushi provides sushi to the stores. “These partnerships complement our wonderful sandwiches and the inspiring food creations customers will find in our hot bars,” says Lombardo. 

Partnerships have also helped Lunds & Byerlys become successful in other perishables departments like the meat and seafood department, in particular. All of its beef comes from Double R Ranch through a partnership with Agri Beef Co., a family-owned company that shares Lunds & Byerlys’ commitment to quality and innovation, Lombardo notes. 

For its seafood offerings, Lunds & Byerlys developed its own Responsibly Sourced program, which helps customers easily identify sustainable seafood offerings through an icon on the packaging. “We’re committed to offering our customers Responsibly Sourced wild-caught and farm-raised seafood,” Lombardo says. “To ensure an item is sustainable, we partner with leading organizations, such as Monterey Bay Aquarium, Global Aquaculture Alliance and Alaska Seafood. Today, more than 80 percent of our seafood is Responsibly Sourced.”  

For more than a decade, the produce department in Lunds & Byerlys stores has been USDA-certified organic. All produce is delivered from the fields to a distribution center in Minneapolis and rigorously inspected by the company’s quality control staff to make sure that it meets the company’s high standards. 

The distribution center has a separate organic cooler and ships organic produce separately from conventional produce. Once the product reaches the store, it is displayed separately so there is no chance of co-mingling. The stores’ produce teams are educated in organic handling practices and are tested yearly.

“We also have deep, long-standing relationships with local growers,” Lombardo adds. “In 2015, we were honored to be named the Minnesota Grown Retailer of the Year by the Minnesota Department of Agriculture for the fourth consecutive year. This award represents our commitment to partnering with and promoting local growers.” 

Examples of Lunds & Byerlys local partnerships expand beyond the perishable departments. Many of the company’s premium private label products are made locally. The company’s premium private label Lunds & Byerlys products fall under Tier 1 of its private label program and features 3,700 SKUs. “These are premium products that are priced at a better value compared to other premium brand products on our shelves,” Lombardo says. 

The Lunds & Byerlys brand has a partnership with local Wayzata Bay Spice Co. to develop its spices—many of which are exclusive only to Lunds & Byerlys. For its conventional Lunds & Byerlys coffee varieties, the company has partnered with Cameron’s Coffee, and Peace Coffee works with the retailer for its Lunds & Byerlys organic coffee. 

“As for our commitment to ethical sourcing, one recent example is the work we did with Cameron’s to source an exclusive microlot of coffee,” Lombardo says. “This included a trip to Costa Rica with a couple of our customers. The team found a family in Costa Rica that was growing a particular bean that met our high quality and ethical standards. We procured the entire microlot to sell exclusively in our stores.” 

Tier 2 of the company’s private label program consists of Full Circle, a 500-SKU line that is a national brand equivalent for natural and organic products, and Our Family, a 300-SKU line that includes national brand equivalent for conventional products. Overall, the penetration rate for its private label products is nearly 20 percent. Lunds & Byerlys branded products have a 16 percent penetration rate, and Full Circle and Our Family have a three percent penetration rate, Lombardo notes. 

FoodE Experience

Behind and beyond the counters in the perishables departments, the Lunds & Byerlys staff is well known for engaging with its shoppers in many ways to create a meaningful shopping experience.

Through the aisles of every Lunds & Byerlys store, shoppers can find a FoodE Expert donning a green chef coat who is there to enhance a customer’s experience. While every employee can help customers find a product that they are looking for, the FoodE can offer insight on the use of a particular item they might recommend, says Mack. 

“FoodEs are really meant to be visible in the store. They are a tremendous resource,” Mack adds. “I’ve seen them help someone plan out appetizers for a party right there on the spot. Often customers come in the store and are almost in a panic for what to do for a group that’s coming over that evening. Our FoodE can provide the resource to solve the problem and help that customer turn it into a wonderful event.” 

“The FoodEs are a real point of differentiation for us,” Lombardo adds. “I’m not aware of anyone in this market that has that layer of staffing in their stores.” 

In addition to inspiring shoppers throughout the aisles, FoodEs are also responsible for spearheading in-store demos, in which they present food and education to customers. Typically, some type of product is on demo nearly every day in stores, with Saturdays being more active. 

For customers that may need assistance beyond the recommendations FoodEs provide, Lunds & Byerlys’ corporate dietitian can help. The dietitian offers individual consultation with customers to help select foods if they have special health concerns, in addition to performing customer tours at the store level. “She’s also a key resource for staff here,” Lombardo adds. “If we have questions, she provides nutritional expertise.”  

Lunds & Byerlys officials also share their expertise beyond the aisles through a robust digital program that includes an online blog, email marketing, an app, text club and social media. “Much of today’s digital program is focused on providing rich content that springs from recipes, entertaining ideas and other tips from our experts,” Mack says. “The blog is home base for our ever-expanding content vault that’s then delivered via many of our other digital channels.”

Into the Digital Era

Blogs, as well as a digital version of the weekly flyer, are included in a weekly e-blast, which has a significant open rate of about 40-plus percent. The company’s app also gives shoppers access to recipes, a calendar of in-store events and a build-your-own shopping list feature. 

The company is also very active on Facebook, Twitter, Instagram and Pinterest. Each store has its own Facebook page that they are able to manage at the store level as another way to connect with their community, Lombardo adds. 

“Our digital programs have helped us grow and reach our fans in whichever way they choose to connect with us,” Mack says.

While store selection can vary slightly based on what customers prefer in each community, Lunds & Byerlys officials emphasize that connecting with customers and offering the “best in class” experiences is what sets them apart from their competitors. 

“All of our stores, regardless of square footage, neighborhood, new or established, connect with their shoppers on a personal, good neighbor level,” Mack says. “We have countless stories about the strong relationship that exists between our people and their customers that fuel our reputation and inspire us to exceed already high expectations.” 

Connecting with the Community 

While top-notch product assortments, signature perishable departments, in-store demos and food experts are enough to make shoppers feel welcome at Lunds & Byerlys stores, the company aims to reach outside of its stores by supporting organizations close to home. 

At the corporate level, Lunds & Byerlys supports organizations that focus on helping at-risk families get back on their feet, improve access to education and provide meals to those in need, says Greg Mack, director of marketing for the Edina, Minn.-based chain. 

In 2008, Lunds & Byerlys launched its Reuse and Reward program. For every reusable bag a customer brings to the stores to bag their groceries, the company donates 5 cents to Second Harvest Heartland. To date, more than $365,000 has been donated. Additionally, more than two million pounds of food is donated to Second Harvest Heartland and the Salvation Army.  

Each individual store also supports organizations that make a difference in their communities, Mack adds. “Specifically, our stores select groups that will truly be impacted by the stores’ monetary donation or time volunteering for the organization,” he says. “We love that the store teams are involved in the selection process, which further connects them with their charitable partner. 

“For us, it is about much more than selling groceries,” Mack says. “It’s also about forming meaningful relationships with our customers and with local organizations that share our goal of making the community even stronger.”