Green with envy

With a commitment to organic produce and natural living, Mrs. Green’s Natural Market is starting to make a big name for itself. A supermarket chain? Not quite, say the top executives at Mrs. Green’s Natural Market. Instead, they view their tony 17-store chain as more of a neighborhood store than any type of supermarket outlet. While selling space at the stores can range up to 16,000 square feet, these officials say that the chain’s merchandising and marketing strategies revolve around offering consumers a shopping experience they cannot get anywhere else, with service that is decidedly intimate and designed to educate. The strategy seems to be working quite well. Mrs. Green’s officials are quite confident that the chain, which has registered double-digit annual sales growth over the last few years, can add as many as 20 stores per year and could hit 200 units within five to seven years. Though only a regional operation right now, Mrs. Green’s is definitely the talk of the town in the area the chain currently operates in: mostly in the upscale and sophisticated northern suburbs of New York, where many shoppers are willing—some say eager—to pay more for specific products they want to feed their families and the service that comes along with it. Mrs. Green’s is doing its part. The chain’s calling card is its commitment to a 100% organic produce section and a unique natural living department, featuring a wide array of cosmetics and health and beauty care items, as well as full-time dieticians in many stores. It also offers a well stocked and varied deli/seafood/salad bar section and a center store operation that offers a wide range of unusual products in the most popular departments. In total, Mrs. Green’s carries about 35,000 items, with an average store stocking about 20,000 different products. For these reasons, Grocery Headquarters has selected Mrs. Green’s Natural Market as its 2014 Natural/Organic Supermarket Chain of the Year. “We have to provide value,” says Curt Avallone, the Irvington, N.Y.-based chain’s CMO. “But we want to be the neighborhood store and be that neighborhood store that is focused on a healthy lifestyle and longevity. These are things that most people want but the items have not been placed in an easy, convenient, easy-to-shop community store at other companies.” Started as a family operation more than two decades ago, the chain was purchased by Catalyst, a Canadian venture capital group, about five years ago. Mrs. Green’s is part of Catalyst’s Natural Market Food Group, along with Planet Organic Market stores and Richtree Natural Market restaurants. Catalyst appears ready to rumble. Most of the chain’s top executives, including Avallone, have been with the company for less than a year. A new CEO, Pat Brown, joined the company in July. Officials say that they hope to accelerate Mrs. Green’s growth over the next three years, with an emphasis on slightly smaller stores. “We’re probably going to go with 12,000 square feet going forward,” Avallone says. “We found that our newest store, in New Canaan, Conn., the smaller footprint there allows us to get in tight with communities and we’re more of a neighborhood store. The bigger box, when we go 20,000 square feet, pushes us into a different competitive set. A lot of the communities that love us, like New Canaan, wouldn’t support us putting a 20,000-square-foot store in but 10,000 to 12,000 feels just right to them. “Part of having that smaller box allows our associates to have a more personal relationship with consumers than what they might get in a larger box like a Whole Foods,” he adds. “We’re very focused on making sure customers live a healthy lifestyle.” Concentrated in Westchester County, N.Y. and southwestern Connecticut (with a few stores in New Jersey, Virginia and Chicago), Avallone says that it is logical for the chain to focus its growth on the East Coast, with New Jersey and other New York and Connecticut locations making the most sense. “But that does not preclude us from moving across the U.S.,” he notes. “Chicago, for example, could be a very good market for us in the future.” For now, the company is hanging its hat on several key food segments, especially the produce section, which can range between 1,600 and 2,000 square feet depending on the size of the overall store. Avallone makes a very big deal of the fact that it is a 100% organic section, noting that other natural/organic stores—and he keeps pointing to one very large one in particular—carry produce that is as much as 50% non-organic. “Being 100% organic allows us to be very honest with our primary consumer, which is a mom with children,” he says. “To say to them very sincerely that when you come to our stores there’s no chance of cross-contamination in the product. It’s 100% organic produce. You can shop our produce department the way you want to, not worrying about selecting between products that do or don’t have pesticides on them.” Living right The natural living department, which can range up to about 1,200 square feet, is a second anchor. Ghassan Hourani, the chain’s senior vice president, health and wellness, says the department is unique in many ways, especially with the on-staff dieticians who can be consulted for free. “It’s good to have the right selection for the right customer, but even better if you have a destination within a store built around the personal experience,” he says. “When you come to shop the natural living or vitamins and supplements, it becomes very personal at that point. In my mind, you’ve crossed that line of natural food consumption to supplementing your diet and healthy lifestyle. Those are the core customers, but the focus is not just offering product, but offering experience. “In that department, specifically, it means utilizing our on-staff registered dietitians in-stores,” he adds. “These registered dietitians are involved in the total store but with a primary focus on the natural living area. We see it as a multi-pronged approach with a focus on making our store better for the consumer.” Hourani says that the natural living department—as well as the entire store—is being developed in a different fashion. “We’re resetting our stores to what we call structure-function,” he says. “They’ll be organized by ailment. For example, there will no longer be a section of vitamin C products. It will become about what do consumers use this product for? This is going on throughout our new stores and we’re going to go back to retrofit the old stores.” Having trained associates is key to this approach, Hourani adds, because consumers do not usually know enough about these products or their ailments, to make informed decisions on their own. “The section is very intimidating to consumers,” he notes. “Consumers walk through and they don’t know what to buy. What do they want? What are they looking for? What hurts or doesn’t hurt? We don’t diagnose. We don’t make a medical assessment or prescribe. Our training is based on scientific evidence that is supported and regularly researched.” Stepping up to the bar The take home food section is pretty impressive too. Avallone says the goal with the deli, seafood and salad bar areas is to cater to both men and women, simply because there are more and more consumers of each gender interested in healthy eating. “We’ve seen a lot of retailers move away from the salad bar but we haven’t because both men and women are coming in and we get a very healthy lunch business in most of our stores,” he says. “We try to offer—not just provide consumers with their grocery staples and health and wellness items—a meal they can take home. That’s kind of been the third pillar or anchor for us. First is produce, second is natural living and third is deli and foodservice that you’re seeing in the new stores.” For example, there is the beverage bar where healthy soft-serve fruit is available for kids, which Avallone says is one of the big hits with customers. “It’s really just some fruit and water in a special machine,” he says. “But it’s those things, if you are a parent, you can bring your child and give them something that’s a real treat but is good for them. The same thing goes for the salad bar or deli salads.” Avallone says the all-organic strategy of the chain reaches the deli counter as well. “Normally when you’re getting potato salad at a supermarket chain, it’s been designed for longevity with chemicals and preservatives, not a 24 to 48 hour turnover,” he says. “We have a central commissary that makes all our salads. It’s one of those things that’s really important to us to differentiate ourselves.” Staying competitive Pricing plays a big role in the company’s strategy too. Avallone says that Mrs. Green’s goal is to be competitive on pricing with all the players in the region, from Whole Foods to ShopRite to Stop & Shop, as well as independents and specialty stores. “We have 3,000 items that are below $3, which we advertise in the stores,” he notes. “We want people to know that you don’t have to spend a lot to live a healthy lifestyle. We’ve found that just advertising, just showing people clearly that we do have a strong commitment to providing them a value is vital. It is not only carrying the right items, negotiating the right prices and checking our competition but also highlighting those items in the store that are lower priced.” The chain uses a variety of shelf tags to identify its best prices. Hourani says the natural living department offers up to a 15% discount every day, adding that the chain also competes with specialty stores like GNC and Vitamin Shoppe for the consumers’ attention. Mrs. Green’s also offers a monthly customer appreciation day, where shoppers get 10% off their total bill one day a month. Avallone says that the company invites local suppliers into the store to demo their products during these events. “It’s a big hit,” he says. “It’s a thank you to the customers who have chosen to pursue a healthy lifestyle with us. It’s also a great way for our local suppliers to meet them. The stores are obviously very busy during all of this and we run all the demos. We’re ready for the party, so to speak, and that gives us a chance to really show people what is available in their local communities.” It is also another way of bonding with the community. Avallone says that working with these local suppliers helps to create more jobs in the area. “A lot of the companies we work with really appreciate what we are doing to help them out,” he notes. “We are helping them create a lot of jobs. It is a win-win for the community and for us, and that is what we are trying to do.” In the end, Mrs. Green’s is trying to create a niche that builds a relationship with consumers. “I think we get better at it literally week by week,” Avallone says. “We’re learning and we’re listening. We have our store manager calls every Tuesday. We talk with every store manager and we hear what’s working for them. For example, bulk is becoming bigger and bigger for us. The store managers are encouraging us to big builder bulk product offerings. And that’s something we didn’t even have in the stores 12 months ago.” Natural and knowledgeable The focus of Mrs. Green’s Natural Market’s Natural Living department is not just about offering products across the vitamins, supplements, health, beauty and body care categories, but offering practical knowledge as well. “It’s good to have the right selection for the right customer, but even better if you have a destination within a store built around the personal experience,” says Ghassan Hourani, the chain’s senior vice president, health and wellness. Any Mrs. Green’s customer can get a nutritional consultation with the in-store registered dietitian free of charge. “That’s a service that usually costs consumers $100 on average, but in our stores it’s just a part of our everyday business model,” says Curt Avallone, CMO. Each Natural Living associate participates in Grow Your Knowledge, a nutrition and dietary supplement educational program created by Jeanne Maglione, Mrs. Green’s director of nutrition and wellness. “In this department, education is the key to sales,” says Maglione. “It’s so important that we do provide a continuing education for our Natural Living team.” The Natural Living section averages 1,200 square feet of every Mrs. Green’s location with 6,500 SKUs. It is positioned right alongside the 100% organic produce department. The unique layout serves as a differentiator for the retailer and encourages customers to ask associates questions about both nutrition and dietary supplements. “Typically the consumers are more educated and knowledgeable about natural health and wellness to begin with. They’re already inclined to buy these types of products,” says Kristine Drier, marketing manager. As a part of the store’s structure function merchandising strategy, each location is incorporating its own information hub which both associates and customers can access to educate themselves on ailments, treatments and products. Third party vendors will soon be included, company officials add. Between the knowledgeable store staff, registered dietitians on hand, educational materials and computer station available, Mrs. Green’s is designed for customers to rely on the store for much more than their weekly groceries. “Ultimately we’re trying to create that personal connection with consumers using both technology and the human resource model in stores that is focused on having the Natural Living manager, the registered dietitian and an educated staff that lives the lifestyle more than anything,” Avallone says. For example the Fairfax, Va. store recently implemented the Healthy Habits e-receipt, which is automatically emailed to a customer when they use their Market Rewards card. Each e-receipt features a direct link to the store’s registered dietitian so customers can interact with them anytime, anywhere. — Molly Zimnoch Owning organic The cornerstone of Mrs. Green’s Natural Market’s retail strategy is its 100% organic produce department. There is no doubt about it. It is the heading of every store circular, with the tagline “All produce 100% organic every day,” just below the company name. “It’s what our grandparents called food,” says Jeanne Maglione, the chain’s director of nutrition and wellness. “This term ‘organic’ is not necessarily new. Organic and natural food existed long before we had marketable names for them.” Mrs. Green’s promotes its produce department as the key differentiator from its competitors and promotes its staff as its customers’ partners in health and wellness. Each store’s registered dietitians contribute to the weekly circular with helpful nutritional info and new usage ideas for customers, called “Green Bites.” One such Green Bite explains how the beta-carotene found in nectarines promotes healthy skin and vision. Another cites the ability of the anthocyanins found in blueberries to help protect against heart disease and cancer. Of course organic produce can cost more. To try and keep cost down, at certain times during the year Mrs. Green’s avoids stocking items when prices have skyrocketed due to crop yields and availability. “I know that can be a disappointment for some consumers when they’re seeking specific items, but generally speaking it’s been a good choice for us,” says Curt Avallone, CMO. “When you commit to stocking 100% organic produce, there are only a handful of suppliers available and demand is high for what’s available,” says Bass Khoury, vice president of marketing and merchandising. “It’s not the path of least resistance. Actually, it’s quite a challenge and one we’ve tackled with strong success.”  — Molly Zimnoch