Whole Health: Local Hero

ROBERT VOSBURGH

If it's Michigan-made, Hiller's Markets likely has it.

The independent retailer has made a name for itself as an unabashed booster of a state that resides in one of the economically hardest-hit regions of the country. Yet walk into any Hiller's store and consumers will find some 10,000 Michigan-made products on any given day.

Hiller’s Markets VP Justin Hiller accepts SN Whole Health’s 2011 Enterprise Award.

“We understand that the Michigan economy is not doing well and that we are responsible for our own salvation, of getting through these times together,” said Justin Hiller, who as the retailer's vice president runs the chain with his father, Jim. “We support them and they support us.”

In an area still burdened with empty storefronts and high unemployment, Hiller's continues its high-flying, fearless campaign to nurture large and small Michigan-based companies. While these efforts support the health of the local economy, they also nourish recession-weary shoppers who have come to rely on Hiller's for a variety of natural, organic and special-needs products that are merchandised in an accessible, high-touch environment.

Hiller's leadership in these ongoing tough times — working from a small base of only seven stores — has earned it praise from the communities it serves and from the industry itself. Hiller's Markets was a natural choice to receive SN Whole Health's 2011 Enterprise Award.

Fresh Is Fun

Justin Hiller easily rattles off a mix of percentages and hard numbers: Up to 95% of the produce sold in Hiller's stores at the height of the growing season comes from Michigan. Thirty percent of the fresh fruits and vegetables sold are organic. The options are primarily limited to staple crops, but they do include organic versions of the conventional, pesticide-laden “Dirty Dozen” items singled out annually by the non-profit Environmental Working Group.

“It's more important for us to buy local than to just have the largest selection without regard to where it comes from,” Hiller said.

Local sourcing has been a challenge this year for the chain's produce manager, Fabrizio Casini. The region's weather produced a number of record-setting extremes that crimped the availability of certain popular items.

“We've broken three records this past year alone: Most snow, most rain in April and the hottest summer on record,” said Hiller.

If local crops aren't available, Hiller's tempts customers with unique varieties imported from elsewhere. For example, besides classic red watermelon, shoppers are surprised to find quartered yellow and orange varieties. For the past several years, Hiller's has had the exclusive on large, extra sweet and crunchy Kiku apples from New Zealand. This fall, the chain is preparing to introduce at least two new hybrid apples as well, the Eve and the Envy.

In the prepared food/deli area — Justin Hiller's area of expertise — the salad and olive bars are complemented with a selection of healthful entrees and sides created by the chain's head chef, Peter Julian. About six months ago, Hiller invited Taste of Ethiopia, a two-restaurant operator in Southfield, Mich., to package and sell some of its more popular vegetarian dishes, such as green lentils, cabbage and carrots and injera, a spongy flatbread. He likes the fact that the products are international and better for you.

“They're healthy, wholesome and have a pure label,” he said.

Elsewhere in the self-service and service cases, customers can get other local-made specialties, such as baked spaghetti and latkes from Polly's, or okra and mac 'n cheese from Lady Louisa's. While not strictly health food, the fact that these products are made in the area is “good for the community,” Hiller said.

Most of the products were introduced within the past year and are just gaining traction with customers, Hiller noted. But that's fine by him.

“With small businesses, we use a different metric to measure success,” he said.

The adjacent meat department is sprawling, an allowance made in all seven stores. The focus on fresh, locally sourced meat and poultry isn't surprising given the retailer's roots.

“Hiller's was started in 1941 by my grandfather, Sid Hiller. It started as a meat store. That was my grandfather's trade,” said the third-generation Justin.

Now, as then, Hiller's does not use boxed beef. A veteran staff, led by meat managers Curt Ducharme and Fred Pawlusiak, cut off of quarters brought in from local processors. All grades of ground and even sausage are made fresh in each store daily. The service case is only occasionally highlighted with signage of an outside vendor.

“Anything that doesn't state the origin or name of the processor is our own, so it's coming from Michigan cattle. It's always been this way,” said Hiller, adding that roughly 80% of the meat department's selection is locally sourced and highlighted with green Michigan tags. “Because we started as a meat market, we've always visited the kill floors and buy from Michigan packing plants whenever possible.”

Fresh local meat and poultry equals healthy in the eyes of Hiller's customers, who've made the meat case one of the mandatory stops during each visit to the store. The retailer just began offering a selection of bison steaks, grounds, sausages and patties from High Plains Bison after a number of customers commented on the nutritional profile of bison.

The chain's progressive, adventurous side is even more apparent in a coffin case that contains an impressive selection of frozen game meat. A local favorite, Cayuga duck, desired for its distinctive flavor, comes from a local supplier and is exclusive to Hiller's.

Then there are the truly exotic proteins.

“We carry alligator meat. If you want frozen python, we have it,” Hiller said, shuffling through the frozen packages on the day of WH's visit. A sign hanging above the display exhorts shoppers to “Eat them before they eat you!”

Meeting Special Needs

In 2004, Jim Hiller, Sid's son and president of the chain, was making the rounds at the chain's Ann Arbor store when he was approached by two representatives of the regional celiac sprue organization. They asked if there was any way Hiller's could find a way to stock more products friendly to those suffering from celiac disease and gluten intolerance.

Six years later, Hiller's boasts a range of more than 5,000 gluten-free items that are merchandised throughout stores, and in specially marked shelf-stable and cold case endcaps created for just for this class of customers.

“We have the largest selection of gluten-free in the Midwest — maybe even the entire country,” said Justin Hiller. “We dedicate huge sections to the gluten-free community.”

Gluten-free has emerged as the most popular special-needs category for the chain, which gives additional store real estate to foods that are allergen-free, salt-free (or low-salt), diabetic-friendly and heart-healthy, among others.

“A big part of listening to customers has been a push on lifestyles,” Hiller continued. “We've focused on different lifestyle needs and offering those people an education, and a selection of products that are available nowhere else.”

Early on, the selection of gluten-free products in particular was fairly narrow, limited primarily to packaged baked goods. However, “the category has grown tenfold over the past couple of years. For the first time there are mainstream players taking an active role in the category,” said Hiller.

“We actively seek out new products and now vendors know to come to us first,” he added. “We belong to celiac support groups, too.”

Hiller himself or Lynn Lederman, the retailer's community services director, make a point of attending meetings each month.

Custom endcaps are the extent of Hiller's segregation strategy. Except where cross-contamination is a danger or is required by law, almost every single natural and organic item in a Hiller's store is integrated. Color-coded shelf tags denote products that meet special needs.

“If you integrate, you give the consumer a much better chance of learning the differences between products,” said Hiller. “Most of the tags are just a logo, without any language. We try to make it as simple as possible, but you understand what it is.”

The in-store selection, overseen by head grocery supervisor Larry Krispin, is bolstered by a revolving venue of outside experts, specialty vendors and a visiting dietitian who are all brought into the aisles for live events and educational tours. The retailer hosts an average of eight to 10 fairs a year. Some might include up to 30 manufacturers. Themes have ranged from Family Fun Days promoting healthful kids' items to more practical topics such as gluten-free holiday cooking.

“We had a busload of people come out to one of our gluten-free events from Ohio,” said Hiller. “Our Plymouth store has the largest gluten-free customer base, so they tend to host the most gluten-free fairs.”

Experts like independent dietitian Gail Posner or physicians from the nearby Beaumont Hospital system use stores as classrooms where they meet with customers interested in a discussion and store tour. These events, publicized through the chain's public affairs office, attract cancer survivors, diabetics and, of course, those suffering from gluten intolerance. To date, there have been more than a dozen such affairs.

“Our health tours focus on a different ailment each month. Whether it's high blood pressure or diabetes or whatever it might be, we would bring in a doctor and an expert into the stores,” said Hiller. “We start with a Q&A and then do a store tour where they can make some recommendations on following a healthy diet.”

Hiller's is likewise a destination for a different set of “special needs” consumers. Due to the Detroit metro area's long history as the center of the U.S. automobile industry, there are large numbers of foreigners who bring with them native recipes and a desire for authentic ingredients. To meet their demands, each store provides a selection of imported international goods. Two categories in particular — British and Japanese — have dedicated buyers. The Japanese section alone can have up to 1,000 items. The chain's Commerce Township store, which WH visited in mid-August, devotes an entire aisle to packaged foods brought in from around the world.

“My Dad and I are in the stores every day. It's the shopping experience that no other store can offer,” Hiller said. “Customers know they're going to have a unique shopping experience here.”

Hiller's vs. Goliath

As a chain of seven stores in a region hit hard by pocketbook issues, Hiller's Markets has had to pursue an aggressive strategy that combines efficiency, price and profile.

Competitors in the region include some of the biggest names in supermarket retailing. Target Corp., Wal-Mart Stores, Kroger Co. and Whole Foods Markets all have a presence here, along with Meijer, Spartan-owned Busch's and several independent health-and-wellness banners such as Plum Market and BetterHealth Market & Vitamins.

Hiller’s expansive meat department goes beyond beef, pork and poultry to include bison and various wild game.

Still, Hiller is not worried.

“All of our competitors tend to follow us,” he said. “Wherever we open up, we'll have multiple competitors in no time.”

Indeed, Hiller's was the first full-service conventional supermarket to open in Commerce Township, back in 1991.

The retailer takes advantage of its relationship with a range of suppliers to help it maintain the diverse product selection. The chain relies primarily on Nash Finch, the broadline distributor based in Minneapolis. It turns to Haddon House, Medford, N.J., for some gourmet/specialty products; Supervalu, also in Minneapolis, for health and beauty aids; and World Pure Foods, Dearborn, Mich., for organics, among others.

One noticeable difference between Hiller's and the larger chains is the absence of any significant private-label products outside of some bakery and prepacked gourmet snacks.

“Our push hasn't gone in the direction of self-promotion,” said Hiller. “We'd rather help other businesses succeed. It's been more important for us to focus on our own local economy.”

Sustainability is a growing concern here. All units have switched over to energy-efficient lighting, and most refrigeration units operate off of retrofitted or updated compressors and condensers. Accomplishing this is no easy task. The chain's portfolio of real estate reflects a broad spectrum of sales space. Two stores, including Commerce, measure 70,000 square feet; three are in 50,000-square-foot range; one fills out 25,000 square feet; and the smallest, in Berkley that opened in 1951, weighs in at 12,000 square feet. The latest technological advances will be on display at the chain's newest store scheduled to open in Lyon Township. The unit will measure 40,000 square feet and include expanded produce and prepared food departments — much of it from local sources.

Local. It's the one word that comes up in every conversation with Hiller. It could be a product, a service or a company — but here, local is always translated from the point of view of the customer.

“Our responsibility is to help them make more educated decisions,” said Hiller. “It's our mission to create a total shopping experience that helps them not only make those decisions, but to be active in participating in those decisions with them.”

Hiller's Markets at a Glance

Headquarters: Southfield, Mich.

Ownership private, Hiller family

2010 sales: $160 million

Year founded: 1941

Number of stores: 7 (an 8th opening in 2012)

Market area: Detroit metro

Number of Employees: 700

Michigan Showcase

Beginning this fall, Hiller's is taking “local” to a whole new level. The retailer will raise the curtain on its Michigan Showcase, a talent show of sorts that allows locals to exercise their entrepreneurial spirit with their homegrown ideas.

“The first showcase will feature a gentleman who was laid off from his job as a modeler for the Ford Motor Co.,” said Justin Hiller, vice president of the seven-store chain. “We're going to set up a kiosk in one of the stores that will allow him to show off some of his woodworking skills and products, using us as a stage and hopefully be able to make some sales.”

The designer caught the attention of Hiller's staff with his designs for pieces of occasional furniture, lawn decor and signage.

An upcoming showcase later in the year will promote a maker of organizational devices — similar to those found in the Container Store chain — that are stackable, collapsible, customizable and otherwise pantry friendly.

“We're not going to reject any ideas,” said Hiller. “That's not our role here. We can have 10,000 customers in a store a week, and we figure we can use our own audience to give these people some exposure. The idea is to rebuild Michigan.” — RV