THE NEW WORLD OF INDEPENDENTS 1998-05-04 (2)

LIZA B. ZIMMERMAN

GREENBRAE, Calif. -- The warm brick oven, turning out tasty loaves of sourdough, walnut bread and olive fougasse, is the first thing that greets shoppers when they walk in the door of the Mollie Stones store here.

Dave Bennett, a co-owner of this five-store independent based in Palo Alto, Calif., told SN in an interview that the oven "sets the tone" for a store where fresh, innovative foods that meet the unique culinary needs of the Bay Area abound.

The oven is one of two -- a second one was fired up in March at Mollie Stones' San Bruno location -- that Bennett estimated each turns out hundreds of eagerly gobbled-up loaves every day.

Bennett called bread a big drawing card, adding that in the Bay Area, "locally made breads are so popular." In order to produce more of the types of breads his customers like best, Bennett said, plans were in the works to "bake specifically for each store, through customer surveys."

It's the kind of customized attention that makes Mollie Stone a standout among independents, and indeed anybody's food stores, at least when it comes to fresh foods.

Bennett added that despite the popularity of its in-house breads, Mollie Stones does also carry "competitive brands that were here before the oven was completed." These other brands only account for a small percentage of the selection, however.

"The bakery is selling 85% of what it makes. I would say we have got to sell 200 loaves a day midweek and 300 a day on the weekend at this location," Bennett said. He estimated shrink in this department was about 15%.

Pizzas line the wood grating. Square bricks of focaccia and organic rye can be seen baking through the oven's glass windows, sending out that fresh baked scent that makes shoppers swoon.

Little brown cartons set out front of the oven are filled with a variety of bite-size bread slivers for sampling. A blue ribbon-shaped sign hangs above the oven saying, "Boulangerie Mollie," and smaller signs note that "we use only the purest ingredients: fresh milled organic flour, sea salt and naturally fermented levain starter."

"We start to bake at about 2:30 a.m. and finish at 1 or 2 p.m.," said Bennett.

It is an expensive proposition. "The oven takes a big investment with little return. It'll probably be five years until we start making a profit," he admitted. At the same time, though, the oven serves as one way that Mollie Stones strives to provide for what Bennett called two central needs of his customers: "necessity shopping and passion shopping."

Red and white signs hanging by the register echo this idea. "World One: Necessity Shopping and World Two: Passion Shopping," they say.

"I would guess 50% of shopping is necessity and the rest is passion," Bennett explained. "We want to appeal to the customer for weekly shopping and for gourmet foods."

Thus, Mollie Stones focuses on offering the best in everyday staples, alongside a wide variety of upscale gourmet products from exotic cheeses to ground ostrich.

He said that the operation's "roots are in natural food in the 1980s," and natural food has always been an important component of Mollie Stones' offerings. The first store, which opened in 1985 and was named after the mother of one of Bennett's partners, was a natural-food store.

Organic is an important component of Mollie Stones' produce department assortment and merchandising strategy. The department wraps around the right-hand side of the store. Bennett said the produce department accounts for 13% to 18% of store sales.

"We are about 10% organic and looking to increase it," said Bennett. "We build organic

based on what customers want." The operation even has a suggestion board to better filter in customers' feedback as to how the current produce selection is meeting their needs.

As befitting its natural-food beginnings, the store has an abundant selection of fruits and vegetables. "We don't merchandise produce according to where it's from. We merchandise by variety and try to get as many as we can," he noted. Seven different kinds of peppers line the shelves, along with six types of beans, which range from French to red and white-speckled Cranberry beans.

Bennett stressed the fact that much of the produce is sold in bulk. "Customers can buy perishables in any quantity, like one stalk of celery."

Selling items on an individual basis allows Mollie Stones to market to small households. "Pretty much our whole business is smaller families," Bennett remarked. Indeed, he estimated that 60% of Mollie Stones' shoppers have no children.

"Instead of trying to cut larger, and to sell more volume, we try to merchandise to give them a wider variety and sell lots of small bits."

Merchandising by variety is a sales technique that has also strongly taken root in the dairy department.

"I would say we offer over 300 cheeses from over 20 countries," said Bennett. "We do a lot of sampling and a lot of cheese training comes through suppliers and distributors.

"You can get unusual cheeses like Finnish Lappi loaf presliced," he explained, reiterating the importance of merchandising items in the quantities that suit customers' actual needs. "Slices are easier to deal with. They won't buy it by the chunk."

Bennett said the most popular cheeses are sold presliced, but customers could request to have any of them sliced to order.

Mollie Stones' meat department offers a huge selection of different types and cuts of meat, which include over 50 different cuts of beef and 12 of lamb.

"Full service is how we compete with chains because we can provide the highest quality," said Bennett of the 50-foot meat case.

Long metal pans filled with more than 10 different kinds of ground meat -- from fresh-ground ostrich and turkey to lamb and veal -- line the meat case. There are also more than 10 different kinds of sausage -- from bratwurst to Creole sausage -- to choose from.

Choices in ground beef alone run the gamut from extra lean to a wide grind especially for chili and even include two different grinds of Coleman.

"This store was famous for meat," said Bennett. He attributed much of the Greenbrae's operation's success to "location, and customers who know how to cook."

One of the reasons Bennett wagered that his customer base is so knowledgeable is that "all our stores are in relatively affluent areas."

Beef -- from ground sirloin to porterhouse -- according to Bennett, is by far the top seller and accounts for about 75% of meat sales. Among the beef selections "the biggest seller is ground chuck."

Much of the marinated meat -- there are 15 kinds, which include everything from steak to chateaubriand -- is made with an on-premise tumbler. "We have a signature oil-based marinade with a blend of spices," said Bennett. "The meat stays in approximately 35 minutes and tumbles through the marinade to get the seasoning in."

There's also a 6-foot self-service meat and poultry case that Bennett said accounted for 3% to 4% of meat sales and was "basically for speed."

Mollie Stones also ages its own meat. Beef and legs and racks of lamb are aged for about eight days, and Bennett hastened to add that "if someone asks we could do it for longer."

A full range of kosher meats is currently available at two of Mollie Stones' locations and Bennett is planning to add kosher to the Greenbrae location in April. He said that kosher meat accounts for less than 1% of meat sales.

Bennett said that the kosher meats were prepared by the operation's own butcher and noted that "you can't buy Cryovac fresh kosher meat anywhere in California."

In the seafood department, further down the case, Bennett noted that "60 varieties of seafood are available."

Bright orange salmon fillets and deep tuna steaks line the case next to soft shell crabs. Glass containers of tartar and dill mustard sauce share the top of the case with a wicker basket of lemons.

Dishes like crab cakes and garlic-marinated scallops line the case and Bennett explained that Mollie Stones "has been doing prepared seafood for 11 years."

The seafood department also offers a variety of recipes, some of which are Mollie Stones' own and some generated by suppliers.

"Unusual smoked fish, like tequila and jalapeno smoked salmon are merchandised up-front. These are choices for people who have a little more creativity," Bennett said.

All the Mollie Stones operations also have full-time sushi chefs and some have more than one. "We offer over 30 varieties of prepacked sushi to go as well as raw fish," he explained. "We sell it towards the deli and the salad bar."

Mollie Stones' meat and seafood-based meal solutions are as profitable as they are innovative. Meat and seafood prepared food is about 5% of total meat and seafood sales, according to Bennett.

The 90 feet of meat, poultry and seafood case at the Greenbrae location "is the top seller of all the stores for meat and seafood. It's selling probably 25% more than the other locations." Meat and seafood together account for 15% to 22% of store sales.

Plans to expand the current home-meal replacement program are also in the works. For Mollie Stones' only San Francisco location, "we are planning a new meat and seafood HMR program. We are putting in a full kitchen and a chef."

The program is slated to include a traditional Italian-style deli, a sushi bar and other prepared foods, including "comfort food like meat loaf and pot roast." Upscale offerings likely to be part of the lineup might range from breaded veal to sauteed duck.

The new program will consist of ready-to-heat and ready-to-eat individual servings, priced from $3 to $8, which Bennett is betting will compete well with restaurant offerings. "We will probably have upwards of 20 to 40 HMR items daily, and we'll probably start in June."

Bennett also said Mollie Stones planned to revamp the current HMR program in the San Bruno location.

The program will include both ready to heat and eat.