Saturday, June 5, 2010

Henry's Farmers Market Opening its First Northern California Store in August With A Big 'Local' Push

Smart & Final's Henry's Farmers Market chain puts a huge focus on fresh produce in its stores. The produce departments comprise about 25% of total store selling space and are the leading department in terms of category percentage of sales. Henry's offers 350 different varieties of fresh produce throughout the year, and an additional 100 or more in the summer. The stores carry conventional and organic produce, with a key emphasis on "locally-grown.

Northern California Special Report: Sacramento Metro-Market Region

Henry's Farmers Market, which is owned by Southern California-based Smart & Final but is operated independently in most regards, plans to open its first store in the Northern California city of El Grove near Sacramento earlier than it originally expected - in August rather than November 2010 - according to Janet Little, the grocer's nutritionist and spokesperson.

Irvine, (Southern) California-based Henry's originally planned to open the store at 8211 Laguna Boulevard in Elk Grove this fall, most likely in November. But progress in renovating the former Circuit City store has progressed even faster than the grocer hoped, and it's therefore planning to open the store two months from now, in August.

Read our May 8, 2010 story: Sprouts, and Likely Henry's to Beat Fresh & Easy to Northern California Despite it's Big Head Start.

Smart & Final-owned Henry's, which currently has 39 stores operating under the Henry's Farmers Market and Sun Harvest Farmers Market banners in Southern California and Texas, puts a big emphasis on offering locally-grown and produced foods in its stores, particularly in the fresh produce category.

Local grower and vendor fair

The grocery chain plans on maintaining that "locally-grown" merchandising philosophy and focus in Northern California. In fact, next week its holding a Henry's Farmers Market vendor fair on Thursday, June 10, from 9 a.m. to 5 p.m., and on Friday, June 11, from 9 a.m. to 3 p.m. at the Hilton Garden Inn, 9241 Laguna Springs Drive in Elk Grove, according to Little. Executives from Henry's buying and merchandising staff will be at the two-day event to meet with potential vendors. The purpose of the vendor fair is to establish relationships with local and regional farmers and food producers.

"We are looking for tasty products that are healthy, all natural and-or organic and made with the highest quality ingredients," Little says. "We like working with vendors and sellers who can demonstrate the ability to work with a professional retailer, provide a solid means of distribution, hold adequate liability insurance and can guarantee product quality and safety," she notes in explaining the qualifications local growers and food companies need in order to sell their products in the Henry's stores.

Henry's has long-standing relationships with farmers and producers in Southern California and hopes to establish similar ties with growers in the Sacramento region, Little says.

That shouldn't be difficult to do: Northern California and the nearby Central Valley comprise the leading agricultural growing region in the U.S., as well a being a center for natural, organic, specialty and artisan food companies. Therefore there shouldn't be a shortage of potential vendors from the region for the vendor fair next week. In fact, the Henry's Farmers Market stores in Southern California already carry products from numerous Northern California-based companies, large and small, so many are already familiar with the Henry's format and stores.

Additionally, as we mentioned in our May 8 piece, Henry's Farmers Market is establishing a regional produce hub in Northern California, which will allow it to procure locally-grown produce and other foods to distribute to its first store and to the numerous other units it plans to open in the region.

Job fair

Henry's is following up next week's vendor fair with a job fair to collect applications in preparation for hiring employees to staff the Elk Grove store for its August opening. The job fair will also be at the Hilton Garden Inn and will run from 10 a.m. -to- 4 p.m. on June 22 through June 24, according to Little. Henry's says itplans on hiring about 100 employees for the store.

Going local: Fresh produce and more

Henry's local focus will go over very well in the Sacramento market. The region's two leading grocers (by market share), Sacramento-based Raley's (number one) and Modesto-based Save Mart Supermarkets, both put a major focus on selling locally-grown and produced food and grocery items, identifying the items as "local" with shelf signs in-store and promoting their respective local foods positioning in their weekly advertising circulars, and in radio, television and print advertisements.

Raley's operates under three banners in the Sacramento metro market, which El Grove is part of: Raley's and Bel-Air (supermarkets); and Food Source, a discount warehouse format. Save Mart operates its Lucky banner supermarkets in the Sacramento region, along with it's FoodMaxx discount warehouse stores.

Both chains are privately-held. Save Mart has 250 stores under the Save Mart, Lucky and FoodMaxx banners, with annual sales of about $6 billion. In addition to the three banners mentioned above, Raley's also operates supermarkets in the San Francisco Bay Area and southern coastal region of Northern California under the Nob Hill Foods name. Raley's has 139 stores and annual sales of about $3.4 billion.

The farmers market format

Similar to Sprouts Farmers Market, which opened its first Northern California store in the Bay Area city of Sunnyvale on June 2, Henry's puts a major focus on fresh produce in its stores, devoting about 25% of the store's selling area to the category. And like Sprouts, produce contributes a significant percentage of overall store sales for Henry's Farmers Market.

Further similar to Sprouts Farmers Market, Henry's format focuses on natural and organic products, but also sells a limited assortment of conventional food and grocery brands and items.

Henry's Farmers Market stores also have bulk foods departments, like Sprouts, and the fresh meat departments, like at Sprouts Farmers Market stores, in many cases have both full-service and self-service merchandising cases. Both Sprouts and Henry's grind their hamburger fresh in the stores rather than buying it factory pre-packaged and having it shipped to the stores, for example, stressing the "fresh" focus.

Lastly, like Sprouts Farmers Market, Henry's sells vitamins and nutritional supplements, non-foods items and fresh, prepared foods.

It's no accident the two chains have similar formats since Henry's was founded by the Boney family, members of which founded Sprouts Farmers Market in 2002. The family sold Henry's Farmers Market to Wild Oats many years ago. Wild Oats operated the chain for over a decade. When Whole Foods Market, Inc. acquired Wild Oats in 2008, it sold Henry's to Smart & Final because the store format didn't fit with its merchandising focus and strategic plans. Selling Henry's to Smart & Final also allowed Whole Foods to generate a nice chunk of cash to apply to the Wild Oats acquisition.

Henry's Farmers Market and Sprouts Farmers Market also have another thing in common when it comes to Northern California: Both grocers plan numerous additional stores in the region.

Tesco's Fresh & Easy Neighborhood Market has 19 confirmed future store locations in the Sacramento-Vacaville Metropolitan region. Fresh & Easy first announced those stores over two years ago. The fresh food and grocery chain originally planned to open the stores no later than early 2009. However, it's postponed its launch into Northern California indefinitely, as we've reported on and written extensively about in Fresh & Easy Buzz. [April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait

Fresh & Easy's officially stated reason for not yet opening any stores in Northern California (the grocer also has 18 confirmed stores in the San Francisco Bay Area) is because it has decided to wait until the economy improves before starting to open some of the stores in the region.

The economy has and is improving in Northern California. And although it isn't yet perfect, it's apparently good enough for Sprouts Farmers Market and Smart & Final's Henry's Farmers Market to feel confident enough to enter the market, Sprouts already opening its first store, and Henry's set top open its first Northern California unit just two months from now.

Related stories in our 2010 Northern California Special Report

June 5, 2010: Sprouts Farmers Market Opens First Northern California Store in Sunnyvale; Strikes Up Partnership With Local Non-Profit Farm

May 29, 2010: Going Rural: Fresh & Easy Neighborhood Market to Build First Store in Los Banos, California

May 28, 2010: First Phase of Fresh & Easy Neighborhood Market-Anchored Condo Development in San Francisco's Bayview Set For Completion in June

April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait

May 9, 2010: A Whopping 15 of Whole Foods Market's 41 New Stores in Development are in California - And Nine of The 15 Are In Northern CA

May 8, 2010: Sprouts, and Likely Henry's to Beat Fresh & Easy to Northern California Despite it's Big Head Start

May 6, 2010: Going Smaller & Getting 'Hybrid': Walmart's Smaller Supercenter in Vacant Retail Buildings Strategy Began in 2008

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