Sunflower Farmers Market founder and CEO Mike Gilliland works produce in the produce department at one of his 32 stores. The Sunflower stores offer natural and organic (and some conventional) food, grocery and non-foods products in all categories and at discount prices. A key focus of the format is fresh produce. The farmers market-style produce departments comprise about one-third of total store square-footage. Sunflower Farmers Market stores average 20,000-30,000 square-feet.
Northern California Market Region Special Report
News & Analysis
In a story published on Tuesday (December 7, 2010) - Sunflower Farmers Market Confirms Our Report It's Headed to Northern California; Roseville Store to Open April 2011 - we reported Sunflower Farmers Market confirmed our September report - September 22, 2010: Sunflower Makes Three: Sunflower Farmers Market's First Northern California Store Will Be in Roseville - that it plans to enter the Northern California market and open it first store in Roseville, California in April of next year.
Today the Colorado-based grocery chain went official, announcing its plans to open that first Sunflower Farmers Market store in Roseville, at 424 Roseville Square, on April 13, 2011. The announcement came in the form of a press release issued today by the grocer's public relations firm and devoted specifically to the opening of the Roseville store.
As we noted in our piece on Tuesday, [Sunflower Farmers Market Confirms Our Report It's Headed to Northern California; Roseville Store to Open April 2011], Sunflower Farmers Market also plans to open a second store in Northern California, in the South Bay Area city of San Jose, not long after it opens the flagship unit on April 13, 2011, at Douglas and Harding Boulevards in the Roseville Square Shopping Center, in Roseville, which is near Sacramento.
Sunflower didn't mention plans for a store in San Jose in today's announcement release. However, the retailer plans on opening the unit in the city, based on information we have from multiple sources.
Historic interest part one: The beginning
As we wrote in both our September story and the piece on Tuesday, 32-store Boulder, Colorado-headquartered Sunflower Farmers Market will join Arizona-based Sprouts Farmers Market, which has 52 stores, and Smart & Final-owned and Southern California-headquartered Henry's Farmers Market (40-plus stores in Southern California and Texas under the Henry's and Sun Harvest banners) in opening stores in the city of Roseville - or as we like to call it: "Farmers Market Format Central 2011" - in 2011. [ See - June 5, 2010: Sprouts Farmers Market Opens First Northern California Store in Sunnyvale; Strikes Up Partnership With Local Non-Profit Farm; and May 8, 2010: Sprouts, and Likely Henry's to Beat Fresh & Easy to Northern California Despite it's Big Head Start.]
Sunflower Farmers Market was founded in 2002 by Mike Gilliland, who is also the co-founder of Wild Oats Markets, which was acquired by Whole Foods Market, Inc. in 2007. Gilliland left Wild Oats, where he was CEO from 1987-2001, in 2001. He started Sunflower Farmers Market in 2002. Wild Oats was founded and headquartered in Boulder, Colorado, as is Sunflower Farmers Market.
While running Wild Oats, Gilliland bought the then Southern California-based Henry's Farmers Market chain from its owners, members of the Boney family, which just happens to be the same family (next generation) that founded Sprouts Farmers Market in Arizona in 2002.
Wild Oats Markets Inc. owned and operated the Henry's Farmers Market chain during Gilliland's tenure as CEO and after he left. Wild Oats Markets Inc., which had sales of over $1 billion and 115 stores when Gilliland left in 2001, operated Henry's quasi-independently from its Wild Oats flagship chain. (Smart & Final does the same today.)
Shortly after it acquired Wild Oats in 2007, Whole Foods Market sold the Henry's chain to Southern California-based Smart & Final, which has been expanding the hybrid natural/conventional and fresh produce-focused grocery chain considerably since then, including launching into Northern California this year. [See - May 8, 2010: Sprouts, and Likely Henry's to Beat Fresh & Easy to Northern California Despite it's Big Head Start; and August 17, 2010: Henry's Farmers Market 'Beats' Fresh & Easy Neighborhood Market to Northern California Despite Multi-Year Head Start; Elk Grove Store Opens Tomorrow.]
Historic Interest part duex: All in the family
It's no accident the Sunflower, Sprouts and Henry's Farmers Market formats are very similar. After all, they share a common heritage that goes something like this: Members of the Boney family started Henry's Farmers Market; Mike Gilliland bought Henry's while he was CEO of Wild Oats, which he founded; members of the Boney family (next generation) started Sprouts Farmers Market in 2002, a format that's fair to describe as Henry's Farmers Market 2.0, and Gilliland left Wild Oats in 2001 in order to start Sunflower Farmers Market, which can be described as Henry's Farmers Market but with a greater focus on price/value.
Historic interest part three: Déjà vu all over again
Towards the end of his tenure at Wild Oats, Gilliland wanted the chain to focus more on the Henry's format (price/value focus) rather than its Wild Oats flagship format (conventional-to-upscale natural/organic format), which was similar to and the chief competitor of Whole Foods Market, which was eating Wild Oats' lunch in the 2000's. The reason: Gilliland didn't think two chains going after the same high income natural/organic products consumer could make it. Whole Foods and Wild Oats were at the time (about mid-1990's-2007) the only two chains in what was then called the "supernatural" food retailing segment. That term went away when Whole Foods acquired Wild Oats, in 2007. After all, you can't have a retailing category with only one retailer comprising it.
Mike Gilliland lost that battle at Wild Oats Markets, which was struggling at the time and continued to struggle after he left in 2001. That struggle led to the buyout by Whole Foods Market, Inc. in 2007.
At the time and since then he has said on a number of occasions he believed Wild Oats would have done better by focusing on Henry's Farmers Market because it could have used the format to go after the second-tier consumer; those shoppers with more moderate incomes who still want to be able to buy natural and organic foods and related products. Call it the alternative to Whole Foods Market for shorthand.
Gilliland lost the battle at Wild Oats but won the war - he started Sunflower Farmers Market, which targets the very same demographic and market segment he wanted the board of Wild Oats Markets to do using Henry's Farmers Market as the chain's focus format over a decade ago.
Since 2002, Gilliland and his team have opened 32 Sunflower Farmers Market stores, which they like to refer to as the pioneer grocer in the emerging value segment of the natural and organic foods retailing industry, in six western and southwestern states - Colorado, Arizona, New Mexico, Nevada, Utah and Texas. California - Northern California first - will be number seven.
Based on our estimates, annual sales for Sunflower Farmers Market is in the $600-$700 million range.
Additionally, Gilliland recently said same-store-sales growth for the most recent-ended year were just under double-digits (percentage), adding that in the two previous years they were in the double-digits. Sunflower is privately-held and therefore isn't required by law to make sales and profit figures public. Same-store-sales are a key metric in the food retailing industry because they measure sales at stores opened at least one year. Therefore, the near-double-digit and double-digit growth percentages Gilliland reported are excellent growth percentages for the chain.
Historic interest part four and conclusion: Full-circle
Back to the future: Even in its heyday, when it was performing very well, Wild Oats Markets Inc., under Gilliland's leadership, was never able to succeed in Northern California, where they opened a number of stores, primarily acquiring markets from independent natural foods retailers in the San Francisco Bay Area, but eventually closed them all, ultimately pulling out of the market completely. The Northern California stores were the Wild Oats conventional natural and organic foods store format, not Henry's Farmers Market.
But this time around - different decade, different format - Gilliland and company will enter Northern California with a format - Sunflower Farmers Market - he feels confident will succeed, compared to the Wild Oats stores (although he felt confident they would do the same back in the day) of a couple decades ago. If not, he wouldn't be doing so. Nor would he have plans to open numerous stores in the Northern California region, following the model Sunflower Farmers Market is carrying out in markets in the other western and southwest states, where it's growing rapidly.
Our analysis is similar - but qualified: We think the Sunflower Farmers Market stores (and format) have strong potential to succeed in selected parts of and cities in Northern California. We'll offer some details on that topic in a future piece.
[Editor's Note: We began our 'Northern California Market Region Special Report' series in April of this year. It's one in a number of special report series' we've done in Fresh & Easy Buzz over the last three years. Taken as a whole, we beleive the nine months' of stories offers one of the best up-to-date snap shots of the Northern California market region, which Tesco's Fresh & Easy Neighborhood Market plans to enter in early 2011, that's currently available. Below are the stories in the series thus far. Click on the title to read the story.]
November 30, 2010: DeLano's IGA Markets Closing Five Stores in San Francisco & Marin County; Fairfax, Davis Units to Remain Open (For Now)
November 29, 2010: Veteran Grocer Harley DeLano's 'DeLano IGA Markets' Chain On the Verge of Closure in San Francisco Bay Area
November 22, 2010: Tesco's Fresh & Easy Neighborhood Market Plans Five New Stores in Northern California's Sacramento Region
November 12, 2010: Postponed But Not Abandoned: Fresh & Easy Neighborhood Market Gearing Up For Northern California Launch
November 8, 2010 - Fresh & Easy Neighborhood Market's '5800 Third Street' Northern California 'Flagship' Store in San Francisco is Taking Shape
November 5, 2010: Fresh & Easy Neighborhood Market Queuing Up Three Additional Stores in Northern California For Early-to-Mid 2011 Openings
November 3, 2010: Tesco's Fresh & Easy Neighborhood Market Plans New Store in Northern Central Valley, California City of Ceres
November 1, 2010: Tesco's Fresh & Easy Neighborhood Market Planning to Build its First Store in Northern California City of Brentwood
October 30, 2010: Raley's Launches New 'Raley's TO GO' Pre-Packaged, Refrigerated Fresh-Prepared Foods Line
October 27, 2010: Save Mart CEO Bob Piccinini Poised to Make it to the 'Bigs' as Member of Golden State Warriors' Ownership Group
September 26, 2010: While Tesco's Fresh & Easy Neighborhood Market Postponed, Target Opened 42 'P-Fresh' Fresh Food and Grocery Markets in Northern California
September 22, 2010: Sunflower Makes Three: Sunflower Farmers Market's First Northern California Store Will Be in Roseville
September 22, 2010: Tesco's Fresh & Easy Neighborhood Market Planning A New, Third Store in San Jose, California
September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011
September 21, 2010: A Look Inside Whole Foods Market's Newest Store, A Mall Location in Santa Rosa, California
September 20, 2010: About Today's Walmart Stores, Inc. Smaller Stores Media Frenzy: We Scooped it On July 6, 2010
September 19, 2010: Whole Foods Market Gives Itself A 30th Birthday Present: 299th Store Opens This Week in Santa Rosa, California
September 18, 2010: Keep On Truckin' - Whole Foods Market Celebrates 30 Years This Weekend
September 14, 2010: Eight Plus One: Napa Unit Added to Eight Fresh & Easy Neighborhood Market Stores Opening in Northern CA in Early 2011
September 5, 2010: BevMo Chain Ends Full Time Employment For Store Workers; They Say No Way and Join With UFCW Union to Demand 'A Better BevMo'
September 3, 2010: How the California Grocers Association and its Members Can Snatch Victory From the Jaws of the Defeat of California's Plastic Bag Ban
August 25, 2010: Going Rural: New Fresh & Easy Neighborhood Market Store Planned for Sutter Creek in Northern California
August 23, 2010: Hybrid 'Good Eats' Market-Cafe From Raley's CEO Michael Teel & Company Opens Today in Sacramento CA
August 22, 2010: The Insider: Challenges & Opportunities: Tesco's Fresh & Easy Neighborhood Market Will Supply its Northern CA Stores From its Riverside County DC in Southern CA
August 21, 2010: April 2010 Prediction Correct: February 2011 Target to Open First Eight Fresh & Easy Neighborhood Market Stores in Northern California
August 19, 2010: Tesco Will Open its First Eight Fresh & Easy Neighborhood Market Stores in Northern California in 'Early 2011.'
August 17, 2010: Henry's Farmers Market 'Beats' Fresh & Easy Neighborhood Market to Northern California Despite Multi-Year Head Start; Elk Grove Store Opens Tomorrow
July 29, 2010: Tesco's Fresh & Easy Neighborhood Market Putting Together List of Managers Interested in Transferring to Northern California
July 25, 2010: Safeway to Start Construction on New Pleasanton, California Flagship Store Soon; Thanksgiving 2011 Target Opening
July 22, 2010: 'The Insider' - After Four Years in the High Weeds in Northern & Central California, Kroger Co. is Emerging to Grow its Foods Co Chain
July 21, 2010: Vacant Fresh & Easy Neighborhood Market Store in Pacifica, California Has the City's Mayor in a Pickle
July 18, 2010: 'The Insider' - When it Comes to Northern California - its Competitors are Rome Burning and Tesco's Fresh & Easy Neighborhood Market is Nero Playing the Fiddle
July 14, 2010: Tony Bennett Has Nothing on Whole Foods Market When it Comes to Loving San Francisco...That City By the Bay
July 6, 2010: Walmart Looking for Store Sites in Northern California For 20,000 Sq-Ft Neighborhood Market by Walmart Prototype Store
June 28, 2010: Smart & Final to Open its New Format SmartCo Foods Stores in California and Arizona
June 26, 2010: Tesco Planning to Announce in July When First Northern California Fresh & Easy Neighborhood Market Stores to Open
June 14, 2010: Newly-Named Whole Foods Market CO-CEO Walter Robb Comes Full Circle With the Opening of the New Store in Mill Valley CA
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
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
April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait
[Also: click here , here and here for a selection of past stories on Fresh & Easy and Northern Calfornia.]