Dollar General's California Dream Becoming Reality

Tennessee-based discount retailer Dollar General has been moving hard and fast in Northern California, particularly in the Central Valley, since we first revealed the discount retailer's big plans for the market region in this December 5, 2011 story: Dollar General Jump-Starts California Launch: Taking Over 5 Centro Mart Supermarkets For Early 2012 Openings.

In the mere four months since we published the report, Dollar General has hit the ground running, focusing on its Dollar General Market grocery stores and traditional dollar format stores in the region.

Below is what the mega-discount retailer, which operates 10,000 stores in 39 U.S. states, is up to:

>First store opened: Dollar General opened its first Dollar General Market grocery store in the region March 31, at 1729 West Highway 140, in Merced, California.

The grocery market was store number 10,000 for Dollar General, and it went all out for the grand opening, offering activities for shoppers including: a free make-up consultation from representatives of  L’Oreal and Maybelline; photographs for the kids with characters Sponge Bob, Bimbo Bear and the Energizer Bunny; and food sampling, offering numerous products sold at Dollar General. Additionally, the first 500 customers to arrive at the store for the 9 a.m. grand opening received a free ham and a reusable tote bag filled with product samples and coupons

>Store manager search: The retailer is currently advertising for store managers for its three Dollar General Markets in Stockton, California and the unit in the East Bay Area city of Brentwood. These are four of the five stores Dollar General is leasing from Stockton-based supermarket chain Centro Mart, as we detailed in our December 5, 2011 story. The fifth former Centro Mart unit, in Stockton, will be a Dollar General dollar format store. The four Dollar General Market grocery stores and the dollar store are set to open in the coming weeks.

>Regional director wanted: Dollar General is advertising for a regional director for its dollar stores and Dollar General Market stores for California and Nevada.

According to our sources, the retailer plans to open 150-200 units combined of both formats in California and Nevada over the next two-to-three years.

So far Dollar General has seven stores open in Nevada and six units in California. Dollar General CEO Rick Dreiling said in a March 22, 2012 conference call with financial analysts that the retailer plans to have 50 (grocery stores and dollar stores combined) units open and operating in California by the end of the year.

>More stores: In our December 5, 2011 story we reported Dollar General had plans to open numerous other Dollar General Market (which offer groceries along with perishables, fresh meat and produce) and dollar store units, which carry perishable and dry grocery consumables along with general merchandise items but not meat or produce, throughout Northern California, with a major focus on the Central Valley.

Above: The location of the Dollar General Market in the Gregory Gardens shopping center, Modesto, California.

Thus far we've discovered the following planned Dollar General Market grocery store units in the region: two units in the Fresno area, at Fruit and McKinley in Fresno and Bullard and Minnewawa in nearby Clovis (both are former Save Mart supermarkets which the Modesto-based chain had previously closed); a Dollar General Market in Modesto, in the Gregory Gardens shopping center at 2003 Tully Road, between Bowen and Briggsmore (the retailer has also signed a lease for a dollar format store at 510-560 North Main Street in Modesto); and a Dollar General Market in Winton, which is next door to Merced, where the first store in the region opened March 31.

Dollar General is currently advertising on a variety of online job sites for managers for the Modesto and Winton grocery markets, which are set to open in the coming weeks.

Distribution center

As we reported in our December 5, 2011 story, Dollar General has established a distribution center near Bakersfield, California to service its grocery and dollar format stores in California, Nevada, Arizona and New Mexico. The facility opened this month.

Major growth plans

Dollar General plans to open approximately 625 new stores this year, the majority of which will be its flagship dollar format stores, which average about 7,000 square feet, CEO Dreiling said in the March 22 conference call. Additionally, according to the CEO, the retailer plans to remodel and relocate about 550 stores in 2012.

The retailer opened 625 new stores in 2011, along with remodeling or relocating 575 units, for a net increase in square footage of 7%, Dreiling said.

Dreiling said in the March 22 conference call that Dollar General has about 40 new Dollar General Market grocery stores set to open this year, the majority of which will be in California, Nevada and Arizona.

Last year the retailer opened seven new Dollar General Market stores, seven of which were in Nevada (its first new market since 2006), and remodeled 25 existing grocery markets.

There are currently 70 Dollar General Market grocery stores in the U.S.

The grocery stores, which average 10,000-15,000 and offer a selection of grocery items, perishables, frozen foods, produce, meats and general merchandise, are a key element of Dollar General's strategy for California.

Part of that strategy is to focus on food deserts, regions and cities that are currently underserved by grocery markets offering fresh food and groceries at reasonable prices.

The Dollar General Market format is focused on everyday low prices. A number of industry surveys, for example, put the store's prices on par with Walmart for fresh food, groceries and general merchandise items. Dollar General also runs weekly ads for the grocery markets and sometimes offers store coupons, such as $5 off purchases of $25 or more.

Inside a new generation Dollar General Market. [Photo credit: Dollar General, 09/27/11.]

Good fiscal 2011

Dollar General had a good 2011 fiscal year on all metrics. Its full-year sales increased 13.6% to a record $14.8 billion. There was an extra week in the fiscal year. Excluding that 53rd week, full-year sales increased to 11.4%.

Sales-per-square-foot for fiscal 2011 increased to $209, compared to $201 a year ago. Average sales-per-store came in a bit over $1.5 million.

The 2011 fiscal year also marked the 22nd consecutive year of same-store-sales growth for Dollar General. Same-store-sales were up 6% for the year, with all regions reporting positive comps, according to CEO Dreiling. Dollar general is forecasting a same-store-sales increase of between 3%-5% for the current fiscal year.

Dollar General's adjusted operating profit grew 17% in 2011 over the previous year to a record $1.5 billion and a record 10.2% of sales.

The retailer posted a 31.7% gross margin rate for 2011, which was 31 basis points below the previous year but was 246 basis points higher than in 2008, the first full year of the "great recession."

On the bottom line, Dollar General's adjusted net income increased 26% over 2010, which is an impressive performance.

Dollar General also launched and e-commerce website in 2011, which will not only bring it added revenue but should prove to be a good source of data over time. For example, the retailer is currently in 39 states. Purchasing data from the site over time could prove valuable as Dollar General looks at which of those remaining states it wants to open stores in first.

A closer look inside the Dollar General Market. [Photo credit: Dollar General, 09/27/11.]

Dollar General's impact

It's difficult to forecast whether or not Dollar General will be a major player in the food and grocery retailing business in California in general and in the Northern California/Central Valley region specifically for a couple reasons.

First off, selling food and groceries isn't something the retailer has a solid track record of doing. In fact, a couple years ago Dollar General considered shuttering its Dollar General Market format and stores completely. However, it instead developed a new Dollar General Market prototype in Dallas, Texas, which is the model for the remodeled and new stores, and is going forward with the chain, including emphasising the grocery markets as part of its two-format strategy in California and Nevada, as previously noted.

Second, California has no shortage of seasoned grocery chains and independents, with more coming, like Walmart with its Neighborhood Market supermarkets (see the story link at bottom), for example. But Dollar General's focus on undeserved regions and cities in the Golden State, such as the locations in the Central Valley detailed earlier, could be a very smart move for the retailer with its Dollar General Market stores, which have a low everyday price focus.

For example, Tesco's Fresh & Easy Neighborhood Market, which continues to lose millions of dollars a week with its 10,000 square-foot grocery markets, isn't opening any new stores in California's Central Valley despite having numerous sites in cities like Bakersfield, Fresno, Modesto, Los Banos and Stockton, most of which its been sitting on for three to four years.

Fresh & Easy did finally open its first five stores in Sacramento (see story links at bottom), where Dollar General also plans to open a number of its grocery markets and dollar stores (the first unit we've discovered will be in the Grand Oaks shopping center at 7963 Auburn Boulevard in the Sacramento suburb of Citrus Heights), in March. Tesco now has 196 Fresh & Easy stores. There are 142 units in California, 24 stores in Arizona and 20 units in Arizona.

Dollar General's two-format - the grocery stores and dollar stores - strategy in California should be a powerful one though, allowing it to establish its brand in the Golden State (and in Nevada) much faster than if it was only going with a single-format approach. For example, the dollar format stores also offer a considerable selection of groceries and general merchandise items, along with some perishables and frozen foods (two categories Dollar General is expanding in the stores), which should allow the retailer to establish itself in the highly competitive Golden State faster than if it were doing a single-play strategy only.

We'll keep you updated like only Fresh & Easy Buzz can on Dollar General's march through California, which is just getting started.

Related Stories

December 5, 2011: Dollar General Jump-Starts California Launch: Taking Over 5 Centro Mart Supermarkets For Early 2012 Openings

April 3, 2012: Getting Real in the Golden State: First Group of 13 Walmart Neighborhood Market Stores Opening in California This Fall

March 9, 2012: Scoop Confirmed: Sprouts Announces Acquisition of Sunflower Farmers Market

February 9, 2012: Confirmed: First 2 Fresh & Easy Stores Open in Sacramento March 7; 3 in Metro-Area March 14

January 18, 2012: Fast-Growing The Fresh Market Chain On Track to Launch in California This Year

August 29, 2011: Meaningful Move or Too Little Too Late? Fresh & Easy Neighborhood Market Planning Early 2012 Metro Sacramento Market Launch

August 3, 2011: Fast-Growing Specialty Grocer The Fresh Market Targeting Mid-2012 For First California Store

August 31, 2011: Tesco Says Sayonara to Japan, Good Morning to Sacramento

May-to-October at 82-Year-Old Andronico's Markets: New Owner, 2 Stores Closed ... Now What?

Companion Story: October 18, 2011: Look for Fresh & Easy Neighborhood Market to Grab Closing University Avenue Andronico's Supermarket in Berkeley CA ... If it Can

The Insider - Heard on the Street

In May I wrote in detail about the financial problems facing one of California's oldest family-owned grocery chains, 82-year-old Andronico's, which at the time operated eight supermarkets in Northern California's San Francisco Bay Area.

[Read my May 30, 2011 here: 82-Year-Old Grocer Andronico's Needs A Sugar Daddy of Sorts: 'The Insider' Suggest Tesco and its Fresh & Easy Neighborhood Market Might Fit the Bill.]

In the column I said the survival-mode shoes would soon start dropping at financially troubled Andronico's, which underwent a name change last year from Andronico's Markets to Andronico's Community Markets. They did ... And continue to do so.

The first shoe dropped in July, when the upscale-oriented food and grocery chain, which was founded in 1929 by Greek Immigrant Frank Andronico and has been headed for two-plus decades by his grandson, Bill Andronico, closed its store in the Stanford Shopping Center in Palo Alto, California. I pointed out in the May piece that the store was one of the three worse-performing of the eight Andronico's units.

In August the other shoe - perhaps better described as a heavy-heeled boot - dropped: Andronico's, with one less store than it had a month earlier, filed for Chapter 11 bankruptcy protection, listing debts in the $10-$50 million range, with assets about equal to its debt load.

Not long after the August filing in federal bankruptcy court in Oakland, California, Renovo Capital, a financial firm that invests in companies in financial distress, provided about $5 million in asset-secured debtor-in-possession financing to Andronico's to keep it alive. Renovo also began negotiations with Andronico's to acquire the grocer, which has been owned by the Andronico family since 1929 (three generations).

Last Thursday Renwood Opportunities Fund, a partnership created in October 2010 between Renovo Capital and Rosewood Private Investments, acquired Andronico's from the family for about $16 million, having received final approval to do so from the bankruptcy court. The $50 million Renwood Fund was established last year by the two investment firms to invest in distressed middle-market companies and special situation opportunities.

Two days before, on Tuesday, the financial firms also bought bankrupt nine-store San Francisco Bay Area specialty foods store chain A.G. Ferrari Foods through the $50 million Renwood Fund.

Like Andronico's, A.G. Ferrari, which has three stores in San Francisco, two in Oakland, and one each in Berkeley, Lafayette, Corte Madera and Los Altos, is a food retailing institution in the San Francisco Bay Area. It was founded as a family-owned and operated importer of Italian Foods in 1919. The first store was opened shortly thereafter.

The small stores offer imported and domestic specialty and gourmet groceries, including under it's own label, some frozen foods, and an extensive selection of ready-to-eat and ready-to-heat fresh-prepared foods, with a specialization in Italian cuisine.

Paul Ferrari, a member of the founding A.G. Ferrari Foods' family and who remains president of the chain - for now - expanded the operation over the last couple decades, ending up most recently with 13 stores. Six stores have been closed as part of the specialty retailer's financial problems, which resulted in it filing Chapter 11 earlier this year.

The new owner has brought on ex-Whole Foods Market man John Clougher, who as I reported in my May 30 column has been a top executive at Andronico's since 2010, as CEO of A.G. Ferrari.

Renovo-Renwood hopes it can create some synergies between the seven-store A.G. Ferrari Foods and six-store Andronico's, which is a major reason why they bought both out of bankruptcy, and which is one reason why Clougher, who's been at Andronico's since last year, was named CEO of A.G Ferrari.

In terms of that attempt to find synergy, here's a scoop: Look for A.G. Ferrari's private brand of Italian and related specialty and gourmet food products to start showing up on the shelves and in the perishable cases at the six Andronico's stores in the coming weeks.

Back at Andronico's, as part of the Renovo-Renwood acquisition, Bill Andronico remains CEO of the food and grocery chain founded by his grandfather, Frank, and headed for decades by his father, John, until he took over in the 1980's - at least for the time being.

A week after acquiring Andronico's, Renovo-Renwood made its first move yesterday, announcing it's closing the Andronico's unit on University Avenue in Berkeley, California.

The closing will leave the grocer with three grocery stores in the Easy Bay Area city of Berkeley - one each on Shattuck, Telegraph and Solano avenues.

The other three stores are in the Bay Area cities of San Francisco, Los Altos and San Anselmo.

As I correctly reported in my May 30 column, based on information from my sources, the University Avenue unit was the poorest performing of the four Berkeley stores, something the new owner confirmed yesterday.

The new owner said yesterday that it doesn't plan to close any of the remaining three stores in Berkeley. But it wouldn't surprise me in the least bit if the investment firm's aren't forced soon to close one of the remaining three Andronico's stores in the city, even though I believe it would like to keep all three for reasons of having a better retailing critical mass in Berkeley.

My predicted candidate for closure in Berkeley, if it comes, is the Telegraph Avenue Andronico's unit, which over the last couple years has lost considerable sales to a nearby Whole Foods Market store and Berkeley Bowl, a very popular and high volume local two-store independent grocer. Both Berkeley Bowl stores are located in the city.

The store on Solano Avenue has seen better days as well. And in the coming year-to-two years it will face increased competition from Safeway Stores, which plans to expand and renovate a store nearby, and Whole Foods Market, which is planning a second store not far from the Shattuck Andronico's unit in Berkeley.

The Shattuck Avenue Andronico's market has historically been the grocer's top-performer in the city, but it too is coming under increased competition from Safeway Stores, which also has plans to expand and renovate an existing supermarket not far from the location.

The new owner also must take a serious look at the Andronico's units in the North Bay Area city of San Anselmo (Marin County) and Los Altos, which is in Silicon Valley in the South Bay and not far from the Palo Alto market the grocer closed in July.

Each of the units are Andronico's only grocery stores the respective regions. Having a single store in a market-area - and the North and South Bay are both heavily populated and competitive areas - is a difficult proposition for a grocer because of a lack of critical mass (stores) when it comes to marketing, advertising and promotion. Renovo-Renwood, which doesn't have deep experience in operating grocery stores, will find this out sooner rather than later.

Selling or closing one or both of these stores is something I believe could come before a closing or selling of the Telegraph Avenue store in Berkeley would. Under this scenario, the new owners could sell one or both of these stores and use the cash to improve and promote the remaining four stores, the three units in Berkeley and the supermarket in San Francisco, which is the top-performing store out of the six grocery markets.

Even Andronico's best performing store, the unit in San Francisco's Inner Sunset District noted above, has its challenges. Last year Whole Foods Market opened a new store at Haight and Stanyon Streets in the San Francisco's Haight-Ashbury District.

The Haight-Ashbury Whole Foods store, which is about a five minute drive from the Andronico's unit in the Inner Sunset, has taken some business away from Andronico's, which like Whole Foods specializes in natural, organic and specialty foods, as well as fresh-prepared foods.

The Inner Sunset Andronico's should be able to hold its own though for a couple key reasons.

First, it's the only full-service supermarket in the highly-populated Inner Sunset District. The store has also been a fixture in the neighborhood for decades and has fairly strong customer loyalty.

Additionally, unlike Whole Foods, Andronico's offers a full-selection of mainstream food and grocery products - think big brands like Kraft and Coke and products like Kellogg's Frosted Flakes and French's Mustard - in its stores, including the unit in San Francisco. This is a big plus for the grocer at the Inner Sunset location vis-a-vis the nearby Whole Foods Store.

Additionally, the nearest major mainstream competitor to the Andronico's store is a fairly small Safeway Store a couple miles away on Noriega Street in the Outer Sunset District. There's very little available space in the Inner Sunset for a competitor to open a decent-sized grocery store, as well, which makes the Andronico's location valuable from a geographical perspective.

It's too early to know if Renovo-Renwood can turn Andronico's around, let alone make a success out of the small chain, which has a history of innovation in the Bay Area, which include innovations in interior store design, display fixture use and merchandising that have been copied locally by Safeway Stores, Whole Foods Market and others.

The new owner faces numerous challenges. These include: the diminution in quality and poorer-then-historical appearance of the stores over the last couple years, which the new owner says its going to reverse by investing in renovations; increased competition in every city where the six stores are located; the debt load the new owner is assuming, which includes $1 million owned the United Food & Commercial Workers (UFCW) employee pension fund - Andronico's is a unionized grocer - and more.

Of course the investment firms just might want to turn Andronico's and the six stores around "just enough" to sell the chain off as a whole or sell the stores off individually to multiple grocers, which is the strategic plan I believe Renovo-Renwood is attempting and hopes to pull off.

And speaking of unions and grocers, the contract between the UFCW and Northern California's unionized grocers, which includes Andronico's, expired ten days ago. Contract negotiations are currently taking place between representatives of the union locals and Northern California's three-largest unionized chains, Safeway Stores, Inc., Save Mart and Raley's.

Based on Andronico's poor financial condition, competitive challenges and the fact Renovo-Renwood is going to have to invest substantial capital in the grocery chain in order to keep it alive, not to mention make it successful, it wouldn't surprise me in the least bit if the new owners ask the UFCW union locals for a number of contract concessions, or even attempt to leave the union completely, although that will be near-impossible, when it comes to negotiating and signing a new three-year contract this year.

In the past, Andronico's, like most of the unionized small chains and independents in Northern California - and there are many of them - essentially agreed on the terms of the contract - often called a "me too" contract deal - negotiated and agreed to between the union locals and the region's "Big Three" chains.

Andronico's did this last time around, three years ago. But that was then and this is now. Were it not for Renovo-Renwood providing emergency financing for and then acquiring Andronico's, the 82-year-old grocer would likely have gone out of business. That would have put around 350 unionized store-level grocery workers out of a job.

I expect the new owners to attempt to use this leverage on the union locals in contract negotiations, probably in separate talks from those currently going on between union officials and the "Big Three" chains, although the fact the pension fund is owned $1 million by Andronico's, a debt which the bankruptcy court hasn't discharged according to the my recent review of the court's records, should give the UFCW locals leverage of their own, in turn.

The store-level employees of Andronico's, many who've been in the UFCW union for 10 or more years, and in the case of others are close to retirement, will also join with the union if the new owners make any attempts to go non-union. Many are already very concerned about the debt owed the union pension fund, for example.

The good news, if you appreciate the saving of an 82-year-old regional food and grocery retailing institution - Andronico's Community Markets, or Andronico's Markets if the new owners take the advice I offered in my May 30 column to go back to the old name - is six of the eight stores remain in business, as for now does the "Andronico's" name and brand.

I say "for now" because those of us with experience in food and grocery retailing acquisitions know they seldom end up down the road turning out like the buyers and sellers say they will, particularly when the acquired retailer is a financially distressed grocer and the buyer is a fund, with an expected return on investment, created by two investment firms.

Such investment vehicles are designed to eventually make money for the firms, usually within a five-year time horizon. And that money is generally made by selling the financially distressed property (read Andronico's) that was bought at a discount.

My bottom line: The new owners will restructure the Andronico's operation, lowering labor costs (they've started that process already with the decision to close the store on University Avenue in Berkeley); invest some cash in improving the looks of the stores (any they don't sell soon); pump up the marketing and promotional budget and spend somewhat; and then attempt to either sell all six supermarkets as a whole or sell off the six stores in pairs or individually.

The predicted time horizon: One-to-four years, with a preference from the new owners to achieve the objective, with a decent profit, sooner rather than later.

Mollie Stone's Markets' Year of Passionate Improvement Continues With Launch of New Website Tomorrow; But There's Also More In-Store

Northern California Market Region

Mollie Stone's Markets' uses the slogan "The Best of Both Worlds" to describe its retail format and approach to food and grocery retailing, which is to offer basic necessities - what it calls necessity shopping - along with specialty, natural, organic and gourmet foods - passion shopping - under the same roof.

But the theme or slogan also aptly describes 2011 for the privately-held, nine-store San Francisco Bay Area grocer, in that so far this year Mollie Stone's has been passionately focusing on the necessity of continuous improvement in what today have become the two worlds of food retailing - a grocer's stores and its use of cyberspace and social media to communicate with shoppers.

Mollie Stone's Markets' year of passionate improvement takes another step tomorrow when the Mill Valley (Marin County), California-based food retailer launches its brand new website, which according to co-owner Dave Bennett will not only look good but will also be filled with added features, along with being a work of continuous improvement in and of itself.

The website is at: http://www.molliestones.com/. If the new website isn't working right away on Friday it's probably because it's being tweaked by the designers.

The launching of the new website tomorrow comes on the heels of Mollie Stone's hiring of its first social media manager, which we reported exclusively on in this July 14, 2011 story: Mollie Stone's Markets' Takes Next Step in its Social Media Journey By Hiring First In-House Manager.

As we noted in the story, Mollie Stone's Markets' has been growing its use of social media significantly. As part of that growth the new website will over time integrate the grocer's social media sites with features on the website, according to Elizabeth Milks, the retailer's social media project manager.

Speaking of integration, Mollie Stone's isn't letting its passion for cyberspace and social media take its focus off the nuts and bolts of food retailing - its stores.

In fact the opposite is true. Since January of this year the retailer has been waist-deep in various store remodeling projects as well as acquiring its ninth store in late January in San Francisco's Castro District and opening it less than two months later, on March 9.

Along with opening the new store in San Francisco's Castro District, which is Mollie Stone's third store in the city, the grocer has remodeled the produce, bakery and deli departments in its Burlingame, California supermarket, a project it started in January and completed in April. (You can see a photo here.)

Additionally, Mollie Stone's has just completed the remodeling of the produce department (pictured above) in its Sausalito, California store, along with doing major resets of the in-store bakery and cheese shop.

As part of the produce department remodeling project, the store's manager and the Mollie Stone's team heading it up decided to extend the fresh fruit and vegetable-filled department outside, adding the merchandising feature pictured below in front of the store.

The concept fits the outside of the store well because Sausalito, which is just over the Golden Gate Bridge from San Francisco, is a European-style village community located on the water and its residents are very healthy food and foodie-oriented. The fresh produce outside therefore makes a very locally relevant message, as well as lending itself to impulse purchases and thus added sales for the store, which is exactly what happened last week as the fresh fruits featured in the tropical-themed display below were selling briskly.

Next up for Mollie Stone's Markets, which is co-owned by Mike Stone and Dave Bennett who founded the chain together in 1985, is a remodeling of the deli-prepared foods department in its Greenbrae (Marin County) supermarket. The store's produce department was remodeled in December 2010.

Stone and Bennett have also channeled some of their passion for the grocery business and specialty foods into a new brand of products called "Mike & Dave's." The first product under the eponymous brand, Mike & Dave's Wing Sauce, was launched in May of this year (see our stories linked at the end of this piece). Additional "Mike & Dave's" products are in development, Bennett tells Fresh & Easy Buzz.

Back in cyberspace, Mollie Stone's has launched a new "Secret Sales" promotion on its Facebook site. The promotion works this way: Each Tuesday the grocer posts a deal item along with a promotional code which allows shoppers to get the product at the special Facebook-only price. Customers note the promotional code number and give it to the checker at a Mollie Stone's store in order to get the "secret sale" item at the special price.

The promotion, although brand new has, based on our observation and research, been driving shoppers to the Facebook site and in-turn is driving users of the site into the stores for the deals, depending of course on the specific product and how good the deal is.

Social media project manager Milks' tells us it's the first of what will be many social media site-based promotions Mollie Stone's Markets will be doing in the coming months.

In addition to Facebook, Mollie Stone's has a very active Twitter feed, and also uses the location-based site Foursquare. It also has a YouTube channel where it posts videos.

The launching of the brand new website on Friday will tie-in Mollie Stone's Market's eight month year of passionate improvement - and neither are over yet - in a solid way in our analysis because it will be a bigger and better central place online where the grocer can showcase all it's been doing to improve its stores (and open a new one), along with its growing social media efforts, allowing it to better communicate to shoppers its focus on both the necessities and passions of food and grocery retailing in the San Francisco Bay Area.

Mollie Stone's Year of Passionate Improvement: Follow the Story Below

July 14, 2011: Mollie Stone's Markets' Takes Next Step in its Social Media Journey By Hiring First In-House Manager

June 23, 2011: Mollie Stone's Markets' Owners' Eponymous Mike & Dave's Wing Sauce Grows Display Wings

May 16, 2011: 'Wing Man-to-Wing Man' - Mollie Stone's Markets' 'Mike & Dave' Create, Set to Launch 'Personal Brand' Wing Sauce

March 7, 2011: Fresh & Easy Neighborhood Market, Superior Grocers, Mollie Stone's All Opening New Stores in California Wednesday

March 1, 2011: Mollie Stone's Markets Will Open its New Store in San Francisco's Castro District On March 9

February 17, 2011: Mollie Stones Markets Planning to Open Newest Store in San Francisco First Week in March

January 28, 2011 Mollie Stone's Markets Confirms Our January 13 Report; Announces New San Francisco Store Via Twitter & Facebook

January 13, 2011: Mollie Stone's Markets Taking Over Closed 18th Street Delano's IGA Market in San Francisco's Castro District

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's IGA Markets' Chain On the Verge of Closure in San Francisco Bay Area

Also see Northern California Special Report for related stories.

Fast-Growing Specialty Grocer The Fresh Market Targeting Mid-2012 For First California Store

A Fresh Market store (above) in Miami, Florida and another (below) in Milwaukee, Wisconsin.

Breaking Buzz

Fast-growing Greensboro, North Carolina-based specialty food and grocery chain The Fresh Market plans to become California's next new grocer, and is looking to open its first store in the Golden State as early as mid-2012, Fresh & Easy Buzz has learned.

In February of this year CEO Craig Carlock said in a conference call The Fresh Market is looking west to the Golden State for future expansion, saying then he didn't have any specifics in terms of a time-line for entering California or any other state west of the Rocky Mountains.

The publicly-held specialty grocer currently operates 102 stores in 21 states. Those stores are in the South, Mid- Atlantic, Midwest and Northeast regions. The Fresh Market is currently putting a major focus on accelerating its store expansion in the Midwest and Northeast, Carlock said in a presentation at the William Blair Growth Stock Conference on June 14 of this year.

Our sources tell us The Fresh Market is searching for numerous store locations in parts of Northern and Southern California that fit the specialty grocer's consumer demographic and lifestyle criteria.

That criteria includes: communities where residents tend to have a higher than average income; have attended college; place a higher than average emphasis on food quality and customer service; are less driven by price; put a premium on fresh and healthy foods; and do an above average amount of entertaining at home.

San Francisco Bay Area top of the list

Among the regions The Fresh Market is searching most aggressively for store sites in is the San Francisco Bay Area in Northern California, particularly in cities and neighborhoods that skew high in the variables listed above.

For example, representatives of The Fresh Market are in negotiations with the developer of the Edgewood Plaza shopping center in Palo Alto, California to open what would be the North Carolina-based specialty grocer's first store in California, at 2800 Channing Avenue in the shopping center, which is being redeveloped by Sand Hill Property Company.

Interestingly, in 2008 the developer and Tesco's Fresh & Easy Neighborhood Market were close to signing a lease for the 2800 Channing location (a vacant building in the center), which would have made the grocer the shopping center's anchor store. But the deal ultimately fell through.

Palo Alto and Berkeley also have another thing in common: The Fresh Market has an interest in finding a store location in the East Bay Area college town, just like it is in Palo Alto, which is in the South Bay Area.

The North Carolina based specialty grocery chain is also looking for locations in other Bay Area cities that fit the criteria we described earlier in the story.

Some of those key cities include neighborhoods in Danville and Walnut Creek in the East Bay, parts of Marin County and Napa and Sonoma counties, elsewhere in the South Bay Area near Palo Alto, and in higher income cities on the San Francisco Peninsula, like Burlingame, as well as in San Francisco itself, according to our sources.

The Fresh Market is also looking for locations in the Sacramento metro region in Northern California, according to our commercial real estate sources.


Southern California

We're told The Fresh Market (take a look inside one of its stores above) is also looking for store locations in parts of Southern California, that meet the criteria we've described, for possible 2012 openings, although our sources say that at present the San Francisco Bay area and metro Sacramento region in the north are the number one priorities.

Among the areas in Southern California we're told The Fresh Market is looking for locations in include the higher income parts of Orange County, the western portion of Los Angeles and in and around San Diego.

The Fresh Market's focus and strategy

The fast-growing specialty grocery chain, which says it will open 12-14 new stores by the end of its 2011 fiscal year, focuses on offering premium products, with an emphasis on fresh foods and perishables, in its stores, which average about 21,000 square-feet.

In June CEO Carlock, who spent a number of years working for consumer products giant Proctor & Gamble, said the chain's sales of fresh and perishable foods represented 67% of total fiscal year 2010 sales, with the remaining 33% of sales coming from non-perishable or shelf-stable products.

The grocer's three key category or departmental focuses are specialty grocery, fresh produce, fresh meats and deli/prepared foods. The Fresh Market also offers numerous grocery, perishable and fresh food items under its own private label brand.

The Fresh Market also puts a strong emphasis on customer service. For example, its meat and deli/prepared foods departments are fully-staffed by butchers and clerks. The meat and deli departments are full-service, featuring un-packaged meats which are wrapped by butchers and deli clerks after the desired items are selected by customers. The meats are cut in-store by the butchers.

The fresh-prepared foods offering is extensive, ranging from fully-prepared ready-to-eat and heat items like salads, sandwiches and entrees to complete dinners.

The Fresh Market also takes a neighborhood grocer approach. (Sound familiar?) Each of its stores are designed to fit into the neighborhood, particularly the exterior design (see the photos at top), and the grocer does a considerable amount of product-mix localization on a store-by-store basis. In these two ways The Fresh Market, which was founded as a single store in Greensboro, North Carolina in 1982,  is very much like Austin, Texas-based Whole Foods Market.

Ray Berry, who founded The Fresh Market 30-years ago, is its chairman. CEO Carlock has been with the chain for 12 years.

In addition to its mega-population and foodie-oriented demographics, part of the reason driving The Fresh Market to the Golden State is simply sheer growth - and the grocer's strategic plan for much more of it. 

Since 2000, for example, The fresh Market has tripled its store-count.

Additionally, in June CEO Carlock said current plans call for developing The Fresh Market, which went public in November 2010, into a national specialty grocery chain of over 500 stores.

This isn't a new model. In fact, The Fresh Market is following a selective-region national growth model that's nearly identical to those of America's two most popular specialty grocers: Trader Joe's and Whole Foods Market. The specific geographical focuses of the three specialty chains are somewhat different but their national growth strategies are nearly identical.

Numbers strong

On June 2 The Fresh Market reported a 10% increase in overall sales for its 2011 fiscal year first quarter, which ended My 1, 2011, and a rise in comparable store sales of 4.1%, compared to the same period the previous fiscal year (2010).

Sales for the first quarter of fiscal year 2011 were $245.4 million, compared to $235.7 million for the corresponding period in 2010.

Net income for the first quarter of fiscal 2011 was $13.5 million, compared to $12.2 million for the same period in fiscal 2010.

The grocer also saw an increase in its gross margin rate, rising by 50 basis points to 33.9% for the first quarter of fiscal 2011, compared to 33.4% for the corresponding period in 2010.

For fiscal year 2011, The Fresh Market's CEO says the grocer aims to achieve the following:

>Open 12 to 14 new stores; many of which are expected to open late in fiscal 2011
Relocate two stores and remodel two others

>Spend about $85 million to $90 million in capital expenditures

>Increase comparable store sales by 4%-to-5%

>Improve operating margin as a percentage of sales 20-to-50 basis points over the prior year's 7.2% adjusted operating margin.

>Achieve diluted earnings per share of $1.01 to $1.05

California here it comes

The Golden State is likely to play a major part in The Fresh Market's long range growth, which its CEO says is forecast to be at least 15% annually for the next few years.

The San Francisco Bay Area's foodie culture, particularly in the more affluent and higher education-comprised locations we've described the grocer is targeting, offer a powerful lure for the specialty grocer as it watches how well Whole Foods Market and Trader Joe's are doing in the region, along with in Southern California.

Based on our current information, The Fresh Market plans to launch its first stores in the Bay Area in the north, followed later by opening stores in Southern California.

According to our sources, The Fresh Market likely won't likely announce anything about its specific plans in California until the end of this year or early 2012.

Mollie Stone's Markets Takes Next Step in its Social Media Journey By Hiring First In-House Manager

Two very different ways to drive business. But both are social: One of the many ways Mollie Stone's Markets uses its Facebook, Twitter and YouTube sites is as a way to help "drive" food and grocery shoppers into its nine stores in the San Francisco Bay Area. The grocer also uses stickers like the one pictured above, which it put in the window of its newest store in San Francisco's Castro district in January 2011 in advance of the store's opening in March, to alert and "drive" customer traffic to its social media sites...

But Mollie Stone's doesn't rely on social media alone to "drive" business, particularly not in the case of its three stores in San Francisco. Instead, the grocer literally drives shoppers who live anywhere in the city to the stores, picking them up at home and returning them back with their groceries in tow, in its Mollie Bus (pictured above at the March 9 grand opening of its newest store in San Francisco's Castro District), as long as the customers buy at least $30 worth of groceries.

Food & Grocery Retailing in the 21rst Century: Social Media

Social media is for people of all shapes, sizes and ages (although not too young).

It's also something grocers of all sizes - not just the big chains - should be taking advantage of because in our experience and analysis it offers itself up to smaller (and not so small) regional grocery chains and independents as a potential "great equalizer" in their ever-increasing challenge of competing against the growing power of nationally focused chains like Walmart Stores, Target, Safeway, Supervalu, Inc., Whole Foods Market, Trader Joe's and numerous others, which continue to spread throughout the U.S., opening new stores in existing markets as well as launching into new ones.

Regardless if the operation is a chain of 250, 100, 50, five or just a single store, a grocer can create an account on Facebook and Twitter for zero cost, for example, and find someone with some talent and experience in using social media to coordinate and be in charge of it. From there, the grocer has a potentially whole new world of opportunity opened up to it to talk with customers and potential customers, to create added awareness, promote, and most of all to build, enhance and strengthen customer relationships as part of its overall customer service experience and process.

We use "potentially" above for a very good reason: Social media alone isn't a panacea for grocers, regardless of size. Instead it's a potentially powerful platform that if used regularly and used well - like a plant it must be given regular attention and care - can over time become a powerful communications and customer relationship-building tool for grocers of all sizes, along with that potentially "great equalizer" for smaller chains and independents.

Mollie Stone's social media journey

One independent grocer that's recognized both the overall potential power as well as the "great equalizer" aspect of social media is Mill Valley, California-based Mollie Stone's Markets, which operates nine stores in the San Francisco Bay Area and is majority-owned by partners Mike Stone and Dave Bennett.

Mollie Stone's joined the social media world in late 2010 (Facebook, Twitter and YouTube sites) with some very important help from San Francisco, California-based Reasonate Social Media, which was founded by Eric Harr, who's also the CEO of the firm.

Harr and his team took a comprehensive approach with Mollie Stone's Markets' in partnership with co-owner Dave Bennett, who splits the running of the food and grocery chain with Mike Stone, his partner of  25 years, having founded Mollie Stone's together in 1985.

Harr, Bennett and Stone brought all of Mollie Stone's headquarters office employees together - buyers and merchandisers, finance folks, human resources people and more - together for a number of social media training sessions, so that not only would the process be department and company-wide, but also because they realized that in order to make social media an integrated part of the grocer's overall customer service, marketing and community outreach efforts it had to be something shared by everybody, instead of ending up as a social media ghetto at the company, which often is the case at organizations of all kinds.

Mollie Stone's Markets is now humming on multiple cyber-cylinders when it comes to social media - and most importantly, in our analysis, using it as an integrated part of its overall operations, marketing and customer service functions, which even includes signs in the stores and on store windows inviting shoppers to join the grocer on Twitter and Facebook, for example.

Those multiple cyber-cylinders include very active Facebook, Twitter and Foursquare sites and campaigns, along with active and regular participation on review sites like Yelp, in which Mollie Stone's responds to both criticism and praise (and in-between) of its stores, including aspects like product pricing and customer service.

Reasonate Social Media, which has operated Mollie Stone's various social media sites as part of its consulting relationship with the grocery chain until now, also encouraged co-owner Dave Bennett to step out and become the "face" of Mollie Stone's Markets by appearing in a few videos (like the one above) the firm has produced for the grocery chain, which feature Bennett, who's latest venture, along with partner and fellow wingman Mike Stone, is a specialty foods brand, "Mike and Dave's," the first product being Mike & Dave's Wing Sauce, which we wrote about here in May and again in June.

Elizabeth Milks hired as in-house social media manager

Mollie Stone's Markets has now taken a next big big step in its social media evolutionary process, hiring its first-ever social media project manager, Elizabeth Milks, who is working in-house at the grocer's headquarters in Mill Valley, California (Marin County) and will be using that day-to-day vantage point to increase the amount and variety of social media content Mollie Stone's produces, and to do so in a real time way.

The grocer and Reasonate Social Media are currently in the process of transitioning the day-to-day social media tasks and responsibilities from the firm to in-house at Mollie Stone's Markets, Elizabeth Milks told Fresh & Easy Buzz yesterday.

Mollie Stone's Markets has not publicly announced the hiring of its new social media project manager. Therefore you're reading it here first.

Ms. Milks, who graduated from the University of California at Berkeley in 2006 with a BA Degree in Public Health, worked as a marketing assistant (2008-2011) for VR Research, which is a public records-oriented research firm in Oakland, California. Prior to that she worked in the legal services industry in the Bay Area, following graduation from U.S. Berkeley.

Grocers and social media

Ms. Milks starts her new position at Mollie Stone's with a good base.

For example, Bennett, the chain's head grocery and produce buyers, and a number of other employees regularly use social media sites such as Twitter and Facebook, having established their own accounts.

Additionally, the fact  Reasonate Social Media worked so closely with Mollie Stone's on a chainwide basis is also a big plus because there exists a strong buy-in for the use of social media throughout the grocery chain, from it's headquarters office to the stores, based on our reporting, research and answers we've received from Dave Bennet, Eric Harr and others at the chain.

Such buy-ins are key in order for a grocer to make social media more than a mere promotional vehicle, instead using it as part of the overall customer-relationship building experience, which includes face-to-face interaction where it counts most, in the stores, enhanced by using social media as a cyber-storefront of sorts, harnessing the potential power of many along with the immediacy factor.

For example, think about product recalls in terms of the power of the immediacy factor. Before Twitter or Facebook, a grocer really had no way to let customers know that the FDA or USDA were recalling this or that product for this or that reason except to post signs in all of its stores and alerting the local media, hoping they old report something about it sooner rather than later.

But today, a grocer's social media coordinator can go on Facebook and Twitter, along with a host of other sites, and communicate to followers that a food product has been recalled literally the moment it's found out. There's no longer a need to rely on third parties like the media. Instead the grocer can communicate directly to its followers (the power of many) on the social media sites. And nearly always those followers will tell others using their Facebook pages, Twitter feeds and other social media sites, which harnesses the power of many even further.

This way sound simple (or "so what") because we're already so used to social media despite its young age. But this ability to communicate immediately and directly is revolutionary for food retailers, as are many of the other ways in which social media can be harnessed by grocers who put an effort into doing so. And effort is required, because like those plants, which need attention, care and watering - along with re-potting at times - so too does the use of social media by grocers.

Mollie Stone's Markets is a good example of how grocer's of any size - but particularly those regional chains and independents we mentioned at the start of this story because of the potential "great equalizer" effect - can, if they make a commitment to it, harness the low-cost, high-impact power of social media and use it in an integrated way to enhance what they are already doing at store-level, along with using it to open new doors that previously didn't exist for food and grocery retailers in the pre-cyberspace and pre-social media eras, which seems like it was ages ago but really was only a few years ago, particularly in the case of social media.

Related Stories

June 23, 2011: Mollie Stone's Markets' Owners' Eponymous Mike & Dave's Wing Sauce Grows Display Wings

May 16, 2011: 'Wing Man-to-Wing Man' - Mollie Stone's Markets' 'Mike & Dave' Create, Set to Launch 'Personal Brand' Wing Sauce

March 7, 2011: Fresh & Easy Neighborhood Market, Superior Grocers, Mollie Stone's All Opening New Stores in California Wednesday

March 1, 2011: Mollie Stone's Markets Will Open its New Store in San Francisco's Castro District On March 9

February 17, 2011: Mollie Stone's Markets Planning to Open Newest Store in San Francisco First Week in March

January 13, 2011: Mollie Stone's Markets Taking Over Closed 18th Street Delano's IGA Market in San Francisco's Castro District

January 28, 2011: Mollie Stone's Markets Confirms Our January 13 Report; Announces New San Francisco Store Via Twitter & Facebook

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

Mollie Stone's Markets' Owners' Eponymous Mike & Dave's Wing Sauce Grows Display Wings

Private Brand Showcase

Mike & Dave's Wing Sauce, the eponymous first-in-brand food product created and launched in May by Mike Stone and Dave Bennett, the co-owners of Mill Valley, California-based Mollie Stone's Markets, has sprouted wings of a display kind in one of the grocer's nine stores in the San Francisco Bay Area.

The attractive display (pictured above), in the Mollie Stone's supermarket in San Bruno near San Francisco, is all about summer - A big "wing-style" display of Mike & Dave's Wing Sauce, cross-merchandised with beer and displayed in front of the store's meat department, where the fresh chicken wings are available nearby.

And for many people, summertime and chicken wings go together like, well ... a chicken and its wings.

We wrote about the partner's new brand and first product in this May 16, 2011 story: Wing Man-to-Wing Man' - Mollie Stone's Markets' 'Mike & Dave' Create, Set to Launch 'Personal Brand' Wing Sauce

In addition to offering their wing sauce in the nine Mollie Stone's stores in the San Francisco Bay Area, Stone and Bennett, partners since 1987, are looking for distributors and retailers throughout the U.S. who are interested in taking the product on.

A management member of Unified Grocer's specialty and natural foods distribution division, who also happens to be regular reader of Fresh & Easy Buzz, recently told us the City of Commerce, (Southern) California-based cooperative, which is the largest grocery wholesaler in the Western U.S., is interested in distributing Mike & Dave's Wing Sauce to its chain and independent customers throughout the west.

Unified also has an office in Livermore, in Northern California, along with a distribution center in Stockton, as well as distribution facilities in the Pacific Northwest.

Mollie Stone's Markets is a longtime member of the Unified Grocers cooperative.

Left-to-Right: Partners and wingmen Dave Bennett and Mike Stone.

Strategy Session: Extending the Mike & Dave's brand

Every so often we offer retailers we write about a suggestion or two regarding their private brands - or in the case of Mike & Dave's Wing Sauce what we call a "personal brand." We call this aspect of Private Brand Showcase the "Strategy Session."

Here's our suggestion for the wingmen, Mike Stone and Dave Bennett, as it pertains to their Mike and Dave's Wing Sauce.

One of the hottest fresh-prepared foods items in grocery stores at present is fully-prepared (including the sauce) and cooked ready-to-eat and ready-to-heat chicken wings.

For example, Safeway Stores, which Mollie Stone's Markets competes against in the San Francisco Bay Area, offers a couple varieties of ready-to-eat wings under its Signature Cafe brand. The items are selling extremely well in the grocery chain's stores

Tesco's Fresh & Easy Neighborhood Market also recently introduces a couple varieties of wings to its stores,as we reported on and wrote about in this June 11, 2011 story: Sliders, Meatballs and More - Fresh & Easy Neighborhood Market Introducing Six New Heat & Serve Food Items.

Branding the products also adds value (which for a grocer means a higher gross margin), compared to merely offering the wings as generic prepared foods items. This is particularly true is one has a good hook on which to hang that branding. And we think Mike & Dave do - their "personal brand," Mike & Dave's Wing Sauce.

Our suggestion for the Mollie Stone's wingmen: Create a fully-prepared, ready-to-eat chicken wing item (SKU or two), using the Mike & Dave's Wing Sauce. Brand it as "Mike & Dave's Chicken Wings," using the same graphic design on the label as is on the shelf-stable wing sauce product label, and offer it for sale in the in-stores' deli-prepared foods departments. in the nine Mollie Stone's stores.

Mollie Stone's is well known in the Bay Area for its fresh-prepared foods offerings, so the item is a natural.

The wingmen can also use the ready-to-eat "Mike & Dave's Chicken Wings" product package, merchandised in the store deli departments, to cross-promote the shelf stable Mike & Dave's Wing Sauce, by simply putting a instantly redeemable (IRC) cents-off coupon (say for at least 50-cents) for the bottle of sauce on the outside of the packages. Or tuck a coupon inside to be used later by the customer after they eat the prepare wings. Or do both.

And in good wingman fashion, one hand helping the other, the bottles of Mike & Dave's Wing Sauce can also be used to promote the new ready-to-eat chicken wings under the brand by simply putting a coupon for the product in the deli case on the bottles, a sticker or bottle neck coupon) of the existing wing sauce.

Traditionally it's called cross-promotion or cross-couponing. But in this case we call it "Wingman product marketing." After all, products just like people, can always use a wingman.

Related Stories

Click on this link - Mollie Stone's Markets - for related stories about Mollie Stone's Markets.

Click here - private brands showcase - for past stories in our Private Brand Showcase feature.

'Wing Man-to-Wing Man' - Mollie Stone's Markets' 'Mike & Dave' Create, Set to Launch 'Personal Brand' Wing Sauce

Dave Bennett (left) and Mike Stone, who we've nicknamed the "Wingmen."

Private Brand Showcase

Mill Valley, California-based Mollie Stone's Markets, which is majority-owned by partners Mike Stone and Dave Bennett who founded the local chain in 1985, offers a number of private brands in its nine supermarkets in the San Francisco Bay Area, including a selection of items under its own three brand names - "Mollie Stone's," "Mollie O Organic" and "Nonna Luisa" - which is something that's not all that common for a chain its size to do.

The privately-held, upscale-oriented grocer is a member of the Unified Grocers retailer-owned cooperative and offers its two major private brands - "Western Family" (mainstream food, grocery, perishable, frozen and general merchandise items) and "Natural Selections," the wholesaler's natural and organic products brand - in its nine stores, the newest unit being the store in San Francisco's Castro District, opened on March 9.

Unified, which is the largest retailer-owned wholesale grocer in the Western United States based on annual sales volume ($3.921 billion in 2010), is headquartered in Southern California. It has a Northern California distribution  center in Stockton, in the Northern Central Valley, and a buying-merchandising office in the East Bay Area city of Livermore.

But the focus of this story isn't on the grocer's existing three private brands or the store brands from Unified Grocers it merchandises in its stores.

Instead it's a product branding story of a more personal nature, involving Mollie Stone's Markets' and its owner-partners, Stone and Bennett - Mike and Dave, the "Wingmen."

In fact, if we had a special feature called "Personal Brand Showcase" that's where we'd prefer to put this story. But, and we know our readers will understand, we aren't going to create such a feature because there aren't many stories like this we could put in it.

Stone and Bennett, both veteran grocers in Northern California's San Francisco Bay Area, have created and are preparing to launch in their stores not a new private brand but what we're calling a "personal brand," as a way to distinguish between the two, although there are more similarities between a private brand and "personal brand" (in our usage) than there are differences.

The grocer-partners have created a brand named after their first names and are launching their first item in the nine Mollie Stone's stores this week. The brand name: "Mike & Dave's." The product: "Mike and Dave's Wing Sauce," pictured below.

When we saw the new item (and brand) the name resonated well in our always brand-evaluating minds for a couple reasons.

First, sometimes the best brand names for products come, instead of from long brain-storming sessions and multiple focus group trials, from the simple and familiar - who we are, what we know and the like.

For example, Henry Ford used his last name for his auto company. Familiar. And simple.

The founders of Apple named the company after a common fruit. Simple and familiar enough; though very "out of the apple box" for what was then a revolutionary product - the personal computer.

The football team in Dallas, Texas is, what else - the Cowboys. Could it really be named after anything that's more familiar (and some might say simple) to a Texan than a cowboy?

And two guys in Vermont named Ben & Jerry decided to call their start up company and ice cream brand Ben & Jerry's. The rest, when it comes to the equity and success of the Ben & Jerry's brand today, as they say - is history.

For Stone and Bennett - Mike and Dave - who've been working together in the grocery business for decades, nothing could be more familiar to the partners than each other - and their respective first names.

Imagine, for example, how many times they've used each others first names - face-to-face (or across the way) in the office, over the phone and in e-mails?

The brand name "Mike & Dave's" also fits the product - a wing (as in chicken) sauce - in two key ways: Chicken wings, which absolutely must have plenty of sauce on them, are a personal food, eaten with our hands and usually with family and friends, or strangers who will soon become friends, while watching sports on TV or at parties, picnics and the like.

Secondly, A good business partnership requires the partners to work as a team, something Stone and Bennett are noted for, often acting as each others "wing man" when needed, meaning both understand that in order to stay in business together and maintain and grow a successful grocery chain, neither of them can always be the top banana or spread his wings too much or too often without giving the other a chance to do the same.

Instead, and this is true with the "wing men"-partners, each focuses on his key strengths - and let's the other shine at his. That's what a good "wing man" does in the grocery business.

Dave Bennett's main strengths and key areas of focus are marketing, buying and merchandising - including knowing as much about the kosher foods' category as any grocer in America. Mike Stone focuses primarily on operations, finance and new store development.

As a result of this relationship and partnership "Mike & Dave's Wing Sauce" not only is a "personal brand" in that the name is taken from the two men's first names, it also obtains brand credibility (and offers a fairly decent pun) from what we call the "wing man factor," as described above.

Stone and Bennett - the "Wingmen" - are launching their "Mike & Dave's Wing Sauce" in their nine Mollie Stone' grocery markets, where they will offer it exclusively for now.

But Dave Bennett tells Fresh & Easy Buzz exclusively that he and partner Mike Stone are already "planning [to create and launch] other 'Mike & Dave's' food product items."

Mollie Stone's Markets sells a lot of groceries - particularly specialty food-oriented products - in its nine Bay Area stores. The chain's creative merchandisers love coming up with and implementing cross-merchandising-style displays in the stores.

Therefore, although neither Stone or Bennett - Mike or Dave - or any of their "wing men" on the merchandising team or in the stores have told us this, we're going to spread our predictive wings a bit and offer this: If you happen to be near a Mollie Stone's market (store list here) in the very near future don't be surprised if you see "Mike & Dave's Wing Sauce" not only on the store's shelves but also displayed in one or more locations in the store.

We will offer four potential display opportunities for you to look for if you do happen to visit one of the stores:

>on a thematic end-cap, cross-merchandised with other compatible items;

>in the meat department, displayed near the fresh chicken wings;

>in the deli department;

>and displayed in the produce department, cross-merchandised with ranch dressing, celery, baby carrots and other fresh veggies regularly served with dipping sauces and eaten with sauce-coated chicken wings.

After all, once the store managers and department heads at the nine Mollie Stone's stores learn about the new wing sauce created by and named after their bosses, being the creative merchandisers they are, they're going to want to feature Mike and Dave's "personal brand" in places in the stores where the product is sure to get noticed - and purchased - by customers because ... that's what good wing men and women do in the grocery business.

Related Stories

March 7, 2011: Fresh & Easy Neighborhood Market, Superior Grocers, Mollie Stone's All Opening New Stores in California Wednesday

March 1, 2011: Mollie Stone's Markets Will Open its New Store in San Francisco's Castro District On March 9

February 17, 2011: Mollie Stone's Markets Planning to Open Newest Store in San Francisco First Week in March

January 13, 2011: Mollie Stone's Markets Taking Over Closed 18th Street Delano's IGA Market in San Francisco's Castro District

January 28, 2011: Mollie Stone's Markets Confirms Our January 13 Report; Announces New San Francisco Store Via Twitter & Facebook

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

In Front of and Beyond the Release: Sunflower Farmers Market's New Website and its Journey to the Promised Land

We are the first publication we're aware of to have reported on April 28 that Colorado and Arizona-based Sunflower Farmers Market had just gone live with a major makeover of its website, enhancing its design, along with adding a number of new features to the site. We published our story just a short time after the website went live.

You can read our story here - April 28, 2011: Sunflower Farmers Market Goes 'Live' With New Website - First California Store Opens May 11.

A week later, on May 3, 2011, Sunflower Farmers Market and Grocery Shopping Network, the company that designed and maintains the website for the 33-store farmers market-style grocery chain, announced  the "newly enhanced [Sunflower Farmers Market] consumer website" in a press release. You can read the May 3 press release here.

Some of the enhanced features of the website Sunflower Farmers Market and Grocery Shopping Network touted in the press release are "interactive tools for shoppers that include a digital circular that allows shoppers to search by department or brand; a recipe center that includes wine parings; access to in-store specials and sales items; as well as the ability to create a master shopping list and a record of previous shopping lists."

In our April 28, 2011 story we point out some additional features Sunflower added in its website makeover.

The joint Sunflower Farmer Market-Grocery Shopping Network May 3 press release generated a considerable amount of ink in the press following its publication and distribution on May 3.

But as a reader of Fresh & Easy Buzz, you didn't have to wait for the press release to be issued on May 3 by Sunflower and Grocery Shopping Network in order to learn about the fast-growing grocery chain's website makeover. Instead, you learned about it a full week earlier, on April 28.

Sunflower on the move

Sunflower Farmers Market will open it first store in California, in Roseville near Sacramento, on Wednesday, May 11. It's second store in California - also in the north -  in the Northern Central Valley city of Modesto, is set for an October 2011 opening, according to the grocer.

Competing farmers market-style grocery chain Sprouts Farmers Market opened a store last month in Roseville, its second unit in Northern California. 100-store Sprouts, which now includes Henry's Farmers Market as part of its operations, opened its first store in Northern California, in Sunnyvale near San Jose, on June 10, 2010.

Sunflower Farmers Market is also close to closing on a location either in San Jose or Mountain View, California (or both), according to our sources, as we've previously reported. Sunflower hasn't publicly commented on its future plans in either of the two Bay Area cities. Mountain View is next door to Sunnyvale.

The grocer is also looking at additional locations throughout Northern California, from the Sacramento region and the Bay Area, to the Central Valley and south coast.

As we've also previously reported, Sunflower Farmers Market plans to open at least 5 -6 new stores each year over the next 4-5 years, which is similar to the number of new stores its been opening over the previous few years. This year and next, about half of the 5-6 new stores will be in Northern California, according to our sources.

In addition to Northern California, which Sunflower enters on May 11, the grocer is also entering another new market region soon. As we reported in our April 28 story, Sunflower Farmers Market says it plans to open its first store in Oklahoma City, Oklahoma in September 2011.

Sunflower currently has 33 stores in Colorado, Arizona, New Mexico, Nevada, Utah and Texas. At 7 a.m. on Wednesday of next week it adds California and store number 34 to the list.

We estimate Sunflower Farmers Market currently has annual sales in the $500-$600 million range. The privately-held chain isn't required to and doesn't regularly release its sales figures.

To the promised land

Sunflower Farmers Market is now headed by CEO Chris Sherrell, who took over as interim CEO on February 12, two days after co-founder and CEO Michael Gilliland resigned was arrested in Phoenix, Arizona on the charge of soliciting sex from a female undercover police officer, who was posing on a website as an underage (17-year-old) prostitute as part of a sting-type operation. Gilliland has been indicted on the charge and is set to stand trail in Phoenix August 9.

Sunflower Farmers Market's board of directors announced last week it's made Sherrell, who's 34-years- old, the chain's permanent CEO.

Sherrell has held numerous positions with Sunflower Farmers Market, including president and before that chief operating officer.

Sunflower's store-count has tripled over the last three years, during which time he served as president and was responsible for day-to-day operations of the chain, reporting to Mike Gilliland.

Since stepping in as CEO in early February, Sherrell's done a "yeoman-like" job of keeping Sunflower Farmers Market on track in the aftermath of Gilliand's arrest and resignation, along with overseeing the implementation of a number of new initiatives between then and now, including the launching of a redesigned Sunflower logo (at top), the website makeover, and on Wednesday, the opening of the chain's first store in California.

Sunflower Farmer's Market's board chairman, the other members of the board and investors, are counting on Sherrell, in Michael Gilliland's absence, to achieve what for sometime has been and remains the strategic sales goal they set for Sunflower - which is about $1 billion in sales by around 2015. The chain was founded by Gilliland and partners in 2002.

Gilliland, who according to Bennett Bertoli is now a "minor investor" in Sunflower Farmers Market, used to talk (some say brag) about the $1 billion in sales goal at various natural products industry conventions and in other venues.

Based on its current strategy of opening 5-6 new stores a year between now and at least 2015, which would nearly double its total store count, along with increasing sales at its existing stores, achieving that sales goal is doable for Sunflower Farmers Market, unless it runs into some very major hiccups.

But so far it's seemed to have weathered about the most severe hiccup that could happen to any business, it's CEO being arrested and set to go on trail for solicitation of an underage prostitute, although in fairness we emphasis that under our system of justice Gilliland is innocent until proven guilt or until he pleads guilty.

Having so far righted a potentially sinking ship and provided a steady hand at the helm since taking over as CEO in early February, 34-year-old Sherrell just might be the guy to take Sunflower Farmers Market to that $1 billion promised land, like Bennett Bertoli and the others believe he is.

Related Stories

December 9, 2010: Launching Sunflower Farmers Market Into Northern California is a 'Second Act' of Sorts For Founder-CEO Mike Gilliland

December 7, 2010: Sunflower Farmers Market Confirms Our Report It's Headed to Northern California; Roseville Store to Open April 2011

September 28, 2010: Grocer-Entrepreneur, Sunflower Farmers Market Founder & CEO Mike Gilliland Honored By Hometown Chamber of Commerce

September 22, 2010: Sunflower Makes Three: Sunflower Farmers Market's First Northern California Store Will Be in Roseville

January 10, 2011: Sprouts Farmers Market to Open Second Northern California Store in Roseville No Later Than Mid-April