Fresh-cut fruit is a hero on SpartanNash Investor Day
NEW YORK — The eyebrow-raising success of fresh-cut fruit stood out when dozens of investors and SpartanNash executives discussed the health of the company, its strategies and plans.
On Nov. 2, a block from Times Square, the company — a grocery retailer, value-added wholesale grocery distributor, U.S. military grocery distributor and provider of other food solutions —welcomed those invested in the publicly traded business to gather for SpartanNash Investor Day. SpartanNash is based in Byron Center, Mich.
Grab-and-go fresh-cut produce is up 46% year-to-date, year over year, said Masiar Tayebi, SpartanNash’s executive vice president, chief strategy and information officer.
“Some people say the proof is in the pudding. We say the proof is in the fruit,” Tayebi said. “Our fresh-cut produce is doing phenomenally well.”
The company has a line of private labels, called OwnBrand, which include OurFamily labels for civilians and Freedom’s Choice for servicewomen and men in the military. And in late 2021, the company launched its newest private brand, Fresh and Finest, said Rick Weekley, senior director of OwnBrands marketing.
Fresh and Finest was created after conducting consumer research, such as shopper surveys and loyalty programs. More than 480 Fresh and Finest products have been introduced in less than a year, with many more coming, Tayebi said.
“Actually, my favorite is the maple-glazed carrots. We get it in our household all the time. It is absolutely delicious. It is super convenient,” Tayebi said. “All of these products are over delivering against plan and they're primed for a great holiday season, with Thanksgiving on the horizon.”
During the first year or so of the COVID-19 pandemic, grocery retail business skyrocketed as foodservice business sank, but now, the continued popularity of homecooking could be due to inflation and consumers trying to save money by avoiding restaurant food. Tom Swanson, SpartanNash’s executive vice president and general manager of corporate retail, said he thinks the return to cooking at home is here to stay.
Related news: SpartanNash grocers offer free home delivery in February
Retailers can only do so much about higher prices, but they can focus on the value shoppers get, especially convenient luxury.
The fresh-cut produce program offers that. Watermelons were a great example in summer, plus retailers can earn a lot more per watermelon when sold by slices and cubes.
“We call it watermelon filets,” Swanson said. “We can get three filets from one watermelon.”
And while shoppers nationwide at any store have been slower to add a lot of fresh produce to their online shopping baskets than center-store groceries, at SpartanNash banners, such as Family Fare, Martin’s and D & W Fresh Market, the distribution of fresh produce in click-and-collect is higher than in-store, Swanson said.
“Which shows you the high level of trust our shoppers have in us,” he said.
The company plans to drive revenue growth in two main areas, said Jason Monaco, executive vice president and chief financial officer:
- Retail: Expansion of OwnBrands, eCommerce, Upmarket, local, fresh and loyalty programs to drive incremental volume.
- Wholesale: Grow share through geographic expansion (out West) and product category development.
SpartanNash president and CEO Tony Sarsam said the company plans to increase OwnBrands penetration by more than 20%, launching more than 1,000 new products by 2025.
The company plans to increase market share through omnichannel offerings, with partnerships including: DoorDash, Fast Lane, Instacart, Grubhub and Shipt.
Also, SpartanNash is increasing its focus on sourcing and promoting its local growers and targeting shoppers with young families.
While SpartanNash has many successes and plans in all areas of its business, the produce department is the heart of it all, said Amy McClellan, senior vice president and chief marketing officer.
“Produce is where the personality is,” McClellan said.
About the company:
- SpartanNash began as Nash-Finch Co. in 1885, selling candy and tobacco in North Dakota.
- Then 43 grocers banded together in 1918, to form what looks closer to today’s company, in Grand Rapids, Mich.
- Today, SpartanNash has 19 distribution centers, mostly in the Midwest and Eastern U.S., with an eye toward the West.
- 71% of business is wholesale (including military and legacy distribution), and 29% is retail
- Based on fiscal year 2021, total net sales are $8.9 billion
- There are 147 corporate-owned grocery stores, under the banners of Family Fare, Martin’s and D & W Fresh Market.
- 2,100 independent retailers are served
- Key national partners include Dollar General, Amazon and the U.S. Commissary.
- Differentiated OwnBrands include Fresh & Finest for store-perimeter foods, and Our Family, which covers center-store products.
