Sprouts Farmers Market is in the midst of a major comeback story. 

The pandemic hit the specialty grocer hard, and industry experts as well as the grocer’s investors were wary of its fate as a public company. However, the success of Sprouts’ ambitious store growth plan, which included opening 30 new locations last year, has played a significant role in its rebound. 

But the specialty grocer’s footprint isn’t the only thing that’s growing at rapid speed. 

Alongside the store updates, Sprouts’ private label portfolio is accounting for more and more of the company’s revenue in recent years. 

Sprouts’ private brands accounted for more than 20% of the grocer’s annual revenue in fiscal year 2023, nearly double its sales share in 2017, according to the grocer’s filings with the Securities and Exchange Commission.

Over the last two years, Sprouts has added 300 to 400 new goods annually to its Sprouts brand line, Jac Ross, vice president of Sprouts Brand, said in an interview. While around 100 products per year were replacing existing items to accommodate the new small store format, the growth in new products has been consistent, Ross said. 

Hot honey chicken tenders, non-dairy frozen desserts and flavored cauliflower rice are among the recent private label releases, Sprouts CEO Jack Sinclar said during the grocer’s first-quarter earnings call on Wednesday. 

Sprouts did not disclose how its private label production has changed to handle the growth. 

Sprouts’ work to ramp up its store brand portfolio comes as private label lines have grown in importance over the past few years in response to shoppers continuing to feel the effects of inflation. Last year, private label products accounted for more than 20% of grocery industry unit sales, achieving a new record of $236 billion, according to data from the Private Label Manufacturers Association.

Grocers have been working to bolster their private brand offerings to show customers they are dedicated to easing the pressures of inflation. But for Sprouts, offering a “beneficial price” is only half of what its private brand brings to consumers’ tables, Ross said.

Its private label goods meet a number of the specialty grocer's health and nutritional standards, such as only carrying organic frozen vegetables, Ross said. In addition, Sprouts aims to offer private label items that customers won’t typically find at traditional grocery stores.  

“We’re trying to offer elevated, everyday items that have got a differentiation in some way to what you might find in a conventional grocer,” Ross said.

A cohesive rebrand

Alongside Sprouts’ continued growth and a focus on differentiation in its private label line, the specialty grocer has also been working behind the scenes to consolidate its private label offerings under a single Sprouts brand, Ross said. 

A few years ago, Sprouts had numerous private label lines under numerous departments, Ross said, adding that the grocer’s products could be found under separate private label lines like Butcher Shop, Fish Market, Market Corner and Sprouts Essentials. The consolidation to one “Sprouts Brand” aims to establish a more recognizable and trusted brand for its shoppers to gravitate towards.

The first group of items to be released under the unified brand was Sprouts’ private label cleaning products about 18 months ago, Ross said.

The rebrand of Sprouts’ food and beverage products is slated to be complete by mid-2024. The grocer’s private label vitamins and supplements are also getting rebranded to the Sprouts line throughout this year. While health and beauty products are also part of the brand remodel, shopping for these items is a “different experience for customers,” — so Sprouts launched those products separately as Real Root by Sprouts Farmers Market, Ross noted. 

“If you think about [health and beauty] items, they’re quite often sitting on your shelf or they’re in your bathroom, and we wanted to have a design that really resonated and was able to do that,” Ross said, noting that the name aims to stand out from other healthy and beauty brands. 

So far, Sprouts has introduced Real Root shampoo and conditioner as well as bath bombs with plans to expand the line further, though Ross did not specify a timeline for the brand’s growth.

Throughout the rebranding process, Sprouts has also leaned into seasonal offerings, particularly in holiday-themed goods. The grocer combined its “Harvest” and “Holiday” items under the Sprouts brand, giving the products’ packaging a similar, recognizable design, Ross said.

“It really helped [customers] identify either the [seasonal] items in our store, and we could build one display and we had a lot of fun items there as well,” she said.