Dive Brief:
- Specialty grocer Earth Fare opened its 50th store in Charlotte, North Carolina this week and used the occasion to unveil an aggressive growth plan that involves opening 50 more stores throughout the U.S. by 2024. The rapid expansion follows the chain’s new access to capital after Oak Hill Capital acquired an 80% interest in the brand in 2012, CEO Frank Scorpentini told The Charlotte Observer.
- At least five of these stores will be located in the Charlotte region, Scorpentini said, in addition to the seven currently in operation in that city. Earth Fare's store footprint reaches as far north as Michigan and as far south as Florida, with most locations concentrated in the southeastern U.S.
- To compete with other natural grocers like Whole Foods and Sprouts Farmers Market, Earth Fare has adopted a food “philosophy” that requires any products sold in its stores to be free of antibiotics, hormones, high fructose corn syrup, trans fats, preservatives, bleached flours and artificial sweeteners, artificial colors, and artificial flavors. This "clean" positioning extends to the company’s store management practices, including a ban on chemical-based cleaning agents.
Dive Insight:
As consumers' health demands continue to evolve, grocery chains are racing to claim their stake in the growing space. This requires not only expanding their footprints but differentiating their brands and product offerings to capture competitive market share.
Earth Fare isn’t the only health food outfit breaking new ground. Competitor The Fresh Market completed major upgrades and an expansion to its Charlottesville location a few months after it announced the closure of 15 locations as part of its company-wide turnaround plan. Sprouts Farmers Market also announced plans to open 30 new locations this year in California, Florida, Nevada, and elsewhere.
Where Earth Fare differentiates itself is its focus on health and "clean" foods. The company's list of banned ingredients is extensive. It also employs a chief medical officer, who authors consumer communications and advises management. These practices have appealed to health-conscious consumers across Earth Fare's operating region, and with more shoppers demanding transparency and looking to food as a way to treat and prevent diseases, the retailer aims to be ahead of the curve.
Amazon’s acquisition of Whole Foods has drawn increasing attention to the natural foods segment, particularly when it comes to product pricing. The global online retailer has already taken several steps to slash Whole Foods’ prices. Earth Fare CEO Frank Scorpiniti told the Observer that the company is committed to defeating the assumption that shopping at health food stores is an expensive proposition. The retailer offers deals on popular staples like avocados (three for $2) and bananas (49 cents per pound).
Natural food grocers are also turning to technology to find a competitive edge. Following its acquisition of Whole Foods, Amazon made it clear that it intends to integrate IoT and AI-based technology in Whole Foods stores. Earth Fare has also tapped AI-based technology to hone in on the products that shoppers want the most and has already reported an uptick in efficiency and top-line sales within the first year.
