Sprouts Drives Private Brand Differentiation

Private brand is sprouting at Sprouts Famers Market.

What began as a tool for building up categories has turned into a real differentiator for the Phoenix-based retailer, which operates more than 285 stores in 15 states.
Amin Maredia, chief executive officer, outlined the company’s private label journey, including its most recent expansion in fresh foods, at the recent Shoptalk conference in Las Vegas.

“Our private label strategy is pretty different,” he said, speaking during the conference’s Grocerytalk track. “It’s not the lower-version-of approach. We are laser focused on differentiation.”

At first, the private brand goal was to fill in gaps in certain categories to add value and innovation. Eventually, as Sprouts learned more about private brand customer profiles, it expanded assortments across grocery, frozen, dairy, and vitamins. In the latter case, the retailer – which markets itself as offering natural, healthy and affordable products – carries some 7,000 items in the vitamin department. The strategy is about “a lot of inventory, but also staff knowledge.”

Meanwhile, the newest private brand chapter involves growth in perimeter departments.
“The latest shift for us is taking our branding into fresh categories, with Sprouts Market Corner Deli, The Fish Market at Sprouts, and The Butcher Shop at Sprouts,” he said.
Eyeing the bigger picture of food retail transformation and competition, Maredia said successful operators will be the ones solving meal problems for consumers, including “what’s for dinner tonight.”