TLDR: Sprouts built its brand on being accessible to all types of shoppers, not just those who can afford high-priced health foods or organic produce.
So what? In the low-margin grocery business, it’s all about how you can create a niche that sets you apart from the competition. Here’s how Sprouts did it — and what marketers can learn.
After 20 years, Sprouts Farmers Market is still going strong. The grocery store chain began with 18 stores in the Phoenix area in 2002 and now has over 380 stores nationwide, making it one of the largest grocery chains in the U.S.
Sprouts is a one-stop shop for organic foods. The company has succeeded by making healthy foods affordable and flexible to consumers’ needs. It also functions as a health food store with a wide range of products including vitamins and supplements, body care products, cleaning supplies, organic produce, and natural meats.
Sprouts’ success has come from offering an affordable selection of natural foods, while providing customers with one-stop shopping convenience of over 7,000 products. The brand’s marketing strategy is designed to appeal to customers that usually shy away from organic foods because they’re too expensive or unfamiliar.
For marketers carving out a niche in a crowded industry, here are a few of the strategies used by Sprouts.
The Foundation: Discounted Produce
A big part of Sprouts’ appeal is its low prices. It’s maintained this position by offering customers a 20% discount on produce. Since the company’s earliest days, Sprouts has always offered a large selection of fruits and vegetables for less money. While most grocery stores sell produce based on weight, Sprouts instead bases its prices on size.
This may sound like an unusual practice for grocers, but it allows them to offer customers lower prices than competitors without sacrificing quality or freshness. In fact, many people consider Sprouts’ produce higher quality than what you would find at larger grocery chains like Whole Foods.
The Extras: Demos and Tastings
Sprouts Farmers Market has a compilation of demo and tasting events at various locations across the country. These events are great for educating customers about healthy eating habits and helping them find new food items. They also help build brand loyalty by creating experiences that can be shared with friends and family.
Demos are also beneficial for first-time shoppers who don’t typically read ingredient labels or consider nutrition facts. These demos allow them to learn more about what they’re buying before they make purchasing decisions.
The Marketing: Focus on Products
Sprouts’ marketing strategy — which includes television, Internet, and printed circulars — is heavily focused on its products. The company constantly makes healthy food appealing by providing the best of both worlds: a wide variety of food options, and an emphasis on healthy eating.
They also use their stores as venues for community events like farmers markets and health fairs. Sprouts also uses social media by posting photos from local events at their stores with hashtags like #mysproutstory or #sproutstothepeople. This is also so Sprouts can show how much it values its customers’ opinions by asking them questions about what types of promotions they’d like to see in-store.
Their stores are often located in geographical areas where there are plenty of other businesses that cater to the same demographic (like their competitor Whole Foods). This creates a “network effect” where customers can run many errands at once in the same shopping area.
Sprouts Has Succeeded by Making Healthy Foods Affordable and Flexible with Consumers’ Needs
The Flywheel: Loyalty Programs
To keep customers coming back for more — the “flywheel effect” — Sprouts offers:
- Rewards program: Customers receive points every time they shop at a Sprouts location. These points can be used to earn gift cards or cash back when shopping at other locations within the chain.
- Loyalty program: By downloading the app, customers can access instant savings through scannable coupons.
- Regular deals: The chain offers discounts on specific items each week, while simultaneously offering “Deals of the Month” relevant to the time of year.
Sprouts has worked hard to position itself as a value-driven grocery chain focused on helping customers eat healthier. This strategy has paid off for Sprouts and shows no signs of slowing down anytime soon.
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