“New formats like Fresh Thyme, Lucky’s, and Sprouts are establishing a foothold in the Midwest, which is keeping traditional retailers on their toes,” confirms Bob Kirch, chief executive officer of Indianapolis-based Caito Foods Service, Inc.
“Initially it was the big box stores coming to town and now it’s the niche and the small independents, the natural foods, the fresh foods types of markets and grocers, with a smaller format and smaller footprint,” observes Comito. “Some of these stores vie for market share formerly held by locals and independents, while others seem to be targeting newer or revitalized neighborhoods.”
Fresh Thyme operates in five of the six of the cities profiled here, though its greatest presence is in Indianapolis, with five metro-area stores. The chain opened its third Cincinnati location this year and moved into the crowded Milwaukee market back in June.
“The retail environment in Milwaukee had been dominated by Roundy’s,” recounts Maglio. “Over the last several years,” he continues, “some existing groups have grown in size, new groups have come to town, and online ordering of groceries and meal kits have all eroded [Roundy’s] position,” he explains. “I would say that Milwaukee is oversaturated in retail competition.”
Fighting for market share
National and regional chain stores are responding to the pressure. Fresh Thyme is absent in the Cleveland market, where Heinen’s opened a small-format, downtown location catering to the young professional crowd.
Both Dierberg’s and Schnucks, in St. Louis, maintain produce sections with more organic SKUs; Dierberg’s appears more aggressive with its center-aisle organic offerings, including limited availability of bulk foods.
Colorado-based Lucky’s Market is moving east, with a store in Des Moines, two in St. Louis, and a store in Bloomington, IN.
Delivery services and local producers are also competing for the organic and specialty market; Indianapolis is headquarters to Green Bean Delivery, which expanded to the St. Louis market, where it vies for market share from local chains as well as Fair Shares, a large CSA subscription-style firm offering local produce from many different area farms.
Larger specialty formats are also present and fighting for their share of the fresh produce and food market.
Well known Whole Foods operates at least one store in each of our covered metro areas, with three locations in 2016 around Cleveland and St. Louis. Cincinnati is also home to two-location Jungle Jim’s International Markets, a longtime specialty retailer that started as a single produce stand in the city.
Ray of Ray & Mascari in Indianapolis has also observed Midwest expansion in wholesale cash-and-carry “marketplace” formats, like Gordon’s Food Stores and others. “They’re fueling a lot of demand right now and sparking people’s interest. Smaller mom-and-pop stores are able to pick up fresh produce at these stores,” Ray notes.
