It seems like everyone in the natural products industry knows, admires and trusts Dean Nelson. Want tips on creating an engaging store environment? Chances are you’ll hear, “Ask Dean.” How do you put people over profits yet still do great business? “Ask Dean.”
And more recently, if you have questions about POS systems or anything numbers related, you’ll get a resounding “Ask Dean.” Ironically, the man known for keeping a sharp eye on data and leveraging it for growth and success opened Dean’s Natural Food Market in Ocean, New Jersey, back in 1996 without a lick of business acumen (or so he says; he’s quite the humble guy). Nelson simply had a passion for serving health-minded, environmentally aware consumers, and the rest followed. Even though Nelson was knee-deep in opening his fourth store in July, he took time out to talk with NFM.
What got you into natural products retail?
Dean Nelson: I was brought up with natural foods, and as I got older, I began exercising a lot, didn’t drink alcohol and eliminated animal products from my diet. I’m a vegetarian now and haven’t eaten meat in 22 years. While managing a natural products store 23 years ago, I fell in love with everyone’s dedication to the environment, to their bodies and to simple things like reusable tote bags, which were all so uncommon at the time. I wanted to serve the conscious consumer and felt I could do it on my own, so I borrowed a bunch of money and opened my first store. I didn’t know anything about business back then—I just went for it.
And now you’re famous for your numbers knowledge. How has technology enhanced your business?
DN: It’s all been an evolution. I’d try one thing and realize I could make it a bit better and then even better. But store culture has always been No. 1—focusing on how I want to serve people has always been primary. It wasn’t until technology became readily accessible for small retailers that I understood how it could really enhance our operations. Then it kind of became an obsession. But in the beginning I was just focused on committing to 100 percent organic produce and serving our customers and community.
Would you advise other independent retailers to leverage technology and data as you have?
DN: Great retailers are really passionate about what they do, and the survivors combine passion with business experience. It’s expensive and a huge time and resources commitment to have POS equipment, so it may not be a big benefit for a very small store. But as we’ve grown, between creating labor budgets, tracking top sellers, managing inventory and making cash flow projections, it’s been really vital. Because we invested the time and energy before we grew, the processes were in place, making it significantly easier to grow.
So is this a big reason why you now have four stores?
DN: Actually, we really grew as a company when the focus came off of me and onto the people who work here every day. We have a program called I Matter, which bonuses every employee 5 percent of his or her annual income every quarter if we hit our goals. This gives employees a sense of ownership over their compensation and emphasizes that every single person makes a difference in our success. This has long been a dream of mine, and we finally did it a year and half ago.
Might there be a fifth or even sixth store in the future?
DN: The plan is to grow even more. I made a commitment to create careers for the people in this company if they stayed with us, so I need to fulfill my responsibility. I’ll do that through continued growth.
Is it tougher to stand out today given so much competition?
DN: I’m sure it is, but I think we’ve found our distinctive points of differentiation. We’ve built our brand, and our communities know and trust it. We’re located 200 feet from Wegmans, a great company, so sales reps and brokers always ask me how we do it. I tell them we just try really, really hard every single day. I work with the most driven group of people I know. Shoppers also respect our staunch commitments to organic, non-GMO and the community. And we’re very active in the inner city, especially with the youth and African-American populations, so we get a lot of reciprocated support. Overall, we take the focus off products and put it more into the interpersonal aspects of being a business invested in its community.
Please tell me about your non-GMO commitment.
DN: In 2012, we banned any grocery, dairy or frozen item from coming in if it contained high-risk ingredients—unless it was certified organic or Non-GMO Project Verified. This was a giant milestone for us for two reasons. For one, we felt we were living out our mission and doing our part to change the food industry. For two, we really showed our customers our authenticity. When they’d come in looking for their favorite breakfast sausages and we’d tell them the product didn’t meet our standards, they’d ask why and that became our opportunity to educate about GMOs.
What are the biggest challenges you face as an independent?
DN: Competition scares the heck out of me. When I read about the growth of Sprouts, Natural Grocers, Fresh Thyme, Earth Fare and others, I’m concerned about what the market will look like 10 years down the road. That said, I can only focus on the positive benefits I can provide my community. I’m also concerned about large conglomerates buying small organic and natural manufacturers. When you look at that ownership tree today, it’s kind of scary.
Can independents like you keep thriving going forward?
DN: I won’t lie: I’m concerned about it. We’ve been very active in INFRA, and organizations like that will be critical to the preservation of independents because they give retailers the resources to run their businesses in today’s world. No matter how you slice it, this is business, and it’s going to be very difficult for independents to survive on their own. But if there’s collaboration, we all have a much greater chance. Also, the customer shopping experience is going to shift. The big talk at a recent INFRA meeting was focusing more on fresh because consumers are always on the go. The center of the store is going to change and be more of a peripheral experience. So am I concerned? Absolutely. But no matter what, I know there will always be room for great retailers. Always.
What excites you most about the work you do?
DN: I get excited when I see a young person come into our company, show passion and enthusiasm and create a career opportunity for him- or herself. That is so humbling. And when we’re in a position to help a staff member with tuition or car insurance, that’s when I feel successful. It’s also an honor and a privilege to work within this industry, which is comprised of such amazing people that I couldn’t imagine doing anything else. There is never a day when I wake up and don’t get excited to go to work.
I’m also so humbled by the impact we have on our community. I love it when people enjoy their experience at our stores. It’s not just about the register ringing all the time. Don’t get me wrong: That’s very important. But we created this, and when you create something people enjoy, it’s like art—you only want to do it more and more.