January 31, 2018
A few years ago, Susie Farbin and Diana Hicks of MaMa Jean’s Natural Market found themselves with a growing prepared foods business. Many independent stores across the country have also found that sandwiches, soups, wraps, salads and even hot entrees serve their customers’ lifestyles well and offer great opportunities to grow repeat business.
With growth, Susie and Diana had a challenge: how to ensure they offered consistent quality and value in their three stores. Given the specialized skill set that food preparation requires and the challenge of managing separate prep kitchens, they decided to open a commissary—a single, separate facility in which to prepare food for all locations.
In and of itself, this concept has the potential to help control the big financial challenges of foodservice—food costs and labor costs—while providing freshly made, tasty and innovative products in all stores.
However, MaMa Jean’s gained more than that.
It found a commissary location that was not only conducive to supplying the MaMa Jean’s stores but also to serving the public. Rather than focus solely on cost containment and ensuring quality, Susie and Diana decided to use the location and its products to grow revenue.
And grow some revenue it did.
Christened MJ’s Market and Deli, it became a profit center in its own right, developing into a popular spot to get soups, salads and sandwiches for immediate consumption and other entrees for in-home dining. This innovative new concept not only achieved its intended purpose by serving the other stores, but had become a source of new business by boosting revenue and attracting new customers to both the deli and MaMa Jean’s other outlets.
A basic business strategy tenet is that there are two primary ways to reach customers—by being the price leader with the lowest priced items or by differentiating with quality, innovative products. MaMa Jean’s, like virtually every other independent natural products retailer, cannot be the low-price leader, so it differentiated by offering a new service that features a quality product that meets needs in its community.
Secrets for commissary/deli success
In my visit with Susie and Diana, we talked not only about business growth and success but also about what they learned in the process of opening the commissary/deli that might be of value to other retailers looking to differentiate themselves and grow in crowded and increasingly competitive markets. Here are some of their learnings:
Branding. Give it its own identity. They gave the new deli a slightly different but related name. They did not want to create a new entity, but they didn’t want people to think that this was “location No. 4,” offering the same fare as their current stores.
Location. Pay attention to location. The deli not only was placed and arranged for its role as a commissary but also to serve working people for lunch and take-home products. The setup accommodated deli counters, a steamtable, etc.
Employees. Be sure that your first hires for the new location are well-versed in running foodservice facilities. This not only helps ensure sanitary food prep locations, but an efficient operation that minimizes waste of both food and labor.
Recipes. Establish and follow recipes. This ensures a consistent customer experience and allows you to price products properly.
Standards. Remember that you still need people that know how to handle freshly prepared food in your stores. While the primary work is being done off-site, the items you sell in the stores need to be handled, stored and rotated properly.
Vehicles. Plan for an appropriate vehicle or vehicles to transport items from the commissary to the stores.
Suppliers. Explore the market for suppliers. The major wholesale suppliers in the natural/organic marketplace have added tremendous resources for retailers moving into foodservice. These can be a great help because you have an established business relationship and regular order and delivery routines. Be sure to also check out local suppliers, too. Incorporating products from well-known local growers can help add to the uniqueness of your offerings.
Since their opening in 2002, Susie and Diana have seen their business steadily grow, and they now employ 200. Since the beginning, the stores have been very involved in the community and supporting local nonprofits, and they have connected with their customers with newsletters, in-store events and social media. At Natural Products Expo East, MaMa Jean’s was honored as a Store of the Year by Natural Food Merchandiser and Natural Products Expo.
Growing a natural products retail business from a single store to three locations is no small feat. That accomplishment is even more impressive when considering the size of Springfield, approximately 170,000 people. Also in that relatively small market are at least five other independent natural stores, some national vitamin and supplement stores, the corporate office and several stores from a regional grocery chain with the mission of promoting “healthy eating habits for children and adults,” as well as several national grocery stores that have been emphasizing natural and organic products. In this market, there is a lot of competition.
In the right markets and with the right execution, foodservice can be a boon for a natural retail business. You might consider this in your store. If you grow your foodservice to having enough volume, in one or multiple locations, you might consider a commissary for much the same reasons that Susie and Diana did. If pondering a commissary, consider the option of it being a part of your retail presence and not just a supplier for your stores. It could open new business avenues.
Bill Crawford of Crawford.Solutions has been in the natural products industry for more than 25 years as a retailer, industry analyst, educator and consultant. He can be reached at [email protected].
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