Sprouts Brews Up a New Strategy | Fast Five Shorts

Sprouts says it's going to open 20 in store cafes across Southern California, according to Grocery Dive.

Sprouts Farmers Market announced Wednesday it is expanding its partnership with Klatch Coffee.

Klatch Coffee, good alliteration there.

Although it's not really alliteration because it's a K and a c. To open 20 new in store cafes.

The specialty grocer plans to open cafes inside stores in Southern California in two phases, beginning late this year and lasting into 2026.

And the story about sprouts adding 20 coffee shops to new stores this week definitely intrigued you because I know you want to include it in this week's Fast5 roundup.

Why was that?

Well, I think we ran into Nick Conant from Sprouts.

Yeah, the CEO here at Grocery Shop, and we were talking to him about this.

I was like, I'm really curious about what, you know, what this is all about.

What do you think about it?

And I think what became abundantly clear during that conversation is that this is just adding an enhancement to the Sprouts experience in a way that Sprouts can uniquely provide their customers.

The Sprouts trip is a destination.

The consumer is already going there in a different mindset.

They're not going there with like a bang, bang, bang.

I got to get as many things as possible.

Like, that's an additional trip.

Sprouts knows that.

And so they're making this just a little added convenience while you're there to get you to feel like you.

Yes.

Go talk to the chief foraging officer's team that's in the store showing you their new products.

Go into the beauty and vitamin area and spend some time talking to the Sprouts associate there to learn about the new products that they have there.

Like, it's a completely different mindset.

So this to me is like, you know, getting a glass of champagne while you're shopping at a fancy department store.

Like, getting a locally, like, unique, independent brand's cup of coffee while you're shopping just is stunning.

So on point for them.

And I think it's just going to make the Sprouts experience even better.

Yeah, I mean, I, I, I, I agree.

I think, you know, I, I don't, I don't think the move itself is like that big and noteworthy because it's been done before.

But I think when you put it in the context of what Sprouts is, it's, it's, you know, it's important.

So, like, you know, the, the phrase I keep using after talking to Jack on stage And I've talked about this.

We've talked about this before because we talked about sprouts being the 2024 retailer of the year, if I remember right.

But is dry powder.

They have so much dry powder in their keg at Sprouts in terms of things that are going to help growth.

So like you said, and they've got a value proposition with a defined target market.

They've got an optimized store prototype that is smaller.

They actually went smaller.

And it's working.

It's showing the payback.

Yeah, they're only in 24 states right now, so they've got a ton of growth opportunity.

Just geographically.

They don't even have a loyalty program.

Man, that's the craziest thing.

They don't even have a loyalty program stood up yet.

And now they're started it, right?

Yeah, they're just starting to roll it out.

Yeah, yeah, they're just starting to roll it out nationally, so.

And now they're putting coffee shops in to, you know, gives another reason that gives another traffic hook to go to Sprouts versus somewhere else.

It also gives you a better basket size because, you know, you get the coffee.

And to your point, and here's the other thing, you shop with a coffee, you're not shopping as quickly.

And when you're not shopping as quickly in grocery, you tend to buy more stuff.

And that's the key here.

So.

So they've got so many, so many bullets in the gun, so to speak, to, to go out and continue to grow.

So I wish, I wish, I wish there's probably many CEOs that wish they had as many growth opportunities lying on the ground for them to pick up as Sprouts and Jackson Claire have, in my opinion.

Yeah, 100%.

I think that was one of my favorite takeaways from what he said when you were talking to him on stage.

He's like, we're only going to the areas where we have the audience that we want, we have the distribution close by.

To like, to ensure that this product of Sprouts is going to be a knockout in every market that we go into was so, so impressive.