Sprouts began its expansion in the 2000s. By 2012, Sprouts, Henry’s and the Sunflower chain had merged and all three began flying the Sprouts Farmers Market banner with about 100 stores in its portfolio, mostly in the Southwest. In August of 2013, Sprouts went public, trading on the NASDAQ stock exchange under the SFM ticker symbol. The number of stores has grown exponentially since then pushing its theme of healthy eating. 

Sprouts Farmers Market utilizes an open layout format with fresh produce at the center of the store. The low-profile shelving allows for an uninterrupted view of the entire store layout upon entry. The typical store is 25,000 to 30,000 square feet and has about 19,000 SKUs, which is about half the number carried by a conventional supermarket and about a third of what the bigger box store has in their aisles. Sprouts is intent on new discoveries within its framework, rotating 7,000 new SKUs annually as it keeps SKU count in the same below 20,000 neighborhood.

The chain’s core purpose for its assortment is to have a healthy focus curating food choices to help the Sprouts customer “Live and Eat Better.” The product focus is on fresh, natural and organic foods, with the concept of clean food — free of artificials colors and additives — often touted by its leaders. 

During a tour of one of its stores, Vice President of Marketing Marisa Thompson noted that organic options are front-and-center with more than 50 percent of produce assortment being in that category. She added that 70 percent of Sprouts 19,000 SKUs are attribute based, which would include value-added characteristics such as organic, gluten-free, plant-based, no antibiotics, grass-fed beef, A-2 milk and the list goes on and on. Thompson called them “better-for-you” products.

Sprouts food selections are minimally processed and free of artificial flavors, food coloring, preservatives and synthetic ingredients. These “clean” options represent about 90 percent of its products. The stores do not sell Pepsi or Coca Cola or snacks loaded with artificial dyes and additives. While Sprouts sells brand names throughout the store, including in the produce department, but also has its own private-label brand of products under the store moniker. Sticking to its positioning with a wellness focus front and center, each store’s vitamins and supplements department is very large, typically including about 7,500 products. 

The chain also is very proud of its constantly changing assortment, appealing to what it calls its “forager customers” who are always looking for something new and innovative. In fact, each store has a Forager Finds destination where hundreds of new products are trialed on an ongoing basis.

Produce makes up about a quarter of the business for Sprouts, with the stores carrying at least 200 organic produce items at all times. Locally sourced fruits and vegetables and first-to-market produce options are constantly being vetted by its local produce team.

Prior to the COVID-19 pandemic, Sprouts did not have a major online presence, but the specialty grocer saw a big jump in online sales and has consistently leaned into that option ever since. It now represents more than 10 percent of total store revenue, with value of basket exceeding in-store sales, even for produce.

The chain is aggressively building out its distribution center network to support its aggressive growth. It is laser focused on adding store locations that are within 250 miles of a DC to foster its commitment to freshness, which is another core product element, along with natural, organic and innovative.  

Sprouts leadership team easily acknowledges its space in the retail sector as a complimentary stop for its customers. CEO Sinclair recently spoke to that positioning. “The grocery industry is worth about $1.4 trillion,” he said. “We’ve said we’re just going to go after $200 billion, which means we’re ignoring $1.2 trillion dollars.” 

That $200 billion represents the buying power of its target customer: health enthusiasts who deeply care about what they eat and want a grocery store with similar values. He added: “We’re a small company in a very big landscape. We’re $7 billion in an industry that is $1.4 trillion, so we’re kind of tiny. I think we’ve got a role to play in trying to make the world a bit better.”

Sprouts Farmers Market is explored further through the specific lenses of its produce, merchandising and marketing folks with an additional look at its sustainability and charitable foundation platforms. While each executive has their own unique perspective, Sprouts core values centered around three pillars surfaced during each interview and adorn almost every office wall: “We Care (for each other, customers, planet), We Love Being Different (embracing diversity for unique experiences), and We Own It (teamwork for excellence and celebrating success).”