The three-format retailer serves a diverse customer base using its authentic heritage.
There’s an old saying that if you can’t be first, then be different. Balls Food Stores is a good example of a business that is both — inventor and innovator. These assets have proved a winning combination for this third-generation chain that is close to celebrating a century in operation.
Borne out of a single mom-and-pop store in 1923, today the chain boasts 28 stores in a trio of formats designed to fill the needs of its Kansas City customers. The secret to this success is putting customers’ needs first. Nowhere is this evident than in the produce department.
Produce was one of the foundations of this early full-service supermarket. The store’s founders and food distributors, Sydney and Mollie Ball, opened a store and implemented the area’s first cash-and-carry system. Fred Ball (their son) grew up in his parent’s business. By the 1980s, Fred expanded the chain to 13 stores. Fred’s son, David (the current chief executive officer and company president) continued to expand and kept the focus on fresh with a strong “Buy Fresh, Buy Local” program and in-store CSA.
Today, Balls Food Stores operates three formats: Hen House Markets, Price Chopper and Payless Discount Foods. The retailer is one of the largest employers in Kansas City with 3,200 team members.
Hen House, with 11 locations in the Kansas City Metro area, is a neighborhood supermarket where the emphasis is on perishables and a high level of service. There is an average of 700 produce SKUs, 80 to 100 organic fruits and vegetables, and produce represents 13 percent of total store sales.
Price Chopper is middle-of-the-road in its aesthetics and the low-price leader in Kansas City. The banner’s 16 stores, located in Kansas and Missouri, offer some 500 SKUs with 40 to 50 of these organic. Produce generates 10 percent of total supermarket sales.
Finally, Pay Less Discount Foods carries an average 400 SKUs of fruits and vegetables, limited organics, and 9 percent store sales come from produce. Pricing is EDLP (every day low price). Store sizes span from 30,000-square-feet for a Hen House Market in a small community to a Price Chopper of up to 80,000-square-feet. It’s a trio of formats that gives Balls Foods the ability to offer something to everyone in this two-state metro area — where the population is 2.3 million and median income ranges between $38,000 to $45,000 on the Kansas or Missouri sides, respectively.
The opening of its own central warehouse 15 years ago enabled Balls Foods to purchase 70 percent of its produce direct from suppliers. The remaining 30 percent is sourced through its membership with Kansas City, KS-headquartered Associated Wholesale Grocers (AWG).
“Having our own warehouse allows us to be hands on in what we buy, such as cream-of-the-crop items such as Driscoll’s berries, Sun World’s grapes and Oneonta’s (Starr Ranch Growers) apples, pears and cherries for our Hen House stores,” says Steve May, director of central warehouse, produce and floral for the Kansas City, KS-headquartered chain. “We can also take advantage of a variety of sizes of fruits and vegetables for use in tote programs at Price Chopper and EDLP pricing programs at Pay Less.”
Balls receives deliveries to its warehouse seven days a week, assuring as May says, “maximum freshness due to turns through the roof.” AWG delivers to Balls warehouse three to five days weekly. Individual stores receive produce from the chain’s central warehouse four to five days a week.
May heads the buying team and purchases East and West Coast fruits. Wayne King buys vegetables on both coasts, while Lori Franklin heads up the Hispanic/tropical and organics sourcing. Mark Fishman is the local procurement buyer. Local is huge for Balls, along with organics, and both categories are a major way the chain differentiates itself from chief competitors such as Hy-Vee, Sprouts Farmers Market and Wal-Mart Super Centers and Neighborhood Markets.
“We partner with 150 growers annually located within a 200-mile radius for our ‘Buy Fresh Buy Local’ program. Many of these are family farms, and we serve as their distribution arm by having them simply deliver to our central warehouse. We meet with the growers in November and December to give them specifics on what we want. For example, 300 pounds of cucumbers weekly from X to Y date and what we are willing to pay. That’s what our growers love about us. We’re willing to pay a fair market value.
The locally grown season in Kansas starts with leaf lettuces in the month of May. Fruits and vegetables from berries and apples to peppers and broccoli are cultivated through the summer and into October. This local produce is offered at all three of Balls formats.
May says food safety is key to quality and ensures customers feel safe. This is a fascinating challenge since many of the growers are simple Amish and Mennonite farmers who eschew modern conveniences such as electricity and literally use horsepower to plow. Fishman and his team, May says, help farmers decipher the volumes of requirements needed to become GAP-certified and remain certified each year. To accomplish traceability, the Balls team has come up with a sticker system. Farmers affix these stickers to each box of produce. The stickers have the farmer’s number, and the farmer can then trace the product down to the specific field by date.
“We hold farmers markets right outside the front of our stores from 5 a.m. to 1 p.m. on Saturday mornings from July through September,” says May. “The aroma of the ripe fruits is especially enticing. It’s a fantastic way to for us to showcase the freshness of our produce to customers immediately as they start to shop. In addition, we’ll host ‘Meet the Growers’ events in our Hen House Markets. This will include beef, poultry and dairy farmers as well as a couple of fruit and vegetable farmers. It’s another way that sets us apart, embracing local in a way that’s not limited to produce.”
Hen House Markets was one of the first chains in the U.S. to set up a CSA program in-store. This program is now a decade old. Customers pay $25 to register, and they receive a bag and T-shirt. Each week, shoppers can opt to pick up their bag on Saturdays or Mondays. Prices for products in the bag are up to 30 percent off regular retailers. Bag contents may include a few cucumbers, tomatoes, fresh corn, watermelon, a pound of cheese, chicken and a quart of milk. There’s a trading table where customers can swap items, such as meats for more produce. Members receive a weekly newsletter that highlights participating farms, the growers, crop updates and recipes.
In addition to local, Balls Foods made a commitment to sustainability. For example, the retailer recycles 100,000 tons of cardboard each month; the store has a Bag-to-Bag recycling program that diverted nearly 150 tons of plastic bags from landfills annually; and it composts more that any retailer in Kansas City at 65 tons monthly.
Another way Balls Foods differentiates itself is its chef’s prepared produce. “We are the leader in our market area for fresh-cut fruits and vegetables,” says May. “It’s all done in a specific area of each store’s backroom built for this purpose, by trained dedicated chefs with a stringent food safety program in place.”
Four Hen House Markets are equipped with fresh squeezed juice machines. It’s something the chain introduced 20 years ago. Fresh-squeezed orange juice and lemonade are the two best-sellers. The juice machines are located in a kiosk on the sales floor. There’s a menu of 20 different juices available akin to a juice bar concept. Combinations include carrot-beet and blends with kale. Kiosks are manned by full-time produce staff. The recipes are concocted by the store’s Development Team, which has four produce managers. The team also innovates other fresh-cut produce offerings as well as comes up with a go-to-market strategy for the new products.
“We made a decision a long time ago to only use fruits and vegetables at their peak of freshness to juice, rather than culls,” says May.
Bulk foods are another standout in produce. Selections include the top 120 SKUs of dried fruit, nuts and trail mixes in both conventional and organic. A full-time employee mans this station and makes freshly ground nut butter daily.
Produce isn’t the only perishables department to stand out at Hen House Markets. The deli boasts brand name meats and cheeses as well as an award-winning salad bar with more than 25 fresh fruits and vegetables.
“We can be nimble on truckload items since we have our own warehouse,” adds May. “These are items we didn’t know about in time to put in our banner’s weekly ad. We’ll let customers know via social media. We also use this method to announce in-store events. For example, we do roadshows where our chefs go in store and do demos. We recently did this with breadfruit and ended up selling 30 to 40 cases because of the demo.”
Balls Foods’ Hen House Markets Named Retail Role Model by Produce for Better Health Foundation
Hen House Markets, an 11-store banner of Kansas City, KS-based Balls Foods Stores, is one of only 10 retailers in the nation to receive recognition as a Retail Role Model in 2015 by the Hockessin, DE-headquartered Produce for Better Health Foundation (PBH). This is the first time Hen House received this honor.
Retailers who attain this title employ a multitude of methods to encourage consumption of fruits and vegetables by its customers. This ranges from using the PBH logo on marketing materials, packaging, signage and ad circulars to linking to the organization’s website. In addition, Hen House Supermarket Registered Dietitian, Kayla Graves, teaches customers about ways to include more produce in their diets in a variety of ways, such as school store tours, cooking and nutrition education classes, and in-store events.
“This is very cool,” says Steve May, director of central warehouse, produce and floral, of the Retail Role Model accolade. “It’s great to be recognized for doing good.”