The Raley’s slogan, ‘Nourishing Our Communities,’ is more than idle marketing, earning the company the 2022 PRODUCE BUSINESS Retail Sustainability Award.
Originally printed in the May 2022 issue of Produce Business.
Raley’s sees the big picture, recognizing that sustainability is a critical issue for its customers, but the retailer understands it’s also part of a broader, related set of concerns that it must address holistically.
As they emerged, those concerns have generated a reordering of priorities among many consumers who believe people thrive in their personal lives, their communities and the larger environment when each element is addressed in a way that enhances health and well-being.
One consequence of Raley’s evolving approach has been the development of a new store concept, Raley’s O-N-E Market, which reflects the prescience of Michael Teel, owner, chairman and chief visionary officer. It debuted in the northern California town of Truckee on June 27, 2020. The 35,000 square foot store combines what Raley’s calls a 85-year commitment to exceptional service with an increasing focus on infusing life with health and happiness by changing the way the world eats, one plate at a time.
Raley’s industry-leading efforts in wellness, and sustainability as a critical part of a holistic approach to the well-being of its customers, easily qualified it to be the recipient of the 2022 Produce Business Retail Sustainability Award.
Raley’s has been on a mission to provide shoppers with a supermarket format that supports healthy choices for themselves, the community and the environment in large. Raley’s O-N-E Market takes the effort a step further.
“The Raley’s O-N-E market is more of an experience-based shop, with items that are largely unique to that format that deliver on a lifestyle choice to think differently about food purchases,” says Michael Schutt, Raley’s director of produce and floral.
Raley’s commitment to the wellness and well-being of customers and communities reflects owner Michael Teel’s oft-repeated mantra of ‘changing the way the world eats one plate at a time.
In its quest to support the well-being of communities in which it operates, Raley’s began by taking such steps as eliminating private label sugar sweetened soft drinks and promoting sugar awareness; removing tobacco products; sourcing 100% sustainable seafood; launching Raley’s Shelf Guide with nutrition symbols and information on 17 categories such as Nutrient Dense, non-GMO, kosher and sustainability; and instituting Better-For-You check stands. As they are taking their final steps to purchase, customers aren’t tempted with coolers of artificially sweetened soda and racks full of dubious temptations. Rather, Raley’s stocks an upgraded selection of snacks and treats such as granola bars with improved quality among candy options.
Raley’s began moving to a new approach to wellness and the customer in its existing stores. Then, in 2018, Raley’s opened a new compact store concept, Market 5-ONE-5, in downtown Sacramento that stressed organics, nutrition and education.
The Raley’s O-N-E concept places high value on transparency and education in providing a unique shopping destination with a highly curated product selection that leans heavily toward organics, which the ‘O’ in the O-N-E represents. The Truckee store introduced the first-ever Raley’s Something Extra Health program as a new feature of the company’s loyalty program intended to help interested customers enhance their personal wellness. It debuted with in-store tours and classes, personalized nutrition counseling and supplement recommendations provided by a full-time nutrition adviser and registered dietitian. Raley’s also created a banned ingredient list, applying it to the O-N-E Market assortment, expunging, for instance, high fructose corn syrup, artificial preservatives, artificial flavors, artificial sweeteners and hydrogenated fats and oils.
At the time of the store’s opening, Keith Knopf, Raley’s president and CEO, stated the company’s customers clearly wanted to know more about the origin of their food and what’s in it as well, recognizing it could impact their overall health and wellness. He added that O-N-E Market represents a next phase in Raley’s evolution as a shopping destination, with its approach of giving customers access to and information about thousands of products — education being the ‘E’ in O-N-E.
ALL IN ONE
In the process of developing its new market position, Raley’s began to link health and nutrition with sustainability and community social priorities in target markets.
“We have a holistic view on sustainability and consider our stewardship an important component of the overall well-being of the communities we are proud to serve,” says Chelsea Minor, Raley’s corporate director of consumer and public affairs. “In our annual impact report, we share updates on all elements of the business, including our commitment to our people, our community, our products and the planet.”
Raley’s view of environmental stewardship informs everything it does, Minor says, right down to its daily action and operations. In execution, the major areas of focus include maximizing the capture of the different recyclables in the company’s waste stream and diverting as much food waste as possible from landfills, with the goal of reducing food waste by 50% over the next eight years. The company also is installing rooftop solar at its distribution center and multiple stores, converting lighting to high-efficiency LED, including cases with motion sensor activation, and sourcing 60% or more of its power from green energy sources by 2030.
Raley’s decided to launch the first O-N-E Market in Truckee because, as a community, it supports an active and healthy lifestyle. Raley’s designed the store to resemble a ski lodge as a nod to the community’s athletic propensities and to underscore the company’s intention to make it a meeting place for locals and visitors, with two patios, outdoor seating and fireplaces.
In addition to 210 photovoltaic solar panels panels mounted on the roof, Raley’s O-N-E Market in Truckee opened with sustainability elements such as a highly reflective cool roof, a low water consumption adiabatic refrigeration condensing system and an anaerobic digester process that converts organic waste into bio-natural gas to power homes and fuel school buses. Raley’s harvested the Jeffrey pine trees cleared for the site and repurposed them into the store’s design including décor elements and approximately 10,000 square feet of paneling on the A-frame ceiling. The store also reduced its environmental impact through minimal use of materials, as in the case of simply using polished concrete floors.
Minor says Raley’s customers have communicated their interest in sustainability and the significant level of importance it has to them.
“They expect Raley’s to be a leader,” Minor says. “We work with environmental community groups in multiple counties and have regular dialogue about ways we can improve our sustainability efforts.”
“While we understand the intrinsic environmental benefits of our sustainability efforts, we also see a business benefit, as we have experienced cost savings through our conservation efforts. We continue to look for ways to incrementally increase the sustainability of our operations by taking advantage of new technology and more sophisticated services,” Minor says.
With unpredictable developments and hard-to-forecast costs, Raley’s sustainability efforts have positioned it to address one of the most volatile of expenses.
“As a result of our sustainability efforts,” Minor says, “we have become one of the most energy-efficient, large format grocery retailers in the nation.”
The Raley’s O-N-E concept benefits from everything that the company learned before the first such store opened, but it also was a new beginning.
“Raley’s O-N-E at Truckee was our first O-N-E store and was conceived as the ‘full bright’ expression of Raley’s vision for the future,” Minor says. “Sustainability is an important component of this brand.”
As sustainability elements are sprinkled throughout the operation, it’s hardly surprising that the produce department has its own example in the form of 100% compostable bags.
“Another sustainability focus is the food we sell at our Raley’s O-N-E stores,” Minor says, “food free from artificial ingredients. This includes more offerings of natural foods, organic and pesticide-free produce, sustainably caught seafood, grassfed beef and antibiotic-free poultry.”
Minor points out that Raley’s holistic viewpoint places a premium on nutrition and healthy foods on a par with sustainability in serving the community. Each is important for a truly healthy community where wellness can translate into a more abundant and satisfying lifestyle.
Minor explains the ‘N’ in ONE is for nutrition, “considering the ingredients in our foods and offering a product selection that omits ingredients. Raley’s O-N-E banned ingredient list includes 101 things that are considered when sourcing for the store.”
PRODUCE AT FOREFRONT
Michael Schutt says Raley’s, no matter which store, has to meet high expectations when it comes to the fruits and vegetables it presents to customers. So, even as it has focused on nutrition and sustainability, the produce department has kept pace with trends and consumers’ evolving expectations.
“Raley’s has a history and reputation of having high-quality products,” he says. “This drives all of our work. Over the last 20 years one of the biggest evolutions has been the proliferation of packaged fresh produce items. What started as a salad based offering has migrated to many vegetable items being packaged for convenience and food safety.”
At the same time, produce stands as that connection with nature that consumers desire.
“Produce is one of the last outposts for true seasonality and the tactile experience lends itself to an ever-changing landscape of items that allow our customers to not only visually inspect, but take in the aromatics and validate ripeness through touch,” Schutt says. “We try to communicate this through department, lobby or even outdoor merchandising.”
Raley’s understands that all the wellness virtues it might provide in terms of its produce offering would be limited in impact, and constricting operationally, if fruits and vegetables weren’t affordable.
“Raley’s has been a retailer that offered conventional, organic and locally sourced products,” Schutt says. “Both organic and local have real implications to people and the planet and their relationships to sustainability, but we distill it down to simply trying to offer the customer an exceptional item at a fair price.”
Schutt says the company’s early organic program that began in 1997 “taught us that we need to have more mature relationships and offerings than similar retailers in our channel. And supporting local is something smaller regional chains should take as a responsibility to those food systems and have the ability to engage on a level national behemoths cannot. We pride ourselves in supporting local farmers, many of which have had a 30-plus year relationship with Raley’s.”
Still, he says that produce has to meet the Raley’s customer’s expectations at a level that’s consistent across the store.
“We certainly have an elevated level of attention to organic in our assortment, but it does not overtake our commitment to quality,” Schutt said. “That’s something we don’t trade on. So, when you can deliver a quality item that is grown organically, this is the ‘sweet spot’ of procuring the Raley’s O-N-E Market assortment. Seasonal rhythms can have us tipping the scale at about 75% organic without compromising the shopping experience.”
“The merchandising and space dedication validates the focus,” he says. “This model should engage those who are building a lifestyle around our owner’s mantra of ‘changing the way the world eats one plate at a time.’”
The produce department reflects and projects the philosophy behind Raley’s O-N-E in that it gives arriving customers a clear vision of what the company wants to accomplish: Consumers can generate healthier outcomes in the course of their day’s shopping.
“Meeting customer demand for the best, fresh products coupled with social responsibility is how we view the intersection of people and planet,” Schutt says.
Minor notes that, although the format has been established, Raley’s O-N-E market is a work in progress. Management and store staff are conscious of what the company can do to promote sustainability, and what next steps it can take to extend the O-N-E Market format to additional communities.
“We are considering new technologies, procedures and sourcing packaging and products that make a positive impact on the environment,” she says.
As it revisits the issue of sustainability, which is a key ongoing process, Raley’s wants to bring as much as it can in practice to the environmental stewardship it has undertaken.
“Identifying the most critical sustainability aspect of Raley’s O-N-E is challenging,” Minor says. “We continue to view the food we source and sell, along with the design, build and continued operations of the Raley’s O-N-E stores, as all contributing to their overall sustainability.”
Since the Truckee store introduction, Raley’s has opened two more O-N-E markets. In contrast to the original, the second store, in El Dorado Hills, CA, near Sacramento, was a conversion opened in mid-April 2021. The roll-out plan for O-N-E Markets was set with both ground up and converted stores in mind.
“It’s a balanced strategy,” Minor says. “We are doing both conversions and new stores. We converted existing stores to bring this brand to new markets quickly. We have learned a lot about our customers in these communities.”
The 39,000 square foot El Dorado Hills store maintained the same commitment to transparency and education as in the Truckee original, as well as a similar curated assortment of products that are fresh, nutritious and organic when possible. Store employees received nutrition training in the ongoing process of supporting department standards and the ability to assist customers.
Raley’s O-N-E Market number three was a second conversion, and the first to open outside California.
The store debuted in Reno, Nevada’s Mount Rose neighborhood, and opened only two weeks after the O-N-E Market in El Dorado Hills. The 42,000 square foot store also offers the curated product assortment and array of services provided at its sister stores, and Raley’s made the point of saying that it added 4,200 new items to bolster the assortment of almost 12,000 better-for-you products carried pre-conversion.
Minor says that consumer response to Raley’s O-N-E market gave the company confidence about the concept’s expansion.
“Customers have responded favorably to our new brand,” she says. “We told customers and our team that Raley’s O-N-E was a brand that we would learn from and evolve to meet the needs of the customer. We have done just that.”
Although the products offered and the operational functions incorporated into Raley’s O-N-E are prominent features, Minor says all the elements that go into the store contribute to its success. So, the educational element and events the company offers at its stores all play into what Teel wanted, something that would enhance the wellness quotient for any community where a Raley’s O-N-E operates.
Raley’s is certainly not done with the O-N-E concept, either as a growth format or an incubator for new ideas that the company can transfer to more conventional stores. In developing O-N-E Market, and also in initiatives it has undertaken through its entire portfolio of stores, Raley’s has emerged as a leader among retailers who are taking positive steps in support of the environment’s health. With O-N-E, it simply went a step further, even if it was a pretty big step, and fully earned its Retail Sustainability Award.
The growth of the O-N-E format is an immediate priority for Raley’s in a conceptual and real sense. A new, ground-up Raley’s O-N-E Market opens in Roseville, CA, this June. It will incorporate learnings and advances based on its predecessors. Raley’s growth illustrates its concept that a better supermarket is one that offers more than just food, but also a view to a healthier future.
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At Raley’s, sustainability is more than a buzzword
2021 sustainability report outlines ways retailer is committed to people, the community and the environment.
In April 2021, Raley’s issued its first sustainability report, highlighting environmental and community-oriented actions and goals.
Among the main considerations was Changing the Way We Eat, which included the debut of Raley’s O-N-E Market, but also outdoing competitors in sales of better-for-you items in categories such as clean label, grain-free, non-GMO, keto, plant-based, organic and nutrient dense.
Raley’s, the company pointed out, had been working with 33 family farms to provide food for the operation and carried more than 4,000 items grown or produced in California. Raley’s added that it sourced 36% of its own-brand products from producers located within California and Nevada
The report highlighted such sustainability initiatives as: diverting more than 70% of all waste companywide from landfills; donating 4.8 million pounds of food via Raley’s food rescue program; and continuing commitment to and focus on ethical supply chain practices.
Beyond its O-N-E Market stores, Raley’s rolled out LED lighting throughout the chain, incorporated drought-tolerant plants landscaping, and developed in-store air-conditioning and refrigeration systems that reduce water consumption by up to 70%. It also worked to ensure new refrigeration systems exceed the 2030 standards for CO2 emissions and continued commitments to animal welfare with a focus on transparency and communication. It set goals of transitioning to consumer compostable private label K-cups, discontinuing the sale of plastic foam coolers in all stores and packaging all cut vegetables on compostable trays and meat on recyclable trays. Raley’s noted that it was the first retailer in California to receive the EPA’s Green Chill Gold Level Certification.
EMPLOYEES AND EDUCATION
The report also touched on employment and labor issues, with the declaration that Raley’s is committed to hiring employees who reflect the communities served. The retailer is also working to establish a culture of respect that enables employees to maximize their strengths, achieve their full potential and build a long-term career.
From the Raley’s perspective, education is part of what sustains a community, so it started a relationship to support the Northern Nevada Literacy Council; the Adaptive Learning Center of Concord, CA; Becoming Independent, an organization in California’s North Bay community working people with developmental disabilities; and City Year Sacramento, which places AmeriCorps members in low-performing schools for a year. The company promotes learning within the organization, supporting the development of team members with informal mentorships, encouragement of knowledge sharing, internally designed leadership programs, scholarships and tuition reimbursement.
Community initiatives include food banks via its food rescue program, sponsoring Raley’s Food For Families, which raises money through customers, vendor partners and employees. At the same time, the company makes community investments and promotes Raley’s Extra Credit grants as it donates to nonprofits, schools and school districts, and crisis relief.