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FAREWAY HITS THE HIGHWAY

Fareway has been on a building and remodeling tear of late, with four new stores and two renovations expected by the end of 2023.

With 132 stores (and counting), the family-owned Midwest chain is in expansion mode. But its commitment to customer service and high quality aren’t going anywhere.

In many ways, Boone, Iowa-based Fareway Stores operates like an old-fashioned supermarket chain: it’s family owned, closed on Sundays and committed to customer service. Employees even carry your groceries to your car. But don’t let Fareway’s traditional approach to retailing fool you. This company is going places! (Most recently, to Kansas, where it opened store No. 131, a smaller footprint Fareway Meat Market.) 

‘Over the past several years, we’ve been focused on updating existing stores and expanding our refrigerated and frozen departments.’

Now in seven Midwestern states, Fareway has been in
 expansion mode for the past year. It opened its 132nd location — an even smaller Meat Market — in tiny Luverne, Minn., last month. Later this fall, it will debut a full-service Fareway Meat & Grocery in Ogden, Iowa. And in 2023, it plans to open three more stores, including a Meat Market with expanded grocery, and renovate two others. Beyond that, the company has already announced plans for three new full-service supermarkets in 2025 (Granger, Iowa; Brandon, S.D.; and Ankeny, Iowa).

Fareway offers a robust selection of frozen and refrigerated private label products, all under a single own brand.

“One of the unique things about Fareway is our ability to tailor our store size and experience to the community we are entering,” says chief retail officer Michael McCormick. In every new location, however, “We are committed to doing what we do best: providing only the highest quality meat, farm fresh produce, and second-to-none customer service, including online ordering and pick-up, all at competitive prices.”

Although Fareway is perhaps best known for its fresh meat (it’s even in the store’s name), “Over the past several years, we’ve been focused on updating existing stores and expanding our refrigerated and frozen departments,” says McCormick. “As we have seen customers’ shopping habits shift, we have updated our store layout and fixture plans to improve our ability to offer the most relevant products to our customers.”

We wanted to know more, so we recently sat down for a chat with McCormick. Here’s what he had to say:

FRB: First of all, other than offering more, well…meat and prepared foods, how do Fareway Meat Markets differ from regular Fareway Meat & Grocery stores? And how do you incorporate prepared foods into Fareway Meat & Grocery stores?

Michael McCormick

McCormick: The Fareway Meat Market concept is smaller in footprint, roughly half the size of a traditional Fareway Meat & Grocery store. Therefore, we concentrate on what Fareway is known for: providing the highest quality, freshest meat. Fareway Meat Markets provide a second-to-none, full-service butcher counter and only the best fresh, high quality meat and specialty items. Additionally, these locations offer to-go barbecue meal options and prepared foods. Traditional Kansas City barbecue favorites prepared by our experts include beef brisket, burnt ends, smoked sausage rolls, pulled pork, brisket mac and cheese, steakhouse baked beans, other deli salads and so much more — all smoked fresh and available daily. The Meat Markets also provide an impressive grocery selection, including fresh-cut produce, dairy, healthy products, locally sourced items, and others. A variety of craft beers, fine wines, and top-shelf spirits are offered as well.

[The prepared foods concept] has expanded into parts of new and remodeled Fareway Meat & Grocery stores. But we adjust based on consumer demand and area needs.

Temporary price cuts are highlighted with green shelf tags. But note the “get free ice cream when you buy a pie” signage, evidence of Fareway’s ability to cross-promote complementary products.

FRB: What categories in frozen are growing (and losing) the fastest and what’s driving those changes?

McCormick: Fareway has seen growth in numerous frozen product categories: full-butterfat ice cream (such as Tillamook), appetizers, cookie dough, pasta, and meals/dinners to name a few. However, we have seen a shift…from scoopable ice cream to handheld treats. Not only are they quick and convenient for consumers on-the-go, but there are no dirty dishes! And for the health-conscious customer, handheld treats offer an exact number of calories, which is an added benefit when counting or watching caloric intake. As families eat out less often, frozen meals also continue to grow, especially in the Asian and Hispanic segments.

On the flip side, frozen dairy desserts (i.e., not full-butterfat), frozen juice concentrates and frozen pies have significant competition. Frozen dairy desserts compete with full-fat, full-flavor ice cream; frozen juice competes with shelf-stable and refrigerated juice products, and frozen pies compete with fresh bakeries and thaw-and-sell programs.

‘The dairy/refrigerated department as a whole continues to grow, and we have remodeled many locations to increase refrigerated space…. [In terms of specific categories,] multi-pack yogurt, multi-serve yogurt and premium, natural cheeses are all on the rise.’

FRB: And in refrigerated?

McCormick: The dairy/refrigerated department as a whole continues to grow, and we have remodeled many locations to increase refrigerated space…. [In terms of specific categories,] multi-pack yogurt, multi-serve yogurt and premium, natural cheeses are all on the rise.


Store managers have the autonomy to use endcaps as they see fit, but they’re often used to display sale items like these Fareway products.

FRB: What was the last — or what will be the next — significant change Fareway Stores is making or will make in the frozen and refrigerated departments and why?

McCormick: There has been an increased focus on category management [when] selecting items. Average store size is approximately 24,000 feet, so it is important to focus on offering our customers the most relevant items in each category. We need to have the right assortment and variety to serve the everyday needs of today’s consumer.


FRB: I know carrying local brands is a priority for Fareway Stores — both to support the communities you serve and to better differentiate from competitors — but with 132 stores, how does that happen?

McCormick: Local brands change across our seven-state store footprint. However, management teams have the ability and flexibility — and are also actually encouraged — to source locally produced items. Additionally, they regularly take requests from consumers on local items they would like to see the store carry.


Iowa brands like Tiefenthaler’s are common at Fareway. The frozen assortment is also heavy on Blue Bunny, Pasquale’s Pizza, The Village PieMaker and various Bernatello’s offerings

FRB: How are specialty products selling — and do you merchandise them differently?

McCormick: Indulgent premium and superpremium items across many categories throughout the store are driving growth. Even in tough economic times, consumers are willing to pay for a premium product. Ben & Jerry’s, Häagen-Dazs, and Tillamook are just a few examples of brands that continue to show strong growth. Specialty and nutritious eggs also continue to perform well.

A selection of organic and gluten-free frozen and refrigerated items are integrated into current sets with their conventional counterparts.


FRB: What’s happening in your private label program?

McCormick: Fareway has historically [utilized] a one-brand approach to private label, which carries the Fareway name. The core philosophy of the private label program is to offer our customers the best quality. Private label items continue to show growth. Most recently, we expanded our private brand with plant-based milk, offering national brand equivalent quality at a value price.

FRB: How does Fareway Foods typically use endcaps? What other merchandising strategies are particularly effective, unique to Fareway Foods or otherwise help the chain stand out?

McCormick: Strategies for endcap displays vary by season and weekly item offerings. Our store management teams have the autonomy to decide what is displayed in their endcap freezers and refrigerated units. Some weeks they may highlight the exceptional value of sale items or a cross promotion, and at other times they may have a focused, meal theme. Fareway is unique in its ability to offer and execute a wide array of cross-promotions. We have enjoyed a lot of success with cross promotions that tie items together, everything from brats and beer to bagels and cream cheese.

FRB: What strategies is Fareway Foods using to help shoppers combat inflation?

McCormick: Our industry, like so many others, continues to see inflation and supply chain pressure stressing prices. However, our dedicated workforce focuses on sourcing and delivering quality meat and grocery items at competitive everyday prices…as well as exceptional value in our weekly, monthly, and special event ads. We also offer incredible quality and value in our Fareway brand items. But, in the rare circumstance a local grocery store has a lower advertised price on an identical item, a customer only needs to show the advertisement, and Fareway will happily match that price.


Natural cheese is one of several dairy categories on the rise at Fareway Stores.

FRB: Since online shopping and curbside pickup went chainwide about a year ago, how have consumers responded?

 

McCormick: Usage has been strong and growing ever since we launched online shopping in early 2021. We’ve received glowing reviews from our customers, specifically because of the ability to add to their order up to 30 minutes before their scheduled pick up time, to make substitutions in real time, and to pick up an order in as little as three hours. All of this comes at no charge and with no need to purchase a membership. These features are all part of the second-to-none service we offer.

We are continually expanding the capacity of our program and evaluating additional features (such as delivery) due to the growing demand and great feedback from our customers. 


FRB: Fareway is listed as No. 15 (first quartile!) in dunnhumby’s latest Retailer Preference Index (RPI), alongside such heavy hitters as Amazon, Wegmans, Aldi, Trader Joe’s, Target, Walmart and Publix… Why do you think Fareway Foods resonates so strongly with consumers?

 
McCormick: During the pandemic Fareway stood out because of the convenience and efficiency of our store operations. Customers came to us because our shelves were full, our stores were clean, and they could get in and out easily. All of this gave shoppers a sense of comfort and a feeling that Fareway was a safe, unique, and personalized place to shop. Expanded fresh departments, knowledgeable and approachable staff, the newest items on the shelves, and updated finishes in our stores are all key preference drivers that Fareway has been working on. We are still your neighborhood grocer with great service, but we have improved our overall customer experience in a number of ways.


FRB: What else would you like people to know about your company and what distinguishes it?

 

McCormick: Fareway is committed to providing only the best fresh, high quality meat, with full-service butcher counters; farm-fresh produce; low, competitive prices; and the highest level of customer service, including to-your-car carryout. Additionally, locations offer FastLanes, a self-service checkout option, and online shopping and curbside pick-up (at Shop.Fareway.com).

‘We are still your neighborhood grocer with great service, but we have improved our overall customer experience in a number of ways.’

Denise Leathers

Denise Leathers

Denise is the Editorial Director for Frozen & Refrigerated Buyer.

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