Sprouts Farmers Market, the grocery chain that builds its stores around the product department, promises investors “a beneficial supply chain”.
Greater Denver is at the center of this venture after the company opened a 135,000 square foot distribution center in Aurora this month. Sprout officials say the facility will give Colorado growers and producers more opportunities to sell their products through the chain, a more sustainable supply chain network, and precision-ripened fruit on local shelves.
One of the immediate effects at Colorado’s 32 Sprouts locations is the expanded range of local and organic products, including local herbs and mushrooms, that are first available in the state, according to a press release.
“When you have closer partnerships with growers, you can’t stress the importance of that enough,” Scott Neal, director of fresh merchandising at Sprouts, told the Denver Post last week after celebrating the opening of the Aurora Center on March 17th had fellowship and good for our business. “
AURORA, CO – MARCH 19: Refrigerated semi-trailers will be returned to the loading docks of the new Sprouts distribution center in Aurora on March 19, 2021. (Photo by Eric Lutzens / The Denver Post)
The Aurora Center will allow Sprout’s supplier network in Colorado to expand four or five times, and the company will have well over 100 new items from these suppliers with more growth along the way, Neal said.
Sprouts has stores in 23 states, but the Aurora facility near the Tower Road-Interstate 70 interstate, southwest of Denver International Airport, is only the grocer’s sixth distribution center. A seventh is slated to open in Florida this summer, according to a press release.
After the COVID-19 pandemic and the associated shocks in the supply chain, more distribution centers near the branches means a stronger and more reliable network. Outside the Aurora Center, supplies were being made to Colorado branches from Glendale, Arizona. Now Sprouts can serve all Colorado branches as well as five in Utah and eight in New Mexico from the Denver metropolitan area.
“In the context of the pandemic, the buzzword is ‘supply chain resilience.’ This creates and supports resilience,” said Joe Hurley, vice president of supply chain at Sprouts. “There’s really good resilience between Aurora, Arizona, Utah, and New Mexico.”
Sprouts officials said a quarter of the chain’s sales come from products. With this in mind, the Aurora distribution facility has nine ripening rooms designed to ensure that the shelves are filled with fresh and ready-to-eat items. Bananas and avocados, two of the company’s best-selling products, will receive special attention in Aurora
“When we’re in control here in Colorado, we can either speed them up or slow them down so they reach the perfect ripeness for business,” Hurley said of bananas specifically. “You do what’s really important right every time.”
The distribution center is operated by Penske Logistics. As a third party vendor, Penske is responsible for staffing the center, which has more than 70 employees, Hurley said.
Sprouts estimates that the Aurora Center will save between 4.5 and 5 million road truck trips annually due to the much shorter truck routes between the center and the stores. With a special fleet of trucks, trailers carrying products and other goods come back with cardboard and other recyclable items, which further improves sustainability, Hurley said.
AURORA, CO – MARCH 19: Forklift operator Maria Flores removes pallets of bananas from one of the ripening rooms at the Sprouts distribution center in Aurora on March 19, 2021. (Photo by Eric Lutzens / The Denver Post)
A stronger distribution network means more flexibility to expand, and Sprouts plans to do so in Colorado and beyond.
“We’re going to open 20 new stores next year. There’ll be one here in Colorado, ”said Neal, referring to the upcoming Green Valley Ranch store, which will be just a few miles from the Aurora facility. “We already want to increase our density in Colorado and that (distribution center) will be part of the strategy.”