Can a grocer build a business on the keto diet trend?
Dieting trends may come and go, but a grocery store in Colorado expects ketogenic eating to stay around a while and is finding success by building its assortment around keto products.
The mom-and-pop store, Explorado Market, launched its brick-and-mortar location in 2018 and has experienced month over month exponential growth since then, according to the company. Before launching the store, the grocer’s founders opened a production facility to create its own line of keto-friendly products, which it now sells both in-store and online.
According to Explorado Market co-founder Rob Benson, traditional grocers stocking keto products are unable to keep up with the demand from customers, and some of the products themselves can’t scale due to ingredient costs, necessitating a keto-only grocer for adherents to the lifestyle.
The past decade saw a boom in wellness-focused grocery products — though there’s an ongoing debate about what actually constitutes healthy food. Both high-fat/low-carb diets like keto and lower-fat, higher-carb animal product-free diets like veganism, while in some cases at odds with one another nutritionally, have grown more mainstream. USA Today rated them as two of the biggest wellness trends of 2019.
Customers even expect their snacks to be healthy now, or at least to conform to whatever restrictions they are imposing on their diet. While better-for-you snacks were once primarily produced by independent vendors, big CPGs have been trying to get on top of the trend — in some instances through pricey acquisitions of vendors already popular in the space.
With the mainstreaming of health food products has come shifts on the specialty end of the grocery spectrum as well.
In 2017, around the time it was acquired by Amazon.com, Whole Foods began introducing numerous changes that seemed to be pointing the chain away from its more eclectic selection of products from small, local vendors and more towards stocking brands from the big national CPGs. The chain switched its buying model to a more centralized one and later introduced slotting fees, which would make it more difficult for smaller vendors to get on the shelves.
- New Hybrid Keto Diet Grocery Concept – Explorado Market/PRNewswire
- The biggest health and wellness trends of 2019, from veganism to keto diets – USA Today
- Hershey and Campbell splurge big on better for you acquisitions – RetailWire
- Whole Foods asks vendors to pay to play – RetailWire
DISCUSSION QUESTIONS: Do you think that dietary trends such as ketogenic eating can support their own specialty grocery stores in select markets or perhaps even on a broader scale? How do you expect to see mainstream grocers react to the growing popularity of dietary trends such as ketogenic eating?