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Richard's Foodporium

This chain of 11 natural/specialty stores in
Southwest Florida is riding out the recession by keeping inventory tight, staff lean and by focusing
on the future.

In 1997, John Rorer and two partners bought Richard’s Whole Foods, a chain of six health food stores in Southwest Florida. The stores, which were founded by Richard Downey, had been holding their own for 18 years, grossing about $3 million annually through the sale of bulk items and vitamins. Downey’s concept was working, notes Rorer, but it was pretty basic. Barrels of bulk items were placed on plywood tables and the stores didn’t even accept credit cards. Rorer, who had a background in natural foods and supplements, saw a lot of potential in this chain as well as a serious business opportunity.

The Early Years…One of the first changes was the purchase of credit card machines, then the addition of grocery and specialty items. Condiments from Robert Rothschild were quickly added as well as bulk chocolate and specialty candies from Koppers. Within two years the stores were doubling their annual gross and more locations were being added. In 2005, Rorer bought out his partners, began evolving the businesses to offer both natural and specialty and added even more neighborhood-focused stores in the region.

Today…The company has 11 stores each grossing $1 million annually. Current locations include three Sarasota stores (where the chain is headquartered), two Venice stores plus others in Belleair Bluffs, Bradenton, Englewood, Osprey, Port Charlotte and St. Petersburg. There are plans to offer franchises for even more stores.

Rorer considers one of the company’s key strengths to be brand recognition, yet in 2009 confusion in the market around the name sparked a brand evolution. Whole Foods Markets moved into Sarasota and, explains Rorer, “People thought we were part of them and they were part of us.” A tweaking of the company name became more critical. Rorer knew he wanted to keep the name Richard’s and after some brainstorming coined the new word Foodporium to create Richard’s Foodporium. “I define a Foodporium as a nostalgic shopping experience that provides a wide variety of natural and specialty foods at affordable prices,” says Rorer. The merchant finds that word of mouth is its best form of marketing; Richard’s Foodporium has a Facebook page and is active on Twitter.

Cutting the Fat…“When I took over the Richard’s stores, I started to position the company for serious growth,” says Rorer. “I created management teams, changed the look of the store and logo and created performance reviews for every employee. I also created planograms with core set items. Because we are small, we focus on the top brands and the top SKUs in those brands. The challenge in the past four years has been to get rid of a lot of dead product that was not moving and stick to our core set.”

The Design…“Our look is a throwback to the original Richard’s but updated,” says Rorer, who married the idea of a turn-of-the-century local grocer with modern and trendy decor. Old black-and-white ads can be seen on the walls, floors are a deep warm wood, ceilings have an antique appearance with galvanized lighting throughout the store, signage has a faux-antique look and walls are a deep red color—a classic Richard’s store look.

The Mix…Richard’s Foodporium stores have the same basic footprint and follow an identical model. All are 2,500 square feet, and 90 percent of the mix is devoted to core categories divided evenly between bulk foods, grocery and supplements. The company takes advantage of central buying to keep the prices on core categories down. The remaining ten percent of the inventory mix is devoted to products that reflect the local flavor of the area the specific store serves. (None of the stores have produce or deli departments.)

Strong Categories…Bulk—nuts such as almonds, walnuts, cashews and dark chocolate-covered nuts; gluten-free; snacks such as chips, nuts, cookies, nostalgic candy and chocolate. Best-selling brands include: Pamela’s cookies, Tinkyada pasta, Glenny’s snacks, Richard’s Foodporium Chocolate Bars, Chocolove, Green & Blacks, Granola Kitchen, Koppers, Mi-del Cookies, Kettle Chips, Stacy’s, Garden of Eatin’, Deep River, Good Health and Terra Chips.

Cost-Cutting Strategies…Rorer keeps the budget on track by having a lean but educated staff and by keeping inventory tight. He focuses on core items rather than packing the store. If a new item comes in that he wants to stock he will remove another item that isn’t selling too well. He also buys bulk items like nuts direct from the commodity broker to get a better deal and takes advantage of cost-saving pallet deals. Rorer has a 5,000-square-foot warehouse to store inventory but he is rapidly outgrowing it and is looking to double in size. When it comes to expansion, he looks at what he calls B-list properties—those in older strip malls or stand-alones—in order to keep rents low. “We never look to expand in new developments, it is too expensive,” he notes.

The Challenge…With Florida being hit particularly hard by the recession, growth has been difficult. “I was trying to figure out a way to grow a brand while continuing to pay off debt,” he says. That’s when the idea of franchising came about. Many customers had been inquiring about where they could find a Richard’s in their neighborhood and that got Rorer thinking. “I realized I would not have to go out and borrow any more money to make this work. It’s a way to get the Richard’s Foodporium brand out there and still support local ownership,” he notes.

Market Changes…“The economy is hurting organics a little,” says Rorer. “But they will bounce back. The current economy has cultivated a clientele that is price conscious, now more than ever.” Rorer says store sales remain flat or down in some stores while others are strong, showing a 20 percent uptick.

Recent Trends…Customers are making healthier choices. “People are understanding that natural food stores offer a lot of solutions for special diets, gluten-free, in particular,” notes Rorer.

The Future…Rorer is always looking for new opportunities. In addition to strong franchisee candidates, he is in the process of adding more brand-building components to his business such as buying equipment so he can package his own bulk items. His plan is to sell these items to other retailers, restaurants and future franchisees. |SFM|

Nicole Potenza Denis is a contributing editor to Specialty Food Magazine.