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It isn’t exactly grocery wars, but life is about to get more interesting for Buffalo shoppers.

A week from today, homegrown Tops Friendly Markets will open an upscale health food and gourmet store called Orchard Fresh in an affluent Orchard Park neighborhood.

The new venture is aimed at foodies who don’t mind paying a little more to try wildebeest steaks and ostrich hot dogs; health-conscious eaters who want to know that their food is fresh, humane, healthy and eco-friendly; and people with special dietary needs, such as vegan and gluten-free. None of those consumers typically mind forking over a little extra cash to ensure they get the type and quality of food they want.

The new store format is a big gamble for Tops, which got its start in the 1920’s and now has 62 stores across Western New York.

The move also reflects a new reality for food stores: Traditional grocers like Tops are under siege. Discounters Aldi, Save-A-Lot and Walmart compete for price-focused shoppers. At the high end, Wegmans, Premier Gourmet, and Dash’s already compete for gourmet shoppers, and California-based Trader Joe’s plans to enter the Buffalo market later this year at Boulevard Consumer Square in Amherst.

The high end – specialty and gourmet items – is a $75 billion-a-year industry and growing faster than any part of the grocery business, said Louise Kramer, of the Specialty Food Association.

“There is a lot of opportunity for both more high-end and low-cost offerings; it’s the mid-cost products that are suffering,” said Jenna Telesca, an editor at Supermarket News. “This is why you see supermarkets starting to offer more gourmet-type fresh product – to go after that, filling that need.”

$30 olive oil

Visitors to Orchard Fresh will have no trouble telling it isn’t Tops.

Part green grocer, part butcher shop and fish market, part gourmet take-out restaurant, Orchard Fresh’s inventory is 85 percent fresh–organic produce, fish flown in daily, hand-cut cheeses, grass-fed beef–and 15 percent packaged dry goods. It flips traditional supermarket percentages, where just 13 percent of inventory is fresh, perishable food, according to Nielsen Perishables Group.

The 18,000-square-foot store – a little larger than an NHL hockey rink – has a station for grinding your own nut butters. An executive chef (trained at the Culinary Institute of America) prepares vegan, organic and gluten-free take-out every day. There are more than 150 varieties of bottled cooking oils and vinegars in bottles on shelves (more are available in a bulk section), the most expensive of which–Dom Diogo extra virgin olive oil–sells for $30.99 for 500 mL.

Instead of Coke and Pepsi, Orchard Fresh will stock Grown-up Soda and several varieties of organic coconut water. You won’t find Cheerios or Lay’s potato chips, but will see Barbara’s Cereal and Tyrrells English Crisps. The store also has hand-picked small vendors, local and national, like Eden Farms and Tipton Mills, to produce private label items specifically for its shelves.

It won’t all be $30 olive oil, Tops insists.

“These smaller companies want their brands in our stores,” said Kevin M. Donovan, a South Buffalo native who was recruited to direct Orchard Fresh from his post as chief operating officer at Maryland’s Conscious Corner, a group of stores known for being socially responsible. “Some of them are sending their first shipments at a 50 percent discount. Things will be affordable.”

‘Super labor-intensive’

For Tops, Orchard Fresh is a gamble.

Fresh food isn’t easy. Orchard Fresh is opening as British grocer Tesco closes a failed attempt at launching similar Fresh & Easy Neighborhood Market stores in the United States, which focused on fresh food and freshly made takeout items.

Locally owned Dash, like Orchard Fresh, has smaller stores that differentiate themselves by offering many gluten-free options and focusing on locally made gourmet products, high-quality meat and seafood, and specialty sweet indulgences, as Orchard Fresh will.

“They’re going to see it’s not easy to run a small store with a large percentage of perishables,” said Joe Dash, Dash’s president. “It’s super labor intensive and you really have to micromanage every [item] to keep it all fresh.”

However difficult it may be, Tops sees Orchard Fresh as its best opportunity to grow and compete throughout Central New York and Pennsylvania. Three years ago, Tops bought 79 former Penn Traffic Co. stores and has spent more than $90 million to upgrade its entire chain. More recently, it has opened smaller Tops stores, like the 30,000 square-foot store at Harlem and Kensington in Cheektowaga, filling in its already well-developed territory.

To succeed, Orchard Fresh must take customers from other stores. “Wegmans would obviously be affected the most,” said Burt Flickinger III, a retail analyst and managing director of New York City’s Strategic Resource Group.

Wegmans does not seem worried.

“When a new retailer or concept enters a market wherever we have stores, we don’t change course,” said Theresa Jackson, a Wegman’s spokesman.

Orchard Fresh may even take some sales from farmer’s markets and farm stands, but more significantly it could discourage other grocers from entering or expanding in the Western New York market.

“It will make some of the chains that have been expanding, like the Fresh Market in North Carolina, think twice about coming in and taking on both Orchard Fresh and Wegmans at the same time,” Flickinger said.

Two more stores?

If Orchard Fresh succeeds, says Frank Curci, Tops’ chief executive officer, Tops plans to expand to as many as three Buffalo locations, most likely in the northtowns in Clarence or Amherst.

Curci hopes Orchard Fresh will “capture more of the customer’s wallet within our system” while bringing in new customers from elsewhere.

“It’s not that we’re trying to hide the fact that we’re Tops, but it’s a completely different format,” Curci said, adding later: “Tops is still our bread and butter.”

Flickinger, the retail analyst, describes Orchard Fresh is an “inspired initiative.” Fresh-food failures like the one by British grocer Tesco, he says, had more to do with “Brits trying to interpret what Americans want to buy.”

“In this case,” he said, “it’s local leadership knowing local consumers, local farmers, local suppliers and talking to local shoppers about what they want.”

email: schristmann@buffnews.com