St. Vrain Market: Nutritious food and drink options for travelers, locals

As part of Natural Foods Merchandiser’s 2023 Market Overview, we talked with five independent natural products retailers to provide a more colorful, nitty-gritty picture of the forces and trends influencing business so far this year. These retailers’ stories are being published online on consecutive Tuesdays: Kimberton Whole Foods, on Sept. 10; Earth Fare, Sept. 17; BiRite, Sept. 24; St. Vrain Market on Oct. 1; and Bristol Farms will publish on Oct. 8.

The small town of Lyons, Colorado (population 2,146) sits just shy of 20 miles north of Boulder, on the way to Rocky Mountain National Park—the fifth most visited national park in the U.S. Almost everybody who visits or passes through Lyons will encounter St. Vrain Market, which captures a prominent corner of the historic downtown.

As with many independent natural products retailers, especially small ones, St. Vrain Market experiences unique opportunities and challenges based on its location while also navigating conditions affecting the overall industry.

Lyons hosts a broad range of summer music festivals every year, each bringing thousands of people to the tiny town for long weekends of camping and good times. St. Vrain Market is the go-to grocer for many of those visitors. They come thirsty.

Related:The big picture: Natural and organic industry sales data for 2023

“We’re all in for functional beverages,” says Neil Sullivan, co-owner of St. Vrain Market. “We’ve got more than a toe in the water—we’ve got an entire foot in there. People are looking for lower-sugar drinks, for drinks with fiber and functional mushroom ingredients. They’re looking to aid their digestion. We are seeing a lot more of these products come into our store—and more leave the store.”

St. Vrain Market’s functional beverage experience mirrors that of some related categories. Nationwide, sales growth of the category that includes soft drinks, enhanced drinks, sparkling and flavored waters, for example, will expand from 6.5% in 2023 to a projected 7.4% this year.

But the biggest growth area for St. Vrain Market in 2023 was prepared foods and ready-to-go meals—and sales show no signs of dimming.

Customers, Sullivan says, are looking for handcrafted meals with high-quality ingredients, and they’re also hunting for convenience. In the past, aligning quality and convenience was challenging. But after lots of experimentation, St. Vrain Market has dialed in its prepared foods program, offering wholesome dishes packed with superb ingredients.

Most of the meals are designed for two people. They’re not cheap, Sullivan says, but compared to restaurant dining, they deliver immense value: about one-third the cost of the same meal at a restaurant.

“Demand for these meals works well for us,” Sullivan says. “Because we have a grocery store with perishable goods, we can turn a lot of those perishables into meals. It’s an excellent and convenient solution, turning what eventually would become trash into cash.”

St. Vrain Market’s embrace of prepared and to-go foods mostly lines up with the industrywide trend. Sales of food service/deli will go from 4.3% growth in 2023 to a projected 5.3% this year, while the total packaged and prepared food category will jump from 3.3% growth in 2023 to an estimated 4.5% in 2024.

Neil and Connie Sullivan bought the St. Vrain Market—including its 19th century building—in 2009.

Another area of growth for Sullivan’s store? Organic produce. He says St. Vrain now sells more organic veggies and fruits than ever before.

On a less positive note, plant-based meats, which Sullivan anticipated would fly off the shelves, have failed to live up to their promise. He has scaled back St. Vrain Market’s selection.

This tracks with the larger industry. Plant-based meat, hit with an onslaught of negative news over the past 18 months regarding sluggish sales, might have bottomed out. Last year, sales of prepared meat alternatives notched an abysmal -8.7% growth. But projections for this year are -0.4%. That’s still negative, but the rate of decline may have been arrested.

Storewide profitability, however, stands as St. Vrain Market’s biggest challenge. Higher staff wages and higher product costs have hurt the bottom line, largely because the store can’t just pass on these cost increases to its customers and expect them to pay. Consumers have grown weary of escalating prices for everything from yogurt to meat and chips.

“It’s an ugly situation for staying in business,” Sullivan says. “Operationally, those are the biggest challenges we face now and going forward as an independent grocer.”