In 1977, Joel Dean and Giorgio DeLuca opened their first store in New York City’s Soho neighborhood. In a New York Times interview a couple years later, they revealed that they were initially worried about the lower Manhattan location. “All those artists,” Dean said of the local residents. “Artists are poor,” DeLuca added, citing the summer exodus of creative types to Long Island as another potential obstacle. “But then we thought,” DeLuca said, “the people who collect artists come here all year long. People with taste. And best of all, people with money.” Unlike other specialty grocers like Zabar’s on the Upper West Side or Sahadi’s in Brooklyn Heights, Dean & DeLuca balanced access with a smattering of exclusivity, which would only grow over the years. Its interior design — the Times described it as a “handsome loft-like space with a certain Mediterranean aura: white from floor to ceiling, glistening with freestanding chrome shelves, lighted by a rear skylight and high‐up fixtures that make a Pyrex double‐boiler seem practically sculptural” — positioned itself less like a food market and more like a high-end retailer, one available to the masses, but subsidized by the rich.
In recent years, specialty grocery stores have been courting a different kind of customer — one who has an appetite for what’s cool and new, if not necessarily gourmet. The traveling Pop Up Grocer acts as a showcase for up-and-coming brands. Wine + Eggs in Los Angeles sells products made in the vicinity of Atwater Village alongside independent, national brands. “Modern convenience store” Foxtrot, does this, too — they even run an “Up & Comers” competition annually — and alongside items like Deux Enhanced Cookie Dough, Noons (“whole cacao crunch bites”), and Noodie (high-protein ramen), they also sell Dunkaroos, a strategy that lends a down-to-Earth air to a brand that’s all about “elevating.” That careful blend of familiarity and trendiness seems to have paid off — Foxtrot, which began seven years ago in Chicago, recently announced plans to open 50 stores over the next two years.
The upmarket food stores of today are flourishing in part thanks to the recent boom of new consumer packaged goods (CPG) brands — a category that describes relatively inexpensive items like ice cream or seltzer that are replaced frequently. The recent success of DTC brands like Fly By Jing (chile sauce), Ghia (non-alcoholic aperitif), and Brightland (olive oil and vinegars) has helped change how people see their pantries, transforming them from basics into everyday luxuries. Brightland comes in a glass bottle that’s powder-coated in white rather than the expected translucent green. Fly By Jing, whose signature Sichuan Chili Crisp jar features yellow text running in multiple directions on a striped red background, evokes the chaotic energy of a Bloomberg terminal. The color of Ghia, a cross between red wine and Clamato, is offset by an ice-blue triangle on the glass bottle, topped by a rounded burgundy knob.
As these brands have grown, they’ve created a submarket of mid-priced, fancy but unfussy products that would seem out of place in most big-box stores — many of them, after all, were initially designed to catch your eye in an Instagram post instead of on a store shelf. Given the emphasis on design, it’s unsurprising that some of these things can be found at home goods stores like Superior Merchandise (a sister brand of distillery Yesfolk) in Troy, New York, and Yowie in Philadelphia. Each sells a handful of consumable things — jam, spice blends, Sencha Kombucha Vinegar — alongside mugs and candles, which is indicative of the way that, for some, food is a Nice Thing. And though the pandemic upped interest in e-commerce and online brands, for the average consumer, going to 12 different websites to source 12 different products is likely too much of a pain. That’s where today’s specialty food store comes in.
This growing category of beyond-basic food stores is understandably appealing to CPG startups. For emerging brands, independent retailers make it possible to get in front of shoppers organically instead of through a social media algorithm, and often without having to get the backing of investors.
Since the 1980s, the experience of food shopping in this country has been defined by volume. Traditional grocery stores pack shelves with products, and new, unproven companies pay, in various ways, to appear among them. The most egregious of these are so-called slotting fees, flat fees in the thousands that brands pay retailers to simply sit on their shelves, which make it difficult for small brands, especially those without major sources of funding, to break into the market. Every retailer does things a little differently — Walmart and Whole Foods don’t charge slotting fees, but they levy other costs related to distribution and shelf space. Put another way, “grocery is uniquely fucked up,” says Emily Schildt, founder of Pop Up Grocer, a rotating, roving selection of food, health, and beauty products that launched in 2019. “I didn’t even know that when I started this company, which was an experiment,” she says. “I just wanted the good products I knew existed via the internet to be in one place.”
To appear in one of Pop Up Grocer’s monthlong retail spaces (past locations have been in Wicker Park, Chicago and Venice Beach, California), as well as on its Instagram, brands pay a single marketing fee. Boutique-like Wine + Eggs, which works with small suppliers, and Foxtrot, which pitches itself as a high-end convenience store, don’t charge brands any fees to appear on their shelves. For CPG brands, specialty stores of all kinds act as a niche but valuable platform: Why compete for space on a crowded Whole Foods shelf when you can be part of a select few in a smaller, hipper store?
Mike LaVitola, CEO and co-founder of Foxtrot, says that the initial idea behind the company was to “remerchandise” the stock of a typical convenience store, replacing middling coffee, beer, and snack options with the “best versions” of those products. Schildt similarly says Pop Up Grocer has three criteria it uses to select products: Does it look good? Is it interesting? Is it responsibly sourced? This level of curation, these owners argue, is antithetical to the way most typical grocery stores operate. Even at Whole Foods, which carries local baked goods and under-the-radar products, the presumed convenience of multiple options keeps shelves packed. But it seems that less choice is what shoppers like most about these more-curated food stores. “I really am of the belief that retail is not declining, it’s just changing,” says Schildt. She notes that since the pandemic began, shoppers have become more comfortable with ordering groceries online, but “the complement to convenience,” she says, “is experience.”
In other words, for the consumer who has access to everything, retailers have to be able to offer something more than just stuff. That extra something varies by retailer, but it all starts with selection. There’s lots to look at, but not too much, and it all looks so nice. Foxtrot stores, which include cafes serving local coffee and pastries, are full of natural light, matte black accents, and cheeky signage (“Good Goods” “Our Place Or Yours”). Spatial designer Adi Goodrich created Wine + Eggs’ glossy tiled facade and European-inspired interiors (curved, cherry wood shelving, blue-and-green checkered vinyl floors, warm pendant lighting).
And while Instagram is important to sourcing, so is travel, and the sense that the curators are doing their jobs. On a recent trip to Jackson Hole, LaVitola visited local bakery Persephone, had their “insanely delicious” animal crackers, and decided that they needed to be on Foxtrot’s shelves. “We want to be able to say yes to the best product, even if we’re getting one SKU from that company,” says LaVitola. (In business-speak, SKU is essentially a more specific term for “product.” Traditional grocery stores are far less likely to go to the trouble of onboarding a vendor so they can carry just one of their SKUs.) Hand-picked buying models like these are supported by direct distribution through retailers, which makes it possible to bring animal crackers from a bakery in Wyoming to every Foxtrot store in the country. Pop Up Grocer, which plans to open its first permanent brick and mortar location in lower Manhattan next year, will soon have a direct distribution model as well.
The taste-driven approach to merchandising at modern specialty food stores is more reminiscent of, say, Barneys than Whole Foods. But unlike Barneys, which closed right around the time Dean & DeLuca did, Foxtrot doesn’t need to worry about being overrun by e-commerce — most of its customers shop both in store and online, using the company’s self-run delivery service. Unlike clothing boutiques or bookstores, where inventory can’t compete with the internet, food stores that position themselves as tastemakers have an advantage: They sell things you can’t find online. Or maybe they’re things that you can buy online, but you didn’t even know existed. They don’t just sell food and beverage; they sell knowledge and the kind of controlled novelty that people crave from physical shopping. The vastness of the internet isn’t an asset when it comes to food shopping — tight, quality selection is. In a market that’s flooded with products, scouting is an increasingly valuable skill.
Monica Navarro, owner of Wine + Eggs, says that the pandemic created opportunities to collaborate with local chefs and makers that probably wouldn’t have been possible otherwise. (The store opened in January of this year, when restaurants in Los Angeles County had just gotten the green light to resume outdoor dining.) She rattles off current offerings: “We have these delicious noodles from our favorite restaurant in Silver Lake in our shop or frozen pizzas from La Morra, which is in West Hollywood.” Navarro’s business is “community-oriented,” in that it pulls largely from businesses in the area, but it’s easy to see how its model, which blends hyperlocal offerings with national brands, could be replicated in other cities. For some goods, she says, “the distribution may be so tiny that it’s only at our store and one other, or maybe through them and us exclusively.”
Grocery shopping is both utilitarian and sensory. But in the past 18 months, it has become more than an errand. It has also become a source of entertainment, excitement, and relatively guiltless spending. For some, buying somewhat frivolous food and drink feels less like conspicuous consumption and more like a justified expense, especially when those dollars are being spent locally or support brands created by BIPOC entrepreneurs. The belief that the best way to fix our flawed culture is by spending more money in the right ways has given a boost to small food sellers, which offer alternatives to Big Food norms. Even before COVID, food stores seemed destined to become the most interesting area in retail simply because food brands are interesting consumer products. It makes sense that a retail environment has sprung up around them.