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Natural Grocers sells both organic produce as well as dietary supplements. Unlike some competitors such as Whole Foods Markets and Sprouts, Natural Grocers devotes a much greater amount of shelf space to supplement products.

In the company’s recent year end earnings statement, CEO Kemper Isley said the company (formally known as Natural Grocers by Vitamin Cottage) has increased the pace of private label launches, which has helped drive profitability.

The increased pace of private label launches has to some extent substituted for the company’s earlier intense focus on new store openings. A few years ago, Natural Grocers was opening as many as 20 new stores a year. That pace has receded to about five to six new stores and one or two relocations per year. The company also said because of the recent competitive environment, the cash on cash payback on the investment into new stores has stretched out to six years from five. The company now operates more than 140 stores in 20 states, mostly west of the Mississippi.

More new SKUs, fewer new stores

“During the year, we were proud to launch 47 new Natural Grocers brand products, in line with our projections. Our private brand products have been developed consistent with our core values and are positioned as a premium quality brand at an affordable price. We remain encouraged by the customer response to date, and we’ll continue to expand our Natural Grocers brand offerings, targeting the launch of an additional 70 products in fiscal 2020,”​ he said.

Among the supplements it is selling are CBD skus, which were introduced this year. The company sells products from Barleans, Ancient Nutrition and others. The company has also hosted CBD education sessions in stores​ in the states where the sales of the products are allowed.

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