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Fresh Foods Specialty Grocer Finds Niche Along The Coast

Fresh Foods

For independent grocer Jon Welsh, serving customers and the community are what he loves most about his job. Welsh owns and operates Fresh Foods specialty grocery stores in Cannon Beach and Manzanita, along the Oregon coast.

While the IGA affiliate stores do a robust business during tourist season, Welsh said the rest of the year they are supported by locals. “You get to know your customer and I enjoy interacting with them,” he said. “I enjoy going out into the community and already knowing everybody.”

Welsh has formed those relationships through the support his stores give to the communities they serve, primarily through local schools. “We sponsor the backpack program, which gets food to kids that need food. It goes home with them on the weekend and on their breaks,” he said. “We help the schools run that program.”

Welsh also serves on the board of the county’s youth athletic program and oversees its operations. The program includes children from third through sixth grades, after which time they are picked up by the middle school at seventh grade.

He said Fresh Foods sponsors the youth athletic program by donating all the equipment and uniforms “so the kids have low cost or no cost to play.”

The stores also support local annual golf tournaments and foundations where proceeds go to marginalized kids. “We really focus on the youth,” said Welsh, adding that he also serves as the assistant track coach at the local high school.

Looking back and ahead

Welsh shared how his father worked for Safeway years ago before opening his own independent grocery store in California. His parents later left California and moved to Oregon, where his dad “ended up buying a tiny little grocery store in the town of Manzanita, back in 1997,” Welsh said. “He ran that and built it up over the course of about 10 years.”

In 2007, Welsh said he and his brother, who is no longer in the business, purchased the store from their father and operated the same platform for about five years. They then expanded into a larger building and, five years later, opened a second location.

Welsh said he wants to expand and is planning to open a couple more stores in the area, just west of Portland, within the next few years.

Surviving the pandemic

The full effects of the COVID-19 pandemic hit Oregon around spring break 2020 in the resort towns of Cannon Beach and Manzanita, according to Welsh.

“Everything came at once,” he said. “We usually bump up for spring break, but also the pandemic came and the shutdown orders for the restaurants hit all at once. We went from a normal spring break, which is already busy, to just an insane spring break.”

Welsh said he became concerned for his staff and decided to split into two crews, each working 12-hour shifts on alternating days with one day off. Business went up about 33 percent “right off the bat” and Welsh said it just never slowed down from there.

“Eventually, we kind of morphed back into more regular operations and over the course we learned a lot of things about efficiency during that time,” he said, giving as an example the decision to close an hour earlier.

“There were just a multitude of different things that were lessons learned on efficiency that have helped us now as we’re coming out of the pandemic,” he said.

Another move that helped was switching wholesalers. Welsh said Fresh Foods went through issues with supply chain before deciding to make the change.

“We ended up becoming a member-owner of URM, which we really believe saved our business,” he said. “Because we went from a fail rate to at least getting product and being able to keep up with the demand of our customers. That was a huge, huge thing that we did during the pandemic.”

While supply chain issues posed challenges, some departments were hit hard by people’s perceptions.

“At the beginning of COVID, our bakery and deli departments just sunk into the ground, along with bulk. And we’re just now coming out of that, in terms of the prepared food being accepted by the customer again,” Welsh said. “…We really scaled that back during that time and now we’re starting to try and build it back up to a robust level again.

“It seemed like anything that a human could have touched, besides meat, which is the weird thing – you know, hands are on meat and produce all day, too – but it seemed like there was just a perception from the customer that anything we touched may be contaminated. You know, that’s what it felt like,” he said.

While prepared foods took a hit, gourmet cooking items took off, with some increasing sales tenfold. The area is very “foodie based,” Welsh said, “and it seemed like everybody was cooking at home, but they were really cooking meals that they would seek out in a restaurant.”

This was a boon for Fresh Foods, which offers an 80-20 mix of products. While 20 percent are considered traditional grocery items, 80 percent are organic, gluten free, natural, keto, “any of those monikers.”

“We like those unique products. Any local vendors that we can use, we bring in,” Welsh said. “We have our own store-branded products, and we did the opposite of what everyone else does where they go with commodity items. We didn’t feel that the world needed another brand of cream corn, so we went with gourmet salsas, barbecue sauces, all the upper end stuff. That’s worked really well for us.”

Welsh noted that the private label business has grown within two years to about 500 SKUs, including beer and wine.

“That business does about $2 million for us a year, with just our store brands. So that’s pretty significant,” he said.

Online is on way

Fresh Foods was just gearing up to launch its e-commerce program when the pandemic hit and it never got off the ground. Welsh said a company website redesign is in the works, and it will lead the way into Fresh Foods’ online services.

Right now, customers continue to email or call in their orders, which are fulfilled by delivery or curbside service, Welsh said. They are handled by Fresh Foods employees, a practice that will continue when the online service begins. Welsh said it would not be outsourced to a third party.

Only now is Fresh Foods feeling the pain of labor shortages, as Welsh said the business has “been very blessed this entire past three years. We have maintained our staffing levels throughout.”

He added that the stores are fortunate in that a lot of seasonal young people are available in the third quarter, which is the company’s busiest.

“That kind of controls itself on our labor side. But now we’re trying to staff back up a little bit earlier this year, and there’s just no labor to be found, to be honest,” he said.

Loyalty is rewarded

Welsh has a variety of methods of marketing to locals and returning tourists or second homeowners. First and foremost, he uses the stores’ loyalty card system.

“The customers sign up for it, giving us their email address. We’re not emailing them a million times a week or anything, but we shoot out our weekly flyer, our monthly flyer,” he said. “We are running a month long on our natural stuff, and then we run weekly on our regular in-store ad, which is more conventionally based.”

Produce is the No. 1 department in the stores and Welsh said much of the square footage is dedicated to that. Fresh Foods also runs a premier meat program anchored with local providers such as Painted Hills Beef, Carlton Farms Pork, Anderson Ranches Lamb and others.

“Our fresh business is great,” Welsh said. “It’s in our name, so we’d better do that well.” 

Welsh said he enjoys reading about the trends and changes in the industry, adding that getting fresh ideas and fresh blood is a big challenge.

“I feel like that’s been my advantage, my flexibility to change,” he said. “Being only 40 years old, I’m not an old dog trying to learn new tricks. I can learn them and react to them very quickly. I think that’s my company’s advantage, is that leadership is all young.”

For more information, visit manzanitafreshfoods.com.

About the author

Treva Bennett

Senior Content Creator

After 32 years in the newspaper industry, she is enjoying her new career exploring the world of groceries at The Shelby Report.

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Suburban Collection Showplace
Novi, Michigan
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