Fresh City Farms has gone from clicks to bricks with the opening of its retail stores in Toronto.
Next month in the city’s west end, the farm and online grocer will open its second bricks-and-mortar location. The 2,000-sq.-ft. store on Ossington Avenue will carry around 1,000 products, including organic and local produce; prepared meals such as salads served in jars; cheese and fresh meat; dry goods from small, independent brands; and organic meal kits.
“We’re really focusing on fresh, and we see ourselves as a neighbourhood store, similar to urban centres in Europe where people do their shop for a couple days at a time,” says Ran Goel, CEO and founder of Fresh City Farms.
“Our typical customer online is female, 25 to 45, and we expect that will be our bread and butter [at the store] as well. There are a lot of young families, couples and single people living in the condos in the neighbourhood and they’re looking to do a quick, quality shop,” says Goel, who was one of Canadian Grocer‘s 2016 Generation Next Award winner.
Fresh City’s first shop on Roncesvalles Avenue opened in April. The 600-sq.-ft. store was purchased from a former supplier that sold preserves and canned goods. “It was a bit of an opportunistic thing, where we were starting to think about bricks and mortar and their store became available,” says Goel. “It’s a micro version of what we’re doing at Ossington, which will allow us to put our full product line in play.”
Goel, a former investment lawyer, founded Fresh City Farms in 2011. It
started off with a subscription model, delivering pre-set bags of produce grown on its city farm to customers in the Greater Toronto Area. Over the years, the company expanded its product assortment and made its model more customer-friendly.
“The majority of our revenue is still subscription based—people subscribing to [produce] bags,” says Goel. “But we do have a la carte options where you can buy whatever you want and you can customize your bag and make substitutions.”
Goel says the move into bricks-and-mortar happened for two reasons.
“What we found is our typical customer gets delivery once a week. But that means they still do shops elsewhere to fill out their week. And for most people, that’s best done in a bricks-and-mortar context,” he says.
Secondly, even the rosiest projections of online grocery penetration—anywhere from 10% to 20%—means that 80% to 90% of food will still be bought at a store. “We really felt we had a great product and a great brand… and bricks and mortar was our next logical step to expand.”
Goel believes the Toronto market can support 10 to 20 small-format Fresh City stores in the central core. “We’re taking it one store a time,” he says. “We think there will be a lot of learning [from the Ossington store], which we think of as our first store in that we designed it ourselves and located it very consciously. But we do think there’s a hunger for this.”