Brand Opportunities Abound as Sprouts Preps for Major Chicago-Area Expansion

For many of us in the Naturally Chicago community, it might at first be surprising that the Sprouts Farmers Market grocery company is the nation’s second-largest Natural Channel grocery chain with more than 500 stores — and growing fast. Surprising because Sprouts has accomplished that growth with no current locations in the whole state of Illinois. 

But that void is soon going to be filled, and then some, as was highlighted in our May 12 webinar, “Succeeding at Sprouts.” The program introduced emerging brands in the consumer packaged goods (CPG) sector to the retailer’s distinctive approach to innovation, merchandising and supplier development. 

Moderated by Naturally Chicago Senior Strategist Greg Keller — who leads our Locally Made and Mentorship programs — the webinar featured a deep dive into how brands can position themselves for success ahead of Sprouts’ planned entry into the Chicago market beginning in 2027. 

Joining Keller on the panel were Sprouts Chief Brand Forager Kim Coffin, Senior Foraging Manager Brody Burk, Foraging Manager Mason Webb, and Katie Paul of KeHE Distributors. 

For Naturally Chicago members and other regional emerging brands, the webinar offered both practical guidance and a strong signal that Sprouts intends to become a significant player in the Midwest natural foods landscape. 

The following are major takeaways from the webinar. For a deeper dive, click the button below to access the full video recording of the conversation.

A Retailer Built Around Health and Discovery

Coffin opened by outlining Sprouts’ evolution from a California fruit stand into what she described as one of the country’s fastest-growing grocery retailers. 

Founded in San Diego and now headquartered in Phoenix, Sprouts has grown from roughly 140 stores when Coffin joined the company 16 years ago to its more than 500 stores across 25 states today. The company is now opening at a rate of 40 to 50 stores annually and believes it has the potential to exceed 1,000 locations nationwide. 

The Chicago grocery sector — the nation’s third biggest behind only New York and Los Angeles — has long been one of the company’s most requested expansion targets. “We get asked about Chicago constantly,” Coffin said, noting that many Midwest consumers already know the brand through travel or seasonal residences in other states. 

The retailer’s expansion plans are substantial. Coffin said Sprouts has identified approximately 140 approved sites across the broader Chicago and Midwest region, with openings expected to begin in 2027. They are holding their cards close to the vest on most of their locations for now, but they have made known that the first stores will be in the Jefferson Park neighborhood on Chicago’s Northwest Side and in the northwest suburb of Buffalo Grove. 

As Coffin explained, Sprouts stores are intentionally smaller and more approachable than conventional supermarkets, typically ranging from 20,000 to 28,000 square feet. Produce anchors the center of the store, reflecting the company’s emphasis on fresh foods and health-oriented shopping. More than half of Sprouts’ produce sales are certified organic. 

The retailer also emphasizes attribute-based merchandising across vitamins, supplements, meat and grocery categories, with Coffin describing customers as “health enthusiasts” seeking clean-label, sustainable and wellness-oriented products. 

The “Forager” Model for Emerging Brands

Much of the webinar focused on Sprouts’ unique “foraging” program, designed to identify and nurture emerging brands before scaling them into broader distribution. 

Burk likened the process to a video game tutorial. “You have to play the tutorial before you get into the main game,” he said. 

The company’s foraging team acts as both talent scout and incubator, helping emerging brands navigate their first experiences in brick-and-mortar retail while minimizing upfront financial risk. 

Unlike many large retailers, Sprouts does not charge free-fill fees for brands participating in the program. Instead, the company works closely with suppliers through what Burk described as a “white glove” onboarding process. 

Products submitted to Sprouts are evaluated using a detailed scorecard that considers packaging, taste, pricing and overall market fit. Brands receiving strong evaluations may be placed into the company’s “Forager Finds” program — a 12-week test-and-learn merchandising initiative designed to measure real-world customer demand. 

The test is intentionally rigorous. Sprouts evaluates velocity, repeat purchases, customer engagement and marketing support while expecting brands to actively support their products through demos, grass-roots marketing and consumer outreach. 

Importantly, products are generally tested at full retail pricing rather than through deep promotional discounts. “What we’re really looking for is how customers show up for you organically,” Burk explained. 

The approach appears to be producing results. Burk said Sprouts currently achieves a 39 percent “graduation rate” from the Forager Finds program into permanent shelf placement — significantly above the estimated industry average of roughly 11 percent. 

Coffin emphasized that the program is intended as a collaborative learning process rather than simply a pass-fail evaluation. 

“A lot of brands are not the same product when they start as when they are ready for scale,” she said. 

The testing period often helps companies refine formulations, pricing, positioning and distribution strategies before pursuing larger retail expansion. 

KeHE’s Role as Strategic Partner

Paul detailed the unusually close relationship between KeHE — North America’s largest “pure-play” distributor of naturally and organic grocery products — and Sprouts, describing the partnership as operating more like a wholesaler-retailer collaboration than a conventional distributor relationship. 

KeHE maintains a dedicated 31-person Sprouts account team based largely near Sprouts’ Phoenix headquarters, along with additional supply chain and growth strategy specialists focused on innovation and category management. “We really think about our teams as one,” Paul said. 

The distributor has also developed extensive infrastructure to support emerging brands, including its “Trend Finder” sourcing events, specialized supplier programs and financial assistance initiatives. 

Paul highlighted KeHE’s recently launched “new and small supplier administrative allowance program,” which simplifies and reduces many of the costs typically associated with gaining distribution.The company has also adjusted payment policies to improve cash flow for young brands — a critical issue for companies scaling rapidly into hundreds of retail locations. 

Both Paul and the Sprouts team repeatedly stressed the importance of disciplined growth and realistic operational planning. 

“Do fewer things really well before expanding,” Paul advised. 

Trends Shaping the Natural Foods Marketplace

Webb outlined several product trends currently attracting strong interest from the Sprouts merchandising and foraging teams. 

Protein remains a dominant category driver, but fiber and gut health are rapidly gaining momentum as consumers become increasingly focused on digestive wellness and functional nutrition. 

Collagen, creatine and clean-label functional ingredients are also seeing heightened demand. 

At the same time, the company continues tightening its ingredient standards and emphasizing transparency. 

Sprouts prohibits most artificial colors, preservatives and additives commonly used in conventional packaged foods. Webb, however, stressed that the company remains willing to work with brands whose products may require reformulation. “We never want to shut the door fully on any brands,” he said. 

Instead, Sprouts often works collaboratively with suppliers to identify cleaner ingredient alternatives that better align with the retailer’s standards and consumer expectations. 

Chicago Brands Prepare for Opportunity

For Naturally Chicago and the region’s growing ecosystem of emerging food and beverage brands, the webinar underscored both the scale of the opportunity and the operational sophistication required to succeed. 

The discussion also reinforced Chicago’s rising profile as a hub for innovation in natural, wellness-oriented and mission-driven food brands. 

The Sprouts team repeatedly emphasized its interest in discovering regional brands and potentially tailoring assortments to local consumer preferences as the company builds out its Midwest footprint. 

Future collaborations are already in motion. Sprouts executives are participating in Naturally Chicago’s upcoming Pitch Competition and Innovation Forum event on May 27 and suggested additional supplier showcase opportunities may be developed both in Chicago and at the company’s new Phoenix headquarters later this year. 

For local founders, the message was clear: The arrival of Sprouts represents far more than another grocery chain entering the market. It signals a major new pathway for emerging Midwest brands seeking national growth in the rapidly evolving natural products industry.