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Sonoma County grocer Oliver’s Market rides customer loyalty during pandemic

As she looked over the closed taproom at the Oliver’s Market in Windsor, Michele Pedro noted how much she missed her customers grabbing their morning coffee and pastry and the happy hour crowd that comes to the bar for beers and tacos.

The pandemic has claimed the hustle and bustle of the taproom, making it a “little sad,” so they filled the space with seasonal gifts items for sale, said Pedro, who oversees the bakery department and the taproom.

That was one more move in a long list of adjustments that Oliver’s has had to make over the last nine months to generate revenue.

Pedro said she has witnessed the kindness from the faithful customers that are the backbone of the business founded in 1988 by Steve and Ruth Maass. Those customers, happy the doors remain open at the region’s Oliver’s grocery stores, have buoyed the company through its biggest economic challenge.

Such customer loyalty has helped Oliver’s during the pandemic avert laying off any of its 1,100 employees who work at its four markets and central warehouse. In fact, It has kept up its $2-an-hour premium pay bonus for hourly workers, a perk that some larger grocery chains have ended.

Meanwhile, Oliver’s was able to increase its overall revenue by roughly 5% in 2020, even with a big drop in sales at its deli counters, including the expansive one at the Windsor market that features a poke bar and taqueria and accounts for 17% of the store’s sales.

“I get asked all the time where are you guys going post-pandemic? I don't know that there's a lot that's different, other than doing a little bit more of what we already do,” said Eric Meuse, general manager at Oliver’s.

And what Oliver’s does well, experts say, is embed itself into the local community. Its success has been derived from that philosophy, said Robert Eyler, an economics professor at Sonoma State University who closely tracks the local economy.

“If they have benefited from this (pandemic), it’s because they've spent decades ingraining themselves in the community to become a first choice for spending,” Eyler said. “As they expanded, they really became Sonoma County's grocer. They're ubiquitous in terms of charitable giving. You see them at events and their logo is very well known around the county.”

Eyler did a study that was published in August on the local food chain. It showed Oliver’s generates 68% more in economic impact across the county from its business revenues than nonlocal grocers and retailers. The study found for every $100 spent at Oliver’s, there was $186 of spillover created for the county’s economy and $19.60 of every $100 spent at the chain went to state and local taxes. Oliver’s recorded $182.6 million in sales in 2019, according to the study. As a privately held company, the grocer declined to disclose 2020 sales.

A key aspect of its economic benefit to the county is that Oliver’s has become the largest supplier for Sonoma County businesses that produce food, drink, health and beauty items. It now has products from more than 400 local producers on its shelves. Along the walls of the Windsor store are photos of the local businesses and their products stocked over the decades.

During the pandemic, Oliver’s experienced some supply chain issues but those strong relationships in the local community helped it navigate obstacles for both the stores and suppliers. Those businesses range from major producers such as Amy’s Kitchen and Lagunitas Brewing Co., both out of Petaluma, to mom-and-pop food producers like Volo Chocolate operated from Windsor by owners Jeff and Susan Mall.

Volo has been in Oliver’s stores since September 2017, but the pandemic has knocked down the chocolate maker’s wholesale business by more than 70%, Susan Mall said.

Volo takes the beans from foreign markets in Guatemala and Haiti and then turns them into premium chocolate with flavors such as chiles and dried cherries, and coffee and cream.

Mall visited the Oliver’s Windsor market this summer and encountered one of the store’s employees she knew. The employee inquired how Volo was faring? “I said, ’I’ll tell you what I tell everybody else, we are hanging in and we’re hanging on,’” Mall recounted.

When the Oliver’s employee asked what could she do, Mall said she starting tearing. The employee later was able to move Volo products, which were mostly stacked in the cheese section as a specialty food item, to the chocolate section of the market.

“That is a huge gift to us,” Mall said.

The buy-in also has occurred among the Oliver’s workforce. The majority of its employees are now 100% vested in their individual accounts through its employee stock ownership plan started Jan. 1, 2017. Maass set up the ESOP as a way to keep Oliver’s “in the community and keep them local.“ Over a decade, the plan will then allow the employees to jointly own a stake of up to 43% in the company.

“The stock price of the ESOP has more than doubled in the last three years. Everybody has done very well, probably better than they have in their 401(k),” said Maass, who serves as president of the company he founded. “It's been a very positive thing because we've been successful. ESOPs are just like any other thing, if you're successful, the stock price goes up. If you're not successful, it goes down.”

During the ongoing pandemic, Oliver’s so far has been fortunate to not have any outbreaks of the coronavirus among employees at it four stores, including the original Cotati store and two in Santa Rosa and the market in Windsor. It has had some individual employees who have contracted the virus outside work, Meuse said.

The Oliver’s stores have mostly recovered from the initial supply challenges with items like hand sanitizer and toilet paper, among others. It used some resourcefulness in contracting with local restaurant supply businesses for some items as their clients closed up shop in the pandemic. That resulted in Oliver’s stocking new items such as Acme Bread from Berkeley and Merry Edwards wine from Sebastopol, Meuse said.

“Food service distributors called and said, ’We got product and we need help to get it through. Can you help us out?’ In April, May and June you would have seen a lot of products in our store that you wouldn't see otherwise,” the general manager said.

Even before the pandemic, the county grocery sector was incredibly competitive, operating on thin margins and increasing competitive pressures. That was seen when G&G Supermarket closed in 2016 and sold its stores to Safeway, while Woodland-based Nuggets Markets bought Sonoma Market and Glen Ellen Village Market. In addition, Amazon’s ownership of Whole Foods is a lingering threat to all area grocers.

A larger number of consumers have switched to online grocery shopping to stay home and reduce their risk of contracting COVID-19. But Oliver’s has not joined the online sales trend. Its executives think that would get away from its core mission that makes its markets unique from the large supermarket chains. Oliver’s also would have to raise its prices, too, if it went the digital route.

“I think most people who do Instacart realize that it is much less personal,” Maass said of the grocery shopping and delivery firm. “That’s part of why we don’t do it.”

Oliver’s goal for 2021 is to hopefully get back to more normalcy as virus vaccinations gain ground in the community. Left unanswered, however, is what will eventually become of indoor dining, salad bars and stations for hot meals and soups? Such questions will keep the grocer’s staff busy through the rest of the year.

“We hope to return to things that made Oliver’s different from others in the industry,” Meuse said. “We want to continue to press forward with what makes us different from Safeway or Raley’s or some other store.”

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.

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