Hy-Vee moves to enhance brand

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WEST DES MOINES, Iowa — Hy-Vee Inc. is adding a hamburger chain and fitness centers to its service mix at a number of locations through two strategic partnerships.

The Midwest grocery chain announced it will build, own and operate 26 Wahlburgers restaurants, a hamburger chain popularized in a reality TV show. They also announced it would partner with Orangetheory Fitness to add workout centers in or near its stores.

Jeremy Gosch, Hy-Vee’s executive vice president of strategy and chief merchandising officer, said that with the Wahlburgers alliance Hy-Vee was looking for a partner where it could continue to drive restaurant sales. He noted that last year eating meals outside the home surpassed meals consumed in the home in the U.S. He said Millennials have played a significant role in the evolution, spending 44% of their food dollars annually on eating out, according to the Food Institute’s analysis of USDA food expenditure data from 2014. “With this move, we were looking at a way, not necessarily to change who we are, but to enhance our brand. I think that Wahlburgers will give us the ability to do just that. Now we will be able to open freestanding Wahlburgers restaurants as well as add select Wahlburgers menu items in all our Market Grille locations.”

He said that the burger chain is all about family and great food. The casual menu includes burgers, fish, chicken and vegetarian options along with a full-service bar. “Paul Wahlberger developed most of their menu, he’s a chef, and they have a lot of really unique flavor profiles inside of that menu.”

Orangetheory Fitness is a fitness center offering a one-of-a-kind, intensive group training workout and currently operates 750 studios nationwide.

“Right now we have dietitians in all of our stores, we have pharmacies, we have health markets, we have medical clinics, we’ve got sports nutrition, we’ve got vitamin shops, we’ve got all kinds of things happening, but we don’t have a solution for fitness, which is a big part of health and wellness for a lot of our customers,” Gosch said.

He explained that the Orangetheory partnership was really about trying to find a partner that wanted to grow and develop new health-conscious programs. “We obviously help them by having dietitians available and all the rest of the health and wellness aspect. So it really just kind of fulfills the customer journey on health and wellness. Both of these moves really provide a great opportunity for us to enhance our brand in a number of different areas.”

He pointed out that, while people in the industry use the term “groceraunt,” its Market Grill eateries are full restaurants. And now Hy-Vee is taking the next step. “To franchise restaurants and partner with Wahlburgers and to go in a unique direction with our brand partnership is thinking outside the box, but it’s also where the customer wants to be. I think Wahlburgers delivers what the customer wants, so it makes sense for us to go there.”



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