California retailer says a diverse range of produce is key to success.

Garden-fresh fruits and vegetables are displayed attractively in a mix of wall cases and island displays in the produce departments of SPD Markets, a third-generation owned and operated, two-store chain with locations in Nevada City, CA, and Grass Lake, CA.

There’s something else uniquely eye-catching too, likely one of its kind. Set atop the cold cases is a 3-foot-tall, 20-something-foot-long billboard-type display that boasts a collage of hundreds of vintage fruit crate labels. Some, like Mt. Shasta California Pears, King Brannan’s Coachella Valley Eggplant, and Peacock Melons from the Turlock Fruit Co., date to the 1950s. This is the same decade SPD Markets was founded.

“My grandfather, Lawrence Painter, who had two small corner markets, and two other gentlemen, Bert See, a butcher, and Joe Dilly, who owned a hardware store, decided to put everything under one roof back in 1959. They named it SPD, for See, Painter and Dilly when they did,” says Ben Painter, the third-generation owner and president of SPD Markets. “My grandfather bought out his partners 10 years later, so it’s been in our family since then.”

In 1981, the retailer opened a second location in Grass Valley. The stores are a couple of miles apart, both in historic towns, but with somewhat different clientele, says Painter.

Earlier this year, Painter and Greg Wasley, the SPD Market store manager in Grass Valley, were named the USA Retailer of the Year and received the Fresh Merchandising Award by the Independent Grocers Alliance (IGA), topping stores in 46 states and more than 6,300 globally. This is the highest honor the Chicago, IL-headquartered Alliance awards its retailer members. SPD Market joined IGA in 1997.

THE NEIGHBORHOODS

Nevada City and Grass Valley, located within 5 miles of each other in Nevada County, were founded in the Sierra Nevada mountains during the mid-1800s during California’s Gold Rush era. Both towns are about 60 miles from Lake Tahoe to the east, and 60 and 140 miles southwest of Sacramento and San Francisco, respectively. A little over 3,000 residents live in Nevada City, while Grass Valley is the larger town with a population of nearly 13,000. Tourism and construction are among the economic drivers of both.

SPD Markets are roughly 22,000 square feet, with the produce departments measuring 2,500 to 3,000 square feet. The produce and meat departments are adjacent in the 24-aisle stores.

“Overall, our customer base comes from every walk of life,” says Painter. “We’re not a hugely populated area, and most people live outside city limits, so we don’t have the socioeconomic boundaries you find in most places. Even so, there are differences in produce purchasing. For example, our Nevada City store sells more organic produce than conventional, like 60-40. Grass Valley does well, but not as much, with organic and conventional sales of about 50-50.”

The competitive retail landscape in both towns includes chains such as Raley’s, Safeway, Save Mart, and Grocery Outlet, as well as single-store independent groceries, convenience stores and a couple of co-ops.

SOURCING & PROCURING

Four major produce wholesalers supply SPD Markets with many fruits and vegetables. One is Nor-Cal Produce Inc., in West Sacramento, owned by UNFI. The other three are General Produce in Sacramento; OK Produce in Fresno; and Veritable Vegetables in San Francisco.

“Each wholesaler provides us with their lists. One of our produce managers goes through, crunches the numbers, and sets the prices. We’ll do price changes within the stores three to four times a week. He’ll let the other produce manager know who has better prices on which items, so they’re on the same page regarding ordering, pricing and writing ads. Of course, the main factor we look for is quality,” says Painter.

He says someone might have a less expensive product, but it’s not worth putting on the shelf if the quality isn’t there. “If we receive something of substandard quality, we’ll kick it to the side and send it back the next day. I’d rather have an empty shelf than a subpar item on it.”

SPD Markets makes every effort to source locally grown produce and/or produce directly from the farmer for its shelves.

“Some of the produce we get isn’t local per se, but from an hour away. For example, we don’t grow citrus where we are, but they do in the valley at lower elevations. There’s a farm there too where we get multiple pallets of pomegranates each year because they give us such a killer deal,” says Painter.

“There are a lot of local little farms. Several of the same people who participate in the farmers market sell to us, too. Most of the time, they use all organic practices, but some of these farms are small and not certified USDA organic, so we call it natural.”

A DEPARTMENT TOUR

Walk into the entrance of SPD Markets and find produce to the far left. It’s the first department shoppers enter. The department layout is square, starting with an L-shaped wet rack. A local artist painted a mural with fruits and vegetables to signify where the organic section of the wet rack is located and provides a farmers market feel.

Then, there are three islands. According to Painter, one displays bananas, the No. 1 produce SKU the stores sell. The other two island tables are for dry rack organic and conventionally grown produce, respectively. Next is an eight-door cooler with enclosed doors filled with packaged salads, followed by another dry rack. Both stores received all new produce cases less than two years ago.

A diverse range of produce is a key to SPD Market’s success.

“As a barometer, we moved 1,520 SKUs through the department in the last six months. This, of course, includes items that have multiple SKUs, such as blueberries. However, we have a large variety, which is driven by customer requests. We don’t have to go through corporate for approval to bring something in — I’m corporate,” Painter says.

“If a request appeals to the masses, we’ll bring it in and stock it. If something isn’t likely popular with all shoppers, we’ll place a special order for the customer.”

SPD Markets has long been known for its full-service meat departments. Packaging is minimal. Instead, meat products are laid out on trays behind the glass for customers to choose to order.

“Meat has always been our big draw, but today, our produce department has been doing as much or more sales than meats dollar-wise,” says Painter. “That’s notable because typically, meats have a higher dollar ring per package. So, you have to move an even greater volume of produce to equal or surpass meats, which is impressive.”

AWARD-WINNING MERCHANDISING

What’s the secret to SPD Market’s earning IGA’s award for excellence in fresh category merchandising?
Quality produce, says Painter. “You don’t have to have fancy, big ice sculpture displays. It’s a matter of keeping the product fresh, rotated and displays full. Quality of produce is No. 1. When trimming, our guys know what to put on the shelf and what not to. I’d say many of our customers are pretty astute, and they will look at their product before they put it in their basket.”

Departmental promotion often focuses on the seasonality of produce.

“When something’s in season, like pomegranates, we will build out big displays, cross-merchandise on portable display units that we can move to wherever we need them, and run them on an ad,” says Painter. “It’s all a matter of what warrants additional displays, especially if something’s on an ad and we run it at a hot price. That ebb and flow of seasonal produce is what customers are looking for.”

COMMUNITY SPIRIT

SPD Markets has won the Best of Nevada County’s “Best Grocery Store” award 23 times as of 2024, as voted by readers of the local newspaper, The Union.

“Our customers come because they want to come to our store. They want to see their friends. They want to see their favorite checker. It’s not uncommon to walk down the aisle and see two people talking, and then come back an hour later, and they’re still there,” says Painter.

SPD Markets plays a significant benefactor role in its communities. A few years ago, Painter and Wasley introduced a loyalty reward program that returns 3% of all purchases to the community. Shoppers can choose which charities, nonprofits, or schools receive the financial contribution. Since implementation, they have donated over $1.6 million to the community, including food banks, animal shelters and little leagues.

FACT FILE

SPD Markets
735 Zion St., Nevada City, CA
Hours: Daily, 7 a.m. to 9 p.m.
Web: spd.iga.com | Tel: 530-265-4596