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11/04/2021

Organic Garage plans significant expansion

New expansion plan targets up to 22 Ontario markets

Organic Garage is embarking on it first “significant” expansion plan since its 2005 inception, and has enlisted Savills Real Estate to help secure new sites in municipalities across Ontario.

CEO Matt Lurie told Canadian Grocer in an email interview that the company has long had an interest in growing its store network, but said recent operational changes—most notably the decision to close its centralized distribution and warehouse facility—have made it easier to execute against those plans.

Lurie said the decision to adopt a decentralized distribution model frees up more than $1 million per year that can be put towards growing the store network.

“The potential in the market was something we have always believed in, and preparing the company to be ready for the growth was critical to us getting to this step,” he said. “Being more nimble and quick really was a game-changer for how our business runs, and sets us up to be able to take advantage of locations anywhere in Ontario, where previously we were anchored to our [distribution centre].”

The company has also seen increased interest from landlords, with the pandemic showing grocery as “pandemic proof” and an “essential business.” In a recent report focusing on the grocery sector, Savills said property investors are showing confidence in physical food stores, noting that “the ongoing resilience of the food sector has provided a secure investment alternative.”

In an analysis of the Ontario market, Savills and Organic Garage have identified locations in 22 markets and will be accepting new site proposals from agents and developers. “These markets present ideal conditions for an Organic Garage location,” said Lurie.

The municipalities include Toronto, Mississauga, Brampton, Hamilton, Kitchener, Guelph, Newmarket and Barrie. Organic Garage and Savills are requesting that all potential sites be within three kilometres of the towns/cities listed, and be around 10,500 square feet. They must also meet “strict financial and operational criteria,” the company said.

The new stores will mimic Organic Garage’s existing locations, said Lurie, boasting features such as its nearly four-year-old Hand-Picked Partner program, bulk stations, Express Brew and teaBot. “The goal is to have a cohesive brand that has a common thread between all the stores, with slight variation in décor,” he said.

Lurie did not provide a timetable for the rollout, or any specific insight as to where the new store locations might be. “Our press release was just a formal way of saying to the market that we want to grow, and here is a list of the towns/cities we are interested in growing in,” he said.

Of its five stores, Organic Garage is currently renovating its Oakville and Bathurst locations—in an attempt to bring them in line with newer builds. “The older stores are not representative of the brand, nor do they have a lot of the features that our newer stores have,” said Lurie of the decision to upgrade. “By having the same services and offerings in all the stores, it makes it easier to promote and operate the stores.”

 

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