Fresh City acquires The Healthy Butcher

The subscription grocer is on a growth spurt as it picks up the popular fresh food brand.

First Mabel’s Bakery and Specialty Foods, and now The Healthy Butcher.

Fresh City Farms, a Toronto provider of organic, sustainable and seasonal grocery food, announced its latest acquisition, and has been tweaking its business model since the opening of its third retail location in 2018.

Fresh City CEO Ran Goel tells strategy The Healthy Butcher has built a strong wholesale business and that the company can now add Healthy Butcher items to its online market. He says The Healthy Butcher has a strong brand association and a history of producing 100% grass-fred meat products.

The Healthy Butcher produces everything from steaks to sausages and hamburgers, so it gives Fresh City expertise in a key part of the fresh food spectrum, says Goel. This move adds to its acquisition of Mabel’s in April this year, which brought capacity and credibility to Fresh City’s baked goods, breads and prepared foods offerings.

The Healthy Butcher’s retail locations also offer opportunities for Fresh, Goel says, one of which is in a densely located core (Queen St. West) – in line with Fresh City’s urban target – and the other, at Avenue Road and Eglinton, is a more established neighbourhood with bigger household sizes, serving a slightly different demographic.

“We are competing with the likes of Freshii in terms of prepared foods at our bricks and mortar locations, and on the online side, there’s Mama Earth, and there are more and more incumbents coming into the online space,” says Goel of the company’s need to grow in a fragmented food space.

Goel says its customers trust Fresh City’s strict sourcing policies and supply chain. The grocer does sell some CPG brands through its grocery side (Cha’s Organics, Earth’s Choice, and Eden Organics) but is more focused on fresh and prepared food offerings. The CPG side of things has not been a focus, but if the store drives more volume, that may change, Goel says.

Its latest location on Toronto’s trendy Ossington Avenue has been open eight months. Goel says some product tinkering was required as some SKUs, that historically didn’t do well online, have found a new life in bricks and mortar.

“A big part of the reason we added a bricks and mortar channel, is that I think even in the rosiest projections for online purchasing for grocery, you are looking at 10-20% in a decade and it’s going to be lower for prepared food and fresh servings of produce,” Goel says.

When it comes to activations in store, Jenn Hay, CMO at Fresh City, says the company frequently does product testing and demo, recently showcasing a brand of hummus from Sunflower Kitchen, a family owned Scarborough vegan, and an environmentally friendly producer of dips and pestos.

Fresh City has also hosts book launches, such as the “A Matter of Taste: A Farmers’ Market Devotee’s Semi-Reluctant Argument for Inviting Scientific Innovation to the Dinner Table” event. The brand also hosts cookbook authors to demo recipes, which are available in-store and online.

Goel says its focus is on growth in dense, walkable urban environments in Toronto and its three-five year horizon, includes expansion throughout the GTA.

Hay adds that Fresh City will be opening a new location this fall in downtown Toronto, just a couple blocks from Yonge-Dundas Square, and it will be its largest store yet. It will include a seating area as well as a selection of Healthy Butcher, Mabel’s products and more. With the acquisitions of Mabels and Healthy Butcher its store count is now eight.