Home state grocer Hy-Vee has been making news with its proposed growth into the southern U.S. But it’s also growing in the Midwest. The West Des Moines-based company, which has 550 “business units” – primarily retail stores – in its operating area, recently grew to nine states with the biggest acquisition in company history. Its purchase of 22 Strack and Van Til stores in Indiana closed in May.
Tina Potthoff, Hy-Vee’s SVP of communications, said the similarities between the companies’ stores has been striking, from mission statements to customer service goals to even the colors they use.
“Our mission is ‘making lives easier, healthier and happier,’ and their mission is ‘making lives easier.’ Their colors are red, our colors are red. Their core value is all about customer service, taking care of the customer, which obviously we’ve operated on for a long, long time,” she said.
Strack and Van Til is being operated as a subsidiary of Hy-Vee, led by Jeff Strack as president.
“We really liked the way they were being managed and operated,” she said. “We’re trying to share best practices at this particular moment in time – what works well at Hy-Vee that maybe they can integrate, and what works well with them that we can integrate into our system, too.”
While its only Indiana holdings are Strack and Van Til, Hy-Vee does own property in Zionsville and Fishers. The grocer also owns property in Tennessee and in Kentucky (Louisville), “where we would eventually like to grow.”
Part of positioning the company for growth is enhancing its distribution capabilities. This summer, Hy-Vee opened its new facility in Cumming, Iowa, that houses many of its specialty products, Potthoff said.
Several hundred jobs were created with the new facility.
“We were kind of bursting at the seams because we hadn’t built a new warehouse facility in quite some time,” she said. “Essentially this will be our fourth major warehouse facility within the state of Iowa.”
The others are in Cherokee, Chariton (the company’s original warehouse) and Perishable Distributors of Iowa (PDI) in Ankeny.
The Cumming DC, featuring advanced automation systems, is located off Interstate-35, south of Des Moines.
Fast & Fresh growing
One of the business units that continues to grow is Fast & Fresh, Hy-Vee’s convenience-store model.
“We continue to either convert or purchase additional pieces of land for our new Fast & Fresh locations,” Potthoff said.
A typical conversion is from a Hy-Vee Gas location to a Fast & Fresh, which is a “meal solution destination,” she said.
Items like sushi, roller grill items, pizza and chicken sandwiches are routinely available. Some also have a Market Grille Express for those looking for a restaurant-type option. In these locations, about a dozen fresh-made breakfast choices are offered, along with starters like cheese curds, chicken tenders and bacon jalapeno wontons. A limited number of sandwiches and burgers also are offered, along with fries, tater tots and sweet potato tots on the side.
“Those continue to open, and there are plans to continue that brand into the future,” Potthoff said.
Another of its business units that is doing quite well, she said, is Wall to Wall Wine and Spirits. There are currently four locations: three in Nebraska and one in the grocer’s hometown of West Des Moines.
According to Potthoff, the goal with Wall to Wall was to create a destination shop for every level of wine and spirits buyer, from “the wine connoisseur to the person who wants a particular type of bourbon or somebody who wants something that’s local, like a Templeton Rye here in Iowa. So, we carry everything – from that very low end if you’re looking for a cheap bottle of wine, up to a very high-end bottle of wine and everything in between.”
The stores do sell national brand beverages for those who want them.
An unexpected byproduct with Wall to Wall has been the number of celebrity appearances.
“It’s become a hotspot for celebrities to stop by if they’re getting ready to launch a new tequila, new vodka, [etc.],” Potthoff said.
Mark Wahlberg has been in the store, promoting his partnership with Flecha Azul tequila. Jason Momoa has been in to promote his Meili Vodka. A few years ago, Jenny McCarthy was on site with her Blondies premixed vodka cocktails.
Health advocacy
Hy-Vee’s roots reach back to 1930, when Charles Hyde (Hy) and David Vredenburg (Vee) opened a small store in Beaconsfield, Iowa. Over the years, a focus on health and wellness emerged, underscored when Ric Jurgens, who was “very much into” fitness, became CEO in 2001.
In 2007, the company first sponsored the Hy-Vee World Cup Triathlon, held during the summer in the Des Moines area. The 2008 event was the final qualifying triathlon for the Beijing Olympics that year.
That began a trend of Hy-Vee organizing or supporting road races in local communities, Potthoff said, and the focus on helping customers keep their bodies healthy and in motion continues to increase.
“Health and wellness is still a big initiative for us that is becoming even bigger … because we’re trying to take care of the patient, ideally, from start to finish,” Potthoff said.
Particularly after the COVID-19 pandemic, Hy-Vee realized that doctor’s offices often were full and that there was a need for alternatives for people seeking health and wellness help.
One development has been the Hy-Vee Healthy You subscription service designed by its dietitians. Launched in May 2023, the $99-per-month plan includes a number of benefits, including two 30-minute appointments per month with a Hy-Vee dietitian to discuss health and wellness goals; nutrition programs such as Healthy Habits Menus, Balancing Your Blood Sugar and Weight Management; and two free health screenings per year, where available.
In the pharmacy, Hy-Vee has been implementing automation to free up pharmacists from spending time counting pills. Instead, “they’re able to be out in the store a little bit more, to holistically take care of somebody who may have just been diagnosed with diabetes, to be able to talk to them one on one and actually have more of a relationship with them,” Potthoff said.
For those diagnosed with diabetes, the pharmacist can consult with them about medication, then the dietitian can – when they’re open to it – make lifestyle and diet suggestions.
“Medicine is one piece of the puzzle, but then the other part is food,” she pointed out.
[RELATED: Hy-Vee Adds Independent Infusion Clinic In Chicago]
Another recent development is the opening of Hy-Vee Health Infusion Care, a center where patients can have infusions for a number of conditions, including Alzheimer’s.
In January 2024, Hy-Vee merged with Exemplar Care. Now, there are three Hy-Vee Health Exemplar Care clinics in West Des Moines, Ankeny and Bondurant.
Potthoff is part of a sample group of corporate and store employees that is testing out the services to see what works and what needs to be tweaked before it is offered to additional employees as part of their benefits package. A membership/subscription is required to access primary care physician services at the clinics, but anyone can utilize the urgent care services.
Also in January, Hy-Vee partnered with Soda Health on a Smart Benefits program that allows recipients to receive personalized health and wellness benefits at all Hy-Vee locations. It is available to participating Medicare Advantage, Medicaid and employer benefits programs, as well as other public organizations.
Potthoff said the company’s focus at this time is driving awareness for the Smart Benefits program. Depending on the type of health plan they have, participants may get benefits in the form of healthy food, biometric screenings, condition management programs, dietitian services or smoking cessation support.
Caring for communities
Grocers are known for taking care of their customers outside their stores, and Hy-Vee is no exception.
The grocer’s Disaster Response Units have unfortunately been called into action a lot in recent months.
Hy-Vee’s Healthy You mobiles, which are large RVs, go into communities impacted by storms or other natural disasters and distribute drinking water, granola bars, etc. But sometimes the RVs are not suitable for conditions.
“The RVs weren’t built to be able to help people with downed power lines and trees, when the roads are covered,” Potthoff said. So the grocer added pickup trucks. “We are able now to maneuver through communities that may have been damaged or destroyed.”
Today, the Hy-Vee Disaster Relief Fleet comprises 27 vehicles. In addition to the RVs and trucks, there’s “everything from supply trailers to a mobile pharmacy, generators, portable water system, and then also a command center,” she said.
This year, when a tornado struck Greenfield, Iowa, the town asked Hy-Vee to bring its command center there so that the volunteers would have a place to meet and receive instruction.
The Hy-Vee water tanker was called into action with the flooding that took place across the Midwest. It was able to “provide water to some communities that had been cut off from water sources just due to the flooding.”
The grocer also was able to provide generators to power the police department in Spencer, Iowa, when the flooding caused it to lose power, and the fix would take several days.
Digital shelf tag rollout underway
Hy-Vee has begun the process of rolling out digital shelf tags to its food stores.
With the technology from VusionGroup, Hy-Vee will be able to update product prices and data automatically, in real time, eliminating the need for printing and applying paper price tags at the shelf.
Senior Communications Manager Tina Potthoff said Hy-Vee tested the technology in a small number of stores before deciding to extend it in a “slow rollout,” she said. VusionGroup noted the tags will be in about 230 stores.
In addition to cutting down on the company’s paper consumption, there are other benefits. The digital shelf tags “allow us to be in the aisles more and not hanging tags all the time,” she said.
The grocer also can quickly reduce prices for perishables nearing their sell-by date to reduce waste, and the tags’ flashing lights help store employees find the right products more quickly when picking online orders.
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