The Shelby Report of the West EVP Bob Reeves sat down with Mollie Stone’s Markets COO Elliott Stone, older son of founder/owner/CEO Mike Stone, at an Italian restaurant in Sausalito – which has a Mollie Stone’s – for a meal and a talk about the company.
Stone’s grocery roots run deep, and not just through his father. His maternal grandfather, Rich Moresco, also owned grocery stores, one of which Mike Stone purchased to add to the Mollie Stone’s stable. It’s located in the Pacific Heights area of San Francisco (known as the Grand Central store inside the organization).
“There are grocers on both my mom’s side and my dad’s side of the family. Aaron and I grew up in the stores, and we have the passion to be in the business and make a difference in people’s lives through food,” Stone said. “Our dad had the vision to create an incredible experience for customers and good-paying jobs and benefits for our employees.”
Though Mollie had passed away before Elliott was born, his grandfather who owned the Grand Central store is in his mid-90s and still lives in San Francisco.
A couple of possible factors in his longevity is that he remains in close contact with his family and eats healthy, but also his pride in seeing his legacy being carried forward.
“That’s what excites him – seeing us in the business, seeing us passionate about it, because he was very passionate about it. He’s loving life and living it vicariously through us,” Stone said.
Elliott began working in stores as a freshman in high school at the in-store Starbucks – the first in-store location in the world.
The Starbucks opened in 1998, the result of his dad’s visionary thinking, Elliott said.
“My dad looked at coffee shops and felt like a coffee shop was a great way to drive traffic into grocery stores. We had a really cool, unique store in San Francisco, and he had the vision of putting a coffee shop that people are going to know, that was on the rise. So that’s what he did.”
A raised plaque on the counter commemorates its status as the first store to have a Starbucks inside.
Elliott would work at the Starbucks within the store for the morning rush before heading off to school.
That coffee counter has become “kind of iconic in San Francisco,” he said, pointing out that now there are thousands of in-store Starbucks across the country.
“It’s pretty cool that my dad had the vision to do it,” Stone said. “It was a small local grocer in San Francisco that had that vision, not a big chain that struck the first deal. It’s an honor to have the plaque that says we were the first. There’s a lot of pride in that.”
It’s not uncommon to see people taking photos of the plaque, he noted.
Forward thinking led to the founding of Mollie Stone’s in the first place, in fact.
When his dad opened the first store in 1986, he sensed there was a need for stores to assist customers in their quest for more health-conscious eating. “He saw the trend coming before it became what it is today,” he said. “He’s always thinking multiple years down the line and how can we be in position to be as successful as possible?”
Mission-focused team
While running a grocery store is quite complex, with many moving parts each and every day, the COO said the goal at Mollie Stone’s is to keep things simple and focused on the company’s mission – making a difference in people’s lives through food.
“Our people know us,” he continued. “We go in the stores all the time, and we have a relationship with the people that work for us.”
Average tenure was about 16 years when the grocer studied it a couple of years ago, which is very strong in the grocery industry.
“We have many people that have been with us over 25 years,” Stone said. “We’re thankful to have that and to have them part of the family, because that’s how we look at it.”
Pins and certificates are presented to team members when they hit milestones of service. Each store holds Employee Appreciation days as well.
“The way we look at it is everybody at the office is here to support the stores, so whatever we can do to help the stores be successful, or help the teams be successful, we’re going to do that right away.”
Product selection paramount
With its health food store roots, it makes sense that produce is a big difference-maker for Mollie Stone’s.
“Talking about what makes us ‘us,’ one of the biggest things is our produce operation,” Stone said. “For a company of our size, it’s almost unheard of that we self-distribute 100 percent of our produce and our floral.”
The company has a distribution facility in San Francisco that receives deliveries between 10 p.m. and 3 a.m., then sends product out to the stores later that morning. Berries that come in at 2 a.m. would be in stores by 8 a.m.
“Just hours after we get the product, it goes right out. What does that do? Well, you’re cutting the time of the produce sitting at a distributor by a day or two,” Stone said. “The quicker you get it in there, the fresher the product is going to be. I don’t think anybody, unless there’s a company out there that picks up directly from the farm, is getting their product to their stores at a quicker pace than we do.”
Though some may question the economics of handling produce that way, “we do it because it’s about getting the best quality and having the control over what produce flows in there,” he said. “I put up our produce and floral against anybody else’s, because we’ve created a method of supply chain that really beats everybody else. We control what we buy, we control the back door, we control the inspection of the product – it’s all us.”
In other categories, product decisions are driven by myriad factors, including whether it is going to resonate with customers, Stone said. Figuring that out is based on knowing who’s shopping with you.
“Our stores are so different that sometimes it might work for one store and not work for another, so the product variety that we offer, we spend a lot of time analyzing it,” he said. “And with the size of our stores, we have to be careful because you don’t want something in there that’s not going to sell.”
But customers do want to see new products and the excitement they bring to everyday grocery shopping, so there has to be a balance.
“We have a team of people that are constantly doing category management,” he said.
As a local, family-owned grocer, Mollie Stone’s strives to give shelf space to local products. The key with these products often is sampling, or maybe a really savvy social media campaign, Stone said.
“Especially with our local vendors, we really push to get it in people’s mouths, as it can be hard to break that barrier of somebody buying something new,” he said. “We talk to our vendors and we work with them on it because we look at it as a partnership,” Stone said. “When we bring something in, we’re your partner – it’s up to both of us to make it successful.”
Local products in the center store categories feature tags to alert shoppers. Being in Northern California, Mollie Stone’s stores have a strong showing of locally made options in categories like wine and craft beer.
“The more we can educate the customer, especially about local products, the better, because everybody likes buying local,” Stone said.
Expanded education
While he worked at the Starbucks in the mornings while he was attending high school, he worked longer hours during the summer when he was in high school and college. That was when he would be assigned to work in different departments and in different roles to give him a better understanding of the operation as a whole.
While Mike Stone made it clear to Elliott and his brother Aaron that it was their decision whether to join the family business, Elliott said the passion for the business was always there for him.
He majored in business at Arizona State University, taking the opportunity to see a different part of the country as well as attending a respected business school.
After college, he came back to the family business full time, working as a Mollie Stone’s store manager for six years.
“One of the best things I did after I learned all the departments was to come back and be a store manager,” said Stone, who also is a 2014 graduate of the Food Industry Management Program at USC. “Working as a store manager taught me so much about the business. You can study the business and grow up in the business, but being embedded in it for a period of time you really learn and see the day-to-day problems and opportunities. There are so many opportunities every day, and that’s what’s so motivating about this business.”
The FIM program was valuable to him with its grocery-focused courses, but also in the relationships that were forged. When he travels to cities where his classmates are, he tries to meet up with them in person. In the meantime, they call each other to chat about what they’re seeing in the industry.
Continued out-of-the-box thinking
Among the biggest challenges of the grocery industry is that consumers want and need change, Stone said.
“Our mentality is how can we do better, be different? And we want to continue to do that.”
Mollie Stone’s has grown through acquisition over its four-decade history, resulting in a stable of stores that don’t look the same on the outside. But there is a common denominator.
“One of the most important things that we look at in our stores is how you feel when you get there and how you feel when you leave,” Stone said. “How they feel is extremely important to the overall experience, and then that contributes to people coming back to you.
“We try to make it different so that the experience that they get, and how they feel with us, far surpasses what they can get and feel in another store. That’s what we’ve really tried to focus on, along with the value-added items and things we do in-house.”
The Greenbrae and Sausalito stores feature verdant living walls in their outdoor seating areas to create an inviting space for customers.
“We’ve really invested a lot into our current stores, making them the best that they can be,” Stone said.
Three of the stores are in the city of San Francisco; two are in Marin; and three are on the peninsula.
Because of how much effort goes into each store, it’s a major decision to add stores and, as a family-owned company, the decision to grow lies in the hands of the Stone family.
“We don’t pressure ourselves that we have to grow,” he said. “It’s quality versus quantity. We’re willing to expand, but we want good stores where there’s an opportunity to maximize our format at a particular location.”
The Bay Area has always been a fairly health-conscious place, with people “more in tune with what they’re putting in their bodies, so there are needs across the Bay Area,” he said.
One project currently under way is related to the Palo Alto store. The property is located along the California Avenue retail corridor that has been closed to car traffic since the beginning of COVID. It has since become a popular outdoor dining space, as well as home to the Palo Alto farmers market, Redco Development said, adding that it’s directly adjacent to the California Avenue Caltrain stop.
“We’re in the design stages now, which is fun,” Stone said.
Future generations
Stone and his wife Lexi, who met on a beach in Cabo on spring break from their respective colleges – he the president of his fraternity, she the president of her sorority – have two young children, a son and a daughter that are 4 years and 18 months old.
So it’s a little early to determine if they will want to go into the business, but he does know how he wants to raise them.
“If Lexi and I can replicate how my mom and dad raised Aaron and I, that would be a win for me. Whatever they do, as long as they’re passionate about it, is what we’re going for. If any of our kids, whether Aaron or my kids are interested in the business, we would be really happy about that.”
In the meantime, Stone continues to be passionate about selling groceries and looking out for new opportunities for Mollie Stone’s.
“This business is so dynamic; there’s not a day you wake up that there’s not opportunities to get better.
“Our mentality is to find ways to get better every day.”