How Sprouts scouts out the next big thing in beverage innovation

Sprouts is a favorite for beverage entrepreneurs launching their products into the market place: and with good reason.

The retailer’s ethos is based on two core principles: it focuses its stores around better-for-you products; and it promises a differentiated portfolio to other major retailers. Its portfolio is built up by searching for the best from start-ups and entrepreneurs, accompanied by a core portfolio of private label products.

Sprouts introduced more than 7,100 new items in 2024 and showcases new items every month - making it a dream target for beverage entrepreneurs helping to carve out trending health and wellness focused areas such as functional beverages and modern soda.

Sprouts is prepared to bet on fledgling brands that it believes has a promising future (it was, for example, an early adopter of gut health superstar Olipop). So how does the retailer scout out the products it believes can reshape grocery in the future?

The consumer of today – and tomorrow

Sprouts Farmers Market is one of the largest and fastest-growing specialty retailers of fresh, natural and organic food in the US.

The Phoenix, Arizona-headquartered company focuses on a relatively small $290bn segment of the food-at-home market: turning its back on the rest of the $1.6 trillion market.

The typical Sprouts target consumers are laser-focused on health and wellness; skew a higher-income (and thus less susceptible to economic downturns); and show far stronger interest in organic, fresh, and less processed and more sustainable foods than the average consumer.

For example, more than 70% of its products sold in Sprouts are ‘attribute-driven’: claims such as gluten-free, organic, vegan and non-GMO are particularly important to its consumers. And consumers are wiling to go out of their way to find a Sprouts store that meets their needs and standards.

Above all, they’re after high-quality, lifestyle-friendly products and a differentiated product assortment.

And as health and wellness take top-of-mind priority for an increasing number of consumers, Sprouts is in expansion mode. It currently has more than 450 stores across 24 US states, with some 35 new stores opening in 2025, and the retailers sees white space to reach 1,500 stores across the US.

A unique approach to innovation

With competition for space on shelves being so fierce – particularly in the beverage aisle - retailers know there’ll always be an abundance of products clamoring for space on crowded shelves.

But Sprouts takes a different approach. It’s built up its name and reputation of offering the newest and most exciting products that can’t be found elsewhere. To this end, it proactively searches out for new products that fit into future beverage trends to stay ahead of the pack.

The company has its Foraging Program: where it sends its fleet of ‘foragers’ to conferences and events around the world to scout out the latest innovations that have the potential to be the next big thing.

In an age where consumers are always on the lookout for new products and experiences – particularly in beverages – that holds a lot of value for Sprouts and its consumers.

“The foraging team are going out to find things that no-one else is selling, and that fits with the focus target base,” explained Jack Sinclair, CEO, speaking at The Beverage Forum in London last week.

“They’re scouting the world. As we’ve got better at this. We’ve put an innovation table into our stores and that takes SKUs that are not anywhere else, we give [these products] a chance, give [them] space.

“And then customers are getting excited about the foraging nature there: because the customer becomes a forager as well as the foraging team.”

For Sprouts, it’s important to stock plenty for the consumer to explore and discover.

Sprouts is also a more accessible way for beverage brands to make their first steps into the big world of retail. For many brands, this initial springboard is crucial.

“We’re a very good starting point,” says Sinclair, pointing out that other major retailers are likely to require huge commitments in volumes and money for an initial launch; whereas Sprouts is more orientated to the capabilities of smaller brands.

“I think it’s beneficial for brands to start in a smaller differentiated space. It allows you to learn: if things aren’t quite right, there’s opportunities to learn in a small way and then evolve and grow.”

Sprouts often asks brands for a period of exclusivity: firstly to help it maintain its differentiated portfolio; but also to give both brands and retailers the time and space to grow.