A look inside Sprout’s new mega distribution hub in Fullerton

Recently, I was invited to the grand opening of Sprouts Farmers Market’s new distribution center in Fullerton.

Because I wear two hats — commercial real estate broker and contributing columnist for Southern California News Group — this invitation had a special appeal to me.

The transaction was a high-profile one. The shiny new logistics building replaced the vacant Kimberly Clarke paper plant, which closed in 2018. Sprouts, a well-known grocery store chain based in Arizona and specializing in fresh and organic products, recently made a significant move, setting up a massive distribution center. This move not only marks a new chapter for Sprouts but also promises some positive impact on the local community.

Before the hub was completed in Fullerton, Sprouts operated its distribution out of Colton in a facility leased by Lineage Logistics. The company’s new distribution center signifies a strategic shift in delivering fresh produce to its customers.

According to Joe Hurley, chief supply chain officer for the company, the operation boasts state-of-the-art cold storage rooms cooled to an ambient temperature of 34 degrees and 55 degrees. Also, Sprouts said it reduced its transportation-related emissions by saving an estimated 725,000 annual road miles by shortening its delivery routes due to stores.

To provide the community with an inside look at their facility, Sprouts held an open house. Attendees had the opportunity to witness the significant capital investment that went into the building, as well as explore the ripening rooms for bananas and avocados, among other highlights.

Perhaps the most heartwarming aspect of the event was the donation of $65,000 to Fullerton schools by the Sprouts Charitable Foundation. Commonwealth Elementary received $15,000, while Maple Elementary got $50,000, with a particular focus on cafeteria composting.

At the helm of Sprouts Farmers Market is CEO Jack Sinclair, who took the reins in 2019. With a pleasant Scottish brogue and a pedigree including stints at Walmart and 99 Cent Stores, little did he know that his tenure would coincide with the COVID-19 pandemic, which presented unique challenges to the industry.

Despite these challenges, Sinclair had a clear vision for the company. His objectives included targeting Sprouts’ customer base, described as “health enthusiasts and innovation seekers.”

While the U.S. grocery industry is vast, with an estimated worth of $1.2 trillion, Sprouts has dedicated itself to focusing on a $200 billion slice of that business. To achieve this, Sinclair also wanted to enhance the company’s supply chain, a goal that has been realized with distribution centers now in Aurora, Colorado, Orlando, Florida, and here in Fullerton.

Additionally, the CEO envisioned new stores with a smaller footprint and aims to grow the company’s approximately 402 stores nationally by 10% per year, primarily in the Sun Belt region.

Sprouts’ presence in Fullerton is not just about bricks and mortar; it’s about creating opportunities and giving back to the community.

The 337,000 square-foot logistics building, of which Sprouts occupies roughly 250,000 square feet, added approximately 190 full-time jobs to the community. Sprouts Healthy Communities Foundation also is making donations to local schools, supporting nutrition, education, composting and even school gardens where students learn firsthand how produce is grown and delivered to stores.

Standout features of the Sprouts distribution center are myriad beginning with the presence of ripening rooms within the cold storage area.

These rooms allow for the precise control of temperature and humidity, ensuring that avocados and bananas reach stores at the perfect level of ripeness. The facility also is designed for future solar panel implementation and LEED certification, a part of Sprouts’ commitment to green building practices.

In an effort to encourage environmental responsibility among its employees, the center installed 11 electric vehicle charging stations, with plans for future expansion. Additionally, an electric vehicle terminal truck assists with daily yard operations.

My takeaway: Sprouts is setting an example for businesses looking to make a positive impact on both a local and global scale. As we witness the fruits of their labor ripening in the heart of Southern California, it’s clear that Sprouts Farmers Market is not just a grocery store but a genuine community partner.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.