By understanding how to compete on more than price, this family-owned grocery store is growing while others in its industry are not. Ninety-three years after opening its doors, Mackenthun’s Fine Foods continues to find new ways to entrench itself in the lives of its community. Headquartered in Waconia, Minn., this fifth-generation family-owned and operated grocery store started off as a butcher shop. Although the meat and homemade sausage department continues to bring in customers today, it’s the spirit of service and innovation that makes Mackenthun’s a Twin Cities staple. 

In July 2008, Mackenthun’s introduced its new look and feel. Prior to the renovation, Mackenthun’s focused mostly on price; the new format focused more on in-store-made products, fresh produce, and signature foods. According to Kim Mackenthun, president and CEO, this new format is exactly what his customers wanted. 

“Through market research and focus groups, we determined a focus on fresh items was where we needed to go,” he said. “With the expansion of produce, meat, deli, and bakery, our production is trending up while others in our industry are trending down.”

New opportunities

From the success of the remodeled store opening, Kim and the director of operations, his son Jaime, saw an opportunity to grow by bringing in more organic food options. Mackenthun’s had always had some organic foods, but they both saw an opportunity and a need to be certified as an organic grocer. 

“Everyone is out there fighting the price war,” said Jaime, “You can’t compete on price alone; we saw organics as an opportunity to grow our business even more than where we’re at right now.”

Along with organic foods, Mackenthun’s stocks one of the largest selections of gluten-free foods in the Twin Cities’ area. And, in the spirit of community, the grocer partners with groups focused on raising awareness of the importance of a gluten-free diet. 

“A customer with an autistic son found his son reacts better to a gluten-free diet, so he’s leading the charge among people he knows with kids who have the same problem,” said Kim. “It’s just another niche we fell into and continue working on.”

The focus on organic produce led Mackenthun’s to some new opportunities with vendor partners and suppliers. Kim said that although he’s seen a number of national publications writing about the stagnancy of the organic market, he’s only seen increased interest from his customers. 

“We’re bucking some of those trends by doing a better job, listening to what our customers want, and delivering on it,” he said. Through focus groups, Mackenthun’s discovered that locally grown produce is as popular as organics right now. Rather than overlooking this opportunity, the grocer dove in headfirst. 

“We will always be sourcing products from elsewhere, but when available, we put a very high concentration or emphasis on locally homegrown,” said Kim. “We’ve talked about doing an outdoor, locally grown produce sale every Saturday, and hopefully it will turn into a large Farmer Market event with many local growers.”

Versatile variety

Mackenthun’s has seen significant growth in its produce and in-store signature items, but like most other grocers, center store and non-perishable items are going in the opposite direction. However, with a growing perishables section, the grocer is actually keeping up with competition. “We feel we’re standing stronger than most retailers out here,”said Kim. 

Perhaps this success could also be attributed to the grocer’s ability to be many things to all people. For example, understanding the importance of being a “green” business, Mackenthun’s recycles almost all of its waste. According to Jaime, in one year, the grocer composted 250,000 pounds of organic waste and recycled 66,500 pounds of cardboard, 4,355-gallon bags of plastic, and 14,000 pounds of aluminum, glass, and plastic. 

“We’ve private labeled the bottled water we sell in-store, and those are sold in fully compostable bottles,” said Jaime. 

And with the ability to start from scratch with the new design, Mackenthun’s put more of an emphasis on its cake-decorating department, which is as big of a hit with kids as it is adults. Rather than designating a small corner of the store to cake decoration, a cake design area juts out in the middle of the store so two designers can work simultaneously. 

“People can watch them work and talk to them, and kids will come and watch for an hour while mom and dad are off shopping,” said Kim. “It’s become a focal point within the store.”

Once a year, Mackenthun’s also hosts a graduation, wedding, and party planning event, bringing in local companies that supply these kinds of events and offering samples for customers to try. From floral designers and party goods companies to Mackenthun’s cake decorators, the occasion turned into a popular event for the Waconia community. “It’s just another solution for our customers,” said Jaime. 

Labor of love

To its community, Mackenthun’s represents more than a  grocery store. “It’s almost like a gathering place,” said Kim. “You can definitely tell by looking at the crowd on a Sunday after church; it’s the place they come to get out of the house and visit.”

Perhaps this is due, in part, to one of Mackenthun’s taglines: Experience service…again. Having fresh produce, a large selection, and competitive prices are an obvious must, but having the kind of employees who understand how to convey the friendly and inviting atmosphere of a decades old family-owned business isn’t as easy. 

“There is never a time if someone asks where something is that any one of our employees tell them ‘It’s down aisle 14’ rather than taking them directly to the item,” said Kim. “Service is…”

“…another way to differentiate you from other grocery stores,” finished Jaime. Indeed, with the fifth generation of the Mackenthun family now at the helm, including Kim’s wife Laurie and daughter Jessa, operating Mackenthun’s has become a significant experience for all involved. 

“This whole operation is a labor of love for all of us,” said Kim. “I’m fortunate that I have two kids who enjoy this business as much as I do and as much as my dad, my grandfather, and my great-grandfather did.”