Sprouts Farmers Market, Inc. (SFM): Business Model Canvas [Dec-2025 Updated]

You're looking to see how Sprouts Farmers Market, Inc. (SFM) is actually making its money, especially with TTM revenue hitting a solid $8.654 billion by Q3 2025. Honestly, their focus on the health enthusiast customer is clearly working, built around a produce-forward format and a curated assortment that drives their private label to 24% of sales. We've seen them push expansion, aiming for 37 new stores in 2025 while digital sales chip in 15% of the total-that's a lot of moving parts for a grocer. Below, I break down their entire nine-block Business Model Canvas, showing you exactly where the capital is going and how they plan to keep that growth engine running past their 464 locations.

Sprouts Farmers Market, Inc. (SFM) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Sprouts Farmers Market, Inc. relies on to keep those shelves stocked with fresh, healthy, and innovative products. These aren't just vendors; they're strategic enablers for their entire fresh-first model.

KeHE Distributors: 10-year distribution agreement extension

The relationship with KeHE Distributors, your primary distributor for dry grocery and frozen food products, just got a decade-long lock-in. Sprouts Farmers Market, Inc. announced a 10-year distribution agreement extension with KeHE in September 2025. This solidifies a long-term collaboration marked by what both sides called transformative growth. The terms of this renewed deal include shared targets focused on improving operational efficiencies, lowering food waste, and enhancing the customer experience. KeHE's offerings, particularly the Fresh Marketplace, have been key in helping Sprouts stock unique items across deli, bulk, and bakery sections. This partnership is critical because Sprouts Farmers Market, Inc. is aggressively expanding, planning to open at least 37 new stores in 2025, bringing the total store count toward a long-term goal of about 1,400.

Instacart, DoorDash, Uber Eats: Third-party e-commerce delivery partners

Convenience is non-negotiable now, and Sprouts Farmers Market, Inc. leans heavily on these third-party platforms to meet digital demand. The execution across these partner platforms has been strong, contributing to overall performance. It's defintely worth noting that digital sales baskets are reported to be double the size of in-store purchases when fulfilled via Instacart. You can track the momentum:

• Q1 2025 Digital Commerce Growth: 28% year-over-year.
• Q2 2025 E-commerce Share: 15% of total sales.
• Q3 2025 E-commerce Growth: 21% year-over-year.
• Q3 2025 E-commerce Share: Approximately 15.5% of total sales.

The company has managed to keep its digital commerce share steady around 15% of total sales through the first three quarters of 2025.

Local/Regional Farmers: Sourcing fresh, seasonal, and local produce

The 'Farmers Market' in the name isn't just branding; it's a core supply chain focus, especially for their highest-margin category. Sprouts Farmers Market, Inc. dedicates nearly 40% of each store layout to produce. To support this, they are building distribution centers close to stores, which is vital since fresh produce accounts for 20% of total sales. Furthermore, the commitment to quality means that organic fresh produce now makes up 55% to 60% of that 20% produce sales slice. This translates to over 50% of all produce sales being organic.

Emerging Brands: Curated sourcing of innovative, attribute-driven products

To maintain that sense of discovery, Sprouts Farmers Market, Inc. actively sources new and innovative products, often using a dedicated 'foraging team' that looks at events and social media. This agility is reflected in their private label success, which is a key way they bring attribute-driven products to scale. The Sprouts Brand now represents more than 25% of total sales for Q3 2025, up from 24% in Q1 2025. In 2024 alone, the company introduced 7,100 new products, including over 300 items under the Sprouts Brand. This focus on curated assortment helps them compete in the $200 billion health-focused market segment within the total U.S. grocery sector.

Here's a quick look at how the digital partnerships and internal brand strength are stacking up against the total sales picture for the first three quarters of 2025:

Finance: draft 13-week cash view by Friday.

Sprouts Farmers Market, Inc. (SFM) - Canvas Business Model: Key Activities

You're looking at the core engine driving Sprouts Farmers Market, Inc.'s growth as of late 2025. The Key Activities section of the Business Model Canvas is all about what the company absolutely must do well to deliver its value proposition. For Sprouts Farmers Market, Inc., this centers on aggressive, disciplined expansion, obsessive product selection, taking control of the cold chain, and finally activating a digital relationship with the customer.

Store Expansion

The physical footprint is still paramount. Sprouts Farmers Market, Inc. is executing a focused expansion plan, targeting existing markets for density. The goal for 2025 was to open 37 new stores across the footprint. This aggressive pace is supported by a pipeline of approved locations; as of Q3 2025, the company had nearly 120 stores approved and more than 85 leases signed for future openings. This growth is pushing the total store count higher, with the company ending Q3 2025 with 464 locations across the U.S.

Product Curation

The value Sprouts Farmers Market, Inc. offers hinges on its curated assortment, which is heavily weighted toward fresh and attribute-driven products. The company is constantly refreshing its shelves. For 2025, Sprouts Farmers Market, Inc. launched 7,500 new items, balancing this innovation with product discontinuations to keep the assortment sharp. The focus on private label is a major activity supporting margin; Sprouts-branded items now contribute to one-quarter of overall revenue. This strategy is working, as the Sprouts brand now accounts for more than 25% of total sales.

Here's a quick look at some operational metrics supporting this activity:

Supply Chain Optimization

You can't sell fresh without a rock-solid supply chain, so Sprouts Farmers Market, Inc. is actively transitioning key categories to self-distribution. This is about gaining control and improving in-stock rates. The company has started self-distributing fresh meat and sea food, a key differentiator aligned with its fresh-first strategy. The groundwork for this involved bringing in-sourcing for fresh meat and seafood alongside produce. The first distribution center (DC) for this initiative was on track to begin in-sourcing in Q3 2025. The full benefits are expected to ramp into 2026, supported by planned DC expansion in Northern California next year. Currently, around 80% of its stores are located within 250 miles of an existing distribution center, but this self-distribution push is designed to enhance that control.

Digital Engagement

The final critical activity is deepening customer relationships digitally. Sprouts Farmers Market, Inc. finally rolled out its first-ever loyalty program nationwide in the second half of 2025. The program, Sprouts Rewards, is designed to drive frequency and basket size through personalization. Early signs show increased shopping frequency and sales per customer. The structure of the rewards is concrete: the program will offer $2 for every $100 spent by members. This digital focus is important because e-commerce sales already represent a significant portion of the business, with digital sales baskets being double the size of in-store purchases via Instacart, and nearly 15% of total sales having a digital component.

The expected impact of these digital efforts is forward-looking:

• The nationwide loyalty program rollout is expected to further support comparable store sales growth starting in 2026.
• Digital sales baskets are double the size of in-store purchases via Instacart.
• The program offers $2 back for every $100 spent.

Finance: draft 13-week cash view by Friday.

Sprouts Farmers Market, Inc. (SFM) - Canvas Business Model: Key Resources

You're looking at the hard assets and human capital Sprouts Farmers Market, Inc. (SFM) relies on to execute its strategy right now. It's all about physical presence and the people running the show, so let's look at the numbers that define their scale as of late 2025.

The physical footprint is the bedrock of the operation. As of the third quarter of 2025, Sprouts Farmers Market, Inc. (SFM) operated 464 stores across 24 states. This expansion is deliberate, aiming to place stores within a 250-mile radius of their distribution centers to optimize fresh product speed.

Here's a quick look at the core quantitative resources underpinning the business model:

The team members are a critical, non-tangible asset. Sprouts Farmers Market, Inc. (SFM) has approximately 35,000 employees dedicated to the in-store, customer-facing experience. That's the human element driving the specialty grocery proposition.

The private label offering is a significant financial resource, driving margin and differentiation. For the first quarter of 2025, the Sprouts brand contributed 24% to total sales. The company plans to release over 350 Sprouts-branded items in 2025 alone.

The supply chain infrastructure is built around speed and freshness, which is a key differentiator in this segment. The distribution network is designed to support this focus:

• Strategic self-distribution network for fresh product speed.
• Goal to position fresh distribution centers within a 250-mile radius of stores.
• Recent new distribution centers opened in Colorado and Florida.
• The company is building out self-distribution for fresh meat and seafood alongside produce.

Finance: draft 13-week cash view by Friday.

Sprouts Farmers Market, Inc. (SFM) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Sprouts Farmers Market, Inc. over the competition, grounded in their late 2025 operational snapshot. It's all about fresh, curated, and accessible healthy food.

Produce-Forward Format

The store design centers on the fresh departments, mimicking a true farmers market setup to drive initial customer engagement and perceived quality. This layout dedicates nearly 40% of store space to fresh produce.

Differentiated Assortment

Sprouts Farmers Market, Inc. emphasizes products aligning with specific dietary needs and quality attributes. The private label, the Sprouts Brand, is a key differentiator, contributing 24% of total sales in the first quarter of 2025. This brand generated $1.7 billion in sales in 2024. The company continues to innovate within these attribute categories:

• >20% Vegan offerings.
• >30% non-GMO selection.
• >45% organic selection.
• >55% gluten-free selection.

The company launched over 7,100 new products in 2024 alone, keeping the assortment fresh.

Healthy Value

The value proposition balances high quality with competitive pricing, evidenced by strong financial performance driven by sales velocity. For the third quarter ended September 28, 2025, net sales totaled $2.2 billion, marking a 13% increase year-over-year. The gross margin for that quarter stood at 38.7%. The full-year 2025 outlook projects total net sales growth of approximately 14%. Here's a look at the financial performance supporting this value delivery:

The company ended Q3 2025 with $322 million in cash and cash equivalents.

Experiential Shopping

The physical store environment is designed to feel like an open, easy-to-navigate farmers market, reinforcing the fresh focus. As of September 28, 2025, Sprouts Farmers Market, Inc. operated 464 stores across 24 states. The company has a long-term goal to expand to more than 1,000 locations nationwide. They opened 9 new stores in the third quarter of 2025, contributing to the overall physical presence.

Finance: draft 13-week cash view by Friday.

Sprouts Farmers Market, Inc. (SFM) - Canvas Business Model: Customer Relationships

Sprouts Rewards: National loyalty program for personalized offers and data

The national rollout of the Sprouts Rewards loyalty program commenced in the second half of 2025, following successful testing in 35 stores. As of the third quarter of 2025, the program has fully launched, showing early indications of increased shopping frequency and sales per customer. This program is central to the aspiration of having a very all-embracing loyalty program that accounts for diverse customer dynamics. Before this initiative, only 15% of customers were identifiable.

The relationship is being quantified through key performance indicators:

Personalized Marketing: Using data to drive hyper-relevant product recommendations

The shift in customer engagement strategy moved from paper-based promotions to personalized digital outreach, leveraging data analytics to tailor product offerings. This data-driven approach aims to create a personalized experience and deliver hyper-relevant product recommendations. The digital ecosystem integration supports this, with e-commerce sales jumping 27% in the second quarter of 2025, representing 15% of total sales. In the third quarter of 2025, e-commerce sales accounted for 15.5% of total sales. The focus on loyalty members is showing results, as they demonstrate stronger engagement and higher spending per basket.

High-Touch Service: Knowledgeable team members in specialty departments

Sprouts Farmers Market, Inc. reinforces customer relationships through in-store expertise, particularly in fresh categories. The company is focused on getting merchandising right, with fresh produce being 20% of sales, and organic fresh produce making up 55% to 60% of that fresh category. Furthermore, the Sprouts Brand now accounts for more than 25% of total sales for the quarter.

• Team members provide expertise in specialty departments.
• Focus on fresh product quality, with 80% of stores within 250 miles of a distribution center.
• The company is in-sourcing fresh meat and seafood distribution, starting in Orlando, Florida.
• The overall store count reached 464 locations across 24 states as of Q3 2025.

Sprouts Farmers Market, Inc. (SFM) - Canvas Business Model: Channels

You're looking at how Sprouts Farmers Market, Inc. gets its products into the hands of its health-conscious shoppers. It's a mix of the tried-and-true physical footprint and a rapidly growing digital layer. Honestly, the physical store is still the engine, but the digital side is what's keeping the growth story compelling.

Retail Stores: Primary Channel

The brick-and-mortar presence remains the core channel for Sprouts Farmers Market, Inc. They focus on a curated, fresh-forward experience. As of the end of the third quarter on September 28, 2025, the company operated exactly 464 locations across 24 states. This physical network is key to their brand promise of fresh, natural, and organic food.

The expansion plan is aggressive; they opened 9 new stores in Q3 2025 alone. For the full year 2025, the plan was to open 37 new stores. They are even planning to open more stores in 2026 than they did in 2025, aiming for 10% unit growth by 2027.

Here's a quick look at the physical footprint as of late 2025:

Digital Commerce

Digital commerce, primarily through third-party partners, is a significant and growing piece of the pie. In Q3 2025, e-commerce sales hit 15.5% of total sales, up from 15% in earlier quarters. That's a remarkable 21% year-over-year growth for the channel in Q3 2025. It's defintely not a small add-on anymore.

The company leans heavily on established delivery platforms to execute this. They partner with Instacart, DoorDash, and Uber Eats to get those online orders fulfilled. What's encouraging for the business is that fresh produce maintains the same percentage of the digital basket as it does in-store, showing customer trust in their digital fulfillment for perishables.

The digital channel performance includes:

• E-commerce Sales as % of Total Sales: 15.5% (Q3 2025)
• Year-over-Year E-commerce Growth: 21% (Q3 2025)
• Total Q3 2025 Net Sales: $2.2 billion
• Key Third-Party Partners: Instacart, DoorDash, Uber Eats

Mobile App/Website

The digital interface is where Sprouts Farmers Market, Inc. drives loyalty and direct engagement. They recently rolled out the Sprouts Rewards loyalty program nationwide, and early results show increased shopping frequency and higher sales per customer among enrolled members. This integration is crucial for creating that omnichannel environment where the customer chooses how to shop.

While the focus is on loyalty and coupons, the app is also the gateway for online ordering. Based on estimates from October 2025, the company was seeing approximately 2,333 daily mobile app downloads. This number shows active customer acquisition for their digital tools, which feed into the personalized offers driven by the loyalty program.

Key digital engagement metrics include:

• Loyalty Program: Sprouts Rewards (nationwide rollout)
• Impact of Loyalty: Increased shopping frequency and sales per customer
• Estimated Daily App Downloads: 2,333 (October 2025)

Sprouts Farmers Market, Inc. (SFM) - Canvas Business Model: Customer Segments

You're looking at the core buyers Sprouts Farmers Market, Inc. is targeting as of late 2025. The company is focused on capturing a specific slice of the massive food retail space.

Health Enthusiasts: Core target customer focused on wellness and food provenance

Sprouts Farmers Market, Inc. is positioned to meet the rising demand from consumers focused on wellness. The overall U.S. food-at-home market is valued at approximately $1.6 trillion. Sprouts' specific target customer segment within this market represents about $290 billion of that opportunity. Management reports that their results are driven by effectively engaging with these target customers, who are on their health journey.

Higher-Income Households: Customers less susceptible to economic downturns

The demographic profile for the core Sprouts Farmers Market, Inc. shopper skews toward higher income. This group is considered less susceptible to economic downturns compared to broader consumer bases. Over half of these customers are married or in a relationship, often representing dual-income households.

Natural/Organic Loyalists: Shoppers prioritizing attribute-driven products

Shoppers prioritizing attribute-driven products are central to the business model. The company's attribute-forward products continue to grow faster than the core business. A key indicator of loyalty is the performance of the private label, which management notes shows strong consumer acceptance. The company is actively encouraging farmers to grow more organic product, as organic fresh produce makes up 55% to 60% of the fresh produce sales category, which itself is 20% of total sales.

Omnichannel Shoppers: Customers using both in-store and digital delivery

Customers are increasingly using both physical stores and digital channels to shop. E-commerce sales have shown significant acceleration, reflecting a commitment to an omnichannel environment where the customer chooses how to engage. The company is playing the omnichannel game aggressively, supported by partnerships with delivery platforms.

Here's the quick math on digital adoption as of the third quarter of 2025:

• E-commerce sales grew 21% for the quarter.
• Digital sales accounted for 15.5% of total sales for the quarter.
• In Q1 2025, digital commerce growth was 28% year-over-year, representing 15% of total sales.
• The percentage of fresh produce in the digital basket is the same as in the physical store.

Finance: draft 13-week cash view by Friday.

Sprouts Farmers Market, Inc. (SFM) - Canvas Business Model: Cost Structure

You're looking at the core outflows for Sprouts Farmers Market, Inc. as of late 2025. Understanding where the money goes is key to seeing how they manage their growth and margin targets.

Cost of Goods Sold (COGS): Largest cost, driven by fresh produce and specialty sourcing

The cost of the food itself is, predictably, the biggest drain on cash. This is directly tied to their value proposition-sourcing fresh, natural, and organic items. For the twelve months ending September 30, 2025, Sprouts Farmers Market's Cost of Goods Sold hit $5.294 billion. This represented a 14.59% increase year-over-year from the prior period's COGS. To put that in perspective against the prior full year, the annual COGS for 2024 was $4.778 billion.

Here's a quick look at the scale of the largest cost components:

Capital Expenditures: Projected 2025 investment of $230M to $250M for new stores

Sprouts Farmers Market is actively investing in expanding its physical footprint. Management anticipates total capital expenditures for the full year 2025 to be between $230 million and $250 million, net of landlord reimbursements. This budget covers opening the planned 37 new stores for 2025. Year-to-date through the third quarter of 2025, the company had already invested $194 million in capital expenditures. Looking back, the capital expenditures peaked in the last five years in September 2025 at $244.8 million on a last twelve months basis.

Selling, General & Administrative (SG&A): Includes store labor, marketing, and digital spend

SG&A covers the operational costs of running the business, from the people stocking shelves to the spend on digital engagement. For the twelve months ending September 30, 2025, SG&A expenses were $2.537 billion, marking a 15.83% increase year-over-year. In the third quarter of 2025 alone, SG&A expenses totaled $653 million. However, as a percentage of net sales for that quarter, the metric leveraged down to 29.7%, showing some operating leverage despite the increase in absolute dollars. The annual SG&A for 2023 was $2 billion.

Key components driving SG&A include:

• Store labor costs for the growing store base.
• Marketing spend supporting the new Sprouts Rewards loyalty program.
• Expenses tied to new store openings.
• Digital spend supporting e-commerce operations, where digital sales baskets are double the size of in-store purchases via Instacart.

Supply Chain Costs: Investment in self-distribution and logistics infrastructure

To support the fresh focus and drive margin leverage, Sprouts Farmers Market is deepening its control over logistics. This involves significant investment in infrastructure. A key metric here is geographic density; nearly 80% of stores are located within 250 miles of a distribution center, which helps reduce transportation costs. The company is actively transitioning to self-distribution for fresh categories like meat and seafood to improve both freshness and profitability. This continued investment in supply chain capacity is central to their margin enhancement strategy moving forward.

Sprouts Farmers Market, Inc. (SFM) - Canvas Business Model: Revenue Streams

In-Store Product Sales: Primary revenue source from fresh and packaged goods

• Total Net Sales for the third quarter ended September 28, 2025: $2.2 billion.
• Total Net Sales for the second quarter ended June 29, 2025: $2.2 billion.
• Fresh produce accounted for 20% of Sprouts Farmers Market sales in a recent period.
• Organic fresh produce represented between 55% and 60% of those fresh produce sales.

Digital Commerce Sales: Revenue from online orders fulfilled via third parties

• Digital Commerce Sales represented 15.5% of total sales for the third quarter of 2025.
• Digital Commerce Sales represented about 15% of total revenues for the second quarter of 2025.
• Digital Commerce Sales increased 21% year-over-year in the third quarter of 2025.
• Digital Commerce Sales increased 27% year-over-year in the second quarter of 2025.
• Digital Commerce Sales increased 28% year-over-year in the first quarter of 2025.

Private Label Sales: High-margin revenue from Sprouts Brand products

• The Sprouts Brand represented more than 25% of total sales for the third quarter of 2025.
• Private label products accounted for 24% of total sales in the second quarter of 2025.
• The Sprouts Brand contributed 24% of total sales in the first quarter of 2025.
• The Sprouts Brand reached 23% sales penetration in 2024.
• The company launched 300 new private label products in 2024.

Full-Year 2025 Net Sales Growth: Projected at approximately 14%

The full-year 2025 outlook for Sprouts Farmers Market, Inc. includes the following projections: