In my hunt for the top companies to round out the upcoming Outthinker List, I’ve discovered that Sprouts Farmers Market offers a masterclass in CLV-inspired success. The outlier in its industry, Sprouts wins by getting sharper, not bigger.
While most grocers chase breadth and promotions, Sprouts narrowed the aperture: serve health-seeking, attribute-driven shoppers with a produce-first experience, delivered through a right-sized box and a system that compounds customer lifetime value (CLV).
The proof is visible across CEO letters and highlights from 2022–2024: net sales rose from $6.4B to $7.7B, comp store sales multiplied from 2.2% to 7.6%, and diluted earnings per share (EPS) climbed 57%. Those outcomes weren’t luck; they were the compound interest of intentional design.
Sprouts’ Five Moves
1. A sharper “who.”
Attribute-driven products—organic, gluten-free, plant-based, or regeneratively grown—appeal to a distinct segment of health-focused shoppers who often bypass big-box chains. Sprouts sharpened its focus on this group of products, which streamlined assortment, adjacencies, and store layouts, making customers’ product discovery simple rather than overwhelming.
2. A right-sized “box.”
Sprouts’ stores average just over 20,000 square feet making them small enough to be easy to navigate, yet designed to showcase fresh produce at the center of the shopping experience. This compact format lowers rent and labor costs, speeds up inventory turnover, raises the revenue break-even point, and allows Sprouts to open in neighborhoods too small for big-box chains. It’s a case of infrastructure serving as strategy: growth built with purpose.
3. A smarter supply chain.
Sprouts clusters stores around distribution centers, tightening replenishment cycles. This reduces shrink, keeps perishables fresher, and turns logistics into a trust advantage for shoppers who demand quality produce.
4. CLV by design.
Sprouts built its private-label line as a growth engine, not just a margin booster. By 2024, “Sprouts Brand” accounted for 23% of sales, offering high standards at lower prices than national brands.
Like Costco’s Kirkland or Whole Foods’ 365, Sprouts uses its brand to capture customers and build product-level loyalty. Shoppers seek out Sprouts Brand items such as organic almond flour, keto trail mix, or frozen riced cauliflower, making them more likely to return. Targeted loyalty offers, and lower costs compared to national brands, reinforce this behavior, giving customers even more reasons to come back.
5. Culture that innovates.
Sprouts’ purpose — help people live and eat better — is not a marketing line but a filter for decisions. That clarity fosters innovation aligned to customer needs rather than short-term promotions.
Sprouts strengthens trust through sustainability and community impact. Each year it rescues enough food to donate the equivalent of ~29 million meals. Its local vendor program puts nearby farms and artisans on the shelf, while its school garden initiative helps kids learn healthy habits by growing their own food. Together, these efforts anchor Sprouts in its neighborhoods, giving shoppers a reason to feel good about spending more, and a reason to return.
Each move starts with a customer win and ends with a financial one, and never the other way around. That sequencing is the quiet secret of resilience through inflation and supply challenges.
What Leaders Can Learn from Sprouts’ Model
Differentiate through attributes, not noise.
By 2024, more than 70% of Sprouts’ sales came from attribute-driven products, curated across tens of thousands of lifestyle-friendly items. Leaders can take the same approach by zeroing in on their best customers’ non-negotiables, whether that’s organic ingredients, tech-enabled convenience, or standout service, so every new offering strengthens loyalty and pricing power.
Right-size your model, build with purpose.
All new Sprouts stores now follow a smaller, produce-centered design that lowers rent and labor needs. Leaders in any sector can take note: What’s the most streamlined version of your model that still delights customers? Building with focus and precision brings clarity to the customer experience, efficiency to operations, and makes the value proposition unmistakable.
Engineer loyalty by design.
Sprouts combined its expanding private-label line and a 2024 points-based loyalty pilot (tested in select stores to gather first-party data and encourage repeat visits) to drive customer retention. The playbook is clear: identify your best-fit customers, remove friction at the moments that matter most, and introduce one consistent benefit they’d truly miss if it disappeared. Only once that foundation proves effective should additional complexity be added.
Make the proprietary irreplaceable.
For Sprouts, private label isn’t just profit. It’s strategic trust. Shoppers who rely on Sprouts’ exclusive products (like organic almond flour) come back knowing they can’t get the same value elsewhere. Leaders need to create their own version of this: proprietary features, content, or formulas competitors can’t easily copy.
Anchor growth in purpose and precision.
Sprouts’ food rescue programs, ESG leadership, and school-garden initiatives reinforce its purpose of helping people live and eat better. The takeaway: culture and community aren’t marketing. Instead they are the filter for decisions. Grow what strengthens trust and own what defines your promise; outsource the rest.
Clarity Compounds
From 2022 to 2024, Sprouts stayed disciplined by centering on a clearly defined core customer: the health-seeking shopper who prioritizes organic, plant-based, or gluten-free products and values community connection.
Every decision — from expanding its private-label offering to piloting a loyalty program to designing community-anchored stores — was made with this customer in mind. Instead of chasing every shopper, Sprouts focused on serving this archetype better than anyone else. The results speak for themselves: sales reached $7.7B, comps grew 7.6%, EPS jumped 57%, private label rose to 23% of sales, and e-commerce surpassed $1B, accounting for 14% of revenue.
Sprouts proves that going against the grain can be the strongest strategy. The result is not just growth but compounding trust and loyalty. For leaders, the lesson is clear: clarity beats scale. And the power of CLV is that it turns that clarity into momentum that compounds year after year.
Want to see how CLV can help your profits grow? Visit Outthinker.com today to learn to differentiate your business and pull ahead of the pack.