“You will see a significant reduction in the time fresh food is sitting on the trailer before it actually gets to a store, and it also gives us a lot more flexibility when you think about weather,” said Amy Probst, a senior vice president with Target.
Palisade peaches that might have been shipped from Grand Junction to a distribution facility in Denton, Texas, only to make the trip back to the Front Range, now can come straight down Interstate 70.
And the facility, beyond serving an 11-state region, will be a central transfer point where vendors can bring their products to one location rather than having to drop them off at multiple warehouses.
The facility contains more than half a million square feet of refrigerated space and will employ 380 warmly dressed workers, including 37 holding salaried positions.
Wages for the hourly positions will range from $15 to $24, Probst said. The facility will run around the clock, with most workers on four 10-hour shifts, with three days off.
Target employs 9,300 people across 45 stores in Colorado, as well as at a dry goods distribution facility in Pueblo and a sorting center in Denver. Employees at other locations are being offered the chance to work in Thornton.
The company has hired employees from careers outside distribution, said Juan Armendariz, who joined the company in February.
Target takes the time to bring its workers up to speed and has a focus on safety, he added. But the work isn’t for everyone.
“You have to like cold,” he said.
Most of the facility is kept at a constant 34 degrees , which is balmy compared to the minus 15 that those working in the freezer section must endure.
A focus on healthier options
Although both got their start as general merchandisers, Target has lagged Walmart in appreciating the power groceries have to drive store traffic and sales.
Walmart now accounts for just under a fifth of U.S. grocery sales, followed by Kroger, the parent company of King Soopers, and Costco, with about 10% each.
Albertsons, which operates in the state as Safeway, and Ahold Delhaize USA, owner of Food Lion and Giant, round out the top five grocery providers.
Target falls into the bracket of the next five largest grocery retailers, but it historically has been treated as a “fill-in” rather than a “stock up” source of food. “Fill-in,” as in grabbing a gallon of milk while shopping for school supplies after remembering the jug at home is running low.
Until recently, the company relied on third-party vendors to distribute its fresh food offerings, which increased supply costs by adding middlemen.
Walmart, by contrast, built a “hub and spoke” distribution model for refrigerated goods and mastered the art of moving items with a short shelf-life. Its efficiency allowed it to beat larger grocery-dedicated chains in price and, over time, surpass them in sales.
Playing catch-up, Target has built three new distribution hubs in the past four years to replace the capacity third-party partners previously provided.
Thornton represents its fourth and largest facility in square footage, and it has enough room to allow for an expansion in the products that can be carried, Probst said.
The new center will allow Target to offer its customers a greater variety of products, improve freshness and carry healthier options, she said.
Target has overhauled its food and beverage lineup to include more health and wellness items, like premium protein and meat products and products that promote improved gut health.
The “mass wellness” strategy, as some analysts describe it, also emphasizes “clean” ingredients. In late February, the from its cereal line by May.
“Certified” refers to FDA-inspected synthetic colors, typically derived from petroleum sources, such as Blue No. 1 and No. 2, Red No. 3 and No. 40 and Yellow No.5 and Yellow No. 6.
“We know consumers are increasingly prioritizing healthier lifestyles, and we’re moving quickly to evolve our offerings to meet their needs,” said Cara Sylvester, executive vice president and chief merchandising officer at Target, in a release in February.
The company has reformulated its in-house Good & Gather brand to reduce artificial colors and sugar content. And to keep in the retailer’s good graces, national suppliers have reformulated their cereals and other products.
WK Kellogg Co., for example, is providing Target with an exclusive Wild Berry version of Froot Loops made without certified synthetic colors.
And the retailer plans to carry more exclusive boutique brands, like Boulder-based Purely Elizabeth, which will provide a Protein Granola, and new offerings from Lovebird out of Minneapolis.
Target is known for its mass-market prestige or “masstige” lines in clothing and home decor, such as its partnership with Missoni, the Italian apparel design house, and its collaboration first with Michael Graves and then Studio McGee for household goods.
“We’re just seeing a lot more celebrity and design intention within our food and beverage. That’s a fun element, and we are seeing a lot of growth there,” said Ashley Lowes, a spokeswoman for the company.
Top Banana
But curated brands won’t ever dethrone the uncontested king atop the grocery store food pyramid — the common banana.
Highlighting its importance, the tropical fruit receives special accommodations at the new food distribution center with 12 dedicated rooms, said Sean Walker, quality manager at the new facility.
Bananas, as they are at most grocery stores, are the top-selling item at Target, surpassing other staples like milk, eggs and bottled water in popularity.
In contrast to more seasonal fruits, they remain available and popular year-round. But that requires providing special ripening rooms where they can bathe in ethylene after arriving in the U.S.
Bananas release the gas naturally during ripening as complex starches turn into simple sugars, and the green chlorophyll in the peel softens.
But soft bananas don’t travel well. It takes about six to eight days for a newly arrived and green banana to get the proper yellow tan required to head to market, under the watchful eye of a ripening system powered with artificial intelligence.
Ten of the rooms are “single” rooms that can accommodate 21 pallets at a time, and two of the rooms are double rooms. Each pallet carries a ton of bananas.
If all the rooms were at capacity, the Thornton facility could host about 1.5 million or more bananas at any given time.
A strong Colorado connection
Target’s first location opened in 1962 in a suburb of St. Paul, and when the retailer expanded outside of Minnesota in 1966, it didn’t head to neighboring Wisconsin or Iowa.
Instead, Colorado received two stores, and six decades later, the one launched in Glendale remains one of the company’s most active.
Colorado has one of the highest concentrations of Super Target stores, which have expanded food and beverage sections. And the company’s focus on wellness plays well in a state that was at the center of the health food movement in the 1960s and 1970s.
The food distribution center represents an investment of more than $300 million, a significant chunk of the $5 billion in capital spending Target plans to make this year.
It will serve 130 stores in a region stretching from Salt Lake City to Kansas City, Mo., and from the Dakotas down to Texas.
“This gives us the added capacity to really continue to accelerate growth in food and beverage,” Probst said.
Colorado should see additional Super Target stores opening in the years ahead, part of the ongoing investment the company is making.
And existing stores in the state should see fresher food compared to the previous system that brought food in from Denton, Texas, and Cedar Falls, Iowa.
Regional suppliers also should benefit. Several consolidation docks between the inbound and outbound sides of the building will handle vendor shipments.
After arriving, those items will be transferred immediately into other outbound trucks, along with other incoming deliveries, and sent out to other warehouses.
The setup is designed to reduce the number of stops and miles that vendors have to complete to reach the various distribution facilities. And the trucking firms that Target contracts with can operate with fuller loads.
But it will also mean a lot more trucks on the road in Thornton.
Thornton Mayor Jan Kulmann, who attended the center’s opening ceremony along with several Thornton City Council members on May 20, said the area is commercial with no residential nearby.
Food processors operate in the area, and the hope is that the distribution center will drive more of them to locate there.
As to truck traffic, the center is on Washington Street, south of E-470 and east of Interstate 25.
Trucks will have easy highway access and will spend a minimal amount of time on local roads, like Washington Street, which has been expanded to handle higher freight volumes, she said.
“They have a good plan for managing it,” she said.
Target has also agreed to help the Food Bank of the Rockies and Food for Hope with its surplus product, she said.
