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The Marketplace magazine September-October 2019 issue

Owner of Kitchener grocery store promotes healthy choices

Jordan Dolson knows that merchandising choices she makes at her grocery store mean Legacy Greens is less profitable than it could be.

And she’s okay with that.

For Dolson, 35, providing healthy food options for her customers in Kitchener, ON is more important than padding the bottom line. “It’s more of a passion project than a way to get rich,” she says with a smile.

Refreshingly candid about the financial aspects of Legacy Greens, Dolson told an audience at a MEDA hub breakfast that she pays herself $22 an hour.

“I didn’t have this for the first three years of running my business,” she says. “Now I feel financially secure.”

Raised on a farm in southwestern Ontario, she never thought seriously about food and agriculture until Grade 12, when she was captivated by a speaker from an area vegetable farm in her environmental studies class.

But risk-taking and food production run in the family. Her parents gave up their careers and bought a farm in 1985 when they had two small children.

“I never appreciated that as a kid, that they took that risk of entrepreneurship with their lives. I actually never appreciated living on a farm at that time.”

After attending university in British Columbia, she wanted a career in the public sector. She worked for the federal government for several years, then took a municipal job.

Impressed by Vancouver’s vibrant independent grocery store scene and feeling unfulfilled in her job, she considering grocery as a possible future enterprise. When she turned 30, she moved back to Ontario.

After landing a municipal contract position, she started Legacy Greens as a small market garden in 2014 on a quarter-acre plot at her parents’ farm.

She grew vegetables that she sold at a farmer’s market, a restaurant and a grocery store. That part-time operation netted her around $1,500 the first year.

“I learned what it was like to be a supplier, and I think that is really valuable now that I am a retailer dealing with many suppliers. Suppliers like to get paid, and they like when you’re excited when they bring you their food.”

During a trip to Kenya to visit a friend, she was impressed by the energy of entrepreneurs there. If they could grow businesses in that challenging emerging economy, “starting a greengrocer in Kitchener-Waterloo shouldn’t be a big deal,” she reasoned.

In early 2015, Dolson found a storefront on Kitchener’s main street and negotiated a six-month lease to test out her concept and vision.

She invested $40,000 into the pop-up enterprise. “Any entrepreneur, when you are starting new, you’re not sure you have a market, there is an element of risk and you have to be comfortable that you might fail.”

Failing with that level of invested capital would be “an experiential MBA (master’s business degree). I would not have been comfortable if that number was $200,000.”

Having a prep kitchen as part of the store, Legacy Greens limits its produce waste to three per cent.

“That’s what keeps us competitive,” she said. “We price our produce similar to what you would see (at local chain supermarkets). They have such a high markup because they have a lot of waste. We’re able to get a lot of profit back because we don’t have a lot of waste.”

“If you eliminate the shrink or waste component, there’s way more opportunity for profit.”

Dolson marks up produce and prepared foods 100 percent. “My formula for that is ingredients plus labor times two is the price.”

During the first year, Legacy Greens grew quickly and built a talented team. “I put a ton of hours in, but it didn’t feel like work. It felt so fun and exciting.”

The store hit her break-even targets within six months. Her business aligned with her values: including more fresh food options in the core, creating an inclusive and welcoming space, building partnerships to increase access to local food, and providing accessible price points.

“I wanted to make sure that anyone who walked into the store would feel like they could make a purchase.”

She recently decided to stop growing food to sell at the store and is now only buying produce from other farmers.

Legacy Greens averages $30,000 a month in sales. It focuses on fresh produce and prepared food, including soups, salads, and hummus.

Dolson deals with eight to 15 produce suppliers and 15 grocery vendors. She selects suppliers based on product quality and who she finds the easiest to work with.

Legacy Greens storefront

Dolson uses only one vendor for each product category. She gets “fired up about being part of a supply chain where everyone is winning.”

Her point-of-sale system allows her to check sales data from her mobile phone. That comes in handy when she is doing a pickup and deciding how many bananas to buy.

Data drives many of her purchasing decisions. It can also lead to conflict. “What if my values are telling me something else?”

Sugar is a concern for Dolson since a family member was diagnosed with cancer.

Ice cream is her most profitable item. She also sells a lot of chocolate and caramels produced by small businesses at certain times of the year.

Science shows sugar is not good for health. “How do I address that?”

This concern led her to turn down a raw cookie dough product. “I want to give more shelf space to real food.”

Those issues never occurred to her during the first year of operation. “It’s necessary that we as entrepreneurs are always kind of assessing our current values and seeing whether our business goals are meeting those.”

The prepared food portion of her business is growing rapidly. “Convenience and access to ready-made meals is something that our culture is now crazy about.”

Customers are challenging her on single-use plastic, asking if they can make a purchase without plastic. “At this point in time, the answer is no, we’re not set up to give you hummus in your own container, but maybe in the future, the answer will be yes.”

For Dolson, food safety is a more important consideration than reducing the amount of single-use plastic. “Hummus needs to be refrigerated.”

She worries about customers contaminating a batch of hummus through scooping it into an unclean container they bring from home. “I have to choose what I am good at.”

She might eventually consider selling soup, a higher-margin product, in reusable glass containers with a deposit. Getting staff onside with an idea that would require more labor is also part of her discernment.

Legacy Greens saw a 24 percent drop in foot traffic last summer and fall after it moved from a main street location to a side street a few blocks away. But less traffic didn’t bother Dolson once she crunched year-end numbers.

Her new site offered a better kitchen for doing food prep. Also, the average customer transaction increased by 25 percent, offering better margins.

The future may hold other ventures if she can find a way for Legacy Greens to function well with less of her time. “If a had a business idea with less overhead and more margin, I would consider it.”