Inside Erewhon: How a Grocer Turned Culture Into an Operating Model

A $19 strawberry smoothie sells around 40,000 units a month at Erewhon, the premium grocer with 11 stores in Greater Los Angeles. That's roughly $760,000 in monthly revenue, around $9 million annualised, from a single SKU, sold at a single chain (Marketing Brew, Hollywood Reporter).

The smoothie, the Strawberry Skin Glaze, launched with Hailey Bieber in 2022, gets covered as a cultural phenomenon: a viral product, a status symbol, a TikTok artefact. That coverage is fair. It's also the part that's easiest to see, which is why it gets the attention.

What the coverage misses is that the smoothie isn't only a marketing exercise, celebrity collaborations always are, that part is obvious, however the less-obvious part is that Erewhon has built a model where the marketing is also the product line. A long series of collaboration drinks (Bella Hadid, Sofia Richie, Kendall Jenner, Olivia Rodrigo, Sabrina Carpenter and others), each one a SKU with revenue, margin, and real operational requirements. The collabs work as marketing and as products at the same time, and each one generates direct revenue on top of an already premium grocery business.

What Erewhon actually is

Erewhon was founded in Boston in 1966 as a small macrobiotic food store. The Los Angeles operation that exists today traces its roots back to that original business through later ownership changes. For most of its history it was a fringe natural-foods business with no obvious commercial future.

In 2011, Tony and Josephine Antoci bought it for what's reported as "a few million dollars" (Hollywood Reporter). The Antocis had just sold their previous business, Superior Anhausner Foods, a Southern California food distribution operation, to Sysco in 2009. They had cash, an appetite for another business, and a deliberate thesis about what to do with Erewhon: take it upmarket, hard, raise prices, stop operating in regular neighbourhoods. Open in Beverly Hills and Malibu. Build a luxury brand inside a category, which is grocery, that almost nobody had ever attempted to luxury-ify.

That thesis has played out across a decade. Erewhon today operates 11 stores across Greater LA, with three new locations opening in 2025 (Manhattan Beach, West Hollywood, Glendale), Thousand Oaks confirmed for 2026, and a New York store in development for what would be the company's first market outside California (Progressive Grocer, Grocery Dive). Tony Antoci has called this wave "Erewhon 2.0." Erewhon remains privately held, so financials aren't disclosed, but the single-SKU smoothie data and 14-year expansion give a sense of scale.

What's distinctive is what's running underneath the cultural surface.

The operating model has three layers.

Most retail businesses have an operating model, but Erewhon has three, stacked on top of each other.

Layer one: a premium curated grocery. This is the bedrock, smaller-format stores than a supermarket, highly curated assortment, premium pricing (commonly 15-40% above mainstream alternatives), proprietary recipes and exclusive products. A weekly basket that regularly runs three figures. The premium is a deliberate operational decision the Antocis made in 2011 and have held since. This layer has to work on its own. If the underlying grocery experience doesn't justify the basket prices, no celebrity smoothie can rescue it.

Layer two: a launchpad for emerging wellness brands. Erewhon's shelves are the most coveted retail placement in the US wellness CPG industry, Modern Retail has called it "the coveted stamp of approval for CPG startups" (Modern Retail). Being stocked at Erewhon is, on its own, a credibility signal that helps brands win distribution elsewhere. Erewhon uses that demand to capture favourable terms, better margins, exclusive launch windows, branded placements, brand-paid promotion. Some brands pay for inclusion (Marketing Brew). The launchpad is a revenue stream for Erewhon instead of marketing activities, with the asymmetry running in Erewhon's favour because the brands need them more than they need any single brand.

Layer three: branded collaborations as a product category. This is the layer that produces the headlines. Erewhon takes a celebrity (Hailey Bieber, Bella Hadid, Sofia Richie, JLo, Kim Kardashian) and builds a co-branded SKU around them, most often a smoothie, sometimes a bowl, sometimes a coffee. The economics on each collab run on the same structure: the celebrity provides identity and audience, Erewhon provides product, distribution, and brand stage, and the third-party brands whose ingredients appear in the SKU pay placement fees. The result is a single SKU that delivers three things at once: it sells in volume at premium margin, it draws traffic into the stores for everything else, and it generates organic social and earned media that would cost millions to buy.

The Bieber smoothie is the best-documented case. Launched in June 2022 at $19, sustained at roughly 40,000 monthly units, it produces around $760,000 in monthly revenue, roughly $9 million annualised, from a single SKU.

These three layers reinforce each other. The premium grocery generates the cultural capital that makes the launchpad valuable to emerging brands. The launchpad fills the shelves with the wellness SKUs that the cultural customer wants. The branded collaborations bring foot traffic, content and credibility back to the grocery and to the launchpad. Each layer pays the next.

Why this works: three operational decisions beneath the cultural surface

Most attempts to copy Erewhon focus on the celebrity collaboration, because that's the visible part. They often don't work, because the celebrity smoothie in this case, is the output of the operating model. Three operational decisions support and drive the success.

Real estate as an operating choice.

Erewhon has built much of its store estate through adaptive reuse, taking over old buildings (a Mother's Market in Manhattan Beach, an old hardware store in Glendale, repurposed retail elsewhere) rather than fitting out new-build retail. That choice has two consequences: it slows expansion (sites take longer to identify and convert), and it lowers fit-out capital relative to a roll-out chain doing greenfield retail. Both consequences reinforce the premium positioning. The slower pace keeps cultural scarcity intact and the lower capital cost per store improves return on invested capital, which is what allows the high in-store experience (staffing levels, design, prepared food density) without crushing unit economics.

Margin discipline through prepared foods.

A traditional grocery makes most of its profit on a thin slice of categories such as alcohol, prepared food, private label. Erewhon has built the store around the categories with margin headroom. Prepared foods, juice, smoothies, supplements, in-store cafes. These categories drive the gross margin that subsidises the curated assortment elsewhere. The $20 smoothie is a margin engine that the rest of the store can lean on.

Brand-collab structure that aligns incentives.

The Bieber smoothie works because every party gets something they couldn't get on their own. Bieber gets a culturally credible product platform and ongoing royalty economics. The third-party brands inside the smoothie (collagen powders, electrolyte formulas, hyaluronic acid supplements) get a national showcase for their products and pay for the privilege. Erewhon gets the SKU, the traffic, the content, the credit. The structure makes the collaboration sustainable as a category, not just as a one-off PR campaign, because every party has reason to keep going.

What's risky in the model

The model isn't without strain points worth mentioning.

The cultural model is geographically narrow. Eleven stores, all in Greater LA, in a market where the customer base, the celebrity culture, and the wellness aesthetic have been compounding for a decade. The Erewhon 2.0 expansion into Thousand Oaks and then New York will test whether the operating model travels. The risk isn't that NYC customers won't show up for the first store opening (they will, the cultural pull is real). The risk is whether the second, third, fifth New York stores sustain the cultural-scarcity effect that makes the LA stores work. Premium grocery saturates a market quickly.

The model depends on continuing cultural relevance. Hailey Bieber's smoothie has held for three years because Bieber's cultural relevance has held. If the next celebrity SKU misses, or if the cultural moment around wellness shifts, the third operating layer thins out fast. The first two layers (the grocery, the launchpad) still work without it, but the headline economics get more conventional.

Concentration is real. Eleven stores, one geography, one founding family, a small concentrated wellness-CPG launchpad portfolio. The business is more exposed to single-market or single-trend shocks than the cultural prominence suggests. The 2026 expansion partly addresses this; it also introduces new operational complexity.

What other founders can take from this

Most consumer brands try to layer culture on top of weak operations. They land a press hit, a viral moment, a celebrity post, and then can't sustain the demand it creates because the underlying operating model isn't built to absorb it. The culture works for a quarter, the operations don't catch up, the brand fades back to whatever the operations could actually sustain.

Erewhon built the order the other way around. The grocery, the curation, the real estate strategy, the margin discipline, all of it was in place before the brand collaborations became a category. The brand collaborations work because they sit on top of an operating model strong enough to deliver on the demand they create. The smoothie ships in volume because the kitchens can scale to the volume the collabs create. Staffing levels are dense enough to absorb the foot traffic without the in-store experience degrading. Curation discipline holds the shelf credibility through every new wave of collabs.

The teaching point for a founder of a mission-driven consumer brand isn't "do celebrity collaborations." It's that culture is something that can be operationally productised, but only if the underlying operations are healthy enough to be the foundation. Without that foundation, every cultural moment becomes a bottleneck that exposes the operational weakness underneath. With strong operations, each collab leaves something behind, without them, the buzz dies in a week.

Where to start

If your brand has cultural pull that the operations don't quite catch up with, viral demand spikes that produce stock-outs, marketing wins that aren't translating into repeat purchase, partnership moments that strain the team rather than build it , that's your diagnostic and where we can help.

Sources

• Erewhon Hailey Bieber smoothie volume, brand collab business model — Marketing Brew

• Antoci family acquisition history, business background, expansion plans — Hollywood Reporter

• Erewhon 2.0 expansion (Manhattan Beach, West Hollywood, Glendale, Thousand Oaks) — Progressive Grocer

• Erewhon New York store confirmation — Grocery Dive

• Erewhon as CPG launchpad / stamp of approval for emerging brands — Modern Retail

• Erewhon premium pricing analysis (15-40% above mainstream) — Latterly