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For grocery store owner, small towns are up his aisle

Heath Peterson made big changes at grocery stores in Frazee and Osakis. He opened Osakis Family Foods last May. Paula Quam | Forum News Service

Editor’s note: The following story features the owner of Osakis Family Foods, Heath Peterson. It appeared in the Detroit Lakes Tribune because Peterson also owns a store in Frazee.

Life in small towns can often mean a little more peace and quiet and a little more room to breathe.

However, it can also mean driving 15 miles just to get a gallon of milk. This is when a quaint little small-town grocery store can quickly turn into the best value in town.

“I bought the store in 2007,” said Heath Peterson, owner of Frazee Family Foods. Peterson isn’t originally from Frazee, but he’s from a town even smaller – Little Fork, Minnesota.

“My dad, who was the principal of a private school, also owned a grocery store there,” said Peterson, who worked at that little grocery store, learning its ups and downs and dos and don’ts at a very young age.

He didn’t know it then, but he was training for what would one day be his small town, all around livelihood.


Peterson left Little Fork for a big job as an electrician in large ethanol plants, even becoming a superintendent.

“The money was really good like it is in the oil fields,” he said, but the traveling away from his family got old. By this time he was married with two children.

“I was tired of it [the traveling], so I started looking for something different,” said Peterson.

A call to the suppliers for his father’s grocery store led to a tip – a man named Terry Larson was looking to sell his grocery store – Larson’s Family Foods – in Frazee. It wasn’t as little as Little Fork, but it was little enough.

“I like people, I just don’t like crowds of people,” said Peterson, with a smile.

After moving to Frazee and taking over the store, which he re-named Frazee Family Foods, Peterson definitely wasn’t dealing with crowds.

“It started out really slow – that first year was rough,” he said. “I was just getting used to things, and the store needed a lot of improvements.”

It wasn’t long before Peterson remembered exactly what he loved about small town grocery stores.

“You recognize people when they come in the door … the faces … the people ... you get to know them,” said Peterson, who still enjoys carrying out customers’ groceries. “They’re just like, ‘throw it in the back seat,’ and I know what car they’re driving,” he laughed. “It’s that every day I know them, they know me thing – it’s something I enjoy.”

In fact, Peterson found himself enjoying the “produce” of his labor so much that he decided to buy another small town grocery store, this time in Osakis, which is only a few hundred people larger than Frazee.

The Osakis store had been closed for a year and needed a tremendous amount of work, but it was as if the city and the bank were making deals on double coupon day, and Peterson found himself the owner of another small town grocery store.

It took approximately four months of re-siding the building and essentially replacing everything inside, but Osakis Family Foods opened up last May. That store, requiring slightly more attention than the more established Frazee Family Foods, led the family to a move to Osakis.

Peterson now splits his time between the two stores and its small town customers. And just like him years ago, his two teenagers work at the Osakis store. His wife, Cindy, is also a hard worker in the grocery business. “She does a lot behind the scenes to ensure our success,” he said.

Both stores are open seven days a week, which means this hands-on owner is working at least six of those days. It’s one luxury big grocery stores have over him.

“If I didn’t work the stores, payroll would be too much. Margins are much tighter with the small stores,” he said.

But that hands-on approach and genuine customer appreciation also allows Peterson to cater to those customers in a way that is rarely done in larger stores.

“If there is something special that somebody wants, if there’s any possibility that we can bring them in, we try to do that. Some take a little more searching than others,” he laughed, saying he doesn’t have any particular business motto, just to be nice, get customers through the line quickly and carry out their groceries. It’s simple. It works. It’s small town.