Leaders Refresh and Refocus
Loblaws touches both the premium and economy bases with its President's Choice and No Name brands.
Retailers and wholesalers cover all the bases in private label strategies to ride out the recession while maintaining an image of quality and value to stand them in good stead afterwards.
It’s been a busy year for retailers and wholesalers across North America as they steer a course through troubled times by positioning their private label programs to appeal to both price consciousness in the short run and quality and value consciousness in the long run.
Two of the largest retailers, Walmart, Bentonville, AR, and Target, Minneapolis, MN, have made radical changes in their first-line store brands. Walmart has given a new economy look to its Great Value brand, which covers both groceries and basic household supplies; while Target has replaced its store name brand for non-foods, HBC and OTC with the more value-looking Up & Up.
Yet beyond that, the two retail giants part company: Target is aggressively expanding its Archer Farms premium brand, especially with a healthy-eating Simply Balanced sub-brand, while leaving its Market Pantry economy brand virtually unchanged. But Sam’s Choice, once a prominent premium brand at Walmart, has practically disappeared – Sam’s cola is the about the only high-visibility reminder.
Besides consumables, Walmart is touting Canopy, its new brand for domestics, while Target is offering Dwell Studio in the same category as a complement to Essentials and RE Style. Lumé Luxe is a new brand at Target for scented candles, while in apparel the chain is devoting most of its space to Mossimo Supply Co., Merona and Xhilartion, plus Gilligan O’Malley in women’s intimates. Recent Walmart rollouts include McAllen Springs, Urban Lane and Ashton Lane in furniture.
Sears Holdings, Hoffman Estates, IL, is still struggling to hold on to its traditional image at Sears outlets and to create any kind of image at Kmart outlets. Kmart’s consumer site features “popular” products like Joe Boxer, along with Sears’ Craftsman and Kenmore brands – but not Martha Stewart Everyday. That’s because Sears Holdings and the domestic diva have broken up; their corporate marriage officially comes to an end Dec. 31, but Kmart had already been preparing for that eventuality by duplicating the same kind of products under the Jaclyn Smith and Essential Home brands.
No, this isn't a pizza - it's pre-cut bread sticks in the round from Harris Teeter.nd.
Canada’s Loblaw, Toronto, ON, is pushing the envelope with a flow of new introductions under the President’s Choice premium brand and its sub-brands in foods and non-foods – while also offering a wide range of price-sensitive products under the No Name brand. Delhaize Group U.S., Salisbury, NC, is similarly expanding its Taste of Inspirations premium brand while also offering more Smart Option economy alternatives.
It’s the same with Topco Associates, Skokie, IL, with World Classics Trading Co at one end and Clear Value and Valu Time at the other. Kroger Value is getting more exposure at Kroger, Cincinnati, OH, but not at the expense of Private Selection. The Basic Red economy brand has appeared over the past year at Safeway, Pleasanton, CA, but Safeway Select is still growing strong. Even at low-price limited assortment Aldi, Batavia, IL, there are premium options like Grandessa and Deutsche Kuche.
Another Canadian chain, Sobeys, Stellarton, NS, is revamping its private label program to include more premium choices and fewer value items, according to Bill McEwan, president and chief executive officer of Sobeys. The changes include expanding its premium products under the Sensations label from 150 items to 1,000; refreshed packaging on its core Compliments range of national-brand equivalent items; and a new value tier, Signal, in replacement of the Compliments Value brand. Signal will include a range of 250 products, down from 1,000 Compliments Value items, McEwan said, but the selection will be better defined.
Walgreens, Deerfield, IL, has gone further than any other drug retailer to diversify its private label program. While the traditional Walgreen brand for core HBC and OTC producers is being revamped as simply the W brand, the chain is also putting greater emphasis on brands like Finest Natural for specialty vitamins and supplements, Men’s Zone for personal care products and Bioinfusion for specialty hair care. It has also introduced Café W brand for breakfast items like donuts, banana chips and, beyond those, even frozen Buffalo chicken wings, while expanding the Deerfield Farms and Deerfield Trading Co. brands for snack foods, cheeses, beverages and other frozen foods. In the household goods area, there are Tuf for paper goods and plastic bags, Corner Office for office supplies and Kitchen Gourmet and Signature Classics for tableware and small appliances.
CVS, Woonsocket, RI, also has a whole lot of private labels, including Gold Emblem for foods and beverages and licensed HBC brands like Lumene. But its current strategy is focused on its core CVS brand, with a raft of new products in skin care and cosmetic area, aimed at customers ranging from teens (Oil-free Daily Acne Scrub, Dual Action Daily Cleanser and Mask) to adults (Smoothing & Perfecting Wrinkle Treatment, Renewal Anti-aging Eye Treatment Roller Pen). New cocoa butter products include Vitalizing Gel Body Oil, Deep Conditioning Moisturizer (in travel pack as well as regular size) and even a 99-cent Cocoa Butter stick. HBC for men is also a priority, with hair colorings like those at Walgreens and a Face & Body Lotion for men positioned at $4.99 versus $6.99 for Vaseline.
Specialty private labels are making a comeback. Aldi has always avoided using its store name on any of its products, but at mainstream retailers there are now all sorts of category brands like Everyday Living for household supplies and a redesigned Comforts for Baby at Kroger, Eating Right Kids and Bright Green for environmentally-friendly household products at Safeway, and a host of Topco brands such as Electrix for light bulbs, batteries and electrical supplies; Domestix for cookware and other kitchen necessities; and Academix for school and office supplies.
Celebrating its 150th anniversary this year, A&P, Montvale, NJ, launched a raft of new private label brands and designs, including a new logo for America’s Choice (with “Gold Quality” added for frozen fish), plus Via Roma for Italian-themed products, Hartford Reserve for premium coffee, syrup, cheese, fresh pies and other items; Green Way for organic and environmentally-friendly products, Live Better for health care, Market Spa for beauty care, and a redesigned Smart Price economy brand. It also brought out limited-edition A&P anniversary retro products, and added an America’s Choice Kids sub-brand.
Metro puts its Irresistibles name on chocolate-covered butter biscuits under that brand.
Safeway launched the Waterfront Bistro brand for seafood and seafood sauces early this year, and is still expanding it. Winn-Dixie, Jacksonville, FL, has debuted a similar line called Fisherman’s Wharf. Delhaize grouped household supplies under the 360 Home brand, and added Healthy Accents for HBC. K-VA-T, Abingdon, VA, rolled out another Legacy brand (formerly a regional brand): FarmBest for milk, juices and ready-to-drink tea. Even Dollar General, Goodlettsville, TN, got into the act, adding a DG Home brand for domestics and replacing DG Guarantee with Body Sense in the HBC department. Rival Family Dollar, Charlotte, NC, added Grounded Traditions for coffee.
Convenience store chains, too, are broadening their private label offerings, and it’s not just 7-Eleven, Dallas, TX, which has rolled out an extensive 7-Select line ranging from cookies to beef jerky over the past year. BP Products North America, La Palma, CA, which operates or franchises nearly 1,300 AmPm and BP/AmPm outlets, is in the midst of introducing an El Mero line of Hispanic snacks and a Good Stuff economy line. More than 50 private label SKU’s are already marketed under four major brands, according to Gordon Case, proprietary brands manager.
“Ampm is one of the largest convenience retail chains in the United States, consisting of over 1,200 locations throughout the U.S.,” Case told Private Label. “Ampm recently ranked 21st in the Franchise Direct Top 100 and is the only c-store brand owned by an integrated oil and gas company) to make the list. We do $1.4 billion in in-store sales (not including gasoline). Ampm prides itself on being in the forefront of increased focus on private label within the convenience store channel. We feature over 50 private label skus and have received award-winning recognition for package design.”
National brand or better labels include:
- Deluge – bottled water, isotonics and enhanced waters
- Shadow Hills – nuts, seeds, and meat snacks
- Essence – ready-to-drink iced tea.
- Unbound – energy drink and shooter
“We are also coming out with El Mero, our label for authentic Hispanic snacks, and a value line under our ampm Good Stuff label,” Case said.
Built-to-Order is a new line of breakfast ciabatta sandwiches at Wawa, Wawa, PA, already known for a broad range of hoagies, wraps and other take-out fare. Varieties include Ham & Swiss, Bacon Strips & Cheddar and Philly Steak & American on a toasted ciabatta. Chicken Strips are another recent introduction at Wawa: “Tender all-white meat chicken strips with your choice of three different dipping sauces (BBQ, Ranch or Honey Mustard). Available in three or five pieces to satisfy any appetite.” Quik Trip, Tulsa, OK, already known for Hotzi sandwiches and Roosrer Booster energy drinks, has added more take-out items to its QT Kitchens line and introduced f’Real shakes.
Specialty private labels at supermarket chains are branching out. Safeway’s Waterfront Bistro, which started out with strictly frozen seafood items, now includes vacuum-packed refrigerated items like Smoked Salmon. “Bring the seaside dining experience to your family table with the freshest, most flavorful fish,” proclaims Safeway’s web page for the line, which lists such frozen selections as Sockeye Salmon in a marinated garlic lemon pepper flavor, Pacific Salmon marinated with sesame teriyaki flavor, and Colossal Sea Scallops, along with hot and cocktail sauces – others, like Hawaiian Teriyaki seafood finishing sauce, have been added recently. Safeway’s Signature Café line, meanwhile, embraces fresh fare such as panini sandwiches, soups, salads, ribs, pizza and whole roasted chickens.
As part of a company-wide plan aiming to position its stores as “the place” for fresh beef, Supervalu, Eden Prairie, MN, has debuted a Stockman & Dakota branded line of premium USDA Choice Angus beef. Offerings in the “affordable restaurant-quality” line range from bone-in rib eyes, New York Strips, Porterhouse and T-bone steaks to boneless rump and boneless chuck roasts. It’s the kind of program that Supervalu might not have embarked on when it was primarily a wholesaler, but now that most of its sales are direct retail under the Albertsons, Jewel, Acme, Shaw’s and other supermarket banners, plus Save-A-Lot limited assortment stores, it can better manage store brands – as shown by the success of its Wild Harvest organic and Culinary Cuisine premium lines. Like those brands, Stockman & Dakota has its own website.
“Organify your world,” Supervalu proclaims at the website for Wild Harvest, a brand it adopted from Shaw’s and redesigned, much as Delhaize Group U.S. adopted and redesigned Taste of Inspirations and On the Go Bistro from Hannaford. One of the links at the Wild Harvest site is a TV commercial for the line originally run in the Chicago area for Jewel-Osco stores. The Culinary Circle site gives a rundown of products by category. Like the Wild Harvest site, the Stockman & Dakota site offers recipes – at press time, the featured recipe was for shish kabobs – along with general tips on grilling, oven roasting, slow cooking and pan cooking. And, like both of the other sites, it also has a Store Locator link that brings up all the Supervalu banner groups carrying the line.
Delhaize Group U.S. offers brands ranging from first-line Bloom to premium Taste of Inspirations. Nature's Place natural and organic products, On the Go Bistro take-out food, Healthy Accents HBC and Home 360 household products.
Duane Reade, Long Island City, NY-based drug chain, has introduced DR Delish, a line of more than two dozen food and beverage items including gluten-free trail mixes, vitamin-enhanced teas without artificial colors or flavors, 100% juices, all-natural baked potato crisps with zero cholesterol, and soy snacks made without trans fats. DR Delish offers four different varieties of cookies priced at $1.99 for a 12-oz. package, six varieties of juices and four varieties of teas in one-gallon containers for $2.99, Trail Mix Crunch items at 2 for $5.00, a selection of Brownie Bites, Drizzles, and Spudzz baked potato products at 99 cents. By the end of the year, Duane Reade expects to have added organic lemonade, Belgian Chunk & Chip Cookies, Soy Crisp Caramel Chips and a variety of unique, 100% Arabica coffee blends. “We know New Yorkers want and need their drug store to offer convenience and value,” said Joe Magnacca, chief merchandising officer. “But they also want more interesting, unique and high-quality food products and beverages that taste great.”
Smart & Final, Commerce, CA, warehouse grocery retailer with stores in the western United States and northern Mexico, is going through a private brand consolidation. The move is part of the chain’s evolution from a traditional cash and carry business to a hybrid model that provides both the business and retail markets with food and business supplies. Besides the brand consolidation itself, that includes a new store format, Smart & Final Extra, to serve traditional business customers while dramatically increasing offerings for household customers. The new stores offer more than 4,500 new household size items, as well as perishable produce, meat, deli, and frozen departments. Smart & Final portfolio of 23 brands has been pared back to a few: First Street and Simply Value for first and second-tier grocery products, Sun Harvest for organics, Chef’s Review for kitchen tools, and Pro Pride and Pro Value for janitorial supplies, plus some prestige category brands such as La Romanlla for Italian products and Montecito for Mexican foods.
Canadian retailer Metro, Montreal, QC, has revamped its private label brands with a new look and new formulations and is rapidly ramping up its number of offerings in the lines. As of Sept. 29, the company had 3,869 SKUs under two brands: the premium Irresistibles (1,058) and the national brand equivalent Selections (2,811). Irresistibles embraces indulgent items like butter biscuits with the brand name stamped on the chocolate coating, but also a sub-brand called Mieux-Étre (Life Smart) that features nearly 200 SKUs in healthy-eating canned vegetables and the like, plus organic and gluten-free products. Selection covers standard fare such as lasagna, but also items like cherry sauce, plus OTC and cosmetic products and a couple of dozen eco-friendly non-foods.
Safeway blesses mother-hood with Mom to Mom baby care products like scented wipes.
Organizacion Soriana, largest retailer in Mexico, offers more than 1,000 SKU’s under the Soriana brand alone, plus about 200 under other grocery labels (Hipermart, Pro Selection, Club Pack, Valley Foods). Recent introductions promoted at the chain’s website include unisex diapers, tomato puree, refried beans, nail polish remover, orange soda, brooms and hair styling gel. Featured products ranged from toilet tissue to catsup, pizza, beef patties, cola, sandwich cookies, adult diapers, baby formula and shampoo.
“Soriana is constantly encouraging the development of products under the Soriana label, supporting the economy of Mexican families through high standards and controls to certify their quality, offering products which satisfy the requirements of our customers at the best price,” explains Arturo Ledesma Mendozo of the company’s strategic planning department. “Also, we have positioned private labels in market niches thanks to a combination of innovation and low price.”
Topco Associates, which acquired Shurfine ten years ago, has been gaining more and more retail members, and its reach now stretches from Big Y, Springfield, MA, to Haggen, Bellingham, WA, and Winn-Dixie, Jacksonville, FL, which joined just last year. Topco works with members to develop their own brands, usually first-line private labels, while supplying premium (World Classics Trading Co., Dining In), economy (Valu Time, Clear Value), organic (Full Circle), HBC (Top Care) and a number of other niche brands for categories it might not be practical for them to develop on their own.
Recent introductions by Topco range from Full Circle (gluten-free products) and Paws (natural pet foods) to Clear Value (luncheon meats) and Valu Time (freezer pops, cheese hot dogs). There have been at least 40 rollouts in Top Care, ranging from OTC drugs to diapers to dietary supplements, and three dozen in Domestix for cookware – assorted frying pans, sauce pans, sauté pans and even Dutch ovens. There are only a few new Food Club and Full Circle products; they are outnumbered by various new potato items under an old brand, Harvest Club.
Topco member Schnuck Markets, St. Louis, MO, recently opened Culinaria, a small-size prototype store in downtown St. Louis that stresses fresh and upscale fare like Tesco’s Fresh & Easy in Southern California. A Culinaria brand for premium products like pasta sauce is part of the new concept. But at its traditional supermarkets, Schnuck has added a new premium brand, A Passion for Premium, in addition to Schnucks Select.
Weis Markets, Sunbury, PA, has launched two private label fresh food initiatives this year: Wet Aged Beef and Moonlight Premium California fruit. “Think of it as ‘Freshness at your Fingertips,” the chain says if the first, which is aged for tenderness and marketed in leakproof packages – individually sealed for freshness to last longer in home refrigerators They can be purchased in multi-packs that are perforated so that a shoppers can get exactly what they want, when they want it. As for the exclusive Moonlight Premium California Fruit, it offers tree-ripened peaches and nectarines harvested by hand and shipped directly to Weis. In addition to great taste, Moonlight Fruit provides an excellent source of Vitamin C and a delicious source of fiber and antioxidants.
DR Delish, new at Duane Reade drug stores, features items like Fruit Wonders cookies.
A number of other retailers are following new strategies in private label. Wegmans, Rochester, NY, has taken to downplaying its brand on some products. The Wegmans logo is dwarfed by the “Just Tea” on its ready-to-drink tea, for example, and almost invisible on some of its new salad dressings. Stop & Shop, part of Ahold USA, Boston, MA, has been using its new stylized flower icon without any mention of its name on some fresh products such as soup. And while Walmart’s Great Value line has taken on a generic look, some of its light bulbs really are generic – only the distribution statement reveals their source. Some seasonal items at Target also go without a brand.
Websites play an increasing role in private label merchandising. Sears has separate websites for its Craftsman brand of power tools and hardware, and two others for its Lands End and Great Indoors themes – the latter featuring Kenmore appliances. Culinary Circle and Wild Harvest at Supervalu both have their own sites, but don’t necessarily keep up to date with what’s actually in the stores. And speaking of websites, online retailer Amazon.com, Seattle, WA, now has its own private label.
In September, the Internet giant announced the launch of a line of consumer electronic items, AmazonBasics, and followed up with a U.S. design patent for a wooden chopping block. There are also a few domestic and other private label products under other brands. The AmazonBasics line currently includes audio video cables and blank DVD media, with additional accessories and other items to be added in the coming months.
“We saw an opportunity to create a line of consumer electronics basics that combine quality and low prices for an overall focus on value,” explains Paul Ryder, vice president of Consumer Electronics for Amazon. “We aim to offer our customers as wide a selection as possible, and we think AmazonBasics makes a great addition to the brands we already carry.” The Pinzon bamboo cutting board, meanwhile, is being sold as part of Amazon’s own kitchen products line, designed by and named for Seattle chef Tom Douglas.
In getting into private label consumer electronics, Amazon is competing with brick-and-mortar stores like Staples, Framingham, MA, and Best Buy, Richfield, MN. But watch out! Barnes & Noble, New York, NY, the world’s largest bookseller, recently announced the launch of nook, a Barnes & Noble eBook reader, which marries innovative technology and sleek minimalist design with access to the company’s digital store of over one million eBooks, newspapers and magazines. It’s obviously aimed at Amazon’s Kindle reader.
Amazon launched its private-label efforts in 2004 with a line of outdoor furniture called Strathwood and has since expanded into kitchen, bed and bath products under the Pinzon brand. Currently, the company sells more than 1,000 products that are manufactured at its request. The company now has its own design and sourcing team on staff, Ryder said, although manufacturing is outsourced.
