Private Label Magazine - November/December 2011

Broad Brands

By John J. Pierce

Top 100 Retailers & Wholesalers

Retailers consolidating store brands into corporate brands in the name of efficiency and cost savings, but also giving greater emphasis to category brands and redesigns.

Shoppers looking for quality and value at Stop & Shop, Giant and Martins outlets in the Northeast have noticed something missing lately: store brands. Instead, a stylized flower is all that marks national brand equivalent private label products marketed by Ahold USA, Quincy, MA.

It isn’t about flower power, however. It’s about a new strategy in private branding by major retailers that operate under a number of store banners to minimize costs and maximize efficiency by replacing store brands with corporate brands. A brand without a name may be an extreme example, but it’s still an example of a shift in direction.

But there are other new directions in private label. Loblaw, Brampton, ON, launched a super-premium President’s Choice Black Label line Sept. 22 (Packaging doesn’t actually say “Black Label;” it’s just that the labels have a black background.). Distribution may be limited; official word was that the line would be rolled out in 140 stores last month – and Loblaw has a lot more stores than that.

Walgreens, Deerfield, IL, is in the process of rolling out a brand called Nice! that is replacing Deerfield Farms, Walgreens Select, the W brand and Café W in consumables. At the same time, Good & Delish, a premium brand that originated as DR Delish at Duane Reade before Walgreens acquired the New York City area drug chain a couple of years ago, is being rolled out nationwide. In health and wellness the W brand is going back to Walgreens.

Walmart, Bentonville, AR, has been upgrading the look of its Great Value national brand equivalent line, while at the same time expanding its new premium brand, World Table. The Sam’s Choice brand has all but disappeared. Marketside, a brand created for a small grocery store format that never worked out, is showing up more and more in fresh foods. And at Sam’s Club, Walmart has gotten rid of previous brands and launched three new ones: Simply Right, Artisan Fresh and Daily Chef.

“Our mission in introducing Simply Right, Artisan Fresh and Daily Chef brands is to delight members with high quality products at an extraordinary value,” said Maurice Markey, vice president of Proprietary Brands for Sam’s Club. “We realized that our members prioritize consistent, reliable quality above all other product attributes. It is important that we have the highest quality brands – whether national brands or exclusive Proprietary Brands – because our members trust Sam’s Club to deliver consistent quality at a great value every time. We encourage members to experience our new brands on their next shopping trip to Sam’s Club and provide feedback at SamsClub.com.”

The idea of a corporate brand for chains operating under different banners isn’t exactly new. Years ago, both Kroger, Cincinnati, OH, and Safeway, Pleasanton, CA, went national with their core store brands for the same reason. Kroger eliminated the local store brands at regional chains like Ralphs in southern California and King Soopers in the Denver area. Safeway did the same at Dominicks in greater Chicago and Genuardi’s in the Philadelphia area.

The do-over wasn’t complete; the Fred Meyer brand still shares space with the Kroger brand at Fred Meyer in the Pacific Northwest, where the economy brand is still FMV (For Maximum Value) instead of Kroger Value. But Fred Meyer carries other Kroger brands: Private Selection, Private Selection Organics, Naturally Preferred, Fresh Selections, Mirra, Comforts and Active Lifestyle.

Kroger has redesigned packaging for its first-line brand this year, adding a homey touch (“From Our Family to Yours”). Private Selection has also been redesigned (Private Label, September 2011), but it may be significant that in a few categories, such as vinegars, the redesigned Kroger brand has replaced the old design Private Selection brand. Premium private label may be a harder sell in times like these.

Before Kroger and Safeway, Loblaw had already taken a different path – first in 1979 with the No Name economy brand, then in 1985 with the President’s Choice premium brand. Both were and are marketed through a number of banner groups – some corporate-owned, some franchised. Also in 1985, A&P, Montvale, NJ, pioneered a national brand equivalent line that didn’t carry a store name: America’s Choice, now carried in A&P, Waldbaum’s, Fresh Market, Food Emporium and Pathmark outlets.

America’s Choice, which doesn’t privilege one store banner over another, seems to have set the stage for the latest crop of corporate brands. My Essentials at Delhaize America, Salisbury, NC, is replacing the Hannaford, Food Lion, Bloom and Sweetbay brands. Essential Everyday at Supervalu, Eden Prairie, MN, is doing the same – not only with retail brands at Albertsons, Jewel, Shaw’s and Acme outlets acquired by company seven years ago, but with its wholesale brands at banner groups it supplies like Farm Fresh in Virginia.

Only, the Essential/Essentials name itself has become trendy. Safeway has launched a new economy brand called Pantry Essentials. Loblaw has debuted Everyday Essentials – only that has nothing to do with consumables like the similar brand at Supervalu; rather, housewares like light bulbs, grills and orange juice machines. “Essentials” has also become a descriptive term; on the Our Brands page at Food Lion’s website, a menu link for “Home Essentials” leads to Delhaize’s Home 360 brand.

The corporate message about My Essentials seemed at first to be mixed. Sweetbay spokesman Nicole LeBeau told the Tampa Tribune last March that the new brand was positioned to beat prices of Great Value products at Walmart. For example, she said, if Great Value sandwich bread were 88 cents a loaf, My Essentials bread would be cheaper. But LeBeau also stressed that the line would be trans-fat free and low in sodium and sugar. “This is a continuation of our Guiding Stars system to help consumers make nutritious choices,” she later told Supermarket News.

The picture became crystal clear with an ad for the new line in the September-October Fresh magazine at Hannaford: “Same great Hannaford products you trust… now with a new name.” Supervalu spread the same gospel at retail banner websites: “Your trusted Albertsons Brand products have a new name: Essential Everyday,” headlined the promo at that banner group’s website. “Same great taste. Same great value. Look for Essential Everyday items popping up all through your Albertsons store, starting in the cereal and pasta aisles. Make Essential Everyday a part of your shopping list.”

Supervalu’s sales have been hurting compared to those at Kroger and Safeway, where private brands are said to command a greater share of sales, and the company – primarily a wholesaler before it acquired most of the Albertsons family of stores – had explained during a May investor conference that “with the introduction of the Essential Everyday brand, which will roll-out in phases, the company will be able to realize significant savings through packaging and taking a more national approach to advertising and promotions.”

There likewise isn’t any doubt about the positioning of Pantry Essentials at Safeway, which has announced that it is replacing Basic Red and Value Red. Packaging stresses that the new brand offers “Everyday Value” (a phrase previously used by Whole Foods Market, Austin, TX, for its 365 brand), and the product descriptions are bilingual. By replacing “Basic” and “Value” with “Essentials,” Safeway may be trying to improve the image of its economy brand.

The new brand covers not only cereals and related items like toaster pastries but ketchup, maple syrup, paper goods and plastic bags. Safeway’s trademark applications hint at future expansion into canned and frozen vegetables, ice cream, luncheon meats, processed cheese, coffee, baking mixes, detergents and cleaners, aspirin, diapers, dog and cat food and other products. There are two registered logos for the brand: a fork and spoon for (human) edibles and a stylized house for non-foods.

There are signs that My Essentials may be replacing at least some Smart Choice economy brand items at Delhaize – 120-count paper napkins were displayed at the same price in both brands at a Bloom outlet in Virginia last month. Smart Choice has an obvious “economy” ring to it, just like Guaranteed Value at Ahold, Shoppers Value at Supervalu and Clear Value and Valu Time at Topco Associates, Skokie, IL. In the past year, economy brands have spread to drug chains with Simplify at Rite Aid, Camp Hill, PA, and Just the Basics at CVS, Woonsocket, RI.

Where did the Essential name start? Ironically, it may have been with Essensia, a premium brand debuted in late 2003 by Albertsons before most of that chain was acquired by Supervalu. Essensia was a flop, and was eventually replaced by Culinary Circle. Essential Choice as a sub-brand for cereals was introduced in 2005 by Topco; the buying group later extended it to yogurt and frozen French toast and waffles.

Ahold USA’s brandless private brand was first introduced in the Stop & Shop division in the Northeast, then expanded to the Giant division based in Landover, MD. Just recently, it has arrived at the other Giant division, based in Carlisle, PA, which also includes some Martins outlets.

No other retailers have opted to go without a name for their brands, and a couple of attempts at letter brands have apparently floundered. Walgreens made a big push for the W brand over the past few years – but has abandoned it even after winning a suit against Wegmans, Rochester, NY, for trying to do the same. Meijer, Grand Rapids, MI, has put the M brand on a few categories like salad dressing, but gone no further.

Despite the trend towards corporate brands at multi-banner retailers, there are other shifts in private label strategies. One contrary example is at Save-a-Lot, Earth City, MO, the limited assortment store operation of Supervalu, where Save-a-Lot Today (“our exclusive brand of quality, everyday products at shockingly low prices.”) was introduced this year for staple food, drink and non-food items including juice, cookies, baking mixes, pizza, sauces, shredded cheeses, paper goods and detergent. Save-A-Lot had previously used its name only on milk, marketing everything else under a host of category brands, which it reportedly intends to keep.

Category and theme brands are multiplying even at retailers with corporate or core store brands in basic categories. Fresh Selections, is a new brand for fresh salads at Kroger. The largest supermarket operator of all had previously introduced Mirra for health and beauty care, and its other category and theme brands include Private Selection Organics, Naturally Preferred (natural foods), Active Lifestyle (healthy foods), Big K (soft drinks) and Comforts (baby care).

Safeway, which already offered the O Organics and Bright Green brands for organic foods and eco-friendly household products, has come out this year with Open Nature all-natural foods. It had previously launched In- Kind for HBC, Waterfront Bistro for seafood and seafood sauces, and Mom to Mom for baby care. Other Safeway brands include Eating Right, Eating Right Kids, Primo Taglio (cold cuts), Refreshe (soft drinks), Signature Café (fresh foods) and Rancher’s Reserve (fresh meat). Lucerne for dairy products has been around for a long time.

Pet products are increasingly getting their own private brands. Some pet category brands have been around for a long time, like Ol’ Roy at Walmart, and Priority is well established at Safeway. But others are recent introductions like WholeCarePet at Supervalu, Champion Breed at Kmart, Hoffman Estates, IL; Ever Pet at Dollar General, Goodletsville, TN; Family Pet at Family Dollar, Matthews, NC; PetShoppe at Walgreens, Petcentral at CVS, Woonsocket, RI, and Bruiser (dogs) and Buju & Ziggie (cats) at Wegmans. Target, Minneapolis, MN, has been doing more with Boots & Barkley lately.

Mirra at Kroger and In-Kind at Safeway are studies in contrasting design strategies for private brand health and beauty care, even though they offer the same sort of products like shampoos, shower gels and body lotions. In-Kind features off-center teardrop-shaped containers, whereas Mirra’s are more straight up-and-down, some tapered, closer to the national brand look. Private brands of cosmetics and accessories, meanwhile, include Sonia Kashuk at Target and Quo at Shoppers Drug Mart, Willowdale, ON.

Target just introduced a Sonia Kashuk Fall Collection, featuring items like a five-piece Couture Brush Set (“beautiful, professional-quality brushes you won’t want to hide in a drawer or stash in a makeup case”) at $14.99 and an Instructional Eye Shadow Palette at $19.99 (“This new seasonal color palette includes rich jewel tones, dusty mauves and shimmery metallics in beautifully contrasting textures.”). At only $4.99 a pop is a new set of Nail Colors:
Your nails will be the season’s must-have accessory with these sophisticated, ultra-glossy shades. Sonia’s award-winning 3-free formula imparts long-lasting, creamy color in dusty, moodier hues for a look that’s simply chic. Now available in Sugar Rush, a sheer feminine pink, Mauving On Up, a dusty mauve, rich Chocoholic brown and Blank Slate, a beautiful blue-gray that pairs perfectly with fall’s deeper color palette.

Even in consumables, retailers are introducing truly unique products. Just last month, under the Market District premium brand, Giant Eagle, Pittsburgh, PA, introduced a Harvest Pumpkin as the first of a line of seasonal pasta sauces. “Chef John,” who worked on the product, called it “a magnificent blend of slow-roasted pumpkin simmered with real cream, roasted chicken stock, white wine, caramelized onion, Parmigiano Reggiano, a hint of nutmeg and a dash of apple juice to balance the richness of the pumpkin.” Neck tags offer recipes.

Black Label items at Loblaw include bacon marmalade, Cherry Shiraz wine jelly, Taste # 5 Umani paste (with spiced tomato and anchovy paste), Garlic Rosemary potato chips and Normandy style cultured butter. The line was introduced Sept. 22 in a bash at the Neubacher Shor Contemporary art gallery in Parkdale, ON, where the company rolled out a black carpet for journalists and “food influencers,” and chefs including Marc Thuet and Anthony Walsh whipped up dishes like Soy and Ginger Marinated Salmon and Montmorency Cherry Lacquered Squab using Black Label ingredients.

Upscale private label chocolate candy isn’t exactly new, as witness Choxie at Target. But Delhaize has come up with what may be the most offbeat chocolate bar: White Chocolate with Coconut & Cornflakes. It’s part of a new line of imported Authentic Belgian bars under the Taste of Inspirations premium brand that also includes relatively conventional varieties like Milk Chocolate with Almonds and Dark Chocolate with Hazelnuts, plus plain milk chocolate and dark chocolate.

In an entirely different category, Raley’s, West Sacramento, CA, recently offered a private label cure for the end-of-summer blahs: “our fully cooked Baby Back Ribs with barbecue sauce. Perfect on the grill or in your oven, these ribs are an excellent value at 32 oz. (2 lbs.) for 12.99. And what makes them even better – they are ready to serve in 10 minutes or less. So when the dinner clock is ticking, these ribs will deliver the taste and value you won’t find in a drive-thru!”

To help Delhaize-owned Bloom develop a distinctive private brand for a premium angus beef program the Charlotte, NC based design, branding and shopper marketing firm Birdsong Gregory created Sheffield & Sons: a brand aimed at evoking the distinction and personal service of a friendly neighborhood butcher shop. Part of the concept is a related line of spices, packaging for which embodies the gourmet feel of Sheffield & Sons.

Another recent collaboration involves New York-based design agency Beardwood & Co. with Bath & Body Works, Reynoldsburg, OH, on redesign of its aromatherapy line as well as its new line of summery citrus fragrance. Bath & Body Works Signature Citrus Collection was created in collaboration to pair fruity scents with bold, flowing graphics to create a collection of fun, summery fragrances. Hand-drawn graphics are used in the update of the Aromatherapy line.

You wouldn’t expect Dollar Tree, Chesapeake, VA, to be on the cutting edge of product innovation. But its produce bags under the Stor It brand should be a welcome relief to shoppers who have trouble keeping their fresh vegetables fresh. Produce is often marketed either naked or in plastic wrap tied in a knot that has to be cut open and can’t be resealed. But Dollar Tree’s bags are designed specifically for vegetables; consumers are advised to slip them in, add a piece of paper towel to absorb moisture, squeeze the air out and close the bag tightly with a twist-tie.

A strategic decision by Walmart that has nothing to do with branding products is the termination of the Marketside banner group. Marketside, with stores averaging 16,000 square feet, was Walmart’s answer to Fresh & Easy, El Segundo, CA. A subsidiary of Britain’s Tesco, it has shown rapid growth, with sales reaching $818 million at 130 stores last year, although the operation is running deeply in the red.

But Marketside never got beyond four prototype outlets in Arizona, opened in 2008, and Walmart pulled the plug last month – while keeping the Marketside brand for fresh foods at its supercenters. It still has high hopes for another small store format, Walmart Express, with five stores thus far and six more planned, in three test markets: Chicago, Richfield, NC. and the chain's home state of Arkansas. The new format stresses fresh foods, pharmacy and HBC.

It has enjoyed considerable success with Walmart Market, formerly Neighborhood Market, with about 180 stores averaging 40,000 square feet, a quarter the size of a supercenter, and has launched Supermercado, a spin-off targeting the Hispanic market. Walmart’s sales at supercenters and conventional discount stores have been sluggish over the past year, with some shoppers apparently defecting to limited assortment box stores and dollar stores.

Aldi, Batavia, IL, has flourished in the box store segment by offering economical upscale and healthy products under products under the Grandessa and Fit & Active brands, and imported chocolates under the Choceur and Moser Roth brands, as well as staple products under a host of category brands advertised as offering saving like 33% over the national brand in paper towels and 56% in macaroni and cheese dinners –the national brands aren’t carried at its stores.

Dollar General and Family Dollar have both been upgrading their private label programs, but they generally stress non-foods more than foods. Dollar General recently inked a deal to become exclusive distributor of the Rexall brand of OTC drugs in the United States, as the Katz Group, Edmonton, AL, is in Canada, and ran full-page ads promoting its own private labels – primarily Clover Valley in foods and beverages and DG Home in household supplies, but also including Ever Pet and the Smart & Simple economy brand.

Shoppers Drug Mart is an example of a drug chain expanding its reach even further beyond traditional parameters than Walgreens or CVS in the United States. Its first-line brand has long been Life (mostly for HBC, but also including some foods), but over the past years it has introduced Simply Food (“a selection of delicious food suited to your lifestyle”) for upscale foods, Everyday Market as an economy brand, Nativa Organics and even Bio-Life for “green” household products.

Beyond products and packaging, the biggest news this year may be Target’s impending entry into the Canadian market with the acquisition of most of Zellers outlets from Hudson’s Bay Co., Toronto, ON, in a $1.825 billion deal. Taken private in 2003, Hudson’s Bay has done poorly in the retail arena, especially in the Zellers discount segment, which will probably be discontinued entirely before long.

Target Canada president Tony Fisher said recently that the company is looking to finalize the locations for its first 125 to 135 stores in Canada that it plans to start opening starting in March 2013. Up to 220 Zellers outlets will eventually be converted. "We scoured every location that Zellers had throughout the country and it was really important for us to understand which locations were the best strategic and financial value," Fisher said.

Under a related deal with Sobeys, Stellarton, NS, the Canadian grocer will supply Target with frozen, dairy, and dry grocery products, including both national brands and Target's private label products starting early in 2013. As part of the agreement, the two companies will use each other's distribution networks to help reduce transportation expenses.

"The associated increased revenue, and the supply chain efficiencies which will lower our costs, will continue to strengthen our competitive position," Sobeys president and chief executive Bill McEwan explained. Sobeys owns or franchises more than 1,300 stores across Canada under retail banners including Sobeys, IGA, Foodland, FreshCo, Price Chopper and Thrifty Foods, as well as Lawtons Drug. This past summer, it got a love letter on a blog called Raising my Boys by Mom2Michael, Scarborough, ON, a 40-something mom and stepmom who’s a “summer girl.”

“We BBQ all year ’round, just even more so in the summer,” she remarked. So for a recent cookout, she stocked up on Sobeys' Sensations by Compliments line. “The selection of 100% pure beef burgers was pretty awesome – Prime Rib, Angus, Sirloin, Mesquite BBQ, Cheddar & Bacon, Three Cheese, Peppercorn & Garlic, and Korean-Style. And they also have lighter options in the Compliments Balance line - Extra Lean Chicken, and Wild Pacific Salmon. Yum! But, in a house full of boys, needless to say we went all beef.”

She went with the Prime Rib and the Cheddar & Bacon, plus Sensations deluxe sesame seed buns, and Compliments drinks. “I have always loved their Sparkling Lemonade. Sweet & fizzy and really refreshing. The tangerine & lime sparkling water was really tasty as well. Great, refreshing cold drinks for a hot day.” She not only praised the products, but posted a link to the Compliments website, plus a photo of the products, and other pictures from the barbecue – including one son chowing down on the last of a cheddar and bacon burger.