Store Brands - Oct 2017 by ensembleiq

2017 Top Women in Store Brands

How to boost center store sales

Diversity critical for team success October 2017 | www.storebrands.com

Bringing into Focus What retailers need to know about the revised Nutrition Facts Label

NEW LOOK COMING!

Visit us at the ALL NEW STOREBRANDS.COM.

2017 Top Women in Store Brands

How to boost center store sales

Diversity critical for team success October 2017 | www.storebrands.com

Bringing into Focus What retailers need to know about the revised Nutrition Facts Label

NEW LOOK COMING!

Visit us at the ALL NEW STOREBRANDS.COM.

Contents

Volume 39 No. 10 October 2017

16 Cover Story

Bringing into focus What retailers need to know about the revised Nutrition Facts Label

Features 30 Top Women in Store Brands Women on a mission This year’s Top Women in Store Brands are recognized for their perseverance, passion and poise, among other positive traits

44 Sales Boosting Strategies ‘Center’ of attraction Organic and natural/free-from private-branded products can help retailers revive the center store

49 PLMA Show Preview Taking the stage Check out some of the companies that will exhibit at the upcoming Private Label Trade Show

72 Hiring Insights Make the team Diversity of ages, backgrounds and perspectives is critical to building strong private brand teams as is having a champion at the top

76 Sustainable Packaging Going green More consumers who are seeking sustainable packaging to go with their ‘clean’ lifestyles are creating a potentially potent market for eco-friendly store brands

Departments

6 8 10 14 112 114

Editor’s Note Minding the Store Around the Industry Getting Social New Product Concepts End Cap

Category Intelligence 82 86 90 94 98 100 108

Coffee and teas Candy and chocolate Frozen novelties Deli meats Ethnic foods Paper products Disposable tableware

About the cover: The new Nutrition Facts Label emphasizes the calorie counts for more realistic serving sizes as well as “added sugars.” Cover design by Jeff Bowes.

76 4

Store Brands (ISSN-0190-9851; USPS # 0488-370) is published monthly by EnsembleIQ, 570 Lake Cook Rd., Deerfield, IL 60015. Subscriptions: One year, $95; two years, $146. One year, Canada $112; two years, Canada $150, One year, foreign $175; two years, foreign $285. Payable in advance with a bank draft drawn on a US bank in US funds. Single copies $10, except foreign, where postage will be added. Reprints, permissions and licensing, please contact Wright’s Media at ensembleiq@wrightsmedia.com or (877) 652-5295. Canada Post: Canada returns to be sent to IDS, P.O. Box 456, Niagara Falls, ON, L2E6V2. Periodicals postage rates paid at Deerfield, IL and additional mailing offices. Printed in USA. POSTMASTER: send all address changes to Store Brands PO Box 1842 Lowell MA 01853. Copyright 2017 by EnsembleIQ. All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI, 48106. The contents of this publication can not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for claims and representations.

Store Brands / October 2017 / www.storebrands.com

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Editor’s Note Business Intelligence for an Evolving Market

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EVENTS • MARKETING • DIGITAL • RESEARCH • CIRCULATION CORPORATE OFFICERS Executive Chairman

Alan Glass

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Private brands at the center of attention

arly signs point to Amazon rejuvenating Whole Foods Markets after the retailer experienced several dismal quarters of growth before being acquired by the Seattle-based megacorporation. Whole Foods’ store brands, specifically its line of 365 Everyday Value products, are selling like organic whole-wheat hotcakes on Amazon.com, where Amazon is peddling hundreds of the line’s reduced-price offerings with many of them selling out. At Whole Foods’ brick and mortar stores, foot traffic spiked more than 25 percent on the first two days that Amazon officially owned Whole Foods in late August. What’s more, CNBC reported that a Morgan Stanley analyst believes Whole Foods’ sales will grow by 12 percent annually through 2022 and the organic/natural foods retailer will reach a 3.3 percent market share of the U.S. grocery market during the next five years from an estimated 2.1 percent at the end of 2017. The analyst said that growth will come from new shoppers, which he attributes to more competitive pricing and increased convenience — the very two things that Amazon has hung its hat on over the years. The analyst also said that Amazon.com could gain millions of new members in its Prime subscription program from Whole Foods’ current customer base. He estimates that 38 percent of Whole Foods’ customers, or about 5 million households, are currently not Amazon Prime subscribers but will join up by the end of 2019. There’s no doubt in what Amazon wants to do: be the king of the jungle in grocery — with private brands from Whole Foods and Amazon’s own brands playing a major role. I write this column not even a month after Amazon officially acquired Whole Foods. If Amazon painted Austin, Texas-based Whole Foods’ headquarters with a new coat of paint, it’s not even dry yet — yet Amazon has already made some substantial changes to benefit Whole Foods. If the grocery industry thought Amazon’s initial announcement last June to acquire Whole Foods was a wakeup call, well, that alarm is blaring even louder considering what Amazon has done with Whole Foods in such a short time. And there is plenty more to come, including the continuing of lower prices. There is also the question of how many Whole Foods stores Amazon might build to go with its own Amazon Go store concept and how those two entities might operate together. Whole Foods currently has about 470 stores and has been opening its smaller-format 365 stores. Despite Amazon’s already-aggressive push in grocery, other major grocery retailers aren’t going to stand by and watch. And the card these retailers play to differentiate themselves could be their store brands, much like Amazon is using private brands to differentiate itself. Recently, Mike Schlotman, The Kroger Co.’s chief financial officer, noted the “amazing potential” of the Cincinnati-based retailer’s store brands, called Our Brands, which grew more than national brands in grocery during the second quarter. Kroger’s Our Brands represented 27.7 percent of total units sold and 25.4 percent of sales dollars in the second quarter. Kroger’s CEO Rodney McMullen said the potential of future sales of Kroger’s Our Brands is “massive.” More than ever, retailers should be studying their store brands — from packaging to product quality to value to exclusivity — and how to strategically use them through their omnichannels to stay competitive on all fronts. Grocery retailers have many balls in the air, at least the retailers that want to stay relevant. It will come down to what retailers can juggle them best — with store brands, perhaps, at the center of attention. SB

2015

Lawrence Aylward, Editor-in-Chief laylward@ensembleIQ.com 6

Store Brands / October 2017 / www.storebrands.com

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Minding the Store

Driving familiarity and affinity are keys to store brand growth

By Jordan Rost

ong gone are the days of no-frills packaging intended only for those on a tight budget — private labels, increasingly referred to as store brands, are no longer viewed simply as low-cost alternatives to name brands. Their transition has already begun into highquality products that fulfill consumer needs across a variety of price points. According to a recent Nielsen survey, more than three quarters (76.9 percent) of Americans agree that “it’s important to always get the best price on a product.” However, more and more we’re seeing that this desire for savings comes with a largely indifferent set of brand preferences. Nearly just as many (73.4 percent) Americans agree that “store brand products are a good alternative to name brands.” This sentiment holds true as we analyze sales performance over the past five years. In the latest year ending July 29, UPC-coded store brands outpaced branded products in both short- and long-term growth. Store brand dollars increased 0.7 percent in the last year, compared to branded product’s 0.3 percent decline. Growth is apparent in the long-term view as well, with store brands generating a 1.7 percent compound annual growth rate (CAGR), while branded products reported slightly less CAGR (1.4 percent).

A store brand state of mind Despite the positive performance of store brands on the whole, there appears to be a distinction among consumers who have and have not adopted a familiarity or affinity towards private brands. This

store brand state of mind is quite differentiated across various income levels. When it comes to preference, 10.8 percent of households within the highest income brackets (more than $100,000 annually) are the least likely to believe that “store brands are really meant for people who are on tight budgets and can’t afford the best brands.” On the other hand, 20.9 percent of lowincome households ($20,000 or less annually) are the most likely to view store brands this way.

Ethnicity plays a major role Ethnicity also has an impact on familiarity and ultimately comfort level with store brands. Many ethnic households simply “don’t know enough about store brands to want to try them.” When compared to the total population, African Americans, Asians and Hispanics are more likely (24 percent, 82 percent and 25 percent more, respectively) to avoid store brands, simply due to lack of knowledge or familiarity with these products. Additionally, these same groups are most likely to view store brands as products “for people on tight budgets, who can’t afford the best brands” (African Americans 24 percent more, Asians by 45 percent more and Hispanics 6 percent more than the population average).

Closing the ethnicity gap As of December 2016, less than 20 percent of store brand dollar share is attributed to African Americans, Asians and Hispanics, respectively. While there is clearly an outright demand for store brands across the population, there is also a dynamic that exists to engage with or better educate certain socio-economic or multicultural cohorts on store brands. As many brick and mortar retailers continue to invest in store brands and with some of the nation’s largest e-commerce retailers looking to capture a greater share of consumer spending, store brands are here to stay. But as the U.S. population continues to diversify in the decades ahead, manufacturers and retailers must follow suit in order to resonate with multicultural consumers when they are shopping for products that bring value to their lives. SB Jordan Rost is vice president of consumer insights for Nielsen. His work explores emerging trends, shifting buying and media consumption behaviors and helps manufacturers and retailers make more informed business decisions. He shares his expert industry insights via thought leadership content, industry talks and with Nielsen’s clients.

Store Brands / October 2017 / www.storebrands.com

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AroundtheIndustry SHORT TAKES Berner Food & Beverage triples manufacturing space Dakota, Ill.-based Berner Food & Beverage hosted a ribbon-cutting event on Sept. 20 to mark the official opening of a newly expanded facility that triples its manufacturing space, offers customers additional beverage production capabilities, and allows for continued growth in the future. “We have not only tripled our manufacturing footprint with this expanded facility, we have increased our most important asset, our employees,” said Berner CEO Kurt Seagrist at the event. “We have been able to grow from 355 employees, adding over 200 jobs in our local area, and we’re still continuing to encourage job creation in our area. Berner is a great place to work, and we continue to look for additional talent within our community, so that we can all grow together.” The original footprint of the facility has grown in size from 92,000 square feet of manufacturing space to more than 285,000 square feet, and warehousing space has increased to 170,000 square feet.

BJ’s dedicates e-commerce sites to its private brands BJ’s Wholesale Club introduced two new websites dedicated to showcasing the “value, quality and assortment” of its two private brands — Berkley Jensen and Wellsley Farms. This is the first time the Westborough, Mass.-based company has created dedicated ecommerce sites for its exclusive brands. The sites (www.berkleyjensen.com and www.wellsleyfarms.com) will showcase a broad assortment of both brands, share the stories behind the products and create a shoppable, dedicated experience for both brands, according to BJ’s.

Kroger announces plan to eliminate hunger, end food waste The Kroger Co. is implementing a program to end hunger in the communities it calls home and aims to eliminate waste across the company by 2025. “No family in a community we serve should ever go hungry, and no food in a store we operate should ever go to waste,” said Rodney McMullen, Kroger’s chairman and CEO, in a news release announcing the program, which Kroger calls its Zero Hunger/Zero Waste plan. Across the United States, 42 million Americans struggle with hunger, according to Kroger. At the same time, an estimated 72 billion pounds of food ends up in a landfill every year. “More than 40 percent of the food produced in the U.S. each year goes unconsumed, while one in eight people struggle with hunger. That just doesn’t make sense,” McMullen said. “We are committing to doing something about it.” Kroger aims to establish a $10 million innovation fund within The Kroger Co. Foundation to address hunger, food waste and the paradoxical relationship between the two. The retailer also wants to accelerate food donations to provide three billion meals by 2025 to feed people facing hunger in the places Kroger calls home.

Store Brands / October 2017 / www.storebrands.com

Kroger’s McMullen: We won’t lose on price CEO says retailer’s private brand potential is ‘massive’ By Lawrence Aylward

ow low will The Kroger Co. go? That’s what a lot of industry grocery experts, analysts and Kroger shareholders are wondering as the nation’s secondlargest grocer navigates a fiercely competitive industry driven by low prices. During a conference call last month to announce its secondquarter earnings, Kroger CEO Rodney McMullen talked about pricing in a market where food prices are stealing the headlines, from Amazon lowering prices at Whole Foods Markets to newcomer Lidl promising that it won’t be beat on pricing. And don’t forget deep-discounter Aldi and Walmart with its “everyday low prices” in this equation. McMullen cut to the chase during the call when talking about pricing. “We won’t lose on price, [but] we’re not trying to lead the market down on price,” he said. Despite a return to positive comparable-store sales after two negative quarters, Kroger revealed a decline in earnings — $353 million compared with $383 million during the same period a year prior. Kroger’s stock dropped after the earnings announcement, even though the numbers were in line with what Wall Street was expecting, including earnings of 39 cents per share and an increase in revenue from 2016’s second quarter. But the consensus among experts, analysts and shareholders is that Kroger’s lowering of its prices are chipping away at its profits. At the outset of the conference call, McMullen vowed that Kroger is “transforming. He also threw down the gauntlet by announcing, “We see anyone who sells food as competitors in the future.” “We know that the massive $1.5 trillion U.S. food market

An artist’s rendering of Kroger’s new Kitchen 1883 restaurant.

AroundtheIndustry Analyst believes Costco headed to China CNBC reported that Wall Street firm Baird is predicting that Issaquah, Wash.-based Costco Wholesale will soon build its first warehouse clubs in China, home of the world’s second-largest economy. Baird is basing its prediction on the fact that Costco opened a store on Tmall, a Chinese language e-commerce site run by China’s e-commerce giant Alibaba. “It appears [Costco] is on the verge of a bigger push into China … [its recent] launch of an official flagship store on the ‘Tmall’ platform (with an expanded assortment of furniture, consumer electronics and wine) suggests [Costco] has broader ambitions for the market,” analyst Peter Benedict wrote in a note to clients, according to CNBC. The analyst said that “Tmall” store launches require special permission to operate in China. It likely means Costco now also has a license to build stores in China, Benedict said.

Walmart relaunching Parent’s Choice Bentonville, Ark.-based Walmart is doing a “total relaunch” of its private brand Parent’s Choice line, which will include 120 new items and about 100 renovated items. Walmart said that “everything 8” from diapers to blankets to

creates a unique and sustainable growth opportunity for Kroger,” McMullen said. “You’ll see changes in the way we go to market. … Kroger has a history of successfully evolving to meet our customers’ changing needs because we put the customer at the center of everything we do. We are reprioritizing and accelerating investments in our customer for strategy in order to anticipate and meet rapidly evolving consumer demands to shop with us for anything, anytime and anywhere.” To McMullen’s point, Kroger announced in September that it was opening its first restaurant — Kitchen 1883 in late October in Union, Ky. Kitchen 1883 offers a fresh take on new American comfort food, according to Kroger’s Culinary Development team, which designed the concept. During the conference call, Mike Schlotman, Kroger’s chief financial officer, noted the “amazing potential” of Kroger’s store brands, called Our Brands, which grew more than national brands in grocery during the second quarter. “Identical sales for Our Brands also outpaced identical supermarket sales,” Schlotman said. “The second quarter brought strong sales and unit growth, with Our Brands representing 27.7 percent of total units sold, and 25.4 percent of sales dollars, excluding fuel and pharmacy.” McMullen 16” said the potential of future sales of Kroger’s Our Brands is “massive.” SB

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Store Brands / October 2017 / www.storebrands.com

AroundtheIndustry CVS introducing retail vending machines

VS Pharmacy is turning to vending machines to offer consumers more convenience as well as to pump up its private brand business. The Woonsocket, R.I.-based company is introducing automated retail vending machines stocked with convenient, on-the-go necessities including over-the-counter health products, better-for-you snacks and popular personal care products typically sold at CVS Pharmacy locations nationwide. The new vending machines are designed to help maximize convenience and meet customers where they are with on-the-go wellness solutions outside the traditional retail space. Each vending machine will be customized with offerings to fit each location with more than 70 products to choose from, including many from exclusive CVS Pharmacy store brand lines like CVS 8” and Gold Emblem Abound. SB Health, Beauty 360, Gold Emblem

wipes to baby food” are part of the launch and all items will still be offered at the same everyday low prices. Parent’s Choice began 20 years ago as a line with one item — baby formula. With the revamp and relaunch, the line will grow to more than 275 items. Walmart said Parent’s Choice is its largest baby brand by items sold and also its fastestgrowing baby brand.

G.S. Gelato makes Inc.’s fastest-growing list for third year in a row G.S. Gelato & Desserts, a manufacturer of authentic Italian gelato and sorbet, was recently selected as one of Inc. Magazine’s Fastest Growing Private Companies in America for the third consecutive year (2015-2017). G.S. Gelato’s growth exceeded 50 percent in the last three years as the company continues to evolve and advance in the foodservice and retail private brands gelato market. “It is an extraordinary achievement to make the Inc. 5000 list for the third year and we could not be more proud,” said Simona Faroni, co-founder of Fort Walton Beach, Fla.-based G.S. Gelato, in a press release. “The driving force behind our growth is a passion for authenticity and quality, and dedication to customization and support for our clients.” SB

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www.storebrands.com / October 2017 / Store Brands

Getting Social

Q A with Peggy Davies

Vice president of association relations at the Private Label Manufacturers Association and board chair for Women Impacting Storebrand Excellence (WISE) How did you come to the world of store brands? My parents’ business was Marketer’s Cold Storage; my dad was president, and my mom was the chief operating office. Acme and A&P’s Ann Page private label was pervasive in our cupboard. After college, I began my career in the brokerage business working for Paul G. Nester, a food broker who partnered with Laneco to develop Laneco’s Why Pay More Brand. I was assigned inside sales where I coordinated with Laneco and its distributor Wetterau to find the products for the brand.

What is the industry’s biggest challenge? Introducing and energizing young people to join the industry.

Describe the private label industry in one word. Dynamic.

What is the biggest obstacle you have ever overcome? Divorce and the death of my dad when I was 18.

What do you like most about the industry? Developing quality innovative products to provide consumers with alternatives to the national brands

Who is your hero and why? Anyone who faced fear and adversity and paid it forward. What trait in yourself do you attribute most to your success? I’m always willing and often requested to take on a new assignment or project.

What’s the best advice someone ever gave you? Never be afraid to try. It’s 5 o’clock (or later), what do you do for fun? My husband and I entertain friends on our home’s deck with food and cocktails. You have a week off. Where do you go and why? Italy and southern France for the food, the scenery and the people. If you were born 100 years ago, what would you do for a living? Looking at this if I had been born 100 years earlier, I would be a southern belle like Scarlett O’Hara from “Gone with the Wind.”

Peggy Davies is always willing to take on a new assignment or project.

What do you dislike most about the industry? Unreturned phone calls and e-mails. What one great thing does the industry have going for it? Entrepreneurial people. 14

Store Brands / October 2017 / www.storebrands.com

What song do you love to crank up in the car? Anything from Carole King, Katy Perry and Adele. What’s the best book you’ve ever read? “The New York Times Cookbook.” SB

Cover Story: Health & Wellness Regulations

Bringing into Focus What retailers need to know about the revised Nutrition Facts Label By Carolyn Schierhorn

here’s no doubt that complying with the Food & Drug Administration’s (FDA) new Nutrition Facts Label requirements will be a costly and cumbersome endeavor for retailers with thousands of store brand grocery products as well as for private brand food and beverage manufacturers. It’s not just that every package needs to be reprinted with the new panel, which stresses the calorie count and a more realistically portrayed serving size in a bigger and bolder font. That emphasis on calories plus a requirement to include “added sugars” could also lead to expensive product reformulations. 16

Store Brands / October 2017 / www.storebrands.com

By the FDA’s estimates, the conversion will cost the food industry more than $2.3 billion and will affect roughly 800,000 packaged products, with the private brands segment shouldering the expenses disproportionately as consultant Jim Wisner explains. Consider the burden on a food and beverage company that manufactures 25,000 different items, observes Wisner, founder of Wisner Marketing in Libertyville, Ill. “Each of those SKUs is going to require a packaging change,” he points out. “So that company has to make a change individually to everybody they sell to, which produces extraordinarily higher costs.” But as some early adopters of the Nutrition Facts Label have found, the updated panel may help win over information-demanding consumers. Chicagobased Label Insight — a data science company that captures, sorts and analyzes information gathered from food product packaging— and New York-based global data company Nielsen have conducted research indicating a correlation between products that bear the new label and sales increases, notes Dagan Xavier, Label Insight’s co-founder. For example, in the juice category, products adopting the new label grew 34 percent in sales in the 52 weeks ending Aug. 12, while products not yet adopting the new label declined 4 percent during that period. Consequently, private brand owners might want to view the label change as an investment that could pay off in added sales, on top of providing clear benefits for consumers who are insisting on greater transparency, Xavier says. Of the more than 6,500 products in Label Insight’s database that already sport the new label (see the graph on page 20), more than 40 percent are store brand SKUs, Xavier adds. This could indicate that private brand owners are ahead of the curve in seeing value in the label revision, he suggests, noting that a number of retailers and manufacturers today are prioritizing transparency and going beyond what the FDA requires. The challenges of implementing the new requirements have been many, however, including insufficient prepress capacity in the United States. The steps between creating a package’s print layout and the final printing of the package are often handled by overseas firms rather than U.S. companies, so the sudden surge in need for prepress contractors has put a strain on the global packaging printing industry. Above all, ongoing uncertainty over the Nutrition Facts Label compliance deadline has been frustrating for grocery retailers and vendors. Because of arbitrary delays in implementation, President Donald J. Trump’s unpredictability and his often-voiced distaste for

NEW LABEL / WHAT’S DIFFERENT Servings: larger, bolder type

Nutrition Facts 8 servings per container Serving size 2/3 cup (55g) Amount per serving

230

Calories

% Daily Value*

Total Fat 8g Saturated Fat 1g

10% 5%

Trans Fat 0g Cholesterol 0mg Sodium 160mg Total Carbohydrate 37g

New: added sugars Change in nutrients required

Dietary Fiber 4g

Serving sizes updated Calories: larger type

0% 7% 13%

Updated daily values

14%

Total Sugars 12g Includes 10g Added Sugars Protein 3g

20%

Vitamin D 2mcg

10%

Calcium 260mg

20%

Iron 8mg

45%

Potassium 235mg

* The % Daily Value (DV) tells you how much a nutrient in a serving of food contributes to a daily diet. 2,000 calories a day is used for general nutrition advice.

Actual amounts declared

New footnote

regulations, some retailers and manufacturers have preferred to take a wait-and-see stance. Four months ago, the FDA announced an indefinite postponement of the Nutrition Facts Label compliance deadline, which had been set for July 26, 2018, for companies with annual sales of $10 million or more and July 26, 2019, for manufacturers with annual food sales of less than $10 million. On Sept. 14, after stating at a conference that there would be a 12-month deadline extension, FDA Commissioner Scott Gottlieb “tweeted later that evening, apologizing for the confusion, and said it probably would be more like 18 months,” notes Doug Baker, vice president of industry relations for the Food Marketing Institute (FMI), who oversees the organization’s private brand initiatives. “So the compliance deadline could be sometime between January and July of 2020 if that date holds up. But it has not been formally communicated, so it’s still somewhat ambiguous as to when it’s going to happen.”

First major overhaul of NLEA Signed into law by President George H.W. Bush, the Nutrition Labeling and Education Act of 1990 (NLEA) mandates the Nutrition Facts Label. Although it had to be updated in 2006 to include trans fats and there have been other adjustments over the years, the new FDA requirements represent the first major overhaul of the label. Championed by former First Lady Michelle Obama www.storebrands.com / October 2017 / Store Brands

Cover Story: Health & Wellness Regulations as part of her healthful eating initiative, the revisions to the Nutrition Facts Label are intended to help combat obesity and the associated chronic health problems of diabetes mellitus and cardiovascular disease. The NLEA now requires that the serving size be based on what the typical consumer would eat and not on what a person should eat and that both this and the calories per serving be prominent on the package.

Wisner sees advantages to shoppers in being able to discern a product’s true calorie count more easily, and the larger type size specifically benefits aging consumers with worsening vision, he notes. “The serving sizes have been made a lot more realistic,” Wisner says. “There used to be a lot of fudging on that.” For example, Wisner points out that an 8-ounce container of Kraft Cool Whip claimed to contain 25

Label lowdown Here are highlights of the FDA’s revised Nutrition Facts Label, also known as the Nutrition Facts Panel:

u Announced in May 2016, the revisions to the FDA’s Nutrition Facts Label constitute the first major overhaul to the Nutritional Labeling and Education Act of 1990 (NLEA).

u The compliance deadline will be postponed from July 26, 2018, (and July 26, 2019, for manufacturers with less

than $10 million in sales) to a time that could be roughly 18 months after those dates, according to the FDA. (There had been no formal announcement as of press time.)

u The main changes to the panel include a larger, bolder font for calories and serving size; a more realistic serving

size; the need to note “added sugars” under the carbohydrate heading; and the addition of Vitamin D and potassium measurements, which replace Vitamin A and Vitamin C on the label.

u Retailers with large private brand programs are advised to time any product reformulations and packaging redesign initiatives to coincide with the Nutrition Facts Label revisions.

Store Brands / October 2017 / www.storebrands.com

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Cover Story: Health & Wellness Regulations servings, an egregious exaggeration if one considers how people actually use the whipped topping. “The FDA is

trying to put some reality into — and some teeth behind — how serving sizes are determined and the product is used, so that’s one thing that is good from a consumer standpoint,” he says. In addition, the revised Nutrition Facts Label better 8000 reflects the latest research FDA releases in nutritional science and 6505 ﬁnal rule consumer health, according  137% 6000 to Wisner. The new label includes measures for 4761 Vitamin D and potassium  210% because these are nutrients 4000 that Americans typically don’t consume enough of —  322% 2260 in contrast to Vitamin A and 2000 Vitamin C, which have been  300% removed from the panel. 701 The inclusion of “added 234 25 11 5 sugars” is another key 0 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Pre 2016 Q1 2016 Q2 2016 Q3 2016 change to the label, which “will probably lead to some reformulations,” Wisner This graph from Chicago-based Label Insight shows the growth in the number of SKUs (see scale at left) in the company’s product database that bears the new Nutrition Facts Label. predicts. “There has been a

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Cover Story lot of pressure to reduce the amount of added sugars in the American diet, which have been found to be a significant contributing factor toward obesity in the United States.” But Wisner doesn’t understand why “cholesterol” remains on the Nutrition Facts Label, given that “the FDA has come out with an opinion that dietary cholesterol is pretty much irrelevant in terms of its contribution to heart disease,” he notes. Listing dietary cholesterol simply perpetuates the myth that eggs, for instance, are not heart-healthy, when in fact they are among the most healthful foods available to consumers, Wisner adds. Although FMI has been negotiating with the FDA over the timing of the Nutrition Facts Label rollout, the organization doesn’t mind the revisions overall, Baker says. “We support anything that helps consumers get more information about the products they use and consume,” he explains. “So we never had an issue with the Nutrition Facts Panel changes. The only issue we’ve had as an association has been the limited time to get the revisions completed.” Xavier believes that the new FDA requirements are a step in the right direction. “Label Insight’s mission as a company is to help people make healthier food choices, and the new Nutrition Facts Panel provides more transparency on the foods that we eat,” he says. “I think it’s a great start, but it doesn’t go far enough.” Beyond the limited confines of a package, user-friendly digital programs such as SmartLabel, a joint project of the FMI and the Grocery Manufacturers Association to give consumers comprehensive ingredient and additive information online, and a shelf-tag transparency initiative launched by West Sacramento, Calif.-based Raley’s Supermarkets go much further in providing consumers with all of the data they need for healthful eating, Xavier says. (See the accompanying articles on pages 26 and 27.)

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Some grocery retailers refresh their store brand packaging designs every five years or so. If it’s almost time for a strategic redesign, this is an ideal time to do it and incorporate the new Nutrition Facts Label as part of the process, Baker suggests. Deerfield, Ill.-based Walgreens Boots Alliance is doing just that with the redesign of its Nice! store brand food products. “For retailers that are in the midst of a redesign, they can incorporate NLEA updates for any categories that haven’t been touched yet,” Baker elaborates. “Then they can work with their design and prepress companies to update the Nutrition Facts Panel on the packages that were previously redesigned. It’s all about keeping costs down to deliver an optimally priced product to consumers.” A key consideration in deciding which lines to roll out with the new label first is minimizing packaging waste. Alter the packaging on the slowest-moving categories last in order to use up as much of the current packaging stock as possible, Baker advises. “That way you won’t have to throw away packaging 24

Store Brands / October 2017 / www.storebrands.com

Cover Story: Health & Wellness Regulations

SPORTS NUTRITION IS HEALTHY FOR SALES.

because any time you throw something away, it adds cost. In order for private brands to continue to meet the needs of the consumer, they have to be cost-competitive.” According to Label Insight’s database, the leading categories among those items with the new label are snacks and cookies, followed closely by cheese, Xavier notes. Many shelf-stable snack products have been undergoing “clean label” reformulations anyway to remove artificial colors, flavorings and preservatives, so private and national brands are simply integrating the

revised panel into such programs. Xavier suspects that cheese is also at the vanguard of displaying the revised label because it is a perishable product with significant turnover. A huge challenge, however, is that other federal government initiatives are taking place concurrently that will affect food and beverage packaging. The U.S. Department of Agriculture is expected to soon roll out GMO disclosure and labeling standards, and the Food Safety and Modernization Act (FSMA) also has some label implications, Wisner notes. “So how many times are you going to have to change the label?

Consumer-centric SmartLabel initiative fosters product transparency An initiative of the Trading Partner Alliance (TPA), a retailmanufacturing joint leadership group of the Food Marketing Institute (FMI) and the Grocery Manufacturers Association, SmartLabel (www. smartlabel.org) in a nutshell is a user-friendly online digital platform that provides consumers with meaningfully arranged, detailed and comprehensive information on the ingredients, nutrients, additives, preservatives, claims, certifications, sourcing and sustainability attributes of any products entered in the database. A voluntary initiative unlike the Nutrition Facts Label, SmartLabel is a proactive industry program responding to consumer demands for more transparency. SmartLabel aims to provide consumers with more information on the products they are eating than they can glean from the Nutrition Facts Label, ingredient decks and call-out claims on packaging, so that individuals can make informed food choices more easily. “Instead of having an ingredient declaration that has 20 ingredients in one paragraph, SmartLabel lists the ingredients individually and shows their [definitions],” says Dagan Xavier, a co-founder of Chicago-based Label Insight, which provides strategic guidance and turnkey solutions to companies interested in participating in SmartLabel. Kicking off in 2015, SmartLabel now includes nearly 15,000 pages that consumers can view, says Doug Baker, FMI’s vice president of industry relations. In May and June of this year, two companies with SmartLabel pages had more than 400,000 visits to those pages, he notes. “So consumers are starting to use SmartLabel, and they’re starting to learn, even though we’ve yet to do a broad consumer education campaign,” Baker says. Three private brand owners are among the 30 companies now participating in SmartLabel: Albertsons Cos., Ahold USA and Topco Associates. “Most consumers right now are accessing SmartLabel through the search bar on their computer,” Xavier observes. When the database is more comprehensive, smart phone apps and in-store scanning technology will likely facilitate access to the platform. By the end of this year, Label Insight expects that 44,000 SKUs will be SmartLabel-enabled.

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Cover Story: Health & Wellness Regulations The industry has been pushing for more coordination,” he emphasizes.

Complementary programs Unlike mandated changes to food packaging labels, the voluntary SmartLabel program can easily incorporate updates. “[We introduced] a new style guide that addresses the new formatting for the Nutrition Facts Panel,” Baker says. “The nice thing about SmartLabel is that anytime there’s a new or changed reg, it’s basically a keystroke rather than a packaging change. So I see SmartLabel as being very complementary to both NLEA updates as well as new regs coming out of the USDA.” Although the Nutrition Facts Label revisions and SmartLabel are entirely separate endeavors, they are both driven by consumers insisting on greater transparency, Xavier adds. Through the SmartLabel program, brands can share a wealth of nutrient, ingredient, free-from, processing, certification and sourcing information that consumers can access online. “The whole purpose of SmartLabel is that it allows brand owners to have conversations with consumers beyond the package,” explains Baker, who notes that three private brand owners — Albertsons Cos., Ahold USA and Topco Associates — currently have pages available in SmartLabel. Approximately 44,000 SKUs should be SmartLabel-enabled by the end of the year, according to Label Insight. Despite the advantages of a digital format, the package provides the first impression shoppers have of a product in the store, and the Nutrition Facts Label, along with the ingredient deck and call-out claims, provide vital information to customers. Although transparency is a boon for consumers, reaching that ideal will continue to pose challenges for the grocery industry and especially for private brands. With the federal government trying to standardize definitions and product claims such as “natural” and “simple,” Wisner notes that label updates could remain an ongoing frustration. SB Schierhorn, the managing editor of Store Brands, can be reached at cschierhorn@ensembleiq.com.

Store Brands / October 2017 / www.storebrands.com

Raley’s new shelf-tag program sheds light on ingredients, nutrients Research by Nielsen has shown that 59 percent of grocery shoppers have difficulty understanding nutrition facts on product packaging. Providing greater clarity for consumers is the motivation behind the Food & Drug Administration’s revised Nutrition Facts Label, and it is also the reason West Sacramento, Calif.-based Raley’s Supermarkets has launched a unique shelf-tag program throughout the chain’s 122 stores in northern California and Nevada. Created in partnership with Chicago-based Label Insight, the new Shelf Guide program mines ingredient, nutritional and food processing data on more than 400,000 products to create colorcoded shelf tags for items that meet specific criteria. For example, the shelf tag for a clean label product that is minimally processed will include an “M” inside of a blue square with “Minimally Processed” after it. The shelf tag for a “Nutrient Dense” product features “N” inside of a green square, and the tag for a product with no added sugar features an “S” inside of a purple square.

The program also has icons for organic, vegan, kosher, non-GMO and gluten-free. The shelf tags, in addition, include the product’s weight, price and price per ounce. The Shelf Guide is also integrated into the retailer’s eCart click-and-collect service, making it easy for consumers to browse through and order products that have specific characteristics. “The program is very much rooted in label transparency,” says Emmie Satrazemis, wellness evangelist for Raley’s. Satrazemis points out that consumers are bewildered by the plethora of nebulous and gratuitous claims on packaging that are there simply to sell more product. “There is just a lot of confusion in general around label claims, especially in the center store,” she says. “There are so many claims on packages that it’s almost impossible for consumers to figure out what they’re supposed to be eating.” Raley’s spent about a year developing standardized definitions for the Shelf Guide, Satrazemis says. The retailer defines “minimally processed,” for example, as “simply prepared with only clean ingredients, and includes added-sugar and sodium restrictions.” To learn more about this definition and others, consumers can go to the Raley’s home page (www.raleys.com) and click on the “Raley’s Shelf Guide” box. The main goal of the Shelf Guide program is to simplify consumers’ purchasing decisions by making it easier to find nutritious and specific free-from products.

Top Women in Store Brands By Lawrence Aylward

This year’s Top Women in Store Brands are recognized for their perseverance, passion and poise, among other positive traits “Run to the fire; don’t hide from it.” This quote from Meg Whitman, CEO and president of Hewlett Packard Enterprise and former CEO of eBay, doesn’t need to be deciphered. It also speaks to Whitman’s achievements in the business world. The nine women comprising the 2017 Top Women in Store Brands (TWISB) know exactly what Whitman is talking about. They run to the fire; they don’t hide from it. Each year, Store Brands and Women Impacting Store Brand Excellence (WISE) solicit nominations from the private brand industry to identify and honor a select few of these women through our TWISB program, which was created to provide well-deserved recognition for female professionals who have achieved exceptional success and bring a passion for store brands to their day-to-day activities. This year’s categories of recognition include four functional expertise areas (marketing/merchandising, operations, research and development/quality assurance and sales) as well as two achievement categories, the Innovation Award and the Sparkplug Award, the latter of which is being bestowed on two winners this year. In addition, there is the Lifetime Achievement Award, given to a woman who has achieved impressive professional and personal accomplishments during her lengthy career in the private brands industry. The TWISB honorees will be recognized during WISE’s annual meeting and luncheon on Sunday, Nov. 12, at the Hyatt Regency O’Hare hotel in Rosemont, Ill. The event coincides with the opening day of the Private Label Manufacturers Association’s Private Label Trade Show. For more information about the meeting, visit http://womeninstorebrands.com.

Now, onto the winners ... Peggy Davies, board chair for Women Impacting Store Brand Excellence, is featured in our Getting Social Q&A this month. See page 14.

Store Brands / October 2017 / www.storebrands.com

LIFETIME ACHIEVEMENT AWARD

Cathy Crabtree-Kelch/Vi-Jon

In her 36-year career at Vi-Jon, Cathy Crabtree-Kelch rose from the title of compounder to chemist and eventually to vice president of research and development. “It’s different everyday,” says Crabtree-Kelch when asked what is the one thing she likes about research and development. “I like new opportunities and challenges. And you get that in research and development.” Crabtree-Kelch began her career at St. Louis-based Vi-Jon, one of the nation’s oldest private brand personal care manufacturers, in 1981 as a compounder at Vi-Jon’s Cumberland Swan facility in Smyrna, Tenn. From 1981 to 1993, she progressed in her career to chemist and was instrumental in the development of mouthwashes, dental rinses, cough and cold liquid preparations, deodorants and antiperspirants. She was appointed to vice president of research and development in 2012. Crabtree-Kelch is responsible for formulation development, process development, technical services and frontline customer support for personal care and household private-branded products. She leads a group of 31 scientists. “Cathy has been influential in the formulation of over 200 items, ranging from shampoos to skin care,” says Alice Clark, Vi-Jon’s vice president of human resources, who nominated Crabtree-Kelch for the award. “She generated cost savings through novel formulations and has made a great impact on Vi-Jon’s success and its employees.” Crabtree-Kelch says she likes the unknown and putting a known to it. “When you work in private brands, especially from a product development perspective, you’re given the challenge that you need to develop a product for the consumer that is of as high quality as possible,” she says. “But it has to be of value. So it’s wonderful to take that opportunity to look at these products in the marketplace and figure out how I can re-engineer them to provide that value to the consumer.” When she began for Vi-Jon in private brands in 1981, Crabtree-Kelch says the level of quality wasn’t as high as it is today. Products were developed that were regulatory compliant and safe but sold strictly at value. “Now retailers want their private brands to be of higher quality than any of the national brands,” she adds.

Crabtree-Kelch thoroughly enjoys when a private brand she has helped developed beats a consumer brand in a consumer study. “That is just a great feeling,” she says. Clark says Crabtree-Kelch is valued by Vi-Jon at every level of the organization, from operations to sales. “Cathy devotes time and energy into developing talent within the organization,” Clark says. Crabtree-Kelch would have it no other way. “It’s about paying it forward, right? I’ve been blessed in this business,” she says. RESEARCH & DEVELOPMENT/ QUALITY ASSURANCE AWARD

Julie Woods/Sam’s Club

Julie Woods has only spent 1.5 years at Sam’s Club as director of product development for private brands, but she describes her short tenure as “rapid-fire excitement.” Woods has had a tremendous impact on the revitalization of the Sam’s Club Member’s Mark line. In April, Bentonville, Ark.-based Sam’s Club announced the 20-year-old line’s renovation, which will touch about 1,200 products — including 600 new products — in food, beverage and general merchandise by the end of 2018. Cinda Stricklen, director of quality and assurance for Mars Petcare North America, nominated Woods for the award. Stricklen worked with Woods on private brand items with the revamped Member’s Mark line. “Julie and her team have successfully developed hundreds of items to relaunch Member’s Mark,” Stricklen says. “Her efforts have resulted in a significant increase in penetration and sales.”

Julie Woods of Sam’s Club

www.storebrands.com / October 2017 / Store Brands

Top Women in Store Brands Before the relaunch, one goal was for Member’s Mark to achieve a 20 percent penetration in the next three to five years. That goal has already been achieved. This is Woods’ first foray into retail; she spent several years in the ingredients sector and in consumer packaged goods. She says coming to Sam’s Club “felt like the logical next step in my progression.” Her team has worked closely with the Sam’s Club merchant team and other departments to meet the wants and needs of the warehouse club chain’s members. “A lot of work is involved in evaluating our existing products, deciding what we are happy with and what we want to elevate,” says Woods, who oversees nine product developers. “We’re not just playing with our food, we’re perfecting it.” Stricklen says Woods has a broad skill set and is highly regarded in the food industry as one of the leading product developers. “It’s such a fun and exciting career,” Woods says. “Every day is different, and you get the chance to be involved in so many facets of the [research and development] process. There is never a dull moment.” Woods is also enjoying retail. “At Sam’s Club … we can point to a product that the general public is using and say, ‘I helped create that.’”

Store Brands / October 2017 / www.storebrands.com

INNOVATION AWARD

Simona Faroni/G.S. Gelato

In 1996 Simona Faroni and her husband Guido, now the co-owners of G.S. Gelato, moved to the Emerald Coast of Florida from northern Italy where they were born and raised. They did not speak a word of English. But they had a plan — one of which American dreams are made of. Utilizing Guido’s extensive background in food and Simona’s knack for marketing and sales, the couple vowed to bring gelato, an Italian ice cream, to America. Their goal was to create, produce and distribute authentic Italian gelato. There were some unforeseen challenges and it took some time to get the business up and running, but the couple did not give up. Simona, who was learning English but still didn’t speak it fluently, would go to restaurants and educate chefs about Italian gelato. Guido created the product for the chefs to sample. Soon, Fort Walton, Fla.based G.S. Gelato became a burgeoning business. While beginning in foodservice, G.S. Gelato extended its business to private brands for retailers about 10 years ago. “Today, we custom tailor programs and products that

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Top Women in Store Brands SUPPLY CHAIN/PROCUREMENT AWARD

Kim Fromme/Save-A-Lot

Simona Faroni of G.S. Gelato

are a perfect match for retailers’ needs,” Simona says. “If we have to design different flavors of products, we do that. Our innovations and capabilities and the fact that we have total freedom in creating anything that the customer wants in respect to a gelato product has given us an edge in the industry.” Business is strong. At the end of July this year, G.S. Gelato had already done as much business as it had for the entire year in 2016. Stephanie Schultz, marketing coordinator at G.S. Gelato, nominated Simona for the Innovation Award, noting her dedication to making sure the company’s private brand customers “have the best, most innovative product on the market.” “Her passion for crafting the best ingredients into extraordinary products and providing customers with the best possible product on the market is the fuel that drives the company,” Schulz says. “Simona does her research, but also has an eye for innovation.” Innovation is challenging, but Faroni doesn’t think of it as being a task. “We haven’t posed the question to ourselves of how hard is it to innovate,” she says. “We just do it. I don’t think we know any different.”

Store Brands / October 2017 / www.storebrands.com

As a category manager at Save-A-Lot, Kim Fromme is on a mission to provide the retailer’s customers with products at the best value and at the best price. “It’s just a passion for what I believe in — the consumers and what we provide them in the long term and how we can help them,” says Fromme, who has been with Save-ALot for 18 years and oversees product selection, package size, supplier sourcing and artwork development for the retailer’s private brands. Peter Kroner, partner with the Marketing Concepts Group, a marketing agency that has done business with Earth City, Mo.-based Save-A-Lot for many years, knows all about Fromme’s devotion and intensity to her job. They are reasons he nominated her for the Supply Chain/Procurement Award. “Kim understands the importance that integrity, professionalism and honesty play in the world of procurement today and certainly lives by and exemplifies the role of what a strong woman who is truly passionate about our business can accomplish in her career,” he says. If someone has a problem with how Fromme is performing in her job, it is probably Fromme herself. “I want to do everything up to my potential to the point of being hard on myself,” she says. “I want to succeed 100 percent.” Fromme also understands that success often hinges on taking risks, something she is not afraid to do. Save-A-Lot’s consumer base consists of consumers on a very low income, so Fromme has to be conscious of that when it comes to procurement. But at the same time Fromme says she sometimes has to take risks on procuring products that might cost a little more. “If it’s the right item and the consumers will buy it despite the income bracket, it’s a risk we have to take,” Fromme explains. “We have to provide that product. Sometimes you have to step out of the box and say, ‘OK, I get who we are, but our consumers still want this product.’ So we do the best we can to provide them with that quality.” Kroner cites Fromme’s intuitiveness for spotting trends in packaging and product innovation, not to mention her ability to understand customer needs. “Management continues to go to Kim to help manage and lead a category in stores that is in need of improvement, and Kim has consistently stepped in and guided each category to positive sales and profit gains,” Kroner adds.

Congratulations to our own Karen Kaminishi! 2017 Top Women in Store Brands Operations Award Presented by Store Brands magazine and Women Impacting Store Brands Excellence (WISE)

The Top Women in Store Brands Awards program was created to provide well deserved recognition for women executives who bring a passion for store brands to their day-to-day activities. Karenâ&#x20AC;&#x2122;s commitment to operational excellence delivers superior results for Albertsons Companies and serves as an outstanding example across the store brands industry.

Top Women in Store Brands OPERATIONS AWARD

Karen Kaminishi/Albertsons Cos. Karen Kaminishi took on a tall task recently in leading her private brands team to comply with the Food & Drug Administration’s new Nutrition Facts Label. And this undertaking was in addition to Kaminishi’s primary responsibilities, which are to lead Albertsons’ product management team for all store brands in produce, floral, meat and seafood. She is also accountable for new-item innovation, project management to get new items from concept to store, category management and sales into Albertson’s 14 divisions. In nominating Kaminishi for this award, Albertsons’ Nancy Cota cited Kaminishi’s “incredible effort” on the Nutrition Facts Label because of the company’s many divisions and banners doing proprietary private-branded recipes in deli, food service, bakery and produce. “Karen took on the management role in working with our teams in regulatory, product development, product management and the division’s leadership teams to develop solutions to meet federal deadlines on calorie information for consumers,” says Cota, Albertsons’ vice president of own brands product management/fresh departments, who is Kaminishi’s direct supervisor. Kaminishi says the project had tight deadlines, high volume and multiple work streams so it was challenging to coordinate all of the moving parts. “The key was understanding the scope of work, our backstage and retail processes, and aligning resources both internal and external,” she says. “I played the role of connecting teams, setting priorities and ensuring needs were met.” In her daily role, Cota says Kaminishi has provided leadership and helped grow major fresh categories such as frozen, refrigerated, commercial bakery, produce, and meat and seafood. Cota says Kaminishi has also played a large role in growing the retailer’s own brands, including O Organics, Lucerne, Signature, Open Nature and others. “She holds herself and her team to very high standards and has been a huge part of reinventing categories, driving innovation, brand redesigns and identifying growth platforms for our portfolio of brands at Albertsons,” Cota says. To Kaminishi, innovation includes elements of satisfying shoppers’ needs as well as providing them with “surprise and delight.” “We have strong brands in our own brands portfolio, and we are always looking for innovation that will build our shoppers’ trust in these brands,” Kaminishi says. No doubt that Kaminishi has a knack for the business. “I’m third-generation grocery, so I guess you can say that I grew up in the business,” she says. “There is a team of

Store Brands / October 2017 / www.storebrands.com

people behind each product we offer, and it represents all of our passion for what we do.” SALES AWARD

Linda Lee/ C.H.Guenther & Son Inc. Linda Lee loves sales. She loves the process of negotiation, the people involved and her company’s products, of course. Lee, private label sales manager for C.H. Guenther & Son, is good at sales, too. Just ask her boss, Jim Beard, who nominated her for this award. “Linda’s passion for the business, entrepreneurial spirit and ability to build strong relationships has proven her to be a winner throughout her entire career,” says Beard, C.H. Guenther & Son’s national sales manager of specialty and private label. Lee is in her 20th year at the San Antonio, Texas-based company that supplies grain-based products, gravies, seasonings, sauces, baking mixes and other value-added food products for private brands. She is in charge of store brand sales management nationally for supermarkets and value retailers. She also oversees requests for proposal bid submissions and analysis. “The business has changed a lot over the years, and it’s really great to see store brands being more accepted,” Lee says. Even after 20 years, it’s still exciting for Lee to gain a new customer or have a hand in the development of a new product to sell. It always will be. “You have something you take from an idea and go through the process for it to become an actual product … and then

Linda Lee of C.H. Guenther & Son Inc.

Top Women in Store Brands you see it on the shelf and hopefully watch it sell,” she says. “It’s very gratifying.” Lee previously worked in private brand sales for Williams Foods, which was acquired by C.H. Guenther & Son in 2008. “Linda has been highly successful in the expansion of our customer base, achieving significant new points of distribution through multiple new product launches leading to the penetration of additional categories of the store brands business,” Beard says. “We have grown the business a lot of ways just by working with customers to develop and grow their store brand programs,” Lee Moore says. “I like to identify trends and customer voids and then work with customers to develop a strategy to bring an item to market.” Beard says Lee is the ultimate professional. “It’s about being professional in everything you do,” Lee says. “You are true to yourself, true to your company and true to your customers.”

Store Brands / October 2017 / www.storebrands.com

MARKETING/MERCHANDISING AWARD

Rachel Kirkpatrick/Massimo Zanetti Beverage USA On this morning, Rachel Kirkpatrick is having a cup of coffee. What did you expect from the product commercialization manager for Massimo Zanetti Beverage USA, which supplies coffee for private brands, retail and food service? Kirkpatrick confesses that she loves her coffee — but not as much as she loves marketing and merchandising the coffee products of Massimo Zanetti Beverage USA, for which she is receiving this award. “It’s just fascinating to me,” says Kirkpatrick, who is responsible for coordination of all new store brand product launches and product redesigns and also manages the division’s business-tobusiness advertising support and annual trade shows. Clearly, Kirkpatrick’s co-workers think highly of her skills. She was nominated by not just one but two co-workers for the award. Clay Dockery, division vice president of the Suffolk, Va.-based company and Kirkpatrick’s direct supervisor, says Kirkpatrick took responsibility to quickly educate herself on all of the components and personnel needed to launch new

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Top Women in Store Brands products when she joined the company’s private brand team nearly four years ago, “She organized a team to identify best practices in new item launches and effectively created an internal and external communication vehicle for new product launches,” Dockery says. “This has improved our commitment to first ship date by almost 30 days. … Rachel’s process has been recognized by several retail customers as an example of best-in-class product launches.” Natalia Suarez, Massimo Zanetti Beverage USA’s director of application development and support, who also nominated Kirkpatrick for the award, says Kirkpatrick also selected and implemented a workflow solution to help specifically with packaging label reviews with the supplier, the purchasing department and the customer. “Rachel has taken it upon herself to not only follow a process but ensure the process is reviewed to be efficient for all parties involved,” Suarez says. For Kirkpatrick, it’s all in a day’s work. She has a job that keeps her hustling and bustling, but she wouldn’t have it any other way. “I feel like it’s something new every day,” she says. Kirkpatrick prides herself on her efficiency. “You can get things done and be efficient or you can get things done just to pass the time,” she says. “But when you are really, really busy, it’s important to not cut corners but to cut

Store Brands / October 2017 / www.storebrands.com

Rachel Kirkpatrick of Massimo Zanetti Beverage USA

out irrelevant steps as much as possible. … You have to keep up and making things more efficient is the best way to do that.” It’s an exciting time to be in the coffee segment, says Kirkpatrick, who has worked at Massimo Zanetti Beverage USA for eight years. “It has been really interesting with things like ready-to-drink coffee coming out,” she says. “There is more variety, and people want something new and different. … It’s neat seeing the trends come about, and where they are going to take us.”

We Do It All For Them

Today’s consumers want the best for themselves and their families and store brands delivers it. That’s why every year, PLMA organizes its annual private label trade show. So that retailers and manufacturers can meet and work together to create the products shoppers want. Register today. Telephone (212) 972-3131 or visit www.plmaregistration.com.

Nov. 12-14 • Chicago

Top Women in Store Brands SPARKPLUG AWARD

SPARKPLUG AWARD

Katie Kraus/Topco Associates

Deanna Dorrance/Ace Hardware

Topco Associates needed a spark to fuel the success of its new Simply Done brand. They found that person in Katie Kraus. Kraus began at Topco in January 2015 and began working on Simply Done, a non-food and general merchandise brand. “I was brought on because of my experience in consumer packaged goods. I had a previous history in non-food national brands, so I was especially hired for this initiative,” says Kraus, who is also responsible for a portfolio of private brands distributed to nearly 50 regional grocery retailers and wholesalers nationwide for the Elk Grove Village, Ill.-based company. Nancy Antol, corporate communications specialist for Topco Associates, nominated Kraus for the award on behalf of the organization and its leadership team. In nominating Kraus, Antol says Kraus ensured a smooth launch for Simply Done internally by leading a monthly update of the brand that provided visibility to key issues. “At the highest level, Katie led the brand strategy and positioning to garner the attention of Topco’s board and operations team members to get their commitment to remove nonfood items from their mainstream brands and jointly support the launch of Simply Done,” Antol says. Kraus says it was crucial for the success of Simply Done to get Topco’s partners to give up their store brand names and agree to aggregate 700 non-food products under one name. “We needed to have a brand that they felt very comfortable with and felt was strategically positioned for what it should be in their stores,” Kraus says. To develop the brand, Kraus analyzed research of over 1,000 mainstream millennial shoppers. Kraus, who has a master’s degree in consumer behavior, is fascinated by what makes consumers tick — why they buy what they buy. With the launch of Simply Done, Kraus inspired retailers to stop non-foods leakage from the grocery channel to the mass and club channels, Antol says. “Simply Done will be over a $320 million brand at retail in 2017 and this would not have been achieved without the thought leadership that Katie has provided to Topco members,” Antol adds. Kraus says being labeled a spark plug is “a genuine reinforcement to the importance of taking a little bit of risk to try something different.”

Store Brands / October 2017 / www.storebrands.com

In January of this year Deanna Dorrance was promoted to global private label brand manager at Oak Brook, Ill.-based Ace Hardware. Clearly, Dorrance made a quick impression in her new role as she was nominated by Angela Bagdasarian, the company’s associate global private label brand manager, for this award. “Deanna has used her positive leadership skills to challenge others to better themselves by pushing them out of their comfort zones,” Bagdasarian, who reports to Dorrance, wrote in nominating Dorrance for the award. “She has helped influence others to learn more about their roles within the company, and to understand our retailers and connect with them via store visits and meetings.” For Dorrance, who has been at Ace Hardware for 10 years, it’s about making sure that everyone, including herself, pushes the boundaries to avoid complacency. “I try to work with others in a way to get them to do the best that they can do,” she says. Dorrance has a big job. She is not only in charge of Ace’s domestic and international divisions but also for Ace Wholesale Holdings. She is responsible for defining, executing and managing the vision of Ace Hardware’s private brands, a $1 billion global portfolio with seven brands and over 10,000 products. Dorrance has been busy this year leading the charge to complete the Ace brands packaging refresh with a new and sleek design that is more consumer friendly. It has been a five-year project. “I’ve worked closely with our design team … telling them our vision and helping them execute,” she says. Dorrance appreciates working at Ace Hardware, which has stores in 60 countries, for many reasons, one being that the company encourages its employees to find time to train for the betterment of themselves and the company. Dorrance has been involved with a new training initiative at Ace called Future Leaders. In the program, employee groups are challenged to solve real company problems by working within different departments. “It doesn’t have anything to do with my daily job,” Dorrance says. “It’s just an example of Ace trying to train everyone and connect them cross-functionally with other departments.” To Bagdasarian, Dorrance’s involvement in Future Leaders and her willingness to help across channels provides a spark for other employees to be the best they can be. “She leads by example as she herself pushes herself to exceed,” Bagdasarian says. SB

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Sales Boosting Strategies

‘Center’ of attraction

Organic and natural/free-from private-branded products can help retailers revive the center store

rocery’s center store isn’t exactly hustling and bustling with activity these days. According to a recent report from research firm Mintel, the center store — with its array of frozen and shelf-stable packaged food categories — has generated minimal growth recently. Here’s a startling statistic: While center store sales rose 7 percent between 2011 and 2016, the number is actually only 1 percent after being adjusted for inflation over the five-year period, according to Mintel. Meanwhile, the party can be found in the grocery store’s perimeter departments, where Mintel says consumers perceive foods to be fresher, healthier and tastier and where growth is soaring. But despite the center store’s flat-as-a-cookie’s performance, there is opportunity to grow it — with the focus on private brands. Organic and natural/free-from store brands By Lawrence can rejuvenate the center store. Aylward Consider ShopRite as an 44

Store Brands / October 2017 / www.storebrands.com

example. Last December, the Keasbey, N.J.-basedretailer introduced Wholesome Pantry line, a comprehensive line of organic and free-from foods that includes hundreds of items. Many of the products introduced at ShopRite’s 270 stores in New Jersey, New York, Connecticut, Maryland, Delaware and Pennsylvania include center store items. Wholesome Pantry’s organic line complies with standards set by the USDA National Organic Program. Its free-from line includes products void of 110 ingredients and contains no artificial additives, flavors or ingredients. “We’re pleased to report that our Wholesome Pantry store brand has created excitement throughout our entire store, including center store,” says Loren Weinstein, director of private label/branding at ShopRite. “We’ve found that since we launched in December, many of our customers are now specifically shopping this brand. Consumers of all ages are clamoring for products that are simple and have transparent labeling — and that is a key message of this line.”

“From a product standpoint at center store, consumers are really enjoying our award-winning nut butters; our selection of bagged snacks such as nuts, fruits and trail mixes; as well as other popular items, such as our Wholesome Pantry Organic Apple Cider Vinegar.”

Organic continues to surge

29-year-old Americans actively try to include organic foods in their diets, compared with one-third of Americans who are 65 and older, according to a recent Gallup Poll. What’s more, among U.S. parents, more than five in 10 (52 percent) organic buyers are millennials. And they are purchasing organic products on a regular basis, according to the Organic Trade Association’s “U.S. Families’ Organic Attitudes and Beliefs 2016 Tracking Study.” While Mintel’s study says food shoppers aged 18-34 are only about half as likely as those aged 55 and older to cite grocery stores as the channel they shop most often for center store foods, Mintel also points out that young food shoppers are also more likely to shop for center store food at natural food stores or specialty/gourmet stores. It’s a reason for grocery retailers to boost center store sales with organic and natural/free-from products. In its report, Mintel also notes that shelf-stable grocery items and frozen foods are far less likely than fresh produce and fresh meat to be seen as healthy, tasty or fresh, a disparity that may help to explain why center store sales growth lags that of the perimeter and why food retailers looking to differentiate themselves have invested in the perimeter. Again, this is another reason for grocery retailers to boost center store sales with organic and natural/free-from products. “It’s logical that if you want to boost center store sales, why not put in more organic and natural products, which are selling better?” says Carl Jorgensen, Daymon’s director of global thought leadership/wellness. The most-favored fare among private label organic products in order are fresh produce, milk and eggs.

Eighty-eight percent of U.S. households have purchased organic food and beverages in the past year — a trend that’s growing in strength as consumers increasingly turn to more healthy and clean options in food, beverage and non-food categories like personal care, according to a recent report from Nielsen. Retail measurement data validates the shift. In the year ended Sept. 2, dollar sales of UPC-coded organic products grew 9.8 percent, and unit volume increased 11.4 percent compared to the previous year, Nielsen stated. Organic growth is also spreading across the store, according to Nielsen. While fresh departments are top drivers of success for retailers with organic offerings, there are other opportunities for growth across center store aisles that carry shelf-stable packaged goods, dairy and frozen foods, Nielsen reports. In addition, while natural and fresh outlets account for 26 percent of organic spend, share has started to shift in the last two years. For instance, warehouse/club stores, which gained 0.8 percentage point in the past two years, now represent 27 percent of the total organic spend. Supermarkets, mass merchandisers and discount grocery channels now represent a combined 25 percent share of organic spend, up 2 percent from two years ago, according to Nielsen. Enter private brands, which offer organic products at a more affordable price than national Percentage of growth of organic products brands. When looking at the across the store compared to a year ago average price for a selection of organic items, the private brands basket was 18 percent less expensive than the branded basket, according to Nielsen’s research. “For retailers looking to boost their organic sales at price points that resonate with the average shopper, investing in privatebranded organics may open doors to a larger set of consumers on the hunt for healthier foods, regardless of which channel they shop in,” Nielsen states in the report. Back to the center store. According to Mintel, young adults are far less likely to shop center store at supermarkets. But consider Source: Nielsen this: More than half of 18- to

Organic on the upswing

www.storebrands.com / October 2017 / Store Brands

Sales Boosting Strategies No surprise there. But No. 4 on the list, according to research from Daymon, is canned organic vegetables. “Organic consumers seem to have the reputation of wanting everything fresh, but there are certain foods for the sake of convenience that they are willing to buy in canned form and frozen form,” Jorgensen says, citing frozen organic pasta as also a rapidly growing category at center store. Jorgensen says Daymon has been examining the relationship between center store and the perimeter. “What we have found is a phenomenon we call ‘the participation halo of fresh,’” he says.

Products from ShopRite’s Wholesome Pantry line are selling well at center store.

The halo begins in the fresh section with produce, which has expanded to prepped fresh fruit and vegetables, Jorgensen says. Then the halo expands to other fresh-related categories, such as prepared meals, bakery, meat, seafood and deli. “But then look out a little further as you are thinking about this halo,” Jorgensen says. “In consumers’ minds and in their shopping behavior, how does fresh translate a little bit further afield?” The answer is organic and natural/free-from products. “All of these attributes fall within the same fresh halo,” Jorgensen says. “Even center store shelf-stable products that have those attributes resonate with the consumer who has been migrating to the perimeter. So if you really want to revitalize center store, you need to emphasize products that have those characteristics and those propositions.” And you need to make them stand out. “Wholesome Pantry’s distinctive packaging makes it a standout on the shelves, as does its robust in-store merchandising campaign,” Weinstein adds. When it rolled out Wholesome Pantry, ShopRite implemented a multi-tiered marketing campaign, in-store signage and shelf-talkers to inform shoppers about the line. In addition, the retailer’s team of more than 130 instore dietitians host demonstrations and provide product

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Store Brands / October 2017 / www.storebrands.com

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Sales Boosting Strategies suggestions and recipes featuring Wholesome Pantry items. “We also continue to employ an omnichannel marketing program that supports the line’s brand promise across multiple platforms,” Weinstein says, noting the products are available online through the retailer’s ShopRite From Home service. “The overall effect is cumulative, but the most important element is that our shoppers have told us that they appreciate the quality and transparency that these products deliver.”

“It’s logical that if you want to boost center store sales, why not put in more organic and natural products, which are selling better?” — Carl Jorgensen, Daymon’s director of global thought leadership/wellness

Weinstein calls continued consumer demand for organic and natural/from-from products “a bellwether moment,” including at center store. “I don’t think there’s going to be any turning back,” he adds. “We know that consumers are looking for transparent, simple ingredients. We know people are more concerned about what’s in the products they buy

than ever before. We know consumers want organic and free-from items at affordable price points. I think this is a growing movement that’s here to stay, and we fully expect to continue to develop products and items that align with our consumers changing needs for the long run. And we plan to continue to increase the portfolio of Wholesome Pantry products, both center store and total store, to further expand the assortment and variety we offer our customers.” Jorgensen says growth in organic and natural/freefrom foods will not stop anytime soon. “When you consider overall that about 5.3 percent of food sales are represented by organic, that leaves a lot of room to grow,” he adds. And that includes the center store. When it comes to private brands, what better way is there for a store to say to its customers that it wants to partner with them in their wellness journeys by offering them an increasing variety of organic and natural/from-foods as store brands, Jorgensen asks. “Your private brand is your ambassador,” he states. “It says who you are as a retailer.” SB Aylward, editor-in-chief of Store Brands, can be reached at laylward@ensembleiq.com.

2015

Store Brands / October 2017 / www.storebrands.com

PLMA Show Preview Taking the stage Check out some of the companies that will exhibit at the upcoming Private Label Trade Show

ake sure you have a durable and comfortable pair of shoes or two to walk the impressive Private Label Trade Show, which is right around the corner. If one exhibition hall isnâ&#x20AC;&#x2122;t enough, the Private Label Trade Show features three halls, one devoted entirely to non-food items. The annual event, staged by the Private Label Manufacturers Association (PLMA), is set for Nov. 12-14 at the Rosemont Convention Center in Chicago. More than 1,300 companies from 40 countries will be exhibiting their products, including 25 international pavilions. Exhibitors range from small- and medium-size companies to well-known national brand makers that also supply store brands. The following pages highlight some of the companies that will exhibit at the show. u

www.storebrands.com / October 2017 / Store Brands

Special Section: PLMA Show Preview

Acorsa USA Inc.

American Nutrition Inc.

Ardent Mills

H H H H H H

Acorsa USA Inc. is the American subsidiary of DCOOP, a cooperative made up of 75,000 associated farmers and headquartered in the Andalusian region of Spain. One hundred percent of our olives and olive oil comes from our farms, making DCOOP the world’s largest producer. Our seven processing and packing plants are BRC, IFS, kosher and non-GMO certified. Recently added items to our cooperative include wine and cheese.

American Nutrition is a custom manufacturer of consumables with the formulation expertise, marketplace intelligence and turnkey production capabilities to serve leading retailers and pet-food brand owners looking for best-in-class products, facilities and support. This year at PLMA we will feature our Nature’s Source product — a super premium pet food.

Ardent Mills offers the industry’s broadest range of traditional and organic flours, whole grains, customized blends, mixes and finished specialty breads — all available for private brand packaging. Our ingredients are backed by unrivaled technical support, food safety solutions and the supply assurance of more than 40 community mills and blending facilities, an artisan commercial bakery, our Mobile Innovation Center and the new Ardent Mills Innovation Center in Denver, Colo.

Acorsa USA Inc. www.dcoop.es 201-944-0474 PLMA Show Booth: Spanish Pavilion

American Nutrition Inc. www.animanufacturing.com 888-897-3477 PLMA Show Booth #F8722

Ardent Mills www.ardentmills.com 888-685-2534 PLMA Show Booth #F9110

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Your Sweet and Savory Snack Partner • 40+ Trail Mixes & Custom Blends • 10+ Varieties of Flavored Nuts @JoeKnowsNuts

• Roasted Nuts • Pretzel Enrobing • Chocolate Panning • Organic Fruits

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Store Brands / October 2017 / www.storebrands.com

CMY

Special Section: PLMA Show Preview

Bakkavor

Bascom Maple Farms

Baxters North America

H H H H H H

Bakkavor is a market leader in private label fresh prepared foods. The Bakkavor difference is found in our industry-leading standards for innovation, quality, safety and customer service. We manufacture private label foods in the following categories: hummus, dips, soups, sauces, entrées, burritos, grain salads and breads. Bakkavor — elevating the everyday!

Bascom Maple Farms specializes in providing a full range of private label organic and natural maple products. With seven generations of maple experience, we can ensure that any package with your label on the outside has only the best on the inside. Bascom, America’s largest independent maple supplier.

Baxters North America is driving retail brand success with consumer insight and great tasting food in lifestyleready packaging. We bring worldwide category expertise on consumer eating trends based on natural, simple diets. Baxters is committed to sourcing only the most wholesome ingredients, and with no artificial flavors or preservatives, our ready-to-eat meals are a clear choice for the consumer. Come see us at Booth 4115 at the PLMA Tradeshow.

Bakkavor www.Bakkavor.com 980-215-1550 PLMA Show Booth #F4313

Bascom Maple Farms www.Maplesource.com 888-266-6271/802-257-8100 PLMA Show Booth #F2217

Baxters North America www.wornick.com/storebrands 513-552-7400 PLMA Show Booth #4115

Lassonde Pappas is delighted to reveal NEW! product platforms that satisfy your shoppers’ needs! The consumer is at the core of all of our innovative products #thirsting4more /@LassondePappas

/Lassonde Pappas

1-800-257-7019 Sales.us@lassonde.com www.lassondepappas.com

JOIN US AT PLMA 2017, BOOTH #F7405 52

Store Brands / October 2017 / www.storebrands.com

Special Section: PLMA Show Preview

Berner Food & Beverage LLC

Berry Global, Inc.

Catania Oils

H H H H H H

Berner Food & Beverage, a leading private label and contractmanufacturing supplier of quality food and beverage products, will showcase some of the latest trends in the RTD coffee market. Stop by Booth #F4305 and find out how you can get a longer shelf life with your beverages and dips.

Berry Global Inc. is one of the world’s largest manufacturers of plastic and protective materials. We partner with retailers to offer not only private label packaging, but also an extensive line of consumer and contractor trash bags, food storage bags, wraps and adhesive tapes, all manufactured here in the U.S.A.

Catania Oils is featuring a brand new concept in olive oil here in the U.S. — Fresh Pressed Olive Oil in a Bag in Box container. Benefits — reduced UV ray and oxygen contact, kitchen ease. Sourcing — six months northern hemisphere and six months southern hemisphere.

Berner Food & Beverage LLC www.bernerfoodandbeverage.com 800-819-8199 PLMA Show Booth #F4305

Berry Global, Inc. www.berryglobal.com 800-343-7875 PLMA Show Booth #H606

Catania Oils www.cataniaoils.com 978-772-7900 PLMA Show Booth #2215/2216

Store Brands / October 2017 / www.storebrands.com

INNOVATIVE

PACKAGING DESIGN

INGREDIENTS

animanufacturing.com

Special Section: PLMA Show Preview

Chelten House Products

Commercial Bakeries Corporation

Deep Foods, Inc.

H H H H H H

Curating America’s culinary experiences from farm to shelf to table — we are a leading organic and premium sauces, dressings and condiments private label manufacturer. We focus on providing our partners with culinary innovation and products that satisfy America’s changing tastes. We provide expert culinary focus in pasta sauce, salsa, salad dressings, BBQ sauce, marinades, condiments, hot sauces, international sauces and simmer sauces.

Deep Foods is one of the leading manufacturers of Indian foods. Since 1977, it has been tantalizing the taste buds of Indian food lovers. Using authentic recipes, Deep Foods offers delicious snacks, frozen meals, ice creams and other specialties. These all-natural products are prepared to satisfy the most dedicated culinary aficionados of Indian cuisine.

Chelten House Products www.cheltenhouse.com 856-467-1600 PLMA Show Booth # F2316

Commercial Bakeries Corp. www.commercialbakeries.com 416-247-5478 PLMA Show Booth # H606

Deep Foods Inc. www.DeepFoods.com 908-810-7500 PLMA Show Booth #F1540

DelGrosso Foods, Inc.

Fine Foods International (New York) LP

Florapharm Tea USA LP

H H H H H H

Florapharm — we are reinventing tea! Thanks to excellent ingredients, creative recipes and a constant demand to remain unique, our company develops new products and flavors every day. To enable this to happen, our experienced tea tasters travel to the best tea gardens to assess the quality of the teas right where they come from.

H H H H H H DelGrosso Foods Inc. is the oldest major family-owned producer of pasta sauce in the U.S., with 30-plus years of private label experience. We specialize in the very best mainstream, organic and ultra premium pasta sauces and salsas. Visit Booth F1515/1516 or www.delgrossos.com for a complete overview of our company.

DelGrosso Foods, Inc. www.delgrossos.com 814-684-5880 PLMA Show Booth #F1515/1516 56

At PLMA this year, we will feature wire-cut, rotary and sandwich cream cookies in conventional, Certified Organic, Non-GMO Verified, Kosher, gluten-free, sugar-free and natural varieties in tray packs, boxes, re-sealable bags, tubs, single-serve packages and club pack pallet displays.

Store Brands / October 2017 / www.storebrands.com

We are the world’s leading soluble coffee supplier to both the retail market and manufacturers on all continents. Since 1955, we have helped retailers around the globe develop and expand their store brands. With over 1,500 employees in our seven production plants, we guarantee that your private label instant coffee program will succeed.

Fine Foods International (New York) LP www.dek.de 877-842-1300 PLMA Show Booth #F2326

H H H H H H

Florapharm Tea USA LP www.florapharmteausa.com 912-877-7717 PLMA Show Booth #F4719

DISCOVER THE SECRET

TO INCREASING SALES at PLMA’s 2017 Trade Show

Furlani’s Food Corp.

Retailers that promoted vegetable oil as U.S.-Grown 100% Soybean Oil saw unit sales increases of up to 27%.1

H H H H H H Furlani’s is North America’s leading manufacturer of valueadded bread. Our specialties are garlic bread, garlic toast, biscuits and breadsticks. We are the largest supplier of frozen grocery private label programs and the “Side-Bread Experts” to the foodservice trade. Furlani’s Food Corp. www.furlanis.com • 877-317-7146 PLMA Show Booth #3719/3720

Visit Soy Connection booth #F2018 to learn more.

Giovanni Foods H H H H H H

JUST ANNOUNCED

Giovanni Foods is a manufacturer of tomato-based products such as pasta sauce, salsa, pizza sauce, barbeque sauce and also vinegars. We can offer products that are certified organic, kosher, gluten-free and Non-GMO Project Verified. Products are available in glass jars, metal cans, plastic bottles and flexible pouches.

The FDA authorized the use of a qualified heart health claim for U.S.-grown soybean oil.

Giovanni Foods www.giovannifoods.com • 315-457-2373 PLMA Show Booth #F415

Promote qualified soybean oil and soybean oil containing products* as heart healthy today.**

SoyConnection.com/GrownInTheUSA

Global Tissue Group Inc. H H H H H H Through excellence in product delivery to innovative manufacturing processes, Global Tissue Group (GTG) has become a leading converter of household paper products. GTG is one of the few converters to provide three levels of paper quality: standard, premium and ultra premium. With all its success in innovation, GTG is the low cost provider of high quality store brand paper products for all retail channels.

2015 sales data reported by large Midwest grocer with 230+ locations. Qualified products have a minimum of 5 grams of soybean oil per reference amount customarily consumed. **The new health claim states: “Supportive but not conclusive scientific evidence suggests that eating about 1½ tablespoons (20.5 grams) dail of so bean oil, which contains unsaturated fat, ma reduce the risk of coronar heart disease. To achieve this possible benefit, so bean oil is to replace saturated fat and not increase the total number of calories ou eat in a da . One serving of this product contains [x] grams of so bean oil.” 1

Global Tissue Group Inc. www.globaltissuegroup.com • 631-419-1300 PLMA Show Booth #H1506 www.storebrands.com / October 2017 / Store Brands

Special Section: PLMA Show Preview

Godshall’s Quality Meats Inc. H H H H H H Godshall’s Quality Meats has been making premium smoked products since 1945. Beginning as a town butcher shop, Godshall’s has grown to an international producer, specializing in clean label, all-natural, uncured and special requests like Halal and ABF. From real wood smoked turkey bacon to snacks and center plate, just ask Godshall’s!

Great Lakes Cheese Co. Inc. H H H H H H We’re the partner that understands customer trends and develops innovative products that deliver on shelf. This year, we’ll be showcasing innovation through variety. With combination snacking, flavor innovation and new specialty shred blend options, we’re giving customers exactly what they’re looking for.

Heartland Food Products Group H H H H H H Heartland Food Products Group is a global leader in the production of liquid beverage enhancers as well as zero calorie sweetener products, in addition to authentic, small batch cold brew coffee and individual use creamer cups for coffee. Heartland produces and markets offerings in a wide variety of versions, flavors and packaging formats.

Godshall’s Quality Meats Inc. www.godshalls.com 215-256-8867 PLMA Show Booth #F2914

Great Lakes Cheese Co., Inc. www.greatlakescheese.com 440-834-2500 PLMA Show Booth #F9510

Heartland Food Products Group www.heartlandfpg.com/ sweeteners.html 317-566-9750 PLMA Show Booth #F6314

Hickory Harvest Foods

Ice River Springs

Irving Consumer Products Inc.

H H H H H H

Hickory Harvest Foods, The Good Snack People, offers the largest selection of premium nuts, trail mixes, dried fruits, snacks, candies and confections. Quality, taste and consistency is our promise. With more than 400 products in a variety of packaging options, we can offer you exactly what your customers desire.

Fully integrated from water source to the manufacturing of 100 percent recycled bottles, we package spring water, purified water and distilled water in bottle sizes from 8 fluid ounces to 4 gallons in a variety of single units and multipacks in a closed-loop system. Ice River Springs is the only beverage company in North America with a plastic recycling facility and closed-loop production.

Irving Consumers Products is one of North America’s leading suppliers of private label or store brands for major retailers in both Canada and the United States. It’s our commitment to help our customers grow by providing them with quality products, service and innovation. We can supply a complete product line of facial and bathroom tissue, household towels and napkins. Quality on the inside, your store’s name on the outside.

Hickory Harvest Foods www.hickoryharvest.com 330-644-6266 PLMA Show Booth #1130

Ice River Springs www.iceriversprings.com 844-764-7336 PLMA Show Booth #F8719

Irving Consumer Products, Inc. www.irvingconsumerproducts.com 781-273-3222 PLMA Show Booth #H800

Store Brands / October 2017 / www.storebrands.com

Special Section: PLMA Show Preview

J&J Snack Foods Corp. H H H H H H

Lassonde Pappas & Co., Inc.

H H H H H H

Krüger North America is the U.S. office of the Krüger Group, based in Bergisch Gladbach, Germany. One of the world’s largest private label chocolate candy and spreads manufacturers, the Krüger Group delivers German-engineered products of exceptional quality. Stop by to see our NBE candy bars, value-priced 100gram chocolate bar assortments and delectable line of spreads.

Lassonde Pappas & Co. Inc. is an American leader in private label fruit juices and drinks, as well as cranberry sauce. We are a valueadded beverage provider that specializes in innovation and organic expertise, generating exciting new product platforms each year. This year, we will bring beverages that satisfy the needs of our consumers.

J&J Snack Foods Corp. www.jjsnack.com 888-jjsnack PLMA Show Booth #1922

Krüger North America www.kruger-company.com/en 708-851-3670 PLMA Show Booth #F1602

Lassonde Pappas & Co., Inc. www.lassondepappas.com 856-455-1000 PLMA Show Booth #F7405

Leclerc Foods USA

LiDestri Food & Drink

Massimo Zanetti Beverage USA

J&J Snack Foods Corp. is the leader and innovator in the snack food industry. We pride ourselves on niche, affordable snacks and beverages sold in both foodservice and retail outlets.

H H H H H H The Leclerc Group was founded in 1905 by François Leclerc. Over the past 30 years, Leclerc has grown remarkably into a company with more than 1,000 employees, $530 million in revenue and seven highly sophisticated plants in Canada and the U.S. Our installations are located in Quebec (two plants), Hawkesbury, Montgomery, Kingsport (two plants) and Phoenix. The Leclerc Group is headquartered near Quebec City, in the François Leclerc Industrial Park.

Leclerc Foods USA www.leclercfoodsprivate.com 570-547-6295 PLMA Show Booth #F6714 60

Krüger North America

Store Brands / October 2017 / www.storebrands.com

H H H H H H

LiDestri Food & Drink is all about salsa this year! We have an impressive lineup of on-trend salsas as well as a new queso. In addition to our salsa offerings, we are bringing on more innovation with new apple cider vinegar beverages in two amazing flavors. LiDestri continues to live up to its tagline: “Where tradition meets innovation.”

Massimo Zanetti Beverage can help you solve the profit puzzle in private label coffee. With distinct industry insight into consumer evolution and market changes, MZB can become your brand’s solution. Let us help you increase basket ring, encourage trade-up to premium coffee and establish your coffee aisle as a destination experience.

LiDestri Food & Drink www.LiDestriFoodandDrink.com 585-377-7700 PLMA Show Booth #2301

Massimo Zanetti Beverage USA www.mzb-usa.com/ corporate-brands 757-215-7300 PLMA Show Booth #7805

CIA

FLA

I IF NO

Clean Label Pediatric Nutritional Drink O

8 ﬂ oz (237 mL)

TIFIC AL COL I

Toddler Formula Stage 3

Vanilla · Chocolate · Strawberry Vanilla with Fiber

Smoothie Melts

Puﬀs

Mini Rice Cakes

Reclosable Bag 1 oz (28g)

1.48 oz (42g)

1.4 oz (40g)

24 oz (680g)

Pouches

Entrees

Cheese Crunchers

Infant Cereals

Rice Rusks

Fruits & Vegetables 4.5 oz (128mL)

6.5 oz (185g)

1.48 oz (42g)

8 oz (227g)

1.76 oz (50g)

PBC PRIVATE BRANDS CONSORTIUM 3000 BLVD RENÉ-LÉVESQUE, SUITE 330, MONTRÉAL (QUÉBEC) CANADA H3E 1T9 1.514.768.4122 / info@privatebrandsconsortium.com www.privatebrandsconsortium.com

VISIT US AT BOOTH F2146 X 2247 ISL

Special Section: PLMA Show Preview

Mondiv Division of Lassonde Specialties Inc. H H H H H H Mondiv Division of Lassonde Specialties Inc. is a leading manufacturer of shelf-stable products catering to the U.S., Canadian and international grocery and club industries. Mondiv is a Montreal-based specialty foods manufacturer that also manufactures premium and super premium glass, SIG Combibloc and flexible packaging packed products for the private label industry. Our unique glass and pouch retort technology allows for the sterilization and manufacturing of low acid food products such as Alfredo sauces, cream sauces, gravies and soups.

Mondiv Division of Lassonde Specialties Inc. www.mondiv.com 888-477-6663 PLMA Show Booth #F807/907/1007

Natural Sourcing International H H H H H H Natural Sourcing International (NSI) specializes in offering turnkey natural and organic private label food. Our global supply chain is GFSI verified (SQF/BRC) and our products are available as organic, Non-GMO, gluten-free and kosher. We offer top-selling foods such as superfoods (chia, hemp, cacao and maca), and healthy snacks (dried mango, fruit and veggie chips.)

Natural Sourcing International www.nsifood.com 818-639-8335 PLMA Show Booth #F1319 62

Store Brands / October 2017 / www.storebrands.com

Morgan Foods H H H H H H Morgan Foods has been creating the right recipe since 1899. This fifthgeneration, family-owned business is today the number one private label soup and canned bean manufacturer in the U.S. Whether itâ&#x20AC;&#x2122;s soup, broth, beans or gravy, Morgan Foods is staying up to date on the changing trends in the marketplace.

Mother Parkers Tea & Coffee H H H H H H With over 100 years of experience, Mother Parkers Tea & Coffee is a leading customer solutions provider, manufacturing and supplying quality coffee and tea in hundreds of unique roasts, blends and packaging formats to some of North Americaâ&#x20AC;&#x2122;s leading retailers and foodservice chains.

Morgan Foods www.morganfoods.com 888-430-1780 PLMA Show Booth #F6710

Mother Parkers Tea & Coffee www.mother-parkers.com 847-205-9270 PLMA Show Booth #F410

Private Brands Consortium PBC Inc.

Red Gold

H H H H H H

Private Brands Consortium is an important private label supplier focusing on the fast-growing organic and conventional baby food, snacks and pediatric nutritional drinks categories. In addition, Private Brands Consortium also offers a wide range of organic and conventional ready-to-use broths, shelf-stable and refrigerated non-dairy beverages as well as adult nutritional shakes.

Four generations of the Reichart family have been producing premium quality tomato products for 75 years since 1942 when they began producing tomato products for the soldiers overseas. Since then, Red Gold has become the largest privately owned tomato processor in the nation. They partner with family farms to sustainably produce premium quality canned tomatoes, ketchup, sauces, salsas and juices.

Private Brands Consortium PBC Inc. www.privatebrandsconsortium.com 514-768-4122 PLMA Show Booth #F2146 x 2247 ISL

Red Gold www.redgoldfoods.com/ retail/store-brands 765-557-5500, Ext. 1619 PLMA Show Booth #F7410

— with flavor —

Bigger — than the —

LONE STAR STATE

It’s no wonder retailers everywhere choose Eddy!

Offering a complete line of fully cooked, naturally smoked, marinated fresh and frozen meat products, for over 60 years.

A Rated

quality SINCE 19 5 3

Visit us at booth F9534 in Sky Hall Eddy Packing Co., Inc. | Yoakum, Texas 77995 | eddypacking.com

Special Section: PLMA Show Preview

Request Foods Inc. H H H H H H Request Foods is a leading co-packer of frozen prepared entrées, side dishes and specialty items, delivering better solutions to retail, club stores and foodservice customers. Request Foods has two state-of-the-art production facilities located in Holland, Mich. Both facilities are GFSI Certified.

H H H H H H Riverbend Foods is a manufacturer of private label and contractmanufactured canned, Tetra Pak and jar soups, broths, gravies, sauces, bottled coffees and infant feeding products. Whether you’re seeking solutions to your brand of soup, baby food or cold brew coffee, Riverbend Foods has innovative solutions to meet your needs.

Seneca Foods Corp. H H H H H H Seneca Foods ensures U.S. farm-fresh goodness through its 28 facilities located in prime American growing regions. A leading global provider of packaged fruits and vegetables, Seneca’s flexible packaging solutions meet evolving consumer needs: from traditional cans and frozen foods, to convenient pouches and plastic cups. Organic options are also available.

Request Foods, Inc. www.requestfoods.com 616-786-0900 PLMA Show Booth #1638

Riverbend Foods LLC www.riverbendfoods.com 412-442-6785 PLMA Show Booth #F9131

Seneca Foods Corp. www.senecafoods.com 608-757-6000 PLMA Show Booth #200

Shree Ji Printing

Smitty Bee Honey

Snak King

H H H H H H Shree Ji Printing offers high-quality flexographic printed shrink sleeves and pressure sensitive roll labels for packaging. Other printed products include: printed film for form, fill and seal packaging, sticker sheets, window clings and decals for the food, pharmaceutical, nutraceutical, household product, chemical and health and beauty aid markets.

Shree Ji Printing www.sjprinting.com 201-842-9500 PLMA Show Booth #F1141 64

Riverbend Foods LLC

Store Brands / October 2017 / www.storebrands.com

H H H H H H Smitty Bee Honey is a fourthgeneration family-owned honey company with 95 years of experience in both producing and packaging honey. We are committed to food safety and quality under a SQF Level III scheme. Every pound is ethically sourced “from the flower to your table.” We will be featuring a new item this year that calls out our Midwestern heritage.

Smitty Bee Honey www.smittybeehoney.com 712-748-4292 PLMA Show Booth #F2241

H H H H H H We want you as a partner ... not just a customer. Every relationship is important to Snak King. Snak King is committed to delivering superior quality private label and branded snack products and is known for being a nimble, high-quality innovator in the category.

Snak King www.snakking.com 626-336-7711 PLMA Show Booth #F2416

Variety of packaging options available from plastic to glass

Special blends and custom flavor profiles

Organic, Non-GMO, Kosher and SQF Certified Level 3

17-0322

Special Section: PLMA Show Preview

Sofidel America Corp.

Soy Connection

Subco Foods Inc.

H H H H H H

Sofidel America is a fully integrated, privately owned manufacturer of ultra high-end premium bath tissue, towel and napkin products with manufacturing facilities strategically located across the United States. We are part of the Sofidel Group, which has been offering high-quality tissue products to private label retailers for over 50 years. Our focus has always been on innovation.

Purchase intent rises when shoppers learn that most vegetable oil is U.S.grown, heart-healthy, 100 percent soybean oil. Food retailers that promoted private brand vegetable oil as such saw unit sales increases of up to 27 percent. Visit Soy Connection at Booth #F2018 to learn how to increase your sales.

Subco Foods Inc. is a private label manufacturer of liquid and dry products including: syrups, dessert toppings, drink mixes, Bloody Mary mixes, gelatins and puddings with natural or artificial ingredients and colors. We have capability for retail and foodservice packaging. We take pride in both SQF Level 3 facilities.

Sofidel America Corp. www.sofidelamerica.com 800-835-1854 PLMA Show Booth #H2518

Soy Connection www.Soyconnection.com/soy-secret 312-861-5236 PLMA Show Booth #F2018

Subco Foods Inc. www.subcofoods.com 630-231-0003, Ext. 111 PLMA Show Booth #F2007

Freshest thinking in private label packaging.

PRODUCT CAPABILITIES • Pasta Sauces • Pizza Sauces • Barbeque Sauces • Cooking Sauces

VISIT US AT PLMA BOOTH #F415

• Salsas • Mexican Sauces • Bruschettas • Chili Sauces • Sloppy Joe Sauces • Shelf Stable Juices • Vinegars

PACKAGING FORMATS • Glass Jars (14 to 32 oz.) • Glass Bottles (16 and 32 oz.) • PET Jars (16 and 24 oz.) • Pouches (3 to 13 oz.) • Club Packs

GIOVANNIFOODS.COM | 1.844.FOOD.FWD 8800 Sixty Road, Baldwinsville, NY 13027

Store Brands / October 2017 / www.storebrands.com

Food Forward.

• Repacking Capabilities

7-TIME AWARD WINNER

Go tactile or digital. Either way, you win. Consumers love interacting with promotion pieces. Theyâ&#x20AC;&#x2122;ll scratch, peel, rip, tear, collect, or compare, all for the instant gratification of having fun and possibly winning. On the growing digital front, we print invisible watermarks and NFC and RFID tagging for personalized, relevant, and targeted content that drives purchase intent and cultivates brand loyalty. Promotions are just one more example of how WS Packaging innovations make brands come alive. Each day, we impress nearly every man, woman, and child in the U.S. with one of the 45+ billion labels we print annually. Give your brand life. Contact Jenny Lischka at 877.977.5177 or jlischka@wspackaging.com

wspackaging.com

Special Section: PLMA Show Preview

Superior Pack Group

The Fillo Factory Inc.

H H H H H H

Superior Pack Group is a full-service, single-source contract packaging company that helps companies get their package to market with the quickest turnaround by offering a turnkey solution from concept to completion.

The Fillo Factory is a leading manufacturer of appetizers, entrées, desserts and doughs. We strive to create high-quality, innovative and trend-setting products. Our state-ofthe-art facility enables large and small production runs and our R&D chefs and in-house photography help to make us stand out. We offer products that are organic, USDA-approved, BRC, and A-rated kosher.

Superior Pack Group www.superiorpackgroup.com 845-534-1015 PLMA Show Booth #F1055/1056

The Fillo Factory Inc. www.fillofactory.com 201-439-1036 PLMA Show Booth #F1533

FRESH S FOODS PREPARED

Bakkavor is the market leader in fresh prepared foods. The Bakkavor difference is our industry-leading standards for innovation, quality, safety and customer service. Elevating the everyday with Bakkavor.

INTRODUCING BAKKAVOR’S CONSUMER BRAND TM

WE MAKE FRESH HAPPEN HUMMUS · DIPS · SOUP · SAUCE · ENTRÉES · BURRITOS · GRAIN SALADS 68

Store Brands / October 2017 / www.storebrands.com

2700 Westinghouse Blvd. Charlotte, NC 28273 syoung@Bakkavor.us www.bakkavor.com

MAROVINO • Visual Branding

NATURE “ Where Feeds The Future

”

At Baxters we work at a commercial level but with ingredients you would find in your pantry, with no preservatives or artificial flavors. From field to fork, we harvest our food with an acute awareness of where it is coming from and how to ensure its freshness through to your consumer’s table. We bring worldwide category expertise on consumer eating trends based on natural simple diets. Our culinary experts create delicious, wholesome, ready-to-eat meals to delight the needs of your customers.

F I E L D

F O R K

M A S T E R Y

Come see us at Booth 4115 at the PLMA Trade Show, November 13-14-2017

NUTRITION “ Where Feeds The Future

”

At Wornick Foods we craft innovative, nutritious food in lifestyle ready packaging. It is our ﬁrm belief that society is healthiest when we eat wholesome food, so we work hard every day to create and connect people to real food. From babies to military men and women stationed at home or abroad; we make the products for many of America’s leading brands. We are leaders in research, development and the commercialization of sustainable solutions. Let's feed the future!

F O O D

C R A F T

F O O D

C R A F T

I N N O VAT I O N I N N O VAT I O N

Special Section: PLMA Show Preview

The Fremont Company

U.S. Alliance Paper Inc.

H H H H H H

The Fremont Company has been manufacturing ketchup for over 90 years. We are one of North America’s leading private brand ketchup producers, and the only one focused exclusively on our partner’s brands and business. We invite you to partner with The Ketchup Experts for store brand ketchup that turns shoppers into lifelong customers.

U.S. Alliance Paper, one of the largest manufacturers of private label household paper products, will feature its award-winning Ultra Premium Azure control brand. Azure gives retailers who may not have the volume for their own private label program the opportunity to offer their customers value products in premium quality tiers.

The Fremont Company www.PLKetchup.com 419-334-8995 PLMA Show Booth #F2310

U.S. Alliance Paper Inc. www.usalliancepaper.com 631-254-3030 PLMA Show Booth #H2105-2209

We’re here for you Our team has the experience and tools to fulﬁll your private label needs with products you’ll be proud to call your own. Contact us for more information. sales@ﬁllofactory.com

“A” Rated 70

Store Brands / October 2017 / www.storebrands.com

QUALITY YOU CAN COUNT ON: FOR TODAY AND TOMORROW We’re committed to supplying quality household paper products to our customers, while continuing to innovate for the future. Proudly part of J.D. Irving, Limited, a company that’s been providing customer satisfaction since 1882.

For more information, contact us at 781-273-3222 • irvingconsumerproducts.com

Hiring Insights

Make the team Diversity of ages, backgrounds and perspectives is critical to building strong private brand teams, as is having a champion at the top By Carolyn Schierhorn

s store brands gain momentum and prestige in the United States, it has become more critical than ever for retailers to hire the right staff for their private brand teams. To ensure that a private brand is a differentiator and not a me-too imitator of national brands, the team needs to draw on a diversity of experiences, perspectives and talents and prioritize both creativity and analytical skills, experts say. Most important, to be successful in the extremely competitive environment of grocery retailing, private brand teams “need to have a champion at the very senior level,” notes Bob Mariano, the retired former CEO of Milwaukee-based Roundy’s (now part of The Kroger Co.). Unfortunately, at some chains, CEOs may view private brands as an area where they can cut corners to reduce costs and become more efficient, and this is extremely short-sighted, Mariano observes. “When we look at the competitors we face in the future, Lidl, Aldi and Trader Joe’s are all masters of own brands,” he emphasizes. “So senior management should not be looking in the own-brand area to trim costs. Own brands are critical to retailers’ future success.” Ideally, the head of store brands at a chain should be at the vice president level, someone dedicated to private brands who has the ear of the CEO. Mariano believes that the individual running the private 72

Store Brands / October 2017 / www.storebrands.com

brand program “should be someone with a track record in developing own brands because they get it.” That person should also excel at team building. But sometimes what it takes is a motivated branding, marketing or merchandising expert with a passion to learn the intricacies of the business and “break the mold.” At all levels of the private brands team, retailers need individuals with vision and a sense of adventure but also with perseverance, painstaking attention to detail, the ability to meet deadlines, and the flexibility and resourcefulness to adapt to unforeseen circumstances. Excellent interpersonal skills are a must as well, Mariano says. Retailers with strong private brand portfolios typically have the category managers and own brand managers for those categories working in close collaboration. And because store brands cover a vast expanse of categories, people with different areas of expertise need to be able to communicate with each other and work well together.

Building robust teams Building a strong store brands team requires a balance of subject matter experts, such as quality assurance, supply chain management and design professionals, and marketing and sales professionals, notes Michael Taylor, president of private brand development for Daymon. “Besides subject matter experts, it takes people who

Hiring Insights come from a marketing background who understand the consumer you are trying to serve,” he says. Daymon hires “a myriad of different experiences,” ranging from candidates with a consumer packaged goods background to recent college graduates, Taylor says. Prior employment on a private brands team isn’t as important today because the profession is changing so quickly, he observes. Young adults are less brand loyal nowadays, which has created a tremendous opportunity for innovative store brands. “Consequently, experience in the industry is not always a must-have when hiring people,” Taylor elaborates. “Sometimes when you recruit people right out of school and train them in the business, they’ll provide a different perspective.” Taylor, who majored in marketing in college and has been with Daymon for 23 years, likes to hire graduates who studied marketing or business management. Daymon, in fact, actively recruits from universities that have food marketing programs. Regardless of their college major or job history, private brands professionals should be creative and have strong analytical skills, Taylor says. “Private brand is a little bit of art and a little bit of science,” he explains. “Part of the science is understanding what the data are telling you and what is going on the world. And the art involves solving problems creatively and coming up with products or programs that meet consumers’ needs.”

Diversity of ages, cultures, disabilities Demographic diversity on private brand teams has become increasingly important today. To win over a multicultural and multigenerational consumer base with private brand lines, a store brands team should encompass a spectrum of ages and ethnic backgrounds.

“Data has proven that teams that are more diverse — and where leadership is more diverse — are more productive,” says Stacey Miller, director of diversity and inclusion for Carlisle, Pa.-based Ahold USA. “If you only pull from the same group, you’re going to hire people who have the same thoughts and ideas. So how do you challenge the status quo and be innovative?”

“Sometimes when you recruit people right out of school and train them in the business, they’ll provide a different perspective.” — Michael Taylor, president of private brand development, Daymon

Because retailers are targeting so much of their marketing and product-development efforts on millennials and Generation Z, it’s crucial for these age groups to be represented on store brand teams. “Young adults are looking for unique, innovative, niche-type products that are personalized and specialized,” Taylor observes. Millennials and Gen Z-ers on the staff would be able to better understand and cater to this mindset, he says. And with consumers today clamoring for — and expecting authenticity in — ethnic cuisine, whether Latin American, Asian or Middle Eastern, having staff with firsthand experience in those cultures is a big plus, Miller says. To gather a variety of perspectives that can inform product development and marketing, retailers should also proactively recruit people from different socioeconomic backgrounds, regional upbringings and rural versus urban experiences. According to Miller, teams are also strengthened when they include people with disabilities as well as gay and transgendered individuals, all of whom can better address the needs and wishes of consumers from these populations.

Pride and hard work Compared to working on a national brand program, private brand development is a “very detail-oriented business,” Taylor notes. “We’ve seen people who’ve come into our space from the branded side of the business who struggle because they are overwhelmed with the level of detail.” This is because a private brand program covers such a wide range of categories “wall to wall” in a store, Taylor says. “So there is a lot of work,” he stresses. “And it is much more difficult to develop and sell and drive a private brand program, in my opinion, than it is to sell a branded product.” But for those who are right for the business, Taylor says, “there is a strong element of pride that comes with building a successful private brand.” SB Schierhorn, managing editor of Store Brands, can be reached at cschierhorn@ensembleiq.com

Store Brands / October 2017 / www.storebrands.com

Sustainable Packaging

Going green More consumers who are seeking sustainable packaging to go with their ‘clean’ lifestyles are creating a potentially potent market for eco-friendly store brands

ackaging is playing an increasingly pivotal is very or extremely important that packaging is labeled role in consumers’ purchasing decisions. “recyclable,” up from 60 percent in 2013. Along with studying the ingredients in In addition, 70 percent of consumers say they try to buy food and beverages before committing to products in packaging that is recyclable, up from 67 percent an item, a large base of wellness-oriented in 2013; and 52 percent state they always think about the shoppers is extending their focus to packaging as they environmental impact of the packaging before purchasing seek alternatives that also have a positive impact on products, an increase from 45 percent in 2013. their health and the environment, analysts state. The 4,000 survey respondents were grocery shoppers “In addition to desiring cleaner processing of products, between 18 and 65 years of age who shop regularly for their consumers want packaging that does not leave undesirable households. chemicals in what they eat and drink,” says Linda Gilbert, “Consumers are saying that they want to do business founder and CEO of EcoFocus Worldwide LLC, a with companies that are taking stands,” Gilbert notes. Lancaster, Pa.-based marketing research and consulting firm “Retailers have tremendous opportunities to increase sales that specializes in health and sustainability. of private brands by incorporating the sustainable value A 2017 EcoFocus survey found that 75 percent into their own strategies.” By of shoppers say that packaging that keeps healthy Rich beverages fresh without preservatives is either Create a positive perception Mitchell important or extremely important, up from 73 Because 73 percent of grocery shoppers say they percent in 2015; and 65 percent indicate that it are influenced by companies that are committed to 76

Store Brands / October 2017 / www.storebrands.com

Sustainable Packaging only using packaging that is made with recyclable materials, up from 68 percent in 2013, and 72 percent indicate it is important for operators to only use packaging made with renewable materials, an increase from 69 percent in 2015, retailers who embrace sustainability can create a positive halo for all of their private private offerings, Gilbert states. “Many consumers believe retailers have the responsibility to make their store brands the flagship for health and sustainability,” she notes. It is essential, however, that retailers publicize their use of sustainable packaging on product labels and in-store signage to raise shopper awareness, says Marny Bielefeldt, vice president of marketing for Alpha Packaging, a St. Louisbased manufacturer of sustainable plastic bottles and jars. Messaging can include such descriptors as “recycled plastic” and “plant-based plastic,” she says, while Gilbert notes that terms like “eco-friendly,” “environmentally friendly” or “environmentally responsible” also are powerful designations, particularly because most consumers typically don’t use the word “sustainable.” “Messages are going to fall flat if shoppers don’t understand why sustainable packaging is beneficial,” Bielefeldt states. Indeed, educating consumers about the benefits of sustainable packaging is essential if they are to embrace the concept, says Erin Reynolds, marketing director at Evergreen Packaging, a Memphis-based supplier of paper and paperboard containers. “Packaging suppliers have to align with evolving consumer priorities and communicate their commitments to meeting those needs,” she states. “Recyclability is already important and having renewable materials in packages is becoming more of a priority.” Shoppers, meanwhile, also are partial to where sustainable data should be on a package. In a March 2017 online survey of 1,938 adult grocery shoppers, 28 percent of respondents ages 18 to 34 indicated that they would be interested in food packaging

Store Brands / October 2017 / www.storebrands.com

with instructions for exactly how to recycle it, reports Mintel, a global market research firm, in its June “Food Packaging Trends — US” report. Expressing similar interest were 19 percent of respondents between 35 and 54 and 18 percent of persons 55 and up.

“There will be game-changing innovations with packaging and the players that invest in those will win when they go to market.” Linda Gilbert, founder and CEO, EcoFocus Worldwide LLC

In addition, 58 percent of respondents noted that they prefer information on how to dispose of or recycle packages to be on the back of the package, while 14 percent favor the front. Forty-five percent of persons also indicated that they prefer environmental sustainability claims to be on the back of food packaging while 28 percent chose the front. “A challenge is that many shoppers don’t know what is recyclable,” Gilbert notes. “The industry needs to do a better job of identifying the packages that are sustainable.” In addition to information on packages, retailers also can provide easy access to sustainable packaging data by displaying smart phone-readable QR codes on packages, says Nina Happonen, vice president of sales/Americas for Metsä Group, a Helsinki, Finland-based provider of renewable products. Cost a consideration Sustainable packaging typically is about 10 percent costlier to produce than conventional options because of higher prices for renewable resins; a more elaborate manufacturing process; and the need to sanitize equipment when switching between conventional and sustainable production, Bielefeldt states. While Happonen notes the production expenditures “can be very modest” when developing sustainable packaging from scratch, expenses rise when suppliers have to replace existing elements of conventional packages with sustainable alternatives, such as supplanting a plastic interior with a fiber mold or bio-plastics. “Sustainable packaging should combine the use of renewable materials, create possibilities for easy recycling, be biodegradable where needed and protect the product from damage,” she states. Many consumers with interest in sustainable packaging, however, are still reluctant to pay more for it, EcoFocus research reveals. Only 50 percent of consumers say ecofriendly products are worth an additional expense. However, that number is up from 36 percent in 2010. “A large number of shoppers wonder why something sustainable or made with renewable materials does not cost less than conventional items,” Gilbert says. “It doesn’t make sense to them. There also is a lot of frustration from consumers because so much packaging is plastic and not all

Sustainable Packaging plastic is recyclable. They want there to be better alternatives.” Newer manufacturing technologies and techniques, meanwhile, are helping to lower the cost of producing sustainable packaging. More suppliers, for instance, are able to maintain package strength and functionality while using fewer raw materials, analysts note, while the lighter weight of packaging is resulting in decreasing costs to transport the items. Glass packaging, which is 100 percent recyclable, is among the packaging options becoming increasingly lighter. And to add to its allure, it is becoming available in more colors, shapes and designs, says Gina Behrman, director of marketing and communications, glass/North America for Luxembourg-based packaging supplier Ardagh Group. Leveraging more distinctive sustainable packaging will better enable retailers to differentiate their private brands from the national selections, she states, adding that “there is an evolution in product development and innovation along with demands by brands for products to stand out on shelves.” A cleaner future The use of sustainable store brand packaging, meanwhile, will likely increase over the next several years as millennials and other younger shoppers who tend to be more eco-focused give

80 Store Brands / October StoreBrands_HalfPg_Oct-17.indd 1 2017 / www.storebrands.com

greater scrutiny to the materials in containers, Gilbert says. “There will be game-changing innovations with packaging, and the players that invest in those will win when they go to market,” she states. “Consumers, especially those under 35, will reward those companies that they see doing good and penalize those that don’t.” As a result, retailers should “celebrate” their use of sustainable elements in store brands and boldly promote the features, Gilbert states. Many consumers, for instance, complain that the recyclable logo on cans is often too small to notice, EcoFocus research found. “Why doesn’t it say ‘recycle me’ on the top of the can?” Gilbert states. “Merchandisers have to make messaging more prominent and celebrate that message. It is something consumers will reward you for.” Retailers also will reap benefits by using sustainable packaging for all private brands, she notes. “When people see a store brand, they will then immediately know it has eco-friendly packaging because of the retailer’s commitment to it,” Gilbert says. “Consumers have a choice of where they shop, and they are looking for retailers to help them make the buying decision simpler.” SB Mitchell is a freelance writer from Wilmette, Ill.

10/6/17 9:02 AM

CO R E

by EVERGREEN PACKAGING

INTRODUCING

FULLY RENEWABLE CARTONS

CONNECTION

SUSTAINABILITY

EFFICIENCIES

VALUES

Renewable fiber from trees + renewable polyethylene from sugarcane = fully renewable. Consumers want to feel good about their purchases, and they want sustainable packaging. Choosing packaging made from renewable resources is one of the best choices you can make for store brands to provide consumers with what they want.

FRESHNESS

Cartons are made from a renewable material, fiber from trees grown in forests where responsible practices are used. The coating on Fully Renewable Cartons also comes from a renewable material, polyethylene from sugarcane.

YES. Cartons are recyclable. Recycle your cartons so other paper-based products can be made.

To learn more about Fully Renewable Cartons, visit: https://goo.gl/XVGpE9

w w w. E v e rg re e n P a c k a g i n g . c o m

Category Intelligence: Coffee & Tea

A change of taste Retailers can strengthen shoppers’ interest in private brand coffee and tea by responding to evolving market dynamics By Rich Mitchell

hanges are brewing in the coffee and tea sectors. Though the categories remain active, shoppers are seeking newer varieties of selections — and forcing retailers to alter their merchandising strategies if they are to enhance store brand activity. More convenience-oriented consumers already are embracing ready-to-drink and single-cup coffee options along with canned or bottled ready-to-drink teas, reports Mintel, a global market research firm. Better-for-you items also offer ample growth possibilities. Thirty percent of coffee drinkers, for instance, indicate that they believe that coffee is healthier than other caffeinated beverages, and the large base of wellness-conscious shoppers will likely respond to an emphasis on teas’ nutrition and health qualities, Mintel notes. In addition, many younger consumers who have grown up with diverse and widely available higherend coffees, such as those from Starbucks, are interested in specialty selections, Mintel states. “While coffee sales are estimated to slow in 2017, opportunities exist to reinvigorate sales, particularly by reaching the highly engaged iGen and Millennial consumers who are likely to be interested in new product trial and are open to trading-up for premium offerings,” Mintel notes in its July “Coffee — US” report.

A new take on tea Adjustments also are occurring in the tea sector where the growing popularity of canned and bottled readyto-drink and refrigerated teas is helping to offset losses

from bagged or loose-leaf products, Mintel notes in its August 2016 “Tea: Spotlight on Bagged/Looseleaf Tea — US” report. Ready-to-drink teas generate more than twice the sales of bagged/looseleaf selections despite similar consumption frequencies, Mintel says, with the bagged tea declines reflective of the challenges facing merchandisers as the segment moves toward greater premiumization. “Consumers need to be reminded of teas’ versatility as a beverage, as limited drinking occasions hinder greater consumption by core drinkers,” Mintel adds. To stand out in the evolving market, private brand tea and coffee options should include exclusive selections along with national brand equivalents, says Jerry Gilbert, vice president of sales/North America for Mother Parkers Tea & Coffee Inc., a Northbrook, Ill.-based supplier. “A tiered program that offers multiple quality levels and price points can be important to reach consumers looking for variety,” he notes. “Providing differentiated product assortments can offer the retailer a unique point of difference and will help keep shoppers from leaking to other locations.” More consumers, Gilbert says, are seeking tea flavors and blends that go beyond black and green teas, as well as cold brews and hot gourmet coffee, premium coffee blends and single serve espresso and latte options.

The power of publicity

Coffee and tea category performance Ground Coffee

Instant Coffee

Single Cup Coffee

Single Cup Tea

Tea-Bags/ Loose

Private All Private All Private All Private All Private All Brands Brands Brands Brands Brands Brands Brands Brands Brands Brands $369.5 $3,989.6 $54.9

$689.9 $735.4 $3,902.4

$3.4

$121.8

$84.7 $1,170.2

+3.1%

-1.5%

-3.3%

-4.0%

30.0%

1.9%

-8.0%

-12.1%

-0.3%

1.2%

Dollar Share

9.3%

100%

8.0%

100%

18.8%

100%

2.8%

100%

7.2%

100%

Unit Sales (in millions)

71.5

617.6

12.8

154.4

88.4

423.3

0.6

15.6

37.6

364.0

Change vs. Year Ago

+6.4%

-2.1

-5.6%

-2.9

25.2%

2.2

-12.7%

-17.3

-3.2%

-0.4%

Avg. Price Per Unit

$5.17

$6.46

$4.29

$4.47

$8.32

$9.22

$5.66

$7.80

$2.25

$3.22

Dollar Sales (in millions) Change vs. Year Ago

Source: InfoScan Reviews, IRI, a Chicago-based market research firm. Total U.S. supermarkets, drugstores, mass market retailers, military commissaries and select club and dollar retail chains for the 52 weeks ending July 9, 2017.

Store Brands / October 2017 / www.storebrands.com

Along with a wider range of selections, a mix of marketing tactics can enable retailers to trigger greater interest in store brands, Gilbert states. Options include off-shelf displays to drive awareness and impulse purchases; instore signage to communicate pricing; cross-promotions with complimentary categories; and messaging that promotes recyclability. The most effective merchandising initiatives, however, often result from a joint effort by retailers and their suppliers, Gilbert states. “Suppliers can provide deep analyt-

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Category Intelligence: Coffee & Tea

offer specialty selections, which could help to reinvigorate sales.

ics on a category and retailers understand their shoppers’ behavior as well as larger trends across the entire store,” Gilbert notes. “A collaborative relationship will help foster development of products that appeal to consumers and provide opportunity for better communication on forecasting and launch execution.” In addition, holding regular planning meetings with manufacturers will help ensure that retailers have the proper products in the development pipeline and a comprehensive promotion plan for all category segments, says Clay Dockery, vice president of corporate brands for Massimo Zanetti Beverage USA, a Suffolk, Va.-based coffee supplier. “Collaboration is key to any successful private brand relationship,” he states. Coffee assortments, meanwhile, should include a range of robust and whole bean products along with messaging on packages that prominently spotlights features, including roast levels, third-party certifications, organic ingredients and the use of sustainable packaging, he says. “Coffee is a highly experiential product and consumer interest continues to grow as they become more educated about it,” Dockery states. Marketing items in many store locations and leveraging such vehicles as shippers with header

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cards also will generate greater interest in products, he says. “Retailers can win by getting private brand coffee in the shopping cart prior to the shopper getting to the coffee aisle,” Dockery notes. Other effective merchandising tactics include periodic price reductions, distribution of savings coupons and advertisements, adds Reid Chase, U.S. partner for Euro-Caps BP, a Rotterdam, the Netherlands-based supplier of single-serve espresso capsules. Because most espresso shoppers only purchase capsules online, retailers seeking to offer products in stores also should publicize the availability of the selections and have distinctive graphics on packages that emphasize such attributes as containing beans from a single country and a Fair Trade certification, he states. Retailers will further strengthen their store brands by offering a multitude of roast strengths and situating at least three private label SKUs on shelves, Chase notes. “Putting out just single box or SKU will cause it to be lost among the other coffee selections,” he says. “There needs to be a full line or range of private brands to show consumers that the retailer is serious about the category.”

How to heat up a cold sector Enhancing merchandising strategies and product assortments is vital if retailers are to realize the potentially large paybacks from the coffee and tea sectors. While coffee already has strong market penetration with 83 percent of adults drinking some type of coffee at home, expansion may hinge on encouraging consumers to drink a broader variety of formats or to trade up for higher-priced offerings, Mintel notes. That includes cold coffee as only 16 percent of consumers report that they are drinking more cold options. Most cold coffee purchases, however, occur at foodservice outlets, indicating that shoppers may be intimidated by the process of preparing the beverage themselves, Mintel notes. “Cold coffee innovations could help boost athome consumption,” Mintel adds. Merchandisers, meanwhile, could boost tea revenues by offering a wider range of options, including premium selections. More than 25 percent of consumers say they find premium brewed tea worth the extra cost, Mintel reports. Premium products include cold brew, which is generating interest from more than 20 forget to offer percent of tea drinkers, Mintel premium tea states, adding that premium selections, including tea buyers often are older cold brew. millennials and those with higher household incomes. SB

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Category Intelligence: Candy & Chocolate

Treat determinations Discernment is becoming a key component of candy-buying decisions. By Dana Cvetan

incorporate sustainability into product and packaging innovation in the candy category because consumers want to feel good about their indulgence.

pending calories like they do money, consumers are opting for high-quality confections, and they are finding them in private brands, industry leaders say. Candy “is an indulgence, and consumers want the best bang for their calorie. It may be the one treat they allow themselves, and they don’t want substandard quality,” says Margaret Roeder, director of business development for Kruger North America in Oak Park, Ill. Growing trust in store brands is making it possible for confectionery to gain a foothold there, Roeder adds. Private brands are taking shelf space from national brand confections “because consumers and retailers alike are realizing that you can and do have the same value and the same flavor experience; you just don’t have to pay the same price.” Cost is important because not everyone shops at premium retail outlets, says Benjamin Svarc, director of contract manufacturing and private label retail for Astor Chocolate Corp. in Lakewood, N.J. Private brands offer a tremendous opportunity for retailers to build customer loyalty by offering high-quality confections at reasonable prices, adds Mark Puch Jr., marketing and key account specialist for Primrose Candy Co. in Chicago. In Europe, private brands have been strong for

years, and it’s common to see retail outlets carrying up to 40 percent of their stock in store brands, Roeder says. In the United States, millennials are following the European example and are willing to give store brands and their price savings a try.

Market challenges The past year was an uneven one for chocolate confectionery worldwide, according to research published in April by global market intelligence firm Mintel. Volume sales were flat in developed markets [including the United States, the United Kingdom, Germany and France], writes Marcia Mogelonsky, Mintel’s food and drink director of insight, in the Mintel Global New Products Database (GNPD). The fastest-growing chocolate market is India, where retail chocolate confectionery sales climbed 13 percent. However, worldwide, launch activity was “somewhat restrained” for 2016, Mogelonsky reports. New product launches in chocolate confectionery grew by 3 percent internationally between 2015 and 2016, with seasonal chocolate launches accounting for a quarter of that growth.

Better-for-you potential Organic chocolate offers promise for category growth, Mogelonsky says, adding that launches of chocolate confectionery with an organic claim increased 6 percent between 2014 and 2016. Organic chocolate accounted for less than 6 percent of global new product introductions in 2016; still, Mintel expects consumer demand will lead to more organic offerings. “In order to satisfy the growing demand, it will become neglect to add necessary for more cocoa growsophisticated ers to switch to organic farming ingredients such methods,” Mogelonsky says. as ginger and acai “As interest in healthy sweets continues to rise, the availability to differentiate of chocolate that offers organic premium store or all-natural positioning will be brand chocolate desirable as consumers look for candy from better-for-you options.” competing Organic candy is “definitely national brands. trending upward,” with more retailers requesting it, Puch

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Store Brands / October 2017 / www.storebrands.com

Category Intelligence: Candy & Chocolate says. There is also a movement away from artificial flavors, with growing consumer concern over what they put into their bodies, he adds. Better-for-you continues to be a hot topic in the chocolate world as the definition of that label expands, notes Barry Rosenbaum, president of Nassau Candy in Hicksville, N.Y. “We are seeing a continued push into non-GMO Project Verified

as well as fair trade and sustainable palm oil,” Rosenbaum says. Rosenbaum says he expects these attributes to continue to gain momentum because consumers want to feel good about their indulgences. “People really do care about sustainability. It’s not just a bandwagon; they are not just buzzwords. This is here to stay,” he says.

Candy and chocolate category performance Total Chocolate Candy

Total Non-Chocolate Candy

Chocolate Candy Box/Bag/Bar Greater than 3.5 Ounces

Private Brands

All Brands

Private Brands

All Brands

Private Brands

All Brands

Private Brands

All Brands

$163.5

$11,053.7

$368.5

$5,769.5

$133.2

$4,778.0

$179.5

$2,142.1

Change vs. Year Ago

-0.1%

+1.8%

-5.1%

+2.9%

-1.9%

+0.4%

-3.2%

+4.5%

Dollar Share

1.5%

100%

6.4%

100%

2.8%

100%

8.4%

100%

Unit Sales (in millions)

56.3

4,926.0

270.3

3,191.4

40.7

1,368.7

135.1

1,279.8

Change vs. Year Ago

-1.8%

+1.6%

-4.4%

+1.9%

-3.6%

+0.0%

-3.0%

+4.6%

Avg. Price Per Unit

$2.91

$2.24

$1.36

$1.81

$3.27

$3.49

$1.33

$1.67

Dollar Sales (in millions)

Non-Chocolate Chewy Candy

Store Brands / October 2017 / www.storebrands.com

Flavor trends The addition of sophisticated ingredients such as ginger and acai enhance chocolate’s allure, Rosenbaum says. Though they have become common in dark chocolate products, they are becoming popular in milk chocolate candy as well, he adds. Flavor and other innovations are advancing in gummy candies, Rosenbaum observes. “The great thing about gummies is there’s no limit to innovation,” he says. “You can vary the flavor, color, shape and size pretty easily, so you can be as creative as you want to be.” Tweaks to innovative flavors that have moved into the mainstream are trending in chocolate, Svarc says. “People are looking for some level of newness,” he explains. “Take something that is understood, but upgrade it. That’s where we’ve seen success. “For instance, caramel is still very popular, but you could add an element such as making it burnt. With dark chocolate, the cocoa content could be increased.”

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Clear messaging Transparency is a key improvement that shoppers seek from private brand confections, Puch notes. “It’s an impulse buy — it puts a smile on your face — but people still want to know what they’re putting into their bodies,” he says. Candy shoppers spend three seconds or less to make a purchasing decision, Roeder says. If they glance at a product and don’t immediately recognize it as a match for what they want — whether their criteria is national brand equivalent, value brand or something upscale — the chance to sell it is lost, she points out. Loyalty to a store brand can embolden shoppers to branch out into something new and unknown, Roeder adds. “If I’m a shopper and I see there’s some crazy chocolate bar I never heard of, but I see it’s [a trusted brand], I feel good buying it because I know it’s going to be good.” SB Cvetan is a freelance writer based in Barrington, Ill.

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Category Intelligence: Frozen Novelties

Balancing act Snagging icy treat lovers who worry about fitness requires finesse By Dana Cvetan

consider developing organic frozen novelties.

hile health-related concerns complicate efforts to grow frozen novelty sales, consumers continue to clamor for the sweet treats, according to global market research firm Mintel. Retail sales of frozen novelties and ice cream hit $12.8 billion in 2016, a 3.6 percent year-overyear increase, Mintel reports in “Ice Cream US, April 2017.” Volume sales, however, increased only modestly in 2016, following a four-year decline. Market growth in the ice cream category is being driven by positive sales performance in frozen novelties, one of its two largest segments, according to Mintel. The firm forecasts moderate growth in the overall ice cream market. Key demographics, Mintel notes, include iGens [or Generation Z], millennials, parents and Hispanics. The category’s strong performers have been premium offerings featuring natural ingredients and innovative flavors, the report points out.

Health vs. temptation Eleven percent of 1,869 adults questioned in a Mintel/Lightspeed online survey conducted for the report said health concerns led them to buy less ice cream than they did the previous year.

Of those who said they bought at least the same amount of ice cream as the year before, 27 percent admitted that they consider frozen treats to be “unhealthy.” “Everyone is constantly looking to satisfy a craving with a refreshing treat, yet [they] want to maintain healthy eating,” says Okitchy Robertson, associate marketing manager for J&J Snack Foods Corp. in Pennsauken, N.J. As a result, Robertson says, the company is receiving an increasing number of requests for organic frozen novelties for private brands. More than any other feature, retailers and consumers want frozen foods to be healthy, notes Sara Pilati, a sales specialist with Emilia Foods in Sassuolo, Italy. “Nowadays, customers are becoming more and more aware of what they eat and what they want on their tables,” Pilati says. “A deep attention to nutrition benefits will be essential. So keep on paying attention to new customers’ requests [for products that are] gluten-free, lactose-free, vegan and [products made from] vegetables. It will be the keystone to stay in the market and evolve with it.” Retailers are also requesting products that are better than the leading national brands, notes Stephanie Schultz, marketing coordinator for G.S. Gelato & Desserts in Fort Walton Beach, Fla. Careful research and development to choose the right ingredients, formulations and packaging pays off when it results in affordable, premiumquality products that increase consumer loyalty to the private brand, Schultz says. Research and development is key to anticipating consumer needs, responding promptly to market demand and improving product quality, says Pilati, adding that her company has raised its fail to tell a qualitative and control standards compelling in all its product lines. story with Schultz agrees that eye-catching in-house research and packaging. development allows for quick adaptation to changing market

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Store Brands / October 2017 / www.storebrands.com

Category Intelligence: Frozen Novelties demands. The popularity of low fat and no-sugar-added frozen treats has yielded to today’s consumer demands for clean labels, Schultz observes. “Not only do consumers want safe and healthy ingredients in their products, they want to see what is inside before purchasing,” Schultz explains. Gelato can be promoted as naturally a bit healthier and lower in fat than traditional ice cream, Shultz adds, because it is made with milk rather than heavy cream.

Flavor adventures As a consequence of globalization, people are not only getting used to eating exotic foods, but also they expect to find them in all the food categories they usually buy, Pilati says. Flavors are one of the best ways to remain innovative in the frozen novelties category, adds Schultz, whose company maintains popular classic flavors like vanilla and chocolate, plus new “classics” such as caramel sea salt and caramel cookie crunch and adds a pop of innovation with flavors that include ingredients such as peaches, guava and maple bacon, she says. “Retailers also love limited-time-offer flavors like pumpkin pie and sweet potato marshmallow, as it allows them to take a risk with some of these more unique flavors. Consumers love it because they get to try something new under their trusted store brand’s name,” Shultz adds. Flavors as well as ingredients play an important role in formulating healthy treat choices, Pilati points out. “What [health-minded consumers] look for are products that combine healthy ingredients with delicious taste, as in

the case of bars made with fruits and vegetables,” Pilati says. With healthy eating on the rise, it’s important to understand what ingredients are available as alternatives to lesshealthy ingredients, Robertson says. “We’ve seen some retailers start taking the initiative to say what ingredients they don’t want in their products, especially for private brands,” she explains. Her company’s research and development team works to find healthier alternative ingredients that coincide with on-trend, new and popular flavor profiles, Robertson says. Consumers want healthier, non-artificial ingredients in their treats, Schultz adds.

Portions and packaging Giving consumers the option of a smaller serving size is a good strategy, allowing them the opportunity to indulge without guilt, Robertson says. Portion-control packaging could provide a good public image for a retailer, prompting consumers to see it as an entity that helps people stick to their diet and nutrition goals, Pilati adds. Robertson advises using eye-catching graphics to tell a compelling story with packaging. Pilati says retailers can promote their contribution to sustainability by reducing packaging waste. Enhance the fun experience that frozen novelties provide, Shultz suggests, by using reusable PET plastic containers with screw cap lids that not only show off the product, but also let the consumer repurpose the container or recycle it if they choose. SB Cvetan is a freelance writer based in Barrington, Ill.

Frozen novelty category performance Total Frozen Novelties

Frozen Novelties

Private Brands

All Brands

Private Brands

All Brands

Dollar Sales (in millions)

$535.1

$4,148.9

$494.2

Change vs. Year Ago

+1.2%

+1.5%

+0.9%

Frozen Ice Cream/ Ice Milk Desserts Private Brands

All Brands

$3,767.5

$14.8

+1.4%

+9.1%

Private Brands

All Brands

$235.7

$26.1

$145.7

+5.2%

+4.4%

-0.7% 100%

Dollar Share

12.9%

100%

13.1%

100%

6.3%

100%

17.9%

Unit Sales (in millions)

165.0

1,177.5

153.2

1,097.5

0.8

14.1

10.9

65.9

Change vs. Year Ago

-0.7%

-0.6%

-1.0%

-0.6%

+4.5%

+4.9%

-1.6%

Avg. Price Per Unit

$3.24

$3.52

$3.22

$3.43

$17.66

$16.71

$2.39

$2.21

Ice Pop Novelties

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Category Intelligence: Deli Meats

A meaty opportunity Retailers can boost the popularity of store brands by responding to the demands of their specific shopper bases By Rich Mitchell

include signage that details ingredients, flavors, why the retailer is carrying a specific product, if an item is natural or organic and the protein content.

ecause the deli attracts a wide mix of shopper segments — including price-oriented, health-conscious and premium-minded consumers — retailers that offer distinctive options with a solid value proposition are in a position to bolster store brand activity of private-branded deli meats. Indeed, with a large base of consumers already perceiving store-branded lunch meats to be of equal or greater quality than national brands, retailers can focus more on product development and merchandising instead of overcoming a negative branding stigma, says Diana Sheehan, director of retail insights for Kantar Retail, a Boston-based research and consulting firm. “Private brand deli meats have proven to be high quality and good tasting,” she says. “Sandwich meats appeal to everyone, but because consumers are seeking different options, retailers must offer the right selections for their target segments.” The lunch meat and bacon category, meanwhile, remains active with sales over the next five years forecast to mirror the 11 percent growth of the previous five years, states Mintel, a global market research firm, in its October 2016 “Bacon and Lunch Meat — US” report. While greater consumer spending on food outside the home could limit activity, a slowdown in growth of disposable personal income also may make consumers less likely to dine out, Mintel states.

Store brand suppliers and retailers can strengthen sales with product innovations that attract new users and create new usage occasions, Mintel notes. That includes offering more health-oriented selections, as company research found that 28 percent of lunch meat consumers say they seek low-sodium options. “Of notable concern to consumers would be the quality of the ingredients in the products,” Mintel states, adding that more shoppers also are seeking premium or gourmet selections along with organic options, products that are free of meat filler and proteins derived from animals that were raised humanely.

Track the trends Turkey is the most popular bulk deli meat with volume sales up 5.6 percent and private brands growing 5.8 percent for the 52 weeks ending July 29, reports research firm Nielsen. Turkey benefits from its perception as a healthier alternative, while the typically lower price of store brands is attractive to the large segment of costconscious shoppers, says Meagan Nelson, Nielsen’s associate director of the perishables group. Specialty selections with unique and bold flavors also are creating strong sales opportunities, Nelson says, adding that is important for retailers to market items that keep pace with evolving consumer interests. “Many national brands are launching ethnicinfluenced deli meats and store brands should at the very least feature comparable products,” she states. “Retailers must work with their suppliers to keep selections interesting.” While many consumers still are seeking me-too privatebranded meats that are less expensive than similar national underestimate the importance brands, retailers that offer a of educating deli wide range of distinct national and private brand options staffers about will generate more category the attributes of revenues, Nelson states. meats so they “Retailers want to sell both can accurately national and store brands so describe products it is better to expand product portfolios,” she says. “But there to shoppers. is a huge opportunity for store

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Store Brands / October 2017 / www.storebrands.com

brands to offer a different sales proposition to the consumer.” To pinpoint the best alternatives for each deli location, retailers should evaluate the popular sandwich selections at nearby foodservice outlets, Sheehan states. “Retailers can localize and personalize their store brands in ways that mainstream manufacturers that ship nationally from a central location cannot,” she notes. “Using local suppliers also creates a point of difference and the perception that products are fresher.”

feature deli meats as ingredients such as a pasta or casserole dishes. In addition, it is essential that operators educate deli staffers about the attributes of meats so they can accurately describe products to shoppers, says John Kreilich, founder and CEO of Naked Bacon, a St. Louis-based supplier of all-natural bacon and sausage. “Many workers don’t know about all the products and would not be able to answer shoppers’

Tell a story The launch of new deli meat options also enhances the necessity of providing shoppers with product information. Effective vehicles include signage that details ingredients, flavors, why the retailer is carrying a specific product, if an item is natural or organic and the protein content, Nelson states, noting that unlike in many other store departments deli case customers are not able to handle products or closely study labels. “It is important to be transparent about what is or isn’t in the deli meat,” she notes. “Retailers also need to communicate the value-added attributes. It is not going to help anyone if consumers are not aware of a product’s benefits.” Signage also can generate greater interest by telling the story behind a product, such as its local origins and how it was developed, Sheehan states. “That can be differentiating in itself because there is typically little signage or stories about anything in the deli,” she says. Retailers, meanwhile, can compensate for the limited space for signage in deli cases by creating smart phone apps that enable consumers to quickly access product data, Sheehan notes. “Shoppers say they want retailers and manufacturers to be transparent about product ingredients,” she states. “The more retailers look at how they could connect to digital technologies, the bigger opportunities they will find.” Sampling also is valuable for introducing new flavors and demonstrating to shoppers that metoo store brands are as tasty as the national selections, Nelson says, adding that demos can include recipes that www.storebrands.com / October 2017 / Store Brands

Category Intelligence: Deli Meats questions,” he says. “Informing the deli staff is similar to restaurants educating waiters so they can tell customers about that night’s specials.” Many private brand suppliers are able to assist with training and can collaborate with deli operators in developing promotional strategies, including advising on the verbiage that should appear on signs and in advertisements, Kreilich states.

Deli meat category performance Refrigerated Non-Sliced Lunchmeat

Refrigerated Sliced Lunchmeat

Private Brands

All Brands

Private Brands

All Brands $5,365.8

$9.4

$199.2

$931.3

+2.0%

+1.5%

-5.5%

-3.4

4.7%

100%

17.4%

100%

Unit Sales (in millions)

2.9

44.2

234.4

1,592.9

Change vs. Year Ago

-8.5%

+0.6%

+0.2%

-1.1%

Avg. Price Per Unit

$3.29

$4.51

$3.97

$3.37

Dollar Sales (in millions) Change vs. Year Ago Dollar Share

Healthy is hot Messaging can spotlight products’ health-oriented attributes that are becoming more important to shoppers such as no nitrates and less fat and sodium, Kreilich says. “Many consumers are willing to pay more for deli meats with clean ingredients and that are transparent” he states. “Retailers who are first to offer such selections will have an advantage over competitors and will keep their store brands relevant as people are not going to revert back to unhealthy eating.” In addition to having greater arrays of wellnessoriented options, many deli departments over the next several years will offer new flavors to address the demands of the large base of millennial consumers who are more adventurous eaters, Sheehan says. “Millennials are the major shopper segment for everything, particularly as they move into the households with kids stage,” she states. “Baby boomers remain important, but with smaller households they are not buying as much. You want to appeal to the large group when selling deli meats.” SB Mitchell is a freelance writer from Wilmette, Ill.

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Category Intelligence: Ethnic Foods

Leading with curiosity It’s a big world, and consumers are becoming more comfortable with what it has to offer By Dana Cvetan

offer samples to spur trial of less-common ethnic foods.

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estaurants, travel, cable television and changing demographics have opened the world of international cuisine to the masses and made it more familiar. “It used to be Spanish food for Spanish consumers; Indian food for Indian consumers. We catered to ethnic groups with their own foods, but now these foods are reaching a broader audience, and retail buyers are starting to understand that,” says Mike Ryan, vice president of sales and marketing for Indian food manufacturer Deep Foods Inc. in Union, N.J. “We do as much business in the center of the country as we do on the coasts.” Indeed, ethnic food consumers “are seeking out experiences that pique and stimulate the senses … and offer something fresh and different,” according to Mintel Trend Sense of the Intense, a study cited in the global market intelligence firm’s March report “International Food Trends: Spotlight on Flavor, US.” An online Lightspeed/Mintel survey of 1,926 adults prepared for the report asked respondents what flavors they prefer in the international foods they purchase at retail or order when dining out. Topping the list was savory at 57 percent, hot [spicy] at 46 percent, meaty at 43 percent, sweet and sour blend at 38 percent, sweet and spicy [hot] blend at 36 percent, smoked at 31 percent, herbs/herbal at 28 percent, sweet at 26 percent, fruity at 13 percent and sour at 12 percent. From 2011 to 2016, dollar retail sales of ethnic foods increased 19 percent, and the market reached $10 billion. In 2016, dollar sales rose 3.4 percent over the previous year, or 2 percent when adjusted for inflation, Mintel reports.

Growth was strong in all ethnic segments, and Mintel forget to promote forecasts continuing, though slowing, growth through 2021. store brand The Mexican/Hispanic segment ethnic cuisine via represents the largest part of social media. the category at 60 percent. There are several factors responsible for the increasing popularity of international cuisine, Ryan says. “The largest consumer group, millennials, have a propensity to be adventurous eaters. Also, the Food Network shows push ethnic food like crazy. The trend is to appeal to people’s curiosity,” he explains. Consumers are also starting to realize that ethnic cuisines are not necessarily homogenous. Indian food, for example, is quite varied by spice levels and the influences of different regional traditions, Ryan says. Yet familiarity and comfort are also critical when it comes to growing sales of ethnic foods. “If people don’t know how to pronounce [the names of dishes], forget it,” Ryan says. Consumers are more likely to consume ethnic foods in restaurants than in their own homes, Mintel discovered. To encourage consumers to purchase or prepare international foods for at-home consumption, Mintel advises matching products to consumer flavor and format preferences. Mintel’s online survey asked respondents what types of international foods and drinks they would be most willing to explore. Seventy percent said meat-based main courses; 63 percent, appetizers; 53 percent, side dishes; 45 percent, non-meatbased main courses; 43 percent, desserts; 41 percent, sandwiches/wraps; 35 percent, soups; 30 percent, salads; 29 percent, savory snacks; 28 percent, sauces/ Hard/Soft Asian Sauces/ condiments; and 12 percent, Tortillas/Taco Kits Total Asian Foods Marinades non-alcoholic beverages. Private All Private All Private All Exposure to ethnic foods Brands Brands Brands Brands Brands Brands will increase, Mintel predicts, $202.1 $2,394.3 $54.0 $694.9 $15.9 $266.3 as restaurants adopt more and -0.5% +2.8% +5.4% +2.5% +4.5% +5.1% varied menu items and as the 8.4% 100% 7.8% 100% 6.0% 100% nation’s demographics continue to diversify, which will help 118.0 1,049.9 31.4 320.5 6.8 87.8 drive growth in the category. SB -0.2% +2.5% +7.6% +0.7% +7.0% +4.1%

Ethnic food category performance Total Mexican Foods Private Brands

All Brands

$237.0

$2,711.1

Change vs. Year Ago

-1.4%

+2.6%

Dollar Share

8.7%

100%

Unit Sales (in millions)

151.8

1,264.5

Change vs. Year Ago

-1.6%

+2.1%

Avg. Price Per Unit

$1.56

$2.14

Dollar Sales (in millions)

$1.71

$2.28

$1.72

$2.17

$2.33

$3.03

Store Brands / October 2017 / www.storebrands.com

Cvetan is a freelance writer based in Barrington, Ill.

Category Intelligence: Paper Products

Frugal impulses Consumers want to save money with household paper items but will sometimes spring for added benefits By Dana Cvetan

target younger adults and Hispanic consumers with innovative products.

100

hether buying in bulk or stocking up during sales, consumers love saving money on their household paper products, according to global market intelligence firm Mintel. That pervasive economizing disposition is keeping category growth in check, as evidenced by flat sales over the past five years, Mintel notes in its February report “Household Paper Products US.” Mintel expects sales to inch up about 1 to 2 percent a year as far ahead as 2020. However, nearly four in 10 household paper product purchasers say they are willing to spend more money for better quality products, such as those with enhanced durability, strength and comfort, Mintel found. Overall dollar sales of toilet tissue, the largest market segment at $8.5 billion, declined 1.4 percent for the 52 weeks ending July 9, according to Chicago-based market research firm IRI. Dollar sales for paper towels, the second-largest segment at $5.1 billion, dipped a scant 0.1 percent during the same period. Store brands lay claim to 20 percent of the toilet tissue subcategory and nearly 30 percent of the paper towel subcategory.

Store Brands / October 2017 / www.storebrands.com

Interest in innovation

Don’t

Thrifty consumers are finding ignore the alternatives to napkins and potential of facial tissues, replacing them with reusable cloths, paper aromatherapy towels or toilet paper, Mintel fragrances in reports. household paper Though both sales and products. usage of napkins and facial tissues continue to fall, younger adults aged 25 to 34 are more likely to purchase these products, including pocket packages of facial tissues and moist products, the report finds. Mintel found that consumers were willing to spend more for innovations such as paper towels that boast antibacterial properties and moist towelettes with added skincare benefits. Promote the category, Mintel advises, by zeroing in on younger adults and Hispanic consumers because both groups have demonstrated interest in product innovations and convenience. A Lightspeed GMI/Mintel online survey of 1,956 adults who bought household paper products within the past six months revealed what consumers are interested in and will pay more for. Thirty-one percent named paper towels with antibacterial benefits; 29 percent, paper products that were better for the environment; 29 percent paper, towels infused with surface cleaner; 28 percent, moist towelettes or wipes with added skincare benefits that were soothing or moisturizing; 25 percent, water-activated paper towels with dishwashing soap; 24 percent, reusable paper towels; 22 percent, refillable containers to match room décor; 22 percent, tissue storage systems that fit in car

Category Intelligence: Paper Products consoles or automobile cup holders; and 21 percent, household paper products infused with aromatherapy fragrances. Additionally, Mintel discovered that Hispanic consumers expressed greater interest

than other groups in the environmental claims touted by household paper products. However, Mintel cautions that building brand trust is necessary to address skepticism of such claims.

Cost and benefits “It’s sort of like a tale of two cities — some retailers are asking for a lot more emphasis on cost, and others are asking for a lot more innovation. Either you need to get very efficient and drive price out of the cost of goods, or you need to have differentiation,” says Jeff Hedderig, senior director of consumer insights for Spokane, Wash.-based Clearwater Paper Corp., a provider of private label bath tissue to retail grocery chains. In the premium, or “ultra” bath tissue segment, consumers ask for products that are both soft and strong, Hedderig says. In paper towels, “absorbency is absolutely critical,” he adds. In both subcategories, retailers

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Category Intelligence: Paper Products must determine the optimal roll and package size to stimulate purchases, Hedderig adds. Larger packs appeal to consumers who like to stock up and can also serve to divert them from big box and online retailers, says Marc Robinson, vice president of business development for Global Tissue Group Inc., a household paper goods manufacturer based in Medford, N.Y.

Household paper product purchase behaviors revealed in the Lightspeed GMI/Mintel survey were as follows: 52 percent said they keep extra on hand so they donâ&#x20AC;&#x2122;t run out; 36 percent said they usually buy what is on sale; 35 percent are willing to spend more for better quality; 34 percent use coupons to save money on those products and 33 percent buy in bulk.

Paper product category performance Toilet Tissue

Paper Towels

Facial Tissue

Paper Napkins

Private Brands

All Brands

Private Brands

All Brands

Private Brands

All Brands

Private Brands

All Brands

$1,723.4

$8,456.6

$1,520.1

$5,113.1

$366.3

$1,546.6

$330.8

$709.9

Change vs. Year Ago

+1.5%

-1.4%

+4.3%

-0.1%

+3.2%

+0.0%

-2.7%

-1.1% 100%

Dollar Sales (in millions)

Dollar Share

20.4%

100%

29.7%

100%

23.7%

100%

46.6%

Unit Sales (in millions)

380.4

1,294.7

463.3

1,006.8

210.3

674.3

160.1

298.2

Change vs. Year Ago

-1.7%

-2.7%

-0.6%

-2.5%

+3.5%

-2.3%

-2.1%

-0.3%

Avg. Price Per Unit

$4.53

$6.53

$3.28

$5.08

$1.74

$2.29

$2.07

$2.38

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Store Brands / October 2017 / www.storebrands.com

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Category Intelligence: Paper Products Placement and assortment Retailers can drive purchase and also take costs out of the system with display-ready packaging units that will reduce labor, improving retailer and vendor margins, Robinson says.

Mintel found that consumers were willing to spend more for innovations such as paper towels that boast antibacterial properties and moist towelettes with added skincare benefits. Shelving and product assortment are taking on more importance in the category, Hedderig says. “We’ve never been asked to be category captains, but now we are being asked [to advise retailers] about assortment and shelving decisions,” he explains.

The category trends are shifting away from national brand equivalent, and the emphasis is now on helping retailers create their own brand, Hedderig says. Use your supplier relationships to think ahead of the curve and create exclusive and unique product lines, Robinson advises retailers.

Packaging must-haves Easy consumer handles for larger bundle packs and inner packs that can be used for both high-count products and single-selling SKUs are among the available packaging improvements in the category, Robinson says. Just having a good product is not enough, Hedderig says. Packaging should show a lot more graphic work than in the past, and showcase the latest colors and design, he says. Store brands are the future of retail and will succeed if retailers identify both consumer needs as well as their own, while putting forth strong promotional and display efforts, Robinson says. SB Cvetan is a freelance writer based in Barrington, Ill.

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Category Intelligence: Disposable Tableware

Sustainable convenience Environmental consciousness becomes more prominent in the disposable tableware segment By Dana Cvetan

consider environmentally sustainable products and packaging.

n a category that has always been about convenience and historically not about green consciousness, disposable tableware manufacturers are adopting new ways to produce products that have the potential to ultimately reduce landfill waste. Corporate stockholders in this industry are expressing concern for producing sustainable products, and the industry is responding by making greater efforts to provide environmentally friendly products and packaging, says Rakesh Rathore, Ph.D., chief operating officer/chief scientific officer for TrueChoicePack, a Dayton, Ohio-based subsidiary of the Che International Group LLC and a maker of biodegradable and compostable disposable tableware. TrueChoicePack products include hot cups, cold cups, plates, bowls, knives, forks and spoons. “Environmental consciousness is becoming a vital point of view when it comes to plastics and packaging,” says M. Selami Yilmazçoban, managing director for Houston-based Sirius Plastics LLC, manufacturer of Vivapak brand thermoform cups and plates and a subsidiary of Kocaeli, Turkeybased Isik Plastik AS, for which he serves as assistant general manager. Sirius products include thermoform drinking cups, plates and lids. France is taking a lead role in environmental protection efforts and will ban plastic packaging beginning in 2020, Yilmazçoban says. Other European nations are imposing taxes on plastic packaging to discourage its use, he adds.

Renewability and biodegradability Retailers are focused on offering disposable tableware that is similar to or better than the national brand offerings, Rathore says. Privatebranded goods dominate the category with 81.5 percent of overall market share, according to Chicago-based market research firm IRI. The most important thing for private brands, says Yilmazçoban, is to represent them in the best way by upholding high standards for product quality, safety and packaging. Sirius Plastics will begin producing biodegradable polylactic acid (PLA) disposable tableware during the final quarter of this year, Yilmazçoban reports. PLA is a bioactive thermoplastic aliphatic polyester derived from renewable resources such as cornstarch, cassava root or sugarcane. The company also recently made improvements to its BPA free products, he adds. TrueChoicePack’s BioGreenChoice brand of zero-waste disposable tableware is made from renewable materials derived from corn and sugarcane. The products are biodegradable and compostable in three to six months in a commercial composting system, according to the company. Compostable products from renewable resources give consumers an opportunity to avoid adding to landfill waste, to which styrofoams and plastics greatly contribute, according to a company statement. TrueChoicePack’s sustainable packaging solutions rely on the four factors of engineering, says Rathore: design and aesthetics, process management, materials science and life cycle.

Consumers are going green Retailers should consider the big picture when it comes to environmentally designed products and packaging, Yilmazçoban says. “We need to consider this topic as (vital to) our future, not as a part of marketing and sales volumes,” he states. “We are talking about the future environment of our children and (their) safety. We know that we have to pay more for environmentally friendly products, but we have the responsibility of finding the balance” between that and using up non-renewable resources such as petroleum. fail to offer Consumers are now more disposable aware of environmentally friendly tableware online. products and packaging options through easily available media

Don’t

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Store Brands / October 2017 / www.storebrands.com

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Category Intelligence: Disposable Tableware platforms, including social media, magazines and blogs, Rathore says. Modern shoppers tend to search and investigate products and their packaging before buying any products, Rathore says. It may be difficult for companies to delay using environmentally friendly packaging and product options because that’s what consumers strongly prefer, he adds. “This is evident by [the fact that] there are

more environmentally friendly options available on retailers’ shelves now compared to five or 10 years ago,” Rathore notes.

Convenience rules Convenience drives the disposable tableware category, which is inherently a waste-producing enterprise. It’s such a driving force in the overall marketplace that there is no getting away from it. “As time becomes more ‘business-oriented for most of the world’s population each day, we have less time at home,” Straws/Swizzle Yilmazçoban says, noting that Sticks consumers have less time for Private All cooking and cleaning up. Brands Brands To make the category $38.2 $78.9 even more convenient — and +0.1% +1.0% to spur more sales in the 48.5% 100% process — Rathore says more retailers should offer disposable 26.5 50.2 tableware for sale online. SB +1.6% +0.8%

Disposable tableware category performance Disposable Tableware Private Brands

Plastic Cutlery

All Brands

Private Brands

All Brands

Paper/Plastic Table Covers Private Brands

All Brands

Dollar Sales (in millions)

$625.1

$767.0

$494.7

$560.1

$92.1

$128.1

Change vs. Year Ago

+6.5%

+4.3%

+4.7%

+3.1%

+21.2%

+12.2%

Dollar Share

81.5%

100%

88.3%

100%

71.9%

100%

Unit Sales (in millions)

281.5

343.1

201.0

222.6

54.0

70.4

Change vs. Year Ago

+4.9%

+3.8%

+2.2%

+2.7%

+18.0%

+10.2%

Avg. Price Per Unit

$2.22

$2.24

$2.46

$2.52

$1.71

$1.82

$1.44

$1.57

Cvetan is a freelance writer from Barrington, Ill.