Store Brands - Aug 2018 by ensembleiq

High pressure processing for differentiation

Own brands with answers for lifestyle solutions

Using convenience to merchandise packaging August 2018 | www.storebrands.com

INDUSTRY REPORT

NON-FOOD

FOR THOUGHT Our annual report, based on IRI data, can help retailers determine what non-food categories â&#x20AC;&#x201D; from deodorant to dog food â&#x20AC;&#x201D; pose opportunities for private brands

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Volume 40 No. 8 August 2018

DEPARTMENTS 6

Editor’s Take

Viewpoint

Around the Industry

Getting Social

End Cap

CONTENTS INDUSTRY REPORT

COVER STORY

Non-Food for thought

CATEGORY INTELLIGENCE

Our annual report, based on IRI data, can help retailers determine what non-food categories — from deodorant to dog food — pose opportunities for private brands

Salty snacks

Healthy snacks

Meats

FEATURES

Honey & Syrups

24 FOCUS ON FRESH

Milking dairy’s potential Cheese, snacks offer big opportunities for private brand fresh dairy

Skin care

35 PACKAGING

Fashion meets function

Food and beverage packaging is becoming an increasingly potent merchandising vehicle

26 TRENDING Water power High pressure processing’s many benefits may help differentiate private brand products

32 TOTAL STORE Solution merchandising

Leveraging store brands’ power to provide lifestyle solutions

Store Brands (ISSN-0190-9851; USPS # 0488-370) is published monthly by EnsembleIQ, 8550 W. Bryn Mawr, Suite 200, Chicago, IL 60631. 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 2018 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. 4

Store Brands / August 2018 / www.storebrands.com

· Cheese Biscuits and Cornbread · Breadsticks and Garlic Knots · Garlic Toast & Bread

Innovation ation · Inspiration ation · V Value alue The opportunities in Frozen en Bread are unparalleled. A category positioned to offer exactly what consumers crave. The foundations are: Unmatched Food-Value Heart-warming, Grandma-approved Approachable, Inspiring destination items At Furlani we cater to trends not fads. Providing best-in-class retailers and food service operators with core-assortment items, plus gourmet-nostalgia signature products.

EDITOR’S TAKE Business Intelligence for an Evolving Market

8550 W. Bryn Mawr, Suite 200, Chicago, IL 60631 (773) 992-4450

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WHAT I’D DO FOR THAT SOY SAUCE

Katie Brennan

kbrennan@ensembleIQ.com

EDITORIAL Editor-in-Chief

Lawrence Aylward

(330) 635-2586

laylward@ensembleIQ.com

Managing Editor

Lauren Hartman

(224) 231-6359

lhartman@ensembleIQ.com

Contributing Writers

When The Kroger Co.’s Vice President of Our Brands Gil Phipps informed me about the retailer’s double-brewed soy sauce — made from a 1,500-year-old Japanese recipe — I knew I had to have it. I’m a fan of Asian foods, so securing that soy sauce, which Kroger offers under its HemisFares private brand line, became an immediate culinary quest for me. I visited a Kroger in Columbus, Ohio, and found the soy sauce in a center store aisle. I expected the price to be higher than it was, considering the story behind it, and I was surprised that it cost only $3.99. But after tasting the soy sauce, I realized I made a huge mistake, considering I don’t live anywhere close to a Kroger. Dumb me; I only bought one bottle! The soy sauce is magnificent, as in premium quality, and is a tremendous value. But because of my purchasing blunder, I now must drive 40 miles to the closest Kroger to buy more. And that is my point. I will make that drive to Kroger for the soy sauce because it’s the only retailer that offers it. And I might pick up a few other distinctive, exclusive, authentic and premium private brands — at a fantastic value — from Kroger while I’m there. Which brings me to another point. More retailers have figured out that the path to differentiation is through distinctive, exclusive, authentic and premium private brands that offer value. In the last few months, at least two retailers have announced new lines featuring such products. Keasbey, N.J.-based ShopRite, which has more than 270 stores in New Jersey, New York, Connecticut, Maryland, Delaware and Pennsylvania, recently debuted the ShopRite Trading Co., a line of premium, artisanal foods the retailer says is inspired by a variety of world cuisines. Some of the line’s food and flavors are imported from Italy, Ecuador, Spain and Greece. “We sent our ShopRite experts around the world in search of the very best ingredients and finest products,” said ShopRite Spokeswoman Karen Meleta in a press release. Boise, Idaho-based Albertsons Cos. recently announced it is “expanding and elevating” its store brands with “a new top shelf culinary presence” called Signature Reserve, which will feature products in several food and beverage categories. “We scour the earth for ingredients and unique flavors that meet the exacting standards of Signature Reserve,” said Geoff White, president of Albertsons Companies Own Brands, in a press release. “Products earn the Signature Reserve label only after a rigorous selection process, which includes scrutiny by our culinary professionals and expert merchants for top quality craftsmanship.” From Meleta’s and White’s quotes, you can see where ShopRite and Albertsons are coming from. They are literally searching every corner of the world to find a way to be different. So is Phipps and his team from Kroger. So is Sam’s Club’s team. So is Trader Joe’s team. They are helping to lead the next evolution in store brands. They realize what it is that will keep consumers coming back to their stores. Which reminds me … time to drive to Kroger to get that soy sauce.

Rich Mitchell, Dana Cvetan

ADVERTISING & SALES Associate Brand Director Suzanne Caputo

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Regional Sales Manager

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CUSTOM MEDIA Director of Client Services, Enterprise Solutions Kaeli Elisco (224) 632-8221

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AUDIENCE ENGAGEMENT Director of Audience Engagement

Gail Reboletti

Audience Engagemnet Manager

Shelly Patton

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(215) 301-0593

spatton@ensembleIQ.com

List Rental

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Creative Director

Colette Magliaro

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Custom Project Manager

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Custom Project Manager

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Advertising/Production Manager (973) 607-1322

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REPRINTS, PERMISSIONS AND LICENSING

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

Alan Glass

Chief Executive Officer

David Shanker

Chief Operating Officer & Chief Financial Officer

Richard Rivera

Chief Brand Officer

Korry Stagnito

President, Enterprise Solutions Chief Digital Officer

Terese Herbig Joel Hughes

Chief Human Resources Officer Senior Vice President, Innovation

Jennifer Turner Tanner Van Dusen

2015

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

Store Brands / August 2018 / www.storebrands.com

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VIEWPOINT

By Vanna Tran

Tran is director of multicultural growth and strategy at Nielsen.

Private brandsâ&#x20AC;&#x2122; popularity on the rise with minorities Consumers of color are opening their wallets in unprecedented numbers, recognizing the value and quality of private brand products. Gone are the days where store brands were relegated to the bottom shelf. In fact, according to Nielsen data, private brands account for 18.3 percent of sales in all departments, growing at 4.5 percent from May 2017 through May 2018, while branded items were flat at 0.4 percent. With more and more retailers realizing private brands are a means to directly connect with shoppers and build margins, multicultural consumers are poised to be a major player in this sector. Within the U.S., Hispanic consumers spent a whopping $15.5 billion on store brands, growing dollar volume during the time period by 5.4 percent. This

Within the U.S., Hispanic consumers spent a whopping $15.5 billion on store brands, growing dollar volume by 5.4%.

Store Brands / August 2018 / www.storebrands.com

performance surpassed that of non-Hispanic white consumers, where dollar sales grew by 4.5 percent. African American shoppers are also embracing store brands more than their non-African American counterparts, spending 4.8 percent more compared to last year, and reaching $14.8 billion. The nonAfrican American dollar volume growth rate was slightly lower, at 4.6 percent versus a year ago. Hispanic consumers delivered an additional $787.5 million in growth for private brands, equating to 38 percent more than their additional expenditure of $569.2 million for branded items. Similarly, African American shoppers spent an additional $677.4 million on store brands, which is 1.5 times more than their additional spend of $264.5 million of branded items. Retailers take note â&#x20AC;&#x201D; out of 15 departments measured within a recent Nielsen study, private brands posted increases in 80 percent of those departments for Hispanics while African Americans posted growth in two-thirds (10 out of 15) of the departments. Additionally, multicultural consumers who use store brands are also savvy shoppers. One-third of multicultural shoppers who used store brands in a recent seven-day period tapped into their e-mail to access coupons. These shoppers are also 58 percent more likely to access coupons via text messaging. Nearly one out of every five multicultural consumers who used store brands in the seven-day period accessed coupons this way. However, in-store coupons remain the most popular, with one out of every two multicultural private brand users obtaining coupons via this more traditional method. Multiculturals are also 27 percent more likely than others to use in-store coupons. This is no surprise, given that shoppers are accustomed to leveraging their preferred storeâ&#x20AC;&#x2122;s weekly ads. The upward momentum of private brands has not waned since the Great Recession. With multicultural consumers fast approaching the majority population in many communities in the country, the opportunity to build loyalty with this shopping base will be critical for the success of any retailer and manufacturer in the private brand space. SB

AroundtheIndustry

A ‘prime’ snafu Computer glitch proved that even almighty Amazon is vulnerable to technology troubles

By Lawrence Aylward

Amazon.com’s Prime Day periods, making it the on July 16 didn’t go off biggest shopping event without a hitch — there in its history. Amawas a glitch. zon.com said Prime Yes, the largest online members worldwide retailer in the world had purchased more than issues with its website on 100 million products its biggest business day of including many of its the year. Those three words own brands. But it didn’t that no online retailer wants to announce sales figures. Wouldn’t hear — “periodic platform outA few questions, though: you think Amazon.com ages” — prohibited consumers • How could Amazon.com would be from shopping on their laptops, let periodic platform outages ready for a tablets and phones shortly after occur? It’s like the lights going billion hits? Amazon’.coms Prime Day sale out in all Walmarts on Black began. And, yes, those consumFriday. Was it just a case of too ers were irritated — taking to Twitter many shoppers hitting Amazon.com’s to tweet their frustrations. Here’s one of site at once? Wouldn’t you think Amamy favorites: “I saved a bunch of money zon would be ready for a billion hits? today because the Amazon site is down. • How would online shoppers who #PrimeDay.” are new to Amazon.com react if they To be honest, when I logged onto were unable to shop the site because of Amazon.com on Prime Day and saw the the glitch? Will they ever come back? landing page with the cute dog saying Amazon.com, which continues to up there was an error, I figured there was the ante in its own brands across varisomething wrong with my internet serous categories, could take a hit from vice. And then the same thing happened new users if they experienced a first on my phone, and I thought there was “bad experience.” Considering own something wrong with my phone. brands, image is vital; it’s not just about I just figured that Seattle-based Amathe products offered. zon.com — the behemoth of all online Will some online shoppers think less shopping platforms — could never expeof Amazon.com because they were left rience a glitch, especially on Prime Day. in a lurch with the glitch? And will they But even Amazon.com CEO Jeff associate the glitch with Amazon.com’s Bezos has bad days. Funny thing, on own brand product offerings — thinkJuly 16, besides being Prime Day, it was ing those products might not be that also announced that Bezos had become great, especially if ithe website is prone the richest man in history, topping $150 to failure? billion. But something tells me Bezos Perhaps Amazon has experienced wasn’t celebrating. periodic platform outages before. We Prime Day continued on July 17 (as it just didn’t know about them. Alas, the was actually 36 hours this year). Shortly timing of the latest outages couldn’t after Prime Day ended, Amazon.com have been worse. announced that sales surpassed Cyber If anything, the glitch proves that Monday, Black Friday and the previous even almighty Amazon.com is vulnerPrime Day, when comparing 36-hour able to technology troubles. SB 10

Store Brands / August 2018 / www.storebrands.com

SHORT TAKES UNFI will divest SuperValu retailers as part of deal

Providence, R.I.-based United Natural Foods Inc. (UNFI) is buying Eden Prairie, Minn.-based SuperValu for approximately $2.9 billion. As part of the deal, UNFI said it will divest SuperValu’s retail operations, including Cub Foods, Hornbacher’s, Shop ‘N Save and Shoppers. SuperValu offers several private brand lines, including Wild Harvest. UNFI said in a press release that the deal will likely help the grocery food wholesaler accelerate its growth, further diversify its customer base and enable it to cross-sell popular products in perimeter categories, such as meat and produce. UNFI specializes in natural and organic distribution, with more than one-third of its business stemming from a long-term supply contract with Amazon’s Whole Foods Market. “The combination of UNFI and SuperValu provides a substantial premium and delivers certainty of value to our stockholders, meaningful benefits to our customers, expanded opportunities for our employees, and the ability for us and our vendors to efficiently serve a varied customer base,” said Mark Gross, SuperValu’s CEO, in a statement. “We have been executing an ambitious strategic transformation for over two years. We believe this transaction is the best and natural next step for our stockholders, customers and employees. I am confident that, together, SuperValu and UNFI will be well-positioned to succeed — and to help our customers succeed — in today’s grocery landscape.”

Albertsons launches virtual store to sell popular private brand

Albertsons Cos. has launched O Organics Market, an Instacart grocery delivery service-powered virtual store, where customers can find organic, natural and other better-foryou foods, beverages and grocery items. O Organics is Albertsons’ popular organic store brand that

AroundtheIndustry Kroger goes non-food route with new Our Brands offerings The Kroger Co. is extending its private brand offerings to non-food categories. In the past several weeks, the Cincinnati-based retailer has introduced a fashion line and a men’s grooming line under its Our Brands lines. Kroger is partnering with fashion designer Joe Mimran on Dip, described as apparel that makes style easy and affordable. Kroger cited Mimran’s three decades of expertise in the fashion industry as its reason for teaming with him. “We’ve worked closely with Joe and his team to develop a line of clothing that works for today’s times — easy to buy, easy to wear and easy to love,” noted Robert Clark, Kroger’s senior “The goal is vice president of merchandising, in a to connect press release. with our Dip, which includes men’s, women’s, jucustomers niors’, kids’ and baby collections, is designed to help busy, on-the-go people “live with style in innovative ways through and get the most out of their fashion dollar,” Kroger stated. Mimran created the flexible Our Brands.” collections and seasonal highlights to help make creating outfits, or outfitting an entire ROBERT CLARK, SENIOR VICE PRESIDENT family, quick and simple. OF MERCHANDISING, Dip will replace more than a dozen of Kroger’s KROGERS private brand clothing brands. “The goal is to connect with our customers in innovative ways through Our Brands,” Clark said. “Dip enables Kroger to provide a meaningfully better clothing experience, and ultimately, expand on the products and experiences that you can only get at our stores. Imagine grabbing a few groceries and then being able to dip over to the next aisle and find your new favorite top or pants.” Dip will launch this fall across the country in more than 300 Fred Meyer and Kroger stores. Kroger also recently introduced its own brand of shaving and grooming products called Bromley’s For Men. The line includes premium razors, replaceable blades, shaving accessories and skincare products. Bromley’s was created as “a complete grooming experience, with a leading razor and products for every step of the way — at a more affordable price,” the retailer stated in a press release. Bromley’s is the result of development and work design led by skin care experts collaborating with Kroger’s Our Brands team. “Bromley’s For Men offers a complete, customizable grooming experience because Kroger knows it shouldn’t be complicated or expensive,” Clark said. The line includes a pre-shave prep wash exfoliator, a charcoal-infused daily cleanser, a velvety shave cream, an after-shave balm and a daily moisturizing lotion containing SPF 15. The skin care products complement the premium classic razor with a choice of interchangeable razor cartridges. According to a nationwide trial, 88 percent of participants said the razor gave a smoother shave than their current razor, and 80 percent said they would purchase the product, according to Kroger. SB

SHORT TAKES recently achieved $1 billion in sales, and is adding about 450 new products this year. The virtual store will also sell Albertsons’ Open Nature private brand, a line of natural foods, and other branded organic and natural products. The initial launch of the O Organics Market is in San Francisco and Washington, D.C., with plans of expanding to additional cities in the future. O Organics Market caters to an important segment of Instacart shoppers seeking organic and natural products, and deepens Boise, Idaho-based Albertsons’ commitment to expanding its digital footprint, the companies stated in a press release. “With nearly 3,800 items from O Organics, Open Nature and other organic and natural brands, O Organics Market is another important step in our strategy to deliver customers what they want, when they want it,” said Shane Sampson, Albertsons’ chief marketing and merchandising officer, in a press release. “With such a broad selection of organic and natural products, customers will be able to order from exclusive items like Open Nature Sockeye Salmon and O Organics Mission Figs, to more commonplace products, like Dave’s Killer Bread and Annie’s Organic Fruit Snacks.” In related news, Albertsons said it increased own brand sales penetration slightly to 24 percent in the first quarter of fiscal 2018, which ended June 16.

True Family Enterprises acquires Chef’d

Newport Beach, Calif.-based True Family Enterprises and its wholly owned subsidiary True Food Innovations, a fresh food technology, consumer packaged goods and manufacturing company, has acquired the assets of the Los Angeles-based meal kit company Chef’d. Chef’d recently ceased operations, citing funding and expense issues. True Food Innovations acquired all Chef’d assets for an undisclosed amount, and plans to consolidate them into its existing businesses. True Food Innovations provides manufacturing services, turnkey product development, high pressure process packaging and customer partnerships for meal kits and retail-ready HPP products both domestically and internationally. SB

www.storebrands.com / August 2018 / Store Brands

GETTING SOCIAL

Q A with Doug Baker Vice President of Industry Relations, Private Brands and Technology for the Food Marketing Institute How did you come into the world of private brands? I began my career at 17 with Fry’s Food Stores, so I grew up in the business. While serving a global brand like Kraft/Nabisco in the late ’90s, I had a role in the growth of my customers’ private brand programs. When I joined Albertson’s, though, private brands became a passion and focus for me. At FMI, I advocate on behalf of the industry, and work with members to elevate best practices and innovation in private brands. Describe the private brands industry in one word. Loyalty What do you like most about the industry? Our role in sustaining consumers’ sense of community and being at the center of many memorable family/ friend moments.

Doug and Ericka Baker in front of their new cabin, which is under construction.

What one great thing does the industry have going for it? Consumer awareness and acceptance of private brands is paving the way for companies to explore their brands in ways they have not been able to in the past. What is the industry’s biggest challenge? Keeping pace with the speed of change. If you could create one private brand product, what would it be? My boss told the FMI staff on day that I would eat dirt if it had protein in it. I have to admit, he’s probably right. Who is your hero and why?

Store Brands / August 2018 / www.storebrands.com

My father for giving me the independence to fail, the support to pick me up and help me learn, and for his friendship as an adult. Another influential person is my wife, Ericka. She juggled her career as an intensive-care nurse with our daughters’ many activities, and supported me when I pursued new opportunities. What trait in yourself do you attribute most to your success? My dad was very specific about “commitment.” If you make one, show up until that commitment has been fulfilled. What is the biggest obstacle you have ever overcome? Myself. Growth opportunities never stop, and growing pains come in all types of experiences. What’s the best advice someone ever gave you? What you do when others are not watching is more important than what you do when they are. You have a week off. Where do you go and why? My wife and I are building a cabin for weekends and short vacations. Now that we have adult children, we hope they will sneak away to hang out with us. If you were born 100 years ago, what would you do for a living? If it is true your last name reflects what you do for a living, I’d either be a baker of bread or masonry bricks. The way I love bread, I’d hope it would be the former. What song do you love to crank up in the car? John Denver’s, “Take Me Home, Country Roads.” SB

NON-FOOD FOR THOUGHT Our annual report, based on IRI data, can help retailers determine what non-food categories â&#x20AC;&#x201D; from deodorant to dog food â&#x20AC;&#x201D; pose opportunities for private brands BY LAWRENCE AYLWARD

www.storebrands.com / July 2018 / Store Brands

Susan Viamari owns two dogs, and she doesn’t apologize for treating them like family members. “A lot of people treat their pets like they are members of their households,” says Viamari, the vice president of thought leadership for market researcher IRI. Which brings us to private brands, specifically for dogs and cats. Because people are treating their dogs and cats more like people than like dogs and cats, they want better things for them — as in premium products — from supplies to food. Hence, the supplies and food markets for dogs and cats may present retailers with a burgeoning opportunity to grow their private brands with products that are better than the national brand equivalents. That said, large national brands and smaller regional brands are improving their offerings as well.

“[National brand innovation] is really keeping the personal care sector exciting,” Viamari says. “For instance, there are lines targeted specifically toward men’s care, natural care and ethnic needs.” But Viamari says private brands still have a chance to compete.

Pet supplies for dog and cats is a

$2.5 billion category with overall sales increasing nearly 2 percent in the latest 52-week period ending May 20.

“Retailers of store brands have an opportunity to get a piece of a really strong market that has a lot of premium potential with higher margins,” Viamari says.

“Private brands really need to look at where there are pockets of growth in the sector,” she adds, noting that personalization of such products is “really what’s moving the needle in the marketplace.”

According to recent data from IRI, pet supplies for dog and cats is a $2.5-billion category, with overall sales increasing nearly 2 percent in the latest 52-week period ending May 20. Store brand sales increased more than 12 percent in that time period, and now own more than 28 percent of the $2.5 billion-segment.

In the personal care category, which also includes cosmetics, shampoo, deodorant and other products, Viamari stresses the importance of niche products and niche marketing of those products for store brands to succeed.

Private brand sales also rose in the dry cat food category, increasing almost 6 percent during the period. While store brands rank first among products in the dry dog food segment, sales were down 3 percent. Sales of store brand wet cat food climbed 2.5 percent, and sales of store brand wet dog food sales rose 2 percent. There are plenty of other opportunities for store brands to grow in other non-food categories as well. While private brands are performing well in many sectors, they aren’t performing so well in others. But the glass-is-halffull analogy says that store brands have an opportunity to increase market share in the categories where they haven’t made their mark.

Consider deodorant soap, where private brands are having a tough time competing with national brands like Irish Spring. Viamari credits national brand innovation in the personal care sector in general for keeping store brands from making headway.

Store Brands / July 2018 / www.storebrands.com

There has been a recent movement by retailers and manufacturers of store brands to increase their premium product offerings in food and beverage consumer packaged goods. Viamari says premiumization can also impact the non-foods sector. “It’s really about looking at the continuum of products that are offered in [particular] categories,” she says. “And what there needs to be within each category is an assortment that matches the needs of the consumer. So, yes, there’s an opportunity at the premium end. But there are also consumers who just want to save money, and they will forego the premium experience and will buy the value brand. So there is opportunity for store brands in the value end, the premium end and even in between.”

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In some non-food categories, store brands didn’t get off to a good start when they debuted many years ago and continue to lag behind. While such products were inexpensive, consumers found their quality to be lacking. But Viamari advises retailers not to give up on such categories. Products in those categories have and can continue to be improved from a quality and value perspective. “It’s not too late, especially with the rise of millennial shoppers,” she adds. “Millennials are less focused on brands and more focused on a product’s attributes. They also weren’t in the market back when [private brands] had those plain black and white labels.”

CATEGORY

CAPSULES

Private brands

were tops in sales in liquid body wash and second in liquid hand soap.

In non-food segments where private brands are doing well such as wet wipes, toilet tissue and paper towels, Viamari advises retailers to keep innovating and improving products as much as possible so they continue to offer value, not just a low price. It’s through innovation, from the product itself to its packaging and to its story, that store brands in non-foods can differentiate and succeed, Viamari stresses. “It’s about the efforts that private brands are putting into being more than just me-too products and actually being brands in their own right,” she says.

Editor’s note: Store Brands recently analyzed private brands sales data from a list of non-food product categories provided by market researcher IRI. The data also contained the top five manufacturers and top five brands in each category. Below are several category capsules taken from the data that show how store brands performed during a 52-week period ending May 20 when compared to the previous time period. IRI compiled the data from grocery, drug, mass market, military and select club and dollar store retailers. For more information, contact IRI at iriworldwide.com.

SOAP This near $5-billion category includes deodorant bar soap, non-deodorant bar soap, hand sanitizers, hand cleaner, liquid body wash and liquid hand soap. Private brands performed well against brands in some category segments, leading in hand sanitizers, with nearly $93 million in sales, which was a 40 percent increase in sales. Private brands were also tops in sales of liquid body wash and second in liquid hand soap. However, private brands didn’t crack the top five in deodorant bar soap and non-deodorant bar soap.

Store Brands / July 2018 / www.storebrands.com

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In the shampoo category, private brands did not finish in the top five for regular shampoo, a segment with $2.3 billion in sales. MOIST TOWELETTES In this nearly $2-billion category, private brands dominated in sales of baby wipes, with $544.1 million, an increase of nearly 10 percent. Private brands own more than 42 percent of the category.

in overall sales, private brands account for only $4 million and lost more than 18 percent of sales. Women’s hair coloring dominates the category with $1.4 billion in sales. No private brands are in the top five women’s hair coloring selling products.

SANITARY NAPKINS/TAMPONS

SHAMPOO

A $2.8 -billion category, private brands ranked second in sanitary napkins/liners with $318.7 million in sales, a 1.3 percent increase. Private brands captured 11 percent of sales in the tampon market with $116.1 million in sales, also ranking second in the category among products.

In this $3.1-billion category, private brands did not finish in the top five for regular shampoo, a segment with $2.3 billion in sales. While private brands finished third among products in the dandruff shampoo segment with sales of $50.7 million, sales slipped about 8 percent from the previous period.

HAIR STYLING GEL/MOUSSE The $1-billion category grew slightly during the time period, but no private brand products appear in the top five sellers.

HEALTH REMEDIES Private brands performed well in several segments of this $1.1-billion category, finishing first in ear-care products with $25.4 million sales and second in ear drops with $23 million in sales. Both segments also saw a slight increase in sales. Private brands also saw a 20 percent sales increase in Epsom salts with sales of $76.4 million, ranking first in the segment. But while store brand sales of chest rubs finished second, sales were down 9 percent. Overall, that segment rose more than 11 percent in sales.

HAIR COLORING The name brands rule in this $1.61-billion category. In men’s hair coloring, which comprises only $202 million

Store Brands / July 2018 / www.storebrands.com

ADULT INCONTINENCE PRODUCTS Private brands continue to perform well in the category, finishing first among all branded products with sales of $583 million, an increase of 6 percent.

INTERNAL ANALGESICS In this nearly $4-billion category, private brands performed well in several segments, including internal analgesic tablets, a segment that owns $3.4 billion of the category. Private brand sales were $1.2 billion, but increased less than 0.5 percent. Nevertheless, store brand products rank first as the top seller in the category.

COLD/ALLERGY/SINUS TABLETS Private brand sales are holding steady in this $4.7-billion category. Store brand sales were flat, with about $1.46 billion in sales but hold the top spot among all products.

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Private brands are nowhere to be found in the top five products of this nearly $2.2 billion category.

Private brands continue to battle brand name powers such as Listerine in in this $1.46-billion category. Store brands ranked second behind Listerine in product sales with $199.2 million in sales, which were flat when compared to the previous period.

COSMETICS/FACIAL The nearly $2.2-billion category, featuring blush, bronzer, concealer, foundation, powder and other products, is dominated mostly by name brand products.

COSMETICS/EYE Name brands dominate the $2 billion category, which includes eyebrow makeup, eye liner, eye shadow and mascara. Store brands rank fifth among products in eye shadow but sales declined 13 percent.

BABY NEEDS While private brands rank high in several segments of this $878-million category, sales decreased during the 52 weeks in some segments. All store brand sales declined in baby lotions, baby oils, baby powder, baby shampoo and baby soaps.

Sales of private brands grew nearly 9 percent in the tooth bleaching/whitening segment of the toothpaste and tooth bleaching category, ranking store brands second among products in the segment.

Store Brands / July 2018 / www.storebrands.com

TOOTHPASTE AND TOOTH BLEACHING Sales of private brands grew nearly 9 percent in the tooth bleaching/whitening segment of this $3.16-billion category, ranking store brands second among products in the segment. But in the regular toothpaste segment, which comprises $2.86 billion of the category, store brands do not have a product ranking in the top five for sales.

TOOTHBRUSH/DENTAL ACCESSORIES Store brand sales increased 6.7 percent during the period in the category, making retailersâ&#x20AC;&#x2122; own brands No. 1 in the dental accessories/tools segment, which makes up $913.7 million of the $2.65-billion category. Private brands also increased in sales in dental floss (2.4 percent) and manual toothbrushes (2.2 percent), the latter ranking store brands first among all products in the segment, which comprise $822.7 in sales of the category. Private brand power toothbrushes also increased about 9 percent in sales in a segment that had $487 million in sales, ranking them second.

BLADES Sales of store brands slipped in this nearly $2-billion category, including a drop in cartridges; disposables, where private brands rank first in product sales by a wide margin; and razors, where store brands also lead in product sales.

The liquid laundry detergent segment controls

$5.36 billion of the $7.27-billion

laundry detergent category, with private brands accounting for $128.6 million in sales, which did not rank in the top five product sellers. VITAMINS The nearly $7.3-billion category grew about 4 percent overall , with store brands leading the way. Sales of private brand liquid vitamins/minerals soared more than 18 percent, and ranked third among products in that segment. Private brand mineral supplements grew about 5 percent and now own nearly 33 percent of the segment, ranking first among products with $1.2 billion in sales. Store brands also ranked first in the $1.89-billion multi-vitamins segment, and had an increase of nearly 10 percent in sales. In addition, store brands rank first and increased sales 8 percent in the letter vitamins segment.

WEIGHT CONTROL More consumers are buying private brand weight control products, a category worth nearly $3.8 billion. Sales of store brands in the weight control/liquid and powder nutritionals segment, which comprises $3.4 billion of the category, climbed 10 percent.

HAND AND BODY LOTION In this $2-billion category, private brand sales grew 3 percent to about $136 million, ranking store brands second among all products.

DEODORANT In this nearly $3-billion category, store brands haven’t garnered much sales, with no product among the top five.

CONTACT LENS CARE PRODUCTS The $1.9 -billion category is made up mainly of contact lens solution, and store brands continue to have a

Store Brands / July 2018 / www.storebrands.com

foothold, with sales growing 7 percent, ranking private brands first in sales in the segment.

FOOD AND TRASH BAGS Private brands rule this nearly $4.5-billion category. In the garbage/trash/lawn and leaf bags segment, private brands owned about $1.2 billion of the $2.68 billion spent. Sales rose 2.6 percent. In the sandwich/ freezer/food storage bag segment, private brand sales were relatively flat, but still own 42 percent of the $1.7 billion spent.

HOUSEHOLD CLEANERS The $3.4-billion category includes all-purpose cleaner/ disinfectant, tub/tile cleaner, glass cleaner/ammonia, oven/appliance cleaner/degreaser, specialty cleaner/ polish, spray disinfectant and plenty of other products. Yet store brands don’t make much of a dent in many of the segments except with all-purpose cleaner/ disinfectant, spray disinfectant, glass cleaner/ammonia, drain cleaner and a few others.

LAUNDRY DETERGENT The liquid laundry detergent segment controls $5.36 billion of this $7.27-billion category, with private brands accounting for $128.6 million in sales, which did not rank in the top five product sellers. However, store brand sales rose about 4.5 percent in the segment. Store brands held similar rankings in the “other” laundry detergent (packet/bar) segment and the powdered laundry detergent segment, although those segments garnered much lower overall sales.

TOILET TISSUE

DOG AND CAT FOOD

Store brand toilet tissue sales increased more than 10 percent in this category, which remained relatively flat overall with total sales of about $8.5 billion. Private brand sales total about $1.8 billion and now own about 21 percent of the category.

Private brand sales rose in the cat food category, increasing almost 6 percent. Store brands occupy the top product spot in the $2.3-billion category. While private brand dry dog food ranks first among products in the $5.1-billion category, sales were down 3 percent. Sales of store brand wet cat food climbed 2.5 percent, and private brands own 5.6 percent of the category. Store brand wet dog food sales rose 2 percent, and private brands own 8 percent of the category.

PAPER TOWELS Private brand paper towels own the top spot among products in this $5.1 billion category. Store brand sales rose 3 percent and now own 30 percent of the category.

PET SUPPLIES In the dog/cat needs segment of the $4.3 billion category, sales increased more than 12 percent, with store brands owning more than 28 percent of the $2.5 billion segment. Store brands also comprise the No. 1 product in the segment.

PET TREATS At $3.1 billion, the category grew 4.3 percent. Cat treats comprise far less than dog treats in the category, the latter making up almost $2.5 billion of the category. While store brands have no product in the top five for cat treats, private brand dog treats are the top product in the dog treat segment, and sales rose 10 percent. SB

www.storebrands.com / August 2018 / Store Brands

FOCUS ON FRESH: Dairy Trends

For private brands, the big opportunities in fresh dairy can be found in specialty cheese and snacks When the U.S. Department of Agriculture’s Food Pyramid came out in 1992, we learned exactly what a balanced diet looked like. Some targets were more difficult to meet — vegetables, ahem — but dairy, with all of its options , always seemed doable. Today, the number of milk, yogurt and cheese products has exploded, making it easier than ever to get a daily dose of nutrients that only dairy provides. Store brands have always been a player in this key category, but retailers will need to pay close attention to the myriad consumer trends to stay competitive. Talking about today’s dairy trends means talking about plants. Wait, what? Yes, it is true. According to a recent Mintel report titled “Non-Dairy Milk – US 2017,” non-dairy milk continues to grow as the popularity of plant-based nutrition grows. The most popular types of non-dairy milk include almond, soy and coconut. But other nut and plant bases are gaining momentum, including pecan, quinoa, hazelnut and flax milks. “We predict that new plant bases such as cashew and rice will allow new entrants into the non-dairy milk category to eventually surpass the soy milk segment, one of the first non-dairy milk segments to really take off with consumers,” says Megan Hambleton, a beverage analyst at Mintel. But with the plethora of offerings in the plantbased beverage segment, retailer’s shelves are running into issues. “I have observed as many as three to four national brands of almond beverages on a store shelf, with one SKU of store brand almond beverage,” says Cindy 24

Store Brands / August 2018 / www.storebrands.com

B Y N EVEN KA JEVT IC

Sorensen, founder and CEO of Minneapolis-based The Grocery Group. “This is duplication, not variety.” And this amount of duplication, she says, results in diluting sales that might otherwise go to store brands. “It also increases out of stocks on many items in the milk case such as whole milk and flavored milk,” she adds, “which might be under spaced due to the over duplication in plant-based beverages.” She advises applying category management principles to help manage the gross margin return on investment (GMROI) of the category to determine the best product mix and shelf allocation.

Fresh from the dairy

Non-dairy milk has been news for a while now. Growth for the overall category has been steady over the past five years, growing 61 percent since 2012, according to market researcher Mintel. But does that mean dairy milk is past its expiration date? Of course not. Sure, overall sales have declined. But upon closer inspection, pockets of opportunities are being revealed, especially within natural and fresh dairy products. The benefits of dairy have occasionally been overlooked, especially among all the new diet trends, says Jennifer Roberts, a food technologist at Eden Prairie, Minn.-based Agropur Innovation. “As more information keeps coming out about the processing required for dairy alternatives, it’s essential for dairy to capitalize on the natural element,” she explains. Fueled by flavor innovation, Mintel research shows

FOCUS ON FRESH: Dairy Trends flavored milk is the fastest-growing segment of the dairy milk category in recent years. The firm’s report, “Dairy Milk – US 2017,” also notes that whole milk has bounced back a bit, thanks to a more natural approach to nutrition. And retailers should keep in mind that the nearly all non-dairy milk consumers also purchase dairy milk. “Fresh, preferably local dairy is alive and thriving, and in all forms,” says Ram Kumar, product development and technical services manager at Agropur. “When you make a point to create and market premium and make it specialty, it sells.” But according to Chuck Dunford, director of retail sales for Agropur Innovation, some store brand programs are missing the mark when it comes to pricing. “Private brand programs need to be put in place to complement both offerings and price structure of their branded program,” he says. “In most cases, very little thought goes into this strategy, costing the retailer sales and profit.” Sorensen agrees, noting that she has observed national branded milk is often priced on promotion lower than its store brand counterpart. “I would discourage this type of promotion for [three] reasons,” she says. “[One,] it trains the shopper to wait until the national brand is on promotion; [two,] it encourages sales away from the store brand when the national brand is priced lower than the store brand; and [three,] it commoditizes the national brand for which a store should use to build dollar sales and dollar margins.” And when it comes to packaging and merchandising, retailers will need a total store packaging strategy. “Price certainly works for a lot of retailers,” Dunford explains, “but when you can add quality and price, you now have a recipe for strong sales and more importantly, repeat sales.” Agropur’s Roberts thinks that packaging is the ideal opportunity for a retailer to differentiate itself from competitors and can be used to speak to the concerns and needs of the store’s customer base.

Cheese, please

Milk, whether dairy or non-dairy, tends to get the bulk of a retailer’s attention within the fresh dairy department. But other areas — namely cottage cheese, specialty cheese and snacks — also have great growth potential. The Grocery Group’s Sorensen cites a lack of store brand offerings in the cheese and yogurt sections, and notes that conventional cup yogurt and Greek yogurt would be difficult sections for store brand offerings. “The segments have been commoditized, and there is little room for price differentiation for a store brand entry if the store brand is a me-too offering,” she says. Instead, she suggests retailers consider giving cottage cheese a try. “It is poised to be the next big thing in the department,” she explains. “It is higher in protein than Greek yogurt, and manufacturers are bringing innovation to the category with the inclusion of fruit and other mix-ins.”

According to a recent report from Packaged Facts titled, “Cheese: United States,” consumption of natural and specialty cheese has increased while processed cheese has been steadily declining. And at some retailers the specialty cheese section resembles a trip around the world. At Trader Joe’s, the specialty cheese section includes a variety of global flavors, from crumbled goat cheese to Moroccan-inspired cheddar cheese to English cheddar with Italian truffles. Its New Zealand Organic Cheddar, for example, comes from cows that consume a steady diet of the country’s organic grass and clover. “It’s essential for dairy to capitalize on the natural element,” says Agropur Innovation’s Jennifer Roberts.

Snack attack

And let’s not forget snacks. National brands have been developing unique flavor profiles and product offerings in the snack cheese segment, Sorensen says, and it is time for private brands to get in on the action. Agropur’s Kumar agrees. “[Snacking] provides the upcoming generation an opportunity to try bold flavors without buying in bulk, and play with variety,” he says. “These offerings can cover a plethora of categories, such as high protein, hot or worldly flavors.” But dairy snacks are also a good opportunity for retailers to deliver the convenience consumers crave. For example, Trader Joe’s Mozzarella Log is pre-sliced, which leaves each mozzarella medallion ready to be topped with bruschetta, for example, or can be eaten right away. At Walmart, shoppers can find snacks that feature dairy within the fresh department. Labeled under Walmart’s Marketside label, the products include singleserve, portable packs containing the Bentonville, Ark.based retailer’s own brand cheese pairings like apples and string cheese with pretzels and fresh fruit and string cheese or veggies and cheese with almonds and ranch dip. Each package is appropriately sized and priced for the shopper who is looking for a healthy and balanced snack that includes dairy. SB Jevtic is a freelance writer from Schaumburg, Ill. www.storebrands.com /August 2018 / Store Brands

TRENDING

WATER

POWER With its many benefits, high pressure pasteurization may help private brand products to differentiate BY LAWRENCE AYLWARD

The million-dollar word in private brands these days is “differentiation.”

No doubt, you have heard that word about a million times the past year. Retailers that offer distinct and quality store brand products that are different from their competitors’ products will have a better chance of maintaining customers and attracting new ones. But as the private brand industry evolves, it’s not just about a product’s taste, appearance and packaging that can help it differentiate. Enter high pressure pasteurization (HPP), a cold-water pasteurization process that removes bacteria, yeasts, molds, parasites and viruses present in food and beverages, which is a win for food

Store Brands /August 2018 / www.storebrands.com

safety. But there’s more: HPP also allows food and beverage manufacturers to create products without preservatives and other non-desirable ingredients while extending product shelf life, which in turn reduces shrink and food waste. With food manufacturers and retailers looking for any advantage they can find to differentiate with healthier products that bear cleaner labels, HPP is gaining favor. Here’s how it works, according to Middletown, Ohio-based Avure Technologies, which offers the technology for private brands: Sealed products — in their final primary packaging or in large bulk bags — are placed in cylinderical chambers and treated to a flow of 87,000 pounds per square inch of purified cold water that neutralizes food-borne pathogens like listeria and E. coli. HPP not only kills pathogens, it also extends product shelf life. “By applying pressure in all directions uniformly for about one to three minutes, HPP foods retain their

shape,” according to verbiage on Avure Technologies’ website. “The lack of heat (thermal processing) means HPP products taste better and retain their nutrients.” That pressure is roughly equivalent to six times the pressure found at the bottom of the deepest ocean, according to Buena Park, Calif.-based True Fresh HPP, which also offers HPP for private brand products. WHILE HPP IS NOT NEW, it is new to the grocery industry and private brands, says Alan True, founder and CEO of True Family Enterprises, which operates True Fresh HPP and sister company True Food Innovations. HPP is still on the adoption curve in the industry. “A lot of food processors are just learning how to apply it to their products,” True says. “We have spent a tremendous amount of time educating them as to what the benefits are.” True says HPP could be “the most promising food technology application” available. But experimentation is crucial to improving the technology, which is why

HOW HPP WORKS Sealed products — in their final primary packaging or in large bulk bags — are placed in cylindrical chambers and treated to a flow of 87,000 pounds per square inch of purified cold water that neutralizes food-borne pathogens like listeria and E. coli. HPP not only kills pathogens, it also extends product shelf life. Applying pressure in all directions uniformly for one to three minutes allows HPP foods to keep their shape. A lack of heat (thermal processing) means they taste better and retain nutrients. S O U R C E : AV U R E T E C H N O L O G I E S

www.storebrands.com /August 2018 / Store Brands

TRENDING

True Fresh HPP employs food scientists and culinary experts to test how the equipment responds to various types of food and beverage products. “They can crack the code on innovations,” True adds, which will facilitate the technology’s speed to market. Some food companies that manufacture store brands have adopted the technology within their operations. Rochester, N.Y.-based LiDestri, which offers various food and beverage products for private brands, implemented an HPP system about two years ago to improve its healthy and natural product offerings. The company is using the system on several products it makes for private brands, from freshly squeezed juices to sauces and to meats. It is also providing HPP for other food manufacturers’ products. “We knew this could be an answer to providing our customers with a new and innovative way to produce these types of goods,” says Lindsay Rinefierd, product manager for LiDestri. As more retailers become aware of HPP and its benefits, their interest is increasing in the technology, Rinefierd says. “The ability to offer a refrigerated product with a clean label is in high demand with consumers and therefore retailers,” she adds. “Retailers are also excited about the extended shelf life HPP provides. But retailers still need to look for products that can balance these benefits with the added processing costs of HPP. Not every refrigerated product makes sense for HPP. But where it does, it’s a winning combination for retailer, manufacturer and consumer.” Steve Young, vice president of strategic business development for Bakkavor, which provides fresh foods globally for private brands, says HPP makes sense for some of the company’s products, especially dips. HPP has increased the shelf life of the company’s dips from 28 days to 45 to 60 days, Young says. And being able to provide a clean label on such products enables Bakkavor and its retail partners to satisfy the growing number

Store Brands /August 2018 / www.storebrands.com

HPP is an investment, and food manufacturers and retailers must decide which products make the most sense to use it with.

BENEFITS OF USING HIGH PRESSURE PASTEURIZATION • Food safety • Longer shelf life • Allows for cleaner labels • Maintains nutrition and sensory qualities of products SOURCE: COLD PRESSURE COUNCIL

of consumers who want free-from products. HPP is an investment, and food manufacturers and retailers must determine what products make the most sense for HPP after factoring in the cost of the process, yield loss (some packages will fail under the treatment pressure) and distribution costs (you have to ship product to the HPP facility and then product must be returned), Young points out. “You have to consider where it makes the most sense so you can get back your investment,” he adds. Mark Duffy, CEO of Universal Pure, a Villa Rica, Ga.-based company that provides HPP services, says the economic benefits of HPP include shrink reduction because products have a longer shelf life and a reduction in product recalls, both of which should be attractive to retailers. “Those costs all add up, and [HPP] can have a positive economic impact,” Duffy adds. For private brands, HPP can equate to differentiation — and much sooner than national brands, True stresses.

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TRENDING “[The major] consumer packaged goods companies have invested a tremendous amount of money to run production in a very traditional way,” he says. “Private brands have no legacy assets around them. [So private brand retailers and their manufacturers] can literally move faster in adopting this technology. CPG companies will also be slow to adapt it because they don’t want to cannibalize their past investments.”

PHOTO: LAUREL HUNGERFORD

(Above) Alan True, founder and CEO of True Family Enterprises, says HPP could be “the most promising food technology application” available. (Bottom) Mark Duffy (left) says HPP’s economic benefits should be attractive to retailers.

Store Brands /August 2018 / www.storebrands.com

HPP’S SUCCESS HINGES on education. The more education throughout the grocery chain, the more adoption there will be, insiders say. “We want to continue to work closely with retailers and figure out how we can be part of their consumer education campaigns … provide them information to help people better understand the benefits of this technology,” Duffy adds. He says the Cold Pressure Council (CPC), a trade group consisting of HPP providers and others associated with the technology including Rochester, N.Y.based retailer Wegmans, will help on the education front. The CPC’s mission statement is “to lead, facilitate and promote industry standardization, user education and consumer awareness of high pressure processing.” Duffy says the CPC has introduced a High Pressure Certified seal to go on packaging that is HPP treated. As consumers become more educated about HPP, they will look for products with the seal, Duffy adds. “The ability to drive consumer education will become a tipping point for retailers [to adopt it], as more consumers recognize how purposeful this technology is,” he says. As far as educating consumers, Erik Rosenstrauch, president and CEO of retail marketing agency Fuel Partnerships in Boca Raton, Fla., says it’s best if manufacturers and retailers educate consumers on what HPP provides, not what it does. Rosenstrauch says it can sometimes be difficult to transform technology into a meaningful consumer message, especially on a package of food. “I don’t know that consumers will ever understand HPP. I think it’s more about explaining the benefits of what HPP offers,” he says, noting that manufacturers and retailers should concentrate on words like “natural” and “no preservatives.” “A consumer benefit is much more important than a consumer process,” he adds. Bakkavor’s Young points out that manufacturers and retailers have little time or space to communicate a product’s message through packaging and merchandising. So trying to educate them about the nuances of HPP could be cumbersome. “What is it that you want to communicate with those few seconds?” Young asks. “Do you want to try and engage them with HPP or do you want to talk about the

quality of the product and that it has a clean label?” Rinefierd says consumers may not need to know all the specific details about how HPP works, but it’s important they understand that HPP is a tool used to provide safe food products to consumers. “If consumers know about the benefits, then the hope is they will be more accepting of the method used to produce these types of products,” she adds. Rosenstrauch notes that many consumers grew up with food being preserved by heat pasteurization, and they consider refrigerated food as fresh. Hence, in many U.S. consumers’ minds, cold equates to purity. So as consumer education of HPP continues, the words “cold pasteurization” could make a positive impression on them. If HPP can help retailers reduce shrinkage and increase product shelf life, among other things, Rosenstrauch expects that it will only grow in popularity. “If you can use HPP to remove [non-desirable ingredients] and make better claims about the product, it will impact sales,” he adds. True says the number of HPP providers is growing and the technology is improving. He says True

Fresh HPP operates “the latest and greatest machines” on the market — four units manufactured by Hiperbaric that can service an annual capacity of 100 million pounds. HPP could also offer retailers more opportunity in their individual stores, Rinefierd says. “Think prepared foods and centralizing production with outside manufacturers and co-packers,” she says. “HPP may open up new, fresh product categories to smaller private brands, where once it was only large brand owners or large retailers with an extended supply chain that could handle refrigerated products with short shelf lives.” Duffy believes in HPP because it offers so many opportunities, including reducing food waste. The National Resources Defense Council estimates that 40 percent of the food produced in the U.S. gets thrown away. “It’s staggering … it’s sad,” Duffy says of the waste. So to be part of a technology that helps reduce waste, rids products of undesirable ingredients, extends shelf life and helps retailers’ bottom lines, then “that’s a great place to be in,” Duffy adds. SB

www.storebrands.com / August 2018 / Store Brands

TOTAL TOTAL STORE STORE

Leverage the power of private brands to provide lifestyle solutions to consumers seeking answers B Y DANA C V ET AN ✬✬✬✬

Eating to stay healthy and to manage weight and conditions like diabetes and high blood pressure requires more than remembering to pick up some spinach and apples the next time you go to the store. Eating well also encompasses more than purchasing a fancy chunk of cheese or an artisan loaf of bread. Preparing a delicious meal for loved ones involves more than hunting down the sauerkraut because without it the kielbasa just wouldn’t work. Retailers who step in to help shoppers achieve their goals in these endeavors give themselves a new way to promote their store brands as solutions every step of the way. “Retail shopping is not just transactional — it has become more interactive and personal. Consumers are seeking solutions at retail, not just products on a shelf, and they appreciate the value of store brands,” says Nicole Peranick, senior director of global thought leadership/culinary for Daymon, a Stamford, Conn.-based global retail services company that specializes in private brands. According to Daymon research, 81 percent of shoppers believe private brands understand their needs at least as well as, if not better than, national brands, Peranick says. “One of the key insights from our research was consumers expect private brands to be a part of that store 32 32Store Store Brands Brands / August / August 20182018 / www.storebrands.com / www.storebrands.com

experience. [Private brands have evolved to the point where the products are] actively delighting customers and connecting with them,” Peranick says. There’s plenty of opportunity to take advantage of that perception, she explains. “A lot of white space still exists around the curation (creating, organizing and overseeing) of lifestyle solutions,” she adds. “Stores are still organized for the most part around product categories, but consumers shop around solutions. We’re advising retailers to lean on their private brands as the authority on helping shoppers identify what’s right for them.” Based on its research findings, Daymon identified three strategies retailers can use to promote store brand products as “lifestyle solutions” in the store: solutions merchandising, in-aisle engagement and promotional narratives. These strategies could help retailers elevate private brands to something much more differentiated and connected emotionally to shoppers, Peranick declares. SOLUTIONS MERCHANDISING Solutions merchandising requires thinking about how to conveniently organize stores in a way that simplifies the shopping journey.

TOTAL STORE Shoppers have to be able to find things. No one can buy the store brands unless they know where to find them, Peranick points out. “Organize around solutions,” she advises. “We’re seeing interesting applications of this around the globe.” For example, Bilder & De Clercq in Amsterdam offers deconstructed meal kits. Essentially, its stores are organized around recipes. The retailer curates everything needed for the recipe in one place, mixing and matching fresh and center store items. “Private label,” says Peranick, “can be a real key force to bring that all together.” Waitrose in the U.K. offers another interesting solution, Peranick relates. Its prepared foods section focuses on healthy curation, which is another benefit consumers are seeking. Packages of prepared foods are color-coded around calorie content. Blues have X number of calories, greens have X number of calories, and shoppers can easily mix and match items to accommodate their calorie needs. Woonsocket, R.I.-based CVS Pharmacy, the retail division of CVS Health, last year redesigned stores around “Discovery Zones,” highlighting exclusive lines in a move Peranick calls the “next generation format.” The CVS project also included adding new better-for-you food options, including 27 new items under its exclusive Gold Emblem Abound line, featuring health-focused products and beauty selections. Informational in-store signage helps customers discover new offerings. This is a prime example of a retailer moving away from conventional, traditional categories to providing a true solution-based shopping experience, Peranick says. On a slightly different track, ShopRite, a Wakefern Food Corp. retailerowned cooperative based in Keasbey, N.J., employs a service-oriented solution to help shoppers, among other things, choose nutritious foods in its stores. Since 2006, ShopRite’s in-store registered dietitian program has been providing shoppers in more than 140 ShopRite locations across the Northeastern U.S. with complimentary services such as one-on-one consultations, supermarket tours, support groups, weight management classes, kids’ and adults’ cooking classes, and in-store product samplings. ShopRite’s dietitians also work with ShopRite chefs to host culinary workshop classes designed to inspire families to dine together more often. In addition, dieticians regularly partner with hospitals, doctors, libraries, schools, universities and not-for-profit organizations to conduct free workshops and seminars. IN-AISLE ENGAGEMENT In-aisle engagement revolves around helping customers realize what’s important for them, Peranick says. “How can private brands be a curator in real time? Technology is a key approach to facilitate this process.” Big box retailer Target’s Cartwheel smartphone app is a prime example, Peranick continues. Shoppers download the app, which uses beacon technology, and then upload their shopping lists to navigate the store. They can interact with Target in real time, not only to locate items, but also to take advantage of moneysaving promotions. Camp Hill, Pa.-based drugstore chain Rite Aid Corp. is doing some interesting work in its Over The Counter (OTC) department, which also engages with shoppers in real time through technology, Peranick adds. “The vitamin and supplement area is so overwhelming; it’s hard for consumers to figure out what’s right for them,” she explains. In Los Angeles, select Rite Aids have digital kiosks near the pharmacy that allow shoppers to input the health issues with which they are dealing, and the kiosks populate a customized protocol.

PLAYING ON EMOTIONS RETAILERS CAN USE THREE STRATEGIES TO CONNECT EMOTIONALLY TO SHOPPERS:

SOLUTIONS MERCHANDISING —

Think about how to conveniently organize stores in a way that simplifies the shopping journey.

IN-AISLE ENGAGEMENT —

Help customers realize what’s important for them. Technology is a key approach to facilitate this process.

PROMOTIONAL NARRATIVES —

Unexpected moments can make shopping trips more meaningful. For example, Lidl conducts international total store campaigns that take shoppers on a journey throughout the store to find globally inspired products.

www.storebrands.com /August 2018 / Store Brands

TOTAL STORE “Help shoppers find those lifestyle solutions they’re looking for. This is definitely an interesting technology, especially in this climate, where consumers are actively trying to treat their own health issues,” Peranick says. PROMOTIONAL NARRATIVES Unexpected moments can make a shopping trip more meaningful, Peranick says. The U.K.’s Tesco had a campaign called “Food Love Stories:”

Store Brands / August 2018 / www.storebrands.com

videos depicting people expressing their affection by making memorable meals for loved ones. Recipe curation was a component that acted to layer a narrative over products and brought an authenticity to them, Peranick relates. One example was “Nana’s Magic Soup,” in which a grandmother caring for her beloved grandson made him the only dish that made him feel better when he was sick. “Heartfelt story lines help to connect with shoppers, but you are also curating for those shoppers. Every emotional overlay [has the potential to] engage shoppers,” Peranick says. Another narrative could revolve around popular world cuisines, she continues. “Retailers could incorporate a guided treasure hunt in the sense of helping consumers enjoy and understand world cuisines, which consumers are becoming more interested in,” she adds Arlington, Va.-based Lidl, which has about 50 U.S. stores, conducts international total store campaigns, taking shoppers on a journey throughout the store to find globally inspired products, she relates. Lidl’s Taste of Eastern Europe uses flyers and instore signage to provide story lines and education around these products, encouraging customers to buy highlighted products. ShopRite recently debuted its ShopRite Trading Co. store brand of premium, artisanal foods inspired by Asian, Indian, Greek and Latin cuisines. In-store signage and shelf tags inform shoppers about the new brand. Providing a solid rationale for promoting store brand products in service of consumer goals is key to making these strategies work, Peranick says. Be aware that private brands are viewed as trusted partners, and that has a halo effect on the entire store, she points out. “Elevate the relationship with shoppers [via the] specific needs you are meeting,” she says. “With this curation approach, we move toward generating incremental sales, building loyalty and [providing] differentiated, best–in-class private brand programs. Those are the approaches that are most successful these days, and will increase traffic; [providing the reasons why consumers] will shop in your store rather than somebody else’s.” SB

PACKAGING

MEETS FUNCTION

Retailers can help boost interest in store brands by leveraging food and beverage packaging that enhances the visual and taste appeal of products B Y R IC H M ITC H ELL

Packaging is becoming an increasingly potent private brand merchandising vehicle. Graphic designs that enable food and beverage products to standout on shelves while emphasizing freshness are becoming prominent, enabling retailers of store brands to create greater points of difference from national brands. Because private brand merchandisers typically lack the large advertising budgets of national brands, innovative packaging graphics are a more affordable way to spotlight products, says Rebecca Casey, senior director of marketing for TC Transcontinental Packaging, a Montreal-based flexible packaging supplier. “The days of white boxes with private label stickers are behind us,” she states. “Private label packaging today combines colorful, eye-catching graphics with valueadded conveniences.” Protecting the integrity of food and beverages, however, is perhaps the most desirable packaging function, notes Mintel, a global market research firm, in its June 2017 “Food Packaging Trends US” report. “Shoppers are likely to prioritize taste when deciding what to buy over a range of other factors, including cost, healthfulness and ease of preparation,” Mintel states. “Communicating great taste is clearly a top priority in packaging design and graphics, but packaging features that protect freshness, such as resealability, are also important.” The degree of interest in specific packaging elements varies among demographic segments.

While taste and freshness are top priorities for shoppers in all age groups, persons 55 and over typically place greater importance on food product visibility, Mintel notes, while consumers between 18 and 34 are more likely to favor packaging that is reusable for other purposes such as food storage. “These preferences suggest that younger food shoppers expect more of food packaging than previous generations, and are more likely to be drawn to innovative features that help them manage and store food,” Mintel adds. Having ample product information on packages also is important, and consumers are more likely to trust brands when such messaging and claims are succinct and easy to understand, Mintel notes. “Baby boomers and millennials are particularly looking for packages with nutritional information and in a format that is easy to use, convenient and portable,” says Peter Messacar, director of new applications for Scholle IPN Packaging, a Northlake, Ill.-based packaging supplier. By leveraging private brand packages with unique and attractive designs that enable users to easily access all contents as well as extending product shelf life, retailers can demonstrate that they are listening and responding to shopper demands, Messacar states. EASIER SAID THAN DONE Among the major obstacles that keep private brand retailers from upgrading product packaging is the need

www.storebrands.com /August 2018 / Store Brands

PACKAGING to quickly test new formats with consumers and scale up production if successful, Messacar states. “Getting the supply chain process right is extremely difficult from a time, cost and resource standpoint,” he says. “A new packaging design requires working with new materials or prints, and there often is a need for new equipment to produce the packages. Getting it right without spending a lot of capital is a challenge for retailers.” He adds that teaming with co-packers can help retailers leverage the necessary expertise to bring new packages to market quicker and boost output. Ongoing packaging enhancements, meanwhile, will likely include better product safeguards, films that enhance nutrient retention and structural designs that make it easier to remove all food from containers while reducing food waste, Messacar states. “Packaging has long been used by food product manufacturers to convey food quality and achieve product differentiation amid high competition,” notes IBISWorld Inc., a market research firm, in its May “Packaging & Labeling Services in the US” report. IBISWorld states that food, beverage and snack food manufacturers will account for an estimated 44 percent of packaging and labeling services revenues in 2018. Suppliers, meanwhile, also are rolling out packaging that is intended to meet the greater shopper interest in sustainability, recycling and reusing of containers, says Efi Karchmer, director of new product development and innovation for Ardagh Group, Glass/North America, a Luxembourg-based glass and

metal packaging component supplier. “Millennial and Generation Z (those born in 1994 or later) consumers are environmentally conscious, and want better and healthier products,” Karchmer states. “These consumers are now buying locally produced, sustainable products packaged in environmentally friendly containers.” In addition, shoppers are seeking packaging that makes it easier to consume food and beverages while in transit, states Greg Rosati, senior director of commercial excellence/diversified products for Amcor Rigid Plastics, an Ann Arbor, Mich.-based packaging supplier. The expansion of electronic commerce, meanwhile, will boost interest in packaging that does not leak, break or add excessive weight to products, he says. DIFFERENT STROKES To maximize shopper activity, however, it is crucial for packaging to meet the major needs of different consumer segments, Rosati says. That includes designs with easy gripping, opening and closing features for baby boomers, and elements that appeal to the on-the-go lifestyle of millennials and Generation Z shoppers, he states. Casey notes that millennials also are seeking packaging “that is different in shape, color or size and want the latest trend, while baby boomers like packaging that is more traditional — even old fashioned. It’s hard for packaging designers to figure the best way to capture both audiences.” It also can be difficult for private brand merchandisers

STORYHIGHLIGHTS 1 Because private brand merchandisers typically lack the large advertising budgets of national brands, innovative packaging graphics are a more affordable way to spotlight products, says Rebecca Casey, senior director of marketing for TC Transcontinental Packaging.

2 The degree of interest in specific packaging elements varies among demographic segments. While taste and freshness are top priorities for shoppers in all age groups, persons 55 and over typically place greater importance on food product visibility, according to market researcher Mintel notes, while consumers between 18 and 34 are more likely to favor packaging that is reusable for other purposes such as food storage.

Store Brands /August 2018 / www.storebrands.com

3 Suppliers are rolling out packaging that is intended to meet the greater shopper interest in sustainability, recycling and reusing of containers, says Efi Karchmer, director of new product development and innovation for Ardagh Group, Glass/ North America.

4 To maximize shopper activity, it is crucial for packaging to meet the major needs of different consumer segments, says Greg Rosati, senior director of commercial excellence/diversified products for Amcor Rigid Plastics. That includes designs with easy gripping, opening and closing features for baby boomers, and elements that appeal to the on-the-go lifestyle of millennials and Generation Z shoppers.

PACKAGING to adopt new packaging styles, she states. “It’s a big hurdle just to get everyone in agreement on a change and to train personnel, but the biggest challenge or fear we hear about is retaining customer loyalty,” Casey says. “Loyalty isn’t what it used to be. Too many choices are available both online and in-store. Retailers can’t afford to give any opportunity to the competition while introducing a new product or package. Shoppers move so quickly through the store and if they don’t see their normal package, they may switch brands.” Nevertheless, packaging designs are evolving and retailers are increasingly merchandising store brands in aesthetically pleasing containers, which can include transparent packaging with interesting labels and shapes, Karchmer notes. “It comes down to having packages that can make the product more valuable,” Messacar says. “With shelves getting crowded with many different brands and SKUs, packaging can entice shoppers to purchase a specific item. Whoever does that function the best typically wins.” Packaging that enables consumers to easily view the inside of containers, such as glass jars and bottles, can be particularly appealing by creating a perception of trustworthiness and freshness, Mintel states.

Innovations in glass container manufacturing, meanwhile, are allowing for more shapes, sizes, colors and decorative features, Karchmer says. “[But] the challenge for retailers is adjusting shelf space to accommodate these changes in packaging designs.” The incorporation of messaging on packages, and particularly product expiration dates, which help gauge the degree of freshness, also is becoming a key sales driver, Mintel reports, noting that “nearly all food shoppers look for expiration dates, making it the most universally sought piece of information on food packaging.” Mintel research found that shoppers are three times more likely to prefer the data to be on the front of packages versus the back. “An increasing percentage of product launches are based primarily on new packaging as brands look to packaging design and on-pack claims to better align with consumer interest in more natural and less-processed foods,” Mintel reports. “Not only does packaging play a central role in communicating key benefits and product information, it can also add value by protecting freshness and taste and helping to prevent food waste.” SB Mitchell is a freelance writer from Wilmette, Ill.

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CATEGORY INTELLIGENCE SALTY SNACKS

HIT THE FLAVOR MARK Snacking is embedded in our busy lives. Just look at the numbers, says Barbara Moreno, director of marketing for City of Industry, Calif.-based Snak King. Citing global market research firm Mintel statistics, Moreno reports 94 percent of Americans are snacking at least once a day, and 77 percent of millennials believe they can’t get through the day without eating a snack. Consumers are moving away from the traditional three meals a day toward increased snacking or multiple smaller meals throughout the day, and they often turn to readily available salty snacks for this purpose, according to a June report from consumer market research provider Packaged Facts called “Salty Snacks: U.S. Market Trends and Opportunities.” “Our lifestyles are getting busier and busier — juggling work, kids and all kinds of priorities. As such, sit down time for three square meals a day is just not there anymore,” Moreno says. Packaged Facts expects consumers will continue to indulge their salty snack cravings, estimating U.S. demand at the manufacturer level to reach $28.3 billion in 2022, for annual growth of 3.4 percent compared to $24 billion in 2017. Both dollar and unit sales for private brand potato chips; tortilla and tostada chips; and ready-to-eat popcorn and caramel corn were up significantly for the 52 weeks ending May 20, according to market information provider IRI. It’s a huge market. And it’s highly competitive. Growth will come from new taste and flavor combinations as well as the better-for-you varieties of salty snacks, Packaged Facts asserts. “Permissible snacks,” are also on the rise, Moreno says. “Those fall in between better-for-you and indulgent. These are the snacks that taste indulgent but have some level of health-related benefits [and/ or] claims consumers can feel good about. ‘Permissible indulgence’ now represents a 23 percent share of the macro snack market, and is the fastest-growing segment at 2.5 percent,” Moreno adds, citing IRI data.

more often than they did in the past, according to Mintel research. Product developers, Carpenter says, are looking for attributes that will distinguish their products from other retailers. “Offerings that are on par with national brands are a must. Products that offer dietary or nutritional benefits are trending, as are organic and gluten-free items,” he adds. Retailers are looking for innovative snack food items that stand out with delicious flavors, clean labels and great value,” Moreno states. “Not only do retailers want private label products that can compete with the national brands, they also are open to innovative, more premium private label items,” she adds. “In fact, according to Nielsen, expect to see a shift from commodity items [at cheaper price compared to national brands] to more unique, innovative items in private label.” Millennials in particular are looking for flavor adventure, she points out. “We expect to see continued growth from new introductions associated with worldly, ethnic and spicy flavors in 2018. Bland is out and bold is in.” Also expect to see botanicals such as ginger, honey and mint as snack ingredients; plant-based protein inclusions such as lentils, beans, peas, nuts, seeds and

DO cater to cravings for novelty as well as convenience.

DON’T forget to add bold taste and flavor combinations and permissible/better-foryou varieties.

FLAVOR, DIFFERENTIATION “We are seeing much more activity around creating variations of core savory seasonings influenced by emerging ethnic flavors,” says Scott R. Carpenter, president and CEO of Savor Street Foods in Reading, Pa. Global ethnic flavors are on the rise and quickly becoming mainstream, Moreno agrees, adding that one out of four consumers are eating spicy foods www.storebrands.com /August 2018 / Store Brands

CATEGORY INTELLIGENCE SALTY SNACKS

Potato Chips Private Brands

All Brands

Dollar Sales (in millions)

$502.9

$5,807.7

Change vs. Year Ago

+9.2%

+1.4%

Dollar Share

8.7%

100%

Unit Sales (in millions)

304.0

2,593.6

Change vs. Year Ago

+15.7%

+1.2%

Avg. Price Per Unit

$1.65

$2.24

Private Brands

All Brands

Dollar Sales (in millions)

$269.4

$4,245.0

Change vs. Year Ago

+2.3%

+3.6%

Dollar Share

6.4%

100%

Unit Sales (in millions)

137.5

1,627.2

Change vs. Year Ago

+5.9%

+2.5%

Avg. Price Per Unit

$1.96

$2.61

Tortilla/Tostada Chips

Ready-To-Eat Popcorn/Caramel Corn Private Brands

All Brands

Dollar Sales (in millions)

$77.3

$1,110.1

Change vs. Year Ago

+16.7%

+4.5%

Dollar Share

7.0%

100%

Unit Sales (in millions)

37.4

405.3

Change vs. Year Ago

+14.5%

+4.3%

Avg. Price Per Unit

$2.07

$2.74

Private Brands

All Brands

Dollar Sales (in millions)

$178.4

$997.8

Change vs. Year Ago

-1.1%

+1.7%

Dollar Share

17.9%

100%

Unit Sales (in millions)

82.7

361.9

Change vs. Year Ago

+1.5%

+0.4%

Avg. Price Per Unit

$2.16

$2.76

Pretzels

Source: InfoScan Reviews, IRI, a Chicago-based market research firm. Total U.S. multi-outlet (grocery, drug, mass market, military and select club and dollar retailers) for the 52 weeks ending May 20, 2018.

Store Brands /August 2018 / www.storebrands.com

ancient grains; and snack bases with a health halo such as seaweed and other vegetables, Moreno notes. Moreno also sees an increase in seasonal flavors making their mark in the category. “Those flavors you are used to seeing at your local Starbucks [can now be found] in snacks — pumpkin spice, salted caramel and latte.” The Kroger Co., which offers many of its own brands and an extensive line of store brand salty snacks, has introduced innovative flavorings in its Kroger line, such as Nashville Style Kettle Cooked Hot Chicken Potato Chips, Sour Dough Nugget Pretzels, Buffalo Ranch Popcorn, X-Treme Heat Rolled Tortilla Chips in Spicy Chili & Lime and Jalapeno Jack Pretzel Thins, among others. TASTE AND INDULGENCE Indulgent salty snacks continue to be the top choice for snackers, Packaged Facts reports, citing Simmons Research LLC data. Potato chips have the highest U.S. household penetration at more than 80 percent. Popcorn products are consumed by 67 percent of households and corn/tortilla/pita chips and cheese snacks are consumed by 65 percent. American consumers overwhelmingly prefer regular potato chips to low-fat or fat-free varieties, which have dropped in popularity over the past decade, according to Packaged Facts. And despite the clamor for new flavors, there are plenty of traditionalists out there, says Packaged Facts. Nearly 66 million potato chip-eating U.S. households chose plain chips most often, according to Simmons data. Baked potato chips have risen in popularity and are eaten most often by 15 percent of households, the report adds. Heavy household consumers of potato chips are eating much more of the snack, according to Simmons. The number of households consuming 16 or more bags of potato chips in the last 30 days nearly doubled from 5 percent in 2007 to 10 percent in 2017. Households consuming eight to 11 bags per month rose from 13 percent to 16 percent for the same period. Overall, Packaged Facts forecasts demand for potato chips at the manufacturer level to rise 3 percent annually to reach $10.7 billion in 2022; tortilla and other types of corn chips to gain 3.8 percent a year to reach $9.1 billion; and predicts all other salty snacks such as cheese curls and puffs, ready-to-eat popcorn, pork rinds, potato sticks and pretzels will grow 3.5 percent annually to reach $8.5 billion by 2022. SB Cvetan is a freelance writer from Barrington, Ill.

CATEGORY INTELLIGENCE HEALTHY SNACKS

THE FIT FACTOR Consumers love to snack — that will never change. But what is changing is that more consumers want healthier snacks with nutritious ingredients and cleaner profiles. According to a 2017 report from global market researcher Mintel, the top reason Americans say they snack is to treat themselves (50 percent), and 28 percent agree that taste is more important than health when choosing a snack. But one-third of consumers said the majority of snacks they eat are healthy and more than one-quarter said they were snacking more on healthier foods in 2017 compared to the previous year. Kim Holman, marketing director of Loves Park, Ill.based TH Foods, which offers specialty crackers with better-for-you ingredients, says many consumers simply desire “better-for-you junk food,” which could equate to less sugar or other functional benefits. “Consumers no longer want empty calories,” Holman adds. Consumers are looking for crackers and snacks in general that offer real ingredients — “simple, uncomplicated and easy-to-pronounce ingredients,” she says. “They want real.” Mark Singleton, vice president of sales and marketing for Lima, Ohio-based pork rind manufacturer Rudolph Foods, says shoppers are more

DO offer snacks with simple and easyto-pronounce ingredients, and snacks that have inherent benefits.

DON’T be afraid to adopt innovative products in the category that feature new and different ingredients.

Store Brands /August 2018 / www.storebrands.com

keenly aware of nutritional profiles that offer functionality paired with the snack diversity they crave. “Above all, snacking remains a category that can appeal to busy, on-the-go, health-conscious consumers who have begun to put more value on how they snack, as well as what they snack on,” Singleton says. Florent Chiniard, director of marketing and new product development for Los Angeles-based NSI Group, which offers natural and healthy products, including dried fruit for private brands, says snacks with wholesome ingredients are more in demand. “Fruit and vegetable chips are definitely a focus for our customers and us,” Chiniard says, adding that exotic fruits such as dragon fruit, papaya and mango are gaining in popularity as well as legumebased protein snacks with fava beans and chickpeas. In addition, more superfood flavor profiles and ingredients are emerging in mainstream snacks, Chiniard notes. Consumers want healthy snacks with ingredients that offer inherent nutrition, Holman adds. “An example of this is whole-grain crackers with turmeric and ginger — both super spices that offer nutrition,” she says. Holman also expects new grains such as amaranth, sorghum and teff to become more popular in private brands. “These grains are naturally gluten-free and offer whole-grain goodness,” she adds. Singleton says Rudolph Foods has heard from its customers that they want a better-for-you pork rind. “To match this craving, we have created a variety of small-batch pork rinds popped in sunflower oil and with 40 percent less sodium,” he adds. CHANGING PRIORITIES Singleton says the popularity of ketogenic, paleo and low-carb diets — and the continued emphasis on protein-packed snacks with simple ingredients — has encouraged a new group of consumers to embrace pork rinds as a valuable snack food and ingredient in cooking. Organic is becoming a priority for private brands in the category, Chiniard says. “Some of our retail customers will no longer consider conventional dried fruits, which was unthinkable a few years back,” he adds. Consumers also want snacks void of artificial

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CATEGORY INTELLIGENCE HEALTHY SNACKS ingredients and colorings, and free-from preservatives and other undesirable ingredients. Singleton says Rudolph Foods is working with its retail partners “to get all artificial colors and flavorings out of their lineups.” “Our pork rinds deliver zero carbs, zero trans-fat and gluten-free claims that account for the growth of the category,” he adds. TASTE MATTERS While more consumers want healthier snacks, they don’t want to sacrifice taste. Holman says private brands are succeeding in offering unique flavor profiles in crackers. “Retailers need to provide a constant push of new flavors for consumers to purchase,” she says, adding that key flavor trends include hot and spicy; cheese (“the cheesier the better,” she says); vegetables and fruits; sweet, including coconut and dark chocolate; and ethnic flavors. Singleton also realizes the importance of balancing taste and health. “Our Oven Baked Pork Rinds have 33 percent less fat, and are offered in bold flavors like cilantro lime and blackberry habanero,” he says. “Because we haven’t compromised on flavor or texture, consumers have received this better-for-you pork rind excitedly.”

Cottage Cheese Private Brands

All Brands

Dollar Sales (in millions)

$386.9

$1.07 billion

Change vs. Year Ago

-3.4%

-1.11.59%

Dollar Share

36%

100%

Unit Sales (in millions)

174.8

432.1

Change vs. Year Ago

.3%

.1%

Avg. Price Per Unit

$2.21

$2.48

Private Brands

All Brands

Dollar Sales (in millions)

$2.1 billion

$5.7 billion

Change vs. Year Ago

7.9%

3.2%

Dollar Share

37.5%

100%

Unit Sales (in millions)

728

1.94 billion

Change vs. Year Ago

9.3%

3.18%

Avg. Price Per Unit

$2.93

Fresh Cut Salad

Store Brands /August 2018 / www.storebrands.com

It’s about setting trends, which is what Chiniard believes NSI Group is doing in the healthy snack category. “Our product development efforts are focused on this segment because this is what consumers want and need,” he says. “We provide healthier alternatives in sweet and salty snacks categories.” Chiniard says retailers are giving good play to store brand healthy snacks such as NSI Group’s freeze-dried fruits and vegetables. “They will launch a private label item and discontinue the national brand equivalent,” he says. “The difference is that the private label item will be similar in quality and much more competitive.” EMBRACING CHALLENGES There are challenges in the category. From an organic standpoint, the challenge is meeting demand, Chiniard says. “There is a limited amount of organic product available, with sometimes limited production capacities, while the demand is growing very rapidly,” Chiniard says. “But this is a challenge that NSI is addressing through the implementation of new partnerships with farmers on a continuous basis, allowing the company to have large volume available to sustain the strong market demand.” Holman says the biggest challenge is “breaking through all the noise.” “This is a very large category with an entire aisle or area filled with snacks or crackers,” she says. “Retailers need to break through and drive awareness and trial. Having a strong point of difference is critical, but making sure the consumer knows and cares is even more important.” Holman believes only a small majority of retailers are looking to lead through innovation in the cracker segment. “I think all retailers need to get to market sooner with products that are new, on-trend and unique,” she says. “Retailers are going to have a hard time keeping up unless they place some focus on innovation with portfolio updates annually. To continue growing, the pork rind category will need to keep innovation top of mind while also working to expand awareness of pork rinds, Singleton says. “As this protein-packed snack becomes more prevalent in grocery stores, it will more than likely fall into the hands of shoppers who may have never tried it. The responsibility of education will be on brands and retailers alike,” he adds. SB Aylward, editor-in-chief of Store Brands, can be reached at laylward@ensembleiq.com

CATEGORY INTELLIGENCE MEATS

MEATY SALES Meat is having a moment. While consumers are showing a fresh appreciation for plant-based proteins and manufacturers are fortifying all manner of foods and beverages with the hunger-sating nutrient, meat sales are also rising, especially in store brands, according to market research firm IRI. In the private brands sector for the 52 weeks ending May 20, dollar sales of refrigerated, uncooked meats (minus poultry) rose more than 40 percent. Frozen meats (minus poultry) were up almost 8 percent, refrigerated sliced lunchmeat sales increased 6.5 percent, and refrigerated dinner sausage dollar sales went up by nearly 3 percent, IRI data shows. “Protein remains hot (and) meat/poultry should remain dominant despite competition from alternative proteins,” states Packaged Facts in the “Meat and Poultry” chapter of its June report, “U.S. Food Market Outlook 2018.” Opportunities to grow the category abound. Packaged Facts advises offering more boldly and fully flavored products; healthier and more nutritious products; and convenient value-added offerings such as heat-and-eat, ready-to-eat and those featuring some preparation. Clean labels, transparency and product stories are also important to provide consumers what they want, the report notes. Retailers and manufacturers would do well to remind consumers that meat and poultry are some of the best sources of protein available, Packaged Facts points out. “The industry hasn’t fully taken advantage of communicating the nutritional benefits of its products relative to other protein products,” the report states. Protein has never been more popular or sought after, agrees David Jakobovits, foodservice brand manager for Expresco Foods in Montreal. Retail sales of meat and poultry reached $94.7 billion in 2017, with sales increasing at a compound annual growth rate (CAGR) of 2 percent between 2012 and 2017, according to the Packaged Facts report. The analyst also projects meat and poultry retail sales of $103 billion by 2022. SPICY AND BOLD Bolder, worldlier flavors are trending strongly as consumers are eager to try new and interesting spice profiles from around the globe, says Michael Delli Colli, marketing manager for Expresco. The American palate is definitely diversifying — spices that were unknown five years ago are trendy and

widely used in meals and in snacks, says Ron Godshall, chief operating officer of Godshall’s Quality Meats in Telford, Pa. Asian cuisines and flavors are significantly rising in popularity, as is the preference for grilled meats, Jakobovits observes. Flavor trends go two ways, contends Daniel Estridge, chief flavor officer for RealDeli in Acton, Mass. “The health-oriented customer will often favor simple, cleaner basics with the shortest possible ingredient list,” he says. “The foodie, on the other hand, is excited about more variety and adventure. [And for foodies there are] more international and culturally diverse culinary influences than ever before.” A WAY OF LIFE But for both types of consumers, “processed” has become a dirty word, and consumers’ time is at a premium, Estridge says. “So the challenge is to provide convenient but less-processed foods with clean labels and serve the spectrum of tastes from simple to fancy.” Healthier eating “is beyond a trend at this point — it is a way of life,” Delli Colli observes. “Consumers demand better-for-you products.” Convenience, Delli Colli continues, “runs perfectly parallel with our busy lifestyles as

DO offer fully flavored, clean-label, healthier and more nutritious products.

DON’T hesitate to remind consumers that meat and poultry are some of the best proteins available.

www.storebrands.com /August 2018 / Store Brands

CATEGORY INTELLIGENCE MEATS

Refrigerated Sliced Lunchmeat Private Brands

All Brands

Dollar Sales (in millions)

$972.2

$5,354.2

Change vs. Year Ago

+6.5%

-1.3%

Dollar Share

18.2%

100%

Unit Sales (in millions)

249.2

1,572.9

Change vs. Year Ago

+7.8%

-2.1%

Avg. Price Per Unit

$3.90

$3.40

Refrigerated Uncooked Meats (No Poultry) Private Brands

All Brands

Dollar Sales (in millions)

$3,020.0

$4,988.6

Change vs. Year Ago

+40.3%

+9.2%

Dollar Share

60.5%

100%

Unit Sales (in millions)

462.9

748.6

Change vs. Year Ago

+31.9%

+5.0%

Avg. Price Per Unit

$6.52

$6.66

Refrigerated Dinner Sausage Private Brands

All Brands

Dollar Sales (in millions)

$381.0

$3,445.4

Change vs. Year Ago

+2.9%

+1.8%

Dollar Share

11.1%

100%

Unit Sales (in millions)

100.3

915.8

Change vs. Year Ago

+1.0%

-0.7%

Avg. Price Per Unit

$3.80

$3.76

Frozen Meat (No Poultry) Private Brands

All Brands

Dollar Sales (in millions)

$723.3

$1,627.7

Change vs. Year Ago

+7.9%

+2.3%

Dollar Share

44.4%

100%

Unit Sales (in millions)

75.4

208.2

Change vs. Year Ago

+5.4%

+2.3%

Avg. Price Per Unit

$9.59

$7.82

Store Brands /August 2018 / www.storebrands.com

consumers have less food preparation time and seek out snack and meal solutions that require minimal effort but still offer health benefits.” Product improvement in the category is about making items cleaner and healthier, Godshall says. To produce its new uncured deli line, Godshall’s clean room eliminates contamination with positive air pressure filtration, and through using ultraviolet light to kill bacteria and obtain longer product shelf life without the use of artificial preservatives. “Retailers seek to check more of the clean-label boxes with unique flavors, presentations and exclusivity that keeps shoppers coming back to their marquee,” Godshall says. “We built a stateof-the-art research and development center last year to help retailers develop these new offerings.” In the service deli, Estridge says retailers want to offer less-processed prepared meats. “In value-added fresh, we see opportunities for cleaner, more varied and better tasting offerings,” he adds. Delli Colli says retailers are seeking products “that adhere to a progressive list of acceptable ingredients as [they] attempt to eliminate long ingredient decks and allergens. They also want unique selling propositions that make their brand stand out even more, as consumers have accepted private label brands and understand the value they have to offer.” It is imperative that manufacturers respect “retailers’ ‘no-no’ ingredient lists,” Jakobovits adds. Packaging improvements focus on prolonging shelf life and reducing carbon footprints, the manufacturers say. “We look to innovations to extend the life of uncured products,” Godshall says. “Our clean room tacks time back on that we lose by excising chemical preservatives. Nitrogen gas flushing and vacuum packaging are being refined. Much of our new equipment investment focuses on being ahead of the pack on those requests.” Expresco is creating a sustainability program to cut food waste, water and electricity usage in its plant, and improve its carbon footprint by reducing overall packaging material and sourcing higher-quality recyclable material that is better for the environment, Delli Colli says. In addition, Expresco is focusing on cleaner recipes and becoming an allergen-free facility, he adds. Estridge says Real Deli is “striving to continuously improve variety, shelf life and value [with] new barrier films, modified atmosphere packaging and easy-open packaging.” SB Cvetan is a freelance writer from Barrington, Ill.

The Destination for Getting Ahead of Tomorrow’s Shoppers Oct. 2-4, 2018 Minneapolis, MN Minneapolis Convention Center

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FEATURED KEYNOTES

Whitney Hardy

John MacDonald

Dave Sommer

SVP & CMO

VP & CMO

Director, CPG, Shopper Marketing & E-Commerce