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The plant-based meat of the matter
Fastest-growing categories in private brands
Walgreens aims to innovate September 2019 | www.storebrands.com
SEIZING
SUSTAINABILITY MORE GROCERY RETAILERS EMBRACE CONCEPT TO DO THE RIGHT THING AND TO DIFFERENTIATE
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Volume 42 No. 9 September 2019
DEPARTMENTS 4
Editor’s Take
6
Around the Industry
10
Getting Social
35
End Cap
CATEGORY INTELLIGENCE 28
Ice cream and frozen desserts
30
Refrigerated and frozen meats
32
Vitamins and supplements
CONTENTS
FEATURES 20 STORE BRANDS’ GROWTH 100 On the fast track … for now Private brands are thriving in sales and units in several segments, from pest control to wine to hair appliances (hair appliances?) But can these product sectors sustain their growth?
26 RETAILER PROFILE ‘Ambitious’ about own brands 118-year-old Walgreens aims to lead, not follow
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, $125; two years, $146. One year, Canada $190; One year, foreign $275. Payable in advance with a bank draft drawn on a US bank in US funds.Single copies $20. Foreign, $85. 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 3200 Northbrook, IL 60065-3200. Copyright 2019 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. www.storebrands.com / September 2019 / Store Brands
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EDITOR’S TAKE 8550 W. Bryn Mawr, Suite 200, Chicago, IL 60631 (773) 992-4450
Group Brand Director
‘MEAT’ OF THE MATTER
John Schrei
248-613-8672
jschrei@ensembleiq.com
EDITORIAL Editor-in-Chief
Lawrence Aylward
(330) 635-2586
I’m guessing the race is on in the U.S. for a retailer to come up with its own brand of a plant-based meat product that’s similar to Beyond Meat and Impossible Foods. That’s because there’s a genuine fervor surrounding these companies’ “bleeding” veggie burgers. Beyond Meat with its famous Beyond Burger and Impossible Foods with its Impossible Burger are the current darlings of the entire food industry. They are the summer’s rock stars — the Rolling Stones on tour. But will they fade like so many of those one-hit wonder bands from the 1990s? The two companies certainly didn’t receive a vote of confidence from Whole Foods Market Founder and CEO John Mackey who told CNBC recently that “the [brands] capturing the imagination of people — and I’m not going to name these brands because I’m afraid I will be associated with the critique of it … but some of these that are extremely popular now that are taking the world by storm, if you look at the ingredients, they are super, highly processed foods.” You just know Mackey is talking about Beyond Burger and Impossible Foods. But he does bring up a good point. While consumers are demanding more plant-based foods, they also want foods that are less processed and free from undesirable ingredients. While Beyond Burger and Impossible Foods make their fake beef burgers with healthy ingredients, some ingredients have been deemed not-so healthy. In July, Alissa Rumsey, a registered dietitian told CNBC that the fake beef burgers “are not necessarily healthier than beef burgers.” She also said they are “totally fine to eat, but there’s no need to replace your beef burger if you don’t enjoy these.” Mackey told CNBC that eating highly processed foods is not healthy, and that people “thrive on eating whole foods.” One thing is for certain and most everyone will agree that Beyond Meat and Impossible Burger offer products that are better for the environment in that their processing requires a lot less energy and generates a lot less greenhouse gas, among other things. So the companies offer very sustainable products, of which consumers also want more. But another drawback for Beyond Meat and Impossible Burger is cost — their products are expensive, much more than organic ground beef let alone conventional ground beef. Beyond Meat Founder Ethan Brown said that 93% of people who purchase the company’s products in grocery stores are meat eaters. But I just don’t see these carnivores continuing to pay $6 for two patties that weigh 4 ounces each. And most all consumers won’t pay that much of a price for the sake of sustainability, even if they say they will. The plant-based product movement is real and relevant. But here’s the thing: A lot of consumers might think these products are healthier than they really are, from plant-based salty snacks to plant-based dairy products to plant-based meats. That’s definitely not a given. When consumers catch on, then what? If retailers are indeed racing to create their own brand of veggie burgers like those from Beyond Meat and Impossible Burger, perhaps they should consider innovations. that are less processed, if that’s possible. That would be taking this darling of a category to another level.
laylward@ensembleIQ.com
Managing Editor
Gina Acosta
(813) 417-4149
gacosta@ensembleIQ.com
Digital Editor
Louisa Hallett
(904) 294-6764
lhallett@ensembleiq.com
Contributing Writers
Rich Mitchell, Dana Cvetan, Nevenka Jevtic
ADVERTISING & SALES Associate Brand Director
Maggie Kaeppel
(708) 565-5350
mkaeppel@ensembleIQ.com
Senior Sales Manager
Judy Hayes
(925) 785-9665
jhayes@ensembleiq.com
Regional/International Sales Manager 248-514-9500
Tammy Rokowski
trokowski@ensembleiq.com
Senior Sales Manager
Theresa Kossack
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tkossack@ensembleiq.com
Business Development Manager 773-992-4410
Natalie Meehan nmeehan@ensembleiq.com
CUSTOM MEDIA Director of Client Services, Enterprise Solutions Kaeli Elisco (224) 632-8221
kelisco@ensembleIQ.com
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Pat Wisser pwisser@ensembleIQ.com
REPRINTS, PERMISSIONS AND LICENSING Please contact Wright’s Media at ensembleiq@wrightsmedia.com or (877) 652-5295.
EVENTS • MARKETING • DIGITAL • RESEARCH • CIRCULATION CORPORATE OFFICERS Executive Chairman - Alan Glass Chief Executive Officer - Jennifer Litterick Chief Financial Officer - Dan McCarthy Chief Operating Officer - Joel Hughes Chief Innovation Officer - Tanner Van Dusen Chief Human Resources Officer - Ann Jadown Executive Vice President, Events & Conferences – Ed Several
Lawrence Aylward, Editor-in-Chief laylward@ensembleIQ.com 4
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Store Brands / September 2019 / www.storebrands.com
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For Everyone Store brands separate you from your competitors!
Nov. 17-19 • Chicago Visitor registration is now open. Telephone (212) 972-3131 or online at www.plmaregistration.com Presented by the Private Label Manufacturers Association
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AroundtheIndustry
U.S. wines score best performance ever in International Salute to Excellence Awards Costco, Trader Joe’s and ALDI win top honors
With a strong performance in the Private Label Manufacturers Association’s (PLMA) 2019 International Salute to Excellence Awards for private label, U.S. wines continue to shed a once-lousy image for being poorly made and rarely worth drinking. In the competition, held in May in Amsterdam, U.S. wines won seven top honors in the category — the best performance ever recorded for wines sold exclusively by U.S. supermarkets and more than doubling the number of 2018 winners. The award-winning wines are: • Costco Wholesale: Kirkland Signature Bordeaux Supérieur 2016 (Bordeaux, $10), best quality; Kirkland Signature Asolo Prosecco NV (Italy, $10), best value. • Trader Joe’s: Trader Joe’s Organic Grower’s Reserve Merlot 2017 (Califor-
Costco Wholesale’s wines continue to achieve recognition for their quality and value. 6
nia, $5), best quality; Trader Joe’s Platinum Reserve Pinot Noir 2017 (Russian River Valley, $15), best quality. • ALDI: Evanta Malbec 2017 (Argentina, $4), best value; Scarlet Path Zinfandel 2017 (Lodi, $8), best quality; Outlander Cabernet Sauvignon 2016 (Paso Robles, $9), best quality. The showing demonstrates that U.S. private label wines continue to get closer to their European counterparts in terms of value and quality — especially among wines costing less than $15, according to the PLMA. “This matters because wines that are sold exclusively by European supermarkets have long been considered among the best wine in the world at combining those two things,” the PLMA stated. “Don’t overlook private label store wines,” said Washington Post wine columnist Dave McIntrye, one of 18 international judges who participated in the 2019 wine awards program. “These were good value, high-quality bottlings. Some stores are doing a great job sourcing really good juice.” Wines were judged in 25 categories by varietal, style and appellation, and each category was judged for best quality and best value. The 18 men and women who judged the competition came from around the world and included masters of wines, sommeliers, winemakers, wine writers, wine educators and retailers. They judged 350 wines from 40 retailers in 11 countries. Founded in 1979, the PLMA has offices in New York and Amsterdam. SB
SHORT TAKES Private label market continues to grow in Europe
The private label industry has reached an all-time high in Europe, as record market shares for the industry are revealed in the latest survey conducted by market researcher Nielsen for the Private Label Manufacturers Association’s (PLMA) 2019 International Private Label Yearbook. According to the data, 17 European countries’ market share for private label stands at 30% or more. Spain, Switzerland and the United Kingdom lead the way with the highest market shares at or above 50% of the 20 countries researched by Nielsen. In Europe’s largest economy, Germany, private label market share stayed above 44% for the third consecutive year. In the UK, where supermarkets are investing in their private label programs to meet competition from discounters that rely heavily on private label, market share is near 47%. Private label’s share has remained above 40% in the UK ever since Nielsen began compiling data for PLMA in 1997. “The latest Nielsen statistics reveal clearly that the popularity among consumers of private label across Europe remain enormous,” said Brian Sharoff, president of PLMA. “In 17 countries researched, at least every third product sold is a private label product. In the lead are Spain and Switzerland, where every second product sold is a retailer brand.”
Kroger, Walgreens expand partnership
The Kroger Co. and Walgreens will expand their partnership to stores in Knoxville, Tenn. Beginning this fall, 35 Walgreens stores in the area will feature the store-within-a-store Kroger Express concept and Kroger Pickup, while 17 Kroger stores will launch Walgreens’ private brand health and beauty products. This pilot is a continuation of a test that began in northern Kentucky last October and then expanded in December to include the Kroger Express concept as well as some stores in the Chicagoland area. Most of the Walgreens locations will carry the full Kroger Express assortment, which has up to 2,700 products, while other stores will offer an average of 2,300 products. These include Kroger’s Our Brands products, national brands, fresh meat and produce, and Home Chef meal solutions.
Store Brands / September 2019 / www.storebrands.com
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AroundtheIndustry John Mackey began Whole Foods 39 years ago.
Mackey loves Amazon about ‘98% of the time’ Whole Foods Market founder and CEO compares his relationship with Amazon to his marriage By now, more than two years after the sale of his company to Amazon for $13.7 billion in cash, some grocery industry insiders thought John Mackey would be gone from his position as CEO of Whole Foods Market. But Mackey, who founded Whole Foods Market about 39 years ago, is still leading the Austin, Texas-based retailer that’s well known for its 365 Everyday Value private brand. Whole Foods Market was struggling at
the time of the sale, which vaulted Seattlebased Amazon into the bricks-and-mortar grocery arena. Mackey has voiced some disagreements with Amazon, but he compared his relationship with Whole Foods Market’s owner to his marriage in an interview with CNBC. “Do I absolutely love everything about my wife? The answer is that I love about 98%,” he told CNBC. “There are little things that I wish were different, but you
can’t really change people. “Amazon is like a marriage. Do we love absolutely everything about Amazon? No. We probably love 98%.” Mackey also describes his boss, Amazon CEO and Founder Jeff Bezos, as “brilliant.” SB
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e o.
AroundtheIndustry SHORT TAKES Continued The Kroger stores will carry Walgreens’ own-brand products across several categories, including beauty, personal care, over-the-counter medications and wellness. Cincinnati-based Kroger operates nearly 2,800 retail food stores under various banner names. Based in Deerfield, Ill., Walgreens operates about 9,800 drug stores in all 50 states.
Walmart debuts Earth to Skin
Bentonville, Ark.based Walmart recently unveiled its own private brand beauty line called Earth to Skin. The line comes with the tag line: “Real ingredients. Real radiance.” The items in the line, which includes about 30 products, feature natural ingredients like honey, avocado, green tea and cucumber. The formulas are free from additives such as parabens and sulfates.
Study: CPG industry essential to U.S. job market
The consumer packaged goods (CPG) industry supports 20.4 million American jobs that generate $1.1 trillion in labor income, and contribute $2 trillion to the nation’s GDP, according to a new report by the Arlington, Va.-based Grocery Manufacturers Association. The CPG industry encompasses the food, beverage, household and personal care products that Americans depend on every day. The industry’s direct impact alone is massive, totaling 2.3 million jobs in 2017, paying labor income of $151.0 billion and adding $361.3 billion to the nation’s GDP.
Hy-Vee launches exclusive cereal for charity
West Des Moines, Iowa-based Hy-Vee developed an exclusive new cereal created in partnership with 15 and the Mahomies Foundation, the charity of Kansas City Chiefs’ Quarterback and 2018 NFL MVP Patrick Mahomes II. The cereal debuted on store shelves in select cities on Aug. 1. Mahomes Magic Crunch is being sold as a HyVee store brand, and is available in select HyVee stores in southern Iowa, Kansas, Missouri and Nebraska for a limited time. “Patrick Mahomes is a terrific role model for
our customers and football fans alike,” said Donna Tweeten, Hy-Vee’s chief marketing officer and chief customer officer.
Sam’s Club adds more Chick-fil-Atype products
More than a year after debuting its Southern Style Chicken Bites under its Member’s Mark store brand, Sam’s Club has added a Southern Style Chicken Sandwich and Southern Style Waffle Fries to its freezer aisle. Some consumers say the products taste a lot like Chick-fil-A’s offerings. The Southern Style Chicken Sandwich, featuring individually wrapped breaded chicken breast fillets, costs $15.98 for a 69-ounce bag. A 4-pound bag of waffle fries costs $4.98. The Bentonville, Ark.-based retailer garnered social media attention last year after releasing its Member’s Mark Southern Style Chicken Bites. Online foodies hailed the private brand product as tasting just like Chick-fil-A’s chicken nuggets.
H-E-B adding tech hub
San Antonio-based H-E-B is adding a technology hub to its headquarters. Following the June opening of its 81,000-square-foot Eastside Tech Hub in Austin, Texas, H-E-B will begin construction on a five-story, 150,000-square-foot building in downtown San Antonio next summer.
Correction
In the cover story of the August issue — “A bevy of beverages” — we mistakenly reported that BJ’s Wholesale Club’s Wellsley Farms Donut Shop coffee is certified Fair Trade by Fair Trade USA. The Donut Shop coffee is not certified Fair Trade. We also reported that BJ’s Wholesale Club’s Wellsley Farms Organic French Roast k-Cups are developed and distributed by International Marketing Systems. We should have reported that the k-Cups are manufactured by Keurig Dr Pepper. We apologize for the inconvenience.
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www.storebrands.com / September 2019 / Store Brands
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GETTING SOCIAL
Q A with Ron Godshall President, Godshall’s Quality Meats
How did you come into the world of private brands? It’s been a natural progression for us. Godshall’s makes a variety of products from bacons and sausages to snack items. It wasn’t long before buyers started asking for unique products they could carry under their own brands. We embraced the opportunities that made sense for us and our successes brought more requests. Today, private label is a substantial part of our mix. Describe the private brands industry in one word. Booming. What do you like most about the industry? Challenges. I’ve always found motivation in doing what a customer might not be sure was possible. Ron Godshall stands next to one of the company’s solar-powered facilities. Godshall’s Quality Meats is big on environmental stewardship.
What is the industry’s biggest challenge? Keeping up the variety and options that took store brands from being “also-rans” to a destination logo. I’m old enough to remember when store brands were the knockoffs. I’d groan when my mom took them out of the shopping bag. Now there are several private label items I go to a specific retailer to buy. The loyalty built by that is a home run. Who is your hero and why? My grandfather on my mother’s side was my hero. He taught me so many valuable
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things that I still use today — one of the most important being that you should be self-aware and confident. What trait in yourself do you attribute most to your success? My passion, I love what I do and I love learning. What is the biggest obstacle you have ever overcome? Preparing to be both a businessman and a great dad. I wanted to be there for my kids and be part of their lives as well as grow the business. It was and still can be difficult, but it has always been worth it. What’s the best advice someone ever gave you? Bloom where you’re planted. It’s 5 o’clock (or later), what do you do for fun? I like to spend time with my family. I like to grill on my Primo. You have a week off. Where do you go and why? I spend time in the mountains with my kids — hiking, swimming, fly fishing ... all the good stuff. If you were born 100 years ago, what would you do for a living? I’d like to think I would have been a butcher or a carpenter. What’s the best book you’ve ever read? “Good to Great” by James C. Collins. What song do you love to crank up in the car? “Broadsword” by Jethro Tull. SB
Store Brands / September 2019 / www.storebrands.com
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12 12 Store Store Brands Brands / September / September 20192019 / www.storebrands.com / www.storebrands.com
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SEIZING
sustainability More grocery retailers embrace concept to do the right thing and to differentiate BY LAWRENCE AYLWARD
Sustainability.”
It’s a big word, and it comes with a lot of responsibility. Let’s put it this way: “Sustainability” is a lot for grocery retailers to get their arms around. “Sustainability means different things to different people,” says Nancy Cota, vice president of own brands, product management, innovation and brand management for Boise, Idaho-based Albertsons Cos. Indeed. Sustainability is about: • reducing food and packaging waste; • using leftover food to help feed the hungry; • reducing the carbon footprint; • removing undesirable chemicals and ingredients from food and beverage products to make them healthier; • ensuring that suppliers and producers practice environmental stewardship and animal husbandry; • offering products that are inclusive for all people; • and treating employees fairly and with dignity while compensating them adequately. Sustainability simply is responsibility on myriad levels associated with products and services. Grocery retailers have been criticized for not being sustainable, especially regarding food waste. Last year, The Center for Biological Diversity issued a report called “How U.S. Supermarkets Fail to Make the Grade in Reducing Food Waste.” Enough said. But grocery retailers are improving on the sustainability front. They realize, perhaps more than ever, that they need to be leaders for the greater good. They also know that consumers, perhaps more than ever, are
judging them on their sustainable initiatives. Retailers also recognize that being sustainable just makes plain good business sense. Matt Sargent, senior vice president of market research company Magid, believes sustainability provides retailers another tool in the tool box to differentiate their products. “It’s another tool in the toolbox, but it’s also indicative of private label no longer being the copy and paste of national brands,” Sargent says. “It’s saying that not only is a product not a national brand equivalent in terms of taste and quality, it’s also not a national brand equivalent in terms of overall footprint in regard to these different elements of sustainability.” Earlier this year, Gil Phipps, Kroger’s vice president of branding, marketing and Our Brands, told attendees at the Shoptalk retail conference in Las Vegas that having a premium and exclusive store brand product is no longer enough. It must also have a degree of social responsibility built in. “We develop our private brand products by taste profile, but we are definitely finding that different generations resonate differently with different brands,” Phipps said. “Eighty percent of millennials say their decision on what to purchase is driven not only by the products that make them happy, but by products that are also socially responsible.” In the following vignettes, we report on what several grocery retailers are doing to be more sustainable. While these vignettes focus on one or only a few things they are doing, these retailers are doing much more and have made sustainability a significant component of their everyday businesses.
www.storebrands.com / September 2019 / Store Brands
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Albertsons Cos. INNOVATING FOR THE RIGHT REASONS Boise, Idaho-based Albertsons Cos. released a new line of compostable and Earthfriendly products in April under its Open Nature store brand that are not only sustainable but are innovative. Albertsons Cos. weaved innovation and sustainability together to create the line, which features an “eco-picnic” family of products including plates, bowls, cutlery, straws, cold cups and hot cups that are free of bisphenol A, an industrial chemical used since the 1960s in plastics that could be unsafe. All components are made of plant-based material certified compostable in industrial composting facilities. Other compostable additions to the Open Nature brand include garbage bags, lawn and leaf bags, and food scrap bags. More compostable products are planned for the line in coming months. Additionally, Open Nature features bamboo facial tissue, bamboo washable rayon towels and bamboo bath tissue. Albertsons Cos. touts bamboo, a grass,
Albertsons Cos. is focusing on innovative and earth-friendly products.
H-E-B
CELEBRATING THE ENVIRONMENT San Antonio-based H-E-B celebrated Earth Day last April by giving away 200,000 colorful reusable bags to customers across Texas. On April 22, customers who visited any H-E-B in Texas received their complimentary Earth Day bags, made from recycled plastic bottles. Since 2008, H-E-B has given out more than 2 million reusable bags in celebration of Earth Day. This year, H-E-B employees provided the inspiration for the art featured on the Earth Day bag. As part of an internal art contest, the company received dozens of creative designs and chose a colorful composition by a 10-year employee who has a degree in graphic design. On top of the free bag giveaway, H-E-B stores across the state held family-friend14
ly events, tree plantings and community cleanups to celebrate Earth Day. Stores have also teamed with local schools to hold recycling initiatives to see who can collect the most plastic bags. “Throughout the year, H-E-B educates customers on ways to be environmentally conscious,” said Winell Herron, H-E-B’s vice president of public affairs, diversity and environmental affairs, in a statement. H-E-B is also heavily involved in helping those in
as being easily renewable because it grows quickly and matures in only three years. It takes up less land, uses less water than trees, and requires zero pesticides to grow. Bamboo also captures more carbon dioxide from the atmosphere than trees or cotton. Nancy Cota, vice president of own brands, product management, innovation and brand management for Albertsons Cos., said the line was launched for several reasons. “Of course, we wanted to do the right thing for our social responsibility,” Cota stated. “We also wanted to solve a problem for many of our shoppers. They were looking for sustainable products in these categories, and there weren’t many options with the name brands. We also wanted to innovate in the space and differentiate with our Own Brand (its private branded lines) products.” At Albertsons, sustainability is perpetual. The retailer formed a sustainability council that meets regularly to identify more opportunities for the the company to support sustainable practices, Cota said. “Sustainability is embedded in our DNA,” she noted. need. Last May, H-E-B launched a limited-edition cookie, H-E-B Choco Coco Twisters, with 5% of the proceeds being donated to the American Red Cross to help people affected by Texas disasters. The Choco Coco Twisters, featuring coconut crème and bits of real coconut candy flakes sandwiched between two chocolate cookies, is among the more than 1,000 H-E-B Select Ingredients products, which are made without artificial flavors, high fructose corn syrup, artificial colors and other synthetic ingredients. H-E-B gave away 200,000 Earth Day bags this year.
Store Brands / September 2019 / www.storebrands.com
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Retail Business Services
HEALTHY FOOD MEANS HEALTHY COMMUNITIES
Ahold Delhaize USA, the parent company of Salisbury, N.C.-based Retail Business Services, embraces the concept that healthy food makes healthy communities, and reduces the risk of chronic diseases while contributing to a community’s overall resilience and vitality. Retail Business Services, which develops private brands for Ahold Delhaize USA’s six banners — Food Lion, Giant Food, Giant/Martin’s, Hannaford, Peapod and Stop & Shop — is putting its parent company’s philosophy to practice. Late last year, Retail Business Services announced it was making “a landmark commitment” to make the private brand products it provides to all banners free from a list of undesirable ingredients by 2025, including synthetic colors, artificial flavors, artificial preservatives, artificial sweeteners, MSG and high-fructose corn syrup. Retail Business Services’ private brand lines include retailer namesake lines, Nature’s Promise, Taste of Inspirations, CareOne, Smart Living, Always My Baby, Etos, Companion, Limited Time Originals, Guaranteed Value and Cha-Ching. “At our core, we are about making it easier for everyday shoppers to buy better, and this initiative does just that,” said Juan De Paoli, senior vice president of private brands for Retail Business Services, in a statement. Retail Business Services also aims to have 50% of its own brand sales coming from nutritious products by 2020. In 2018, it achieved 47%. It aims to have all own brand products carry Front of Pack labeling by 2020; it achieved 88% in 2018. 16
fi pr tr
Target
TARGETING RENEWABLE ENERGY To lower its carbon footprint, Minneapolis-based Target aims to have all of its electricity come from renewable sources by 2030. The goal, announced in June, applies to all of Target’s domestic operations including stores, distribution centers and offices. According to the company, its businesses currently generate approximately 22% of their electricity requirements from renewable sources. Target is investing in a variety of projects that produce energy through such renewable resources as the sun and wind. “We’ve been on a multi-year journey to operate our facilities more sustainably and setting this ambitious goal is an important milestone,” says John Leisen, Target’s vice president of property management. In addition, Target continues to upgrade its facilities to make them more
Store Brands / September 2019 / www.storebrands.com
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e
The Kroger Co
ZEROING IN ON HUNGER AND WASTE The Kroger Co.’s Rodney McMullen called it the retailer’s “moonshot.” McMullen, Kroger’s chairman and CEO, was talking about the retailer’s ambitious Zero Hunger/Zero Waste Plan initiative to end hunger in communities and eliminate waste in the company by 2025. McMullen announced the plan two years ago. Let’s just say Kroger is well on its way to the moon with the initiative. The Cincinnati-based retailer recently revealed that food waste generated by its retail stores decreased 9% in the past year, and that the company had reduced both overall food waste and greenhouse gases resulting from it. “We know 40% of food produced in the U.S. is thrown out, yet one in eight people in our country are food insecure — perhaps even someone we know,” McMullen said in Kroger’s Environment, Social and Governance Report. “Redirecting just one-third of the food wasted in the U.S. every year would more than feed those struggling with hunger.” As part of Zero Hunger/Zero Waste, Kroger also announced it achieved a 13% improvement in supermarket food waste diverted from landfill, moving from 27% diversion in 2017 to 40% in 2018. The retailer said it has reduced the amount of plastic resin in its private brand packaging by 9.1 million pounds, on track to reaching its 10 million-pound goal by 2020. Kroger also said it has sourced 88% of wild-caught fresh and frozen seafood in its supermarket seafood departments from certified sustainable sources, and also bought more than 17 million pounds of Fair Trade USA-certified ingredients for its private brand products. (Fair Trade USA enables sustainable development and community empowerment by cultivating a more equitable global trade model that benefits farmers, workers, fishermen, consumers, industry and the Earth.)
sustainable. It will have rooftop solar panels on 500 of its locations by 2020. The retailer is also installing electric vehicle charging stations at more than 100 sites across more than 20 states. LED lighting, now in place across nearly all stores, has reduced the chain’s energy usage by 10% annually. On the product front, Target is focusing on inclusivity with its store brand apparel lines. “We strive to design products that serve a variety of guests — regardless of size, body type, skin tone or abilities,” said Jennifer Silberman, Target’s vice president of corporate responsibility, in a statement. “Our intention is to offer products and experiences that reflect the diverse makeup of our guests. The goal is to make guests feel comfortable and confident when wearing our apparel brands.” In 2018 Target introduced a women’s lifestyle private brand, Universal Thread, which includes an assortment with multiple fits, silhouettes, lengths,
Target is focusing on inclusivity with its store brand apparel lines.
rises and sizes. “We developed this brand based on interviews with nearly 1,000 women from around the United States who told us they dreaded shopping for new clothes and that, oftentimes, what they wanted was not offered for their body type,” Silberman says. Target’s Cat & Jack adaptive apparel
line is made especially for kids and toddlers living with disabilities to make it easier for families to dress their kids. The retailer’s design team created 40 different items that have features such as side and back snap and zip closures and hidden openings for abdominal access. The line is also made with comfortable and durable cotton knits.
www.storebrands.com / September 2019 / Store Brands
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Wegmans offers specially adaptive shopping carts at all of its stores.
Walmart
LEADING THE WAY WITH PRIVATE BRANDS Walmart is using its extensive private brands program to make a statement about its commitment to reduce plastic waste. Last February, the Bentonville, Ark.-based retailer announced at its annual supplier forum that it’s working with its U.S. private brands suppliers to achieve 100% recyclable, reusable or industrially compostable packaging for its private brand packaging by 2025. The move will impact more than 30,000 SKUs. Walmart says it’s encouraging national brand suppliers to set similar packaging goals. “As a global retailer that has set an ambitious aspirational goal to create zero waste, we fully recognize that reducing plastic waste by increasing packaging circularity is an area where Walmart can lead,” said Laura Phillips, senior vice president for global sustainability, in a statement. Walmart is targeting at least 20% post-consumer recycled content in private brand packaging by 2025. It also wants to label 100% of food and consumable private brand packaging with the How2Recycle label by 2022. Last year more than 800 Walmart private label suppliers participated in How2Recycle. The move is consistent with three goals Walmart established nearly 15 years ago: to create zero waste, operate with 100% renewable energy, and sell products that sustain resources and the environment. What’s happened in the past 18 months, according to Phillips, is Walmart’s ambition to create zero waste has been applied with increased intensity to plastics. “It’s a big challenge. We are just getting started and there is more to do, but we are excited about the actions we are taking,” Phillips said last month during a panel discussion held in Bentonville called “Technology Enabling Sustainability in Retail.” There is an element of common sense to sustainability, according to Phillips, who said, “If we don’t need plastic, let’s just not use it, or reduce it. And where we can, let’s make it recyclable.”
Walmart has challenged itself to reduce plastic waste. 18
Wegmans
LOOKING OUT FOR ALL CUSTOMERS It was Liza Rudroff, a Wegman’s Food Market customer, who brought the specially adapted shopping cart to the Rochester, N.Y.-based retailer’s attention. Rudroff ’s daughter, Sydney, has a neurological movement disorder that prevents her from standing or walking. Because Sydney is too big to sit in the front of a regular shopping cart and too small for other special needs carts, Rudroff found herself planning shopping trips at a Wegmans in Buffalo around when a family member could stay with Sydney. When Rudroff learned that a specially adaptive cart from Firefly GoTo Shop was available in the U.S., she approached the management team at the Buffalo store to see if they would considering offering it. “[When she shared] her family’s need, we recognized there are more families throughout all our market areas that would benefit from the availability of this cart at our stores,” said Linda Lovejoy, Wegmans’ community relations manager, in a statement. Within two months, Wegmans began piloting the Firefly GoTo Shop carts at that Buffalo store and another store in Pittsford, N.Y. The cart, designed by Leckey, a manufacturer of mobility equipment for children and young people, is designed for
children ages 2-8 (or up to 77 pounds) who require extra postural and head support. The cart features an open front allowing users to easily place a child in the seat, adjustable head and lateral supports, and a fully adjustable, cushioned five-point harness. It provides families with young children who have mobility restrictions a safer, easier way to grocery shop together. Following the pilot, Wegmans rolled out the carts to all of its 99 stores. Wegmans says it is the first retailer in the U.S. to offer the carts in all its stores. “We are committed to providing incredible customer service to all our shoppers, and we’re always looking for better ways to make our stores accessible to everyone,” Lovejoy says. Rudroff was thankful. “Now I can comfortably and safely take Syd grocery shopping with me, whether it’s a planned trip or a last-minute decision to stop on the way home from school” she told Wegmans. “Going to the store immerses Syd in the community and gives her the opportunity to engage with others, explore the sights and sounds, and learn how to shop. It’s a great life experience for her that is now effortless and worryfree for me.” SB
Store Brands / September 2019 / www.storebrands.com
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GET READ EADY FOR A IN YOUR M EAT DEPARTMENT. Meat District Butcher Crafted Premium Burgers drive sales AND traffic.
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TGR_FullPg_temp.indd 1
cell: 513-227-0730
email: TimW@GWFG.com
8/28/19 4:22 PM
STORE BRANDS' GROWTH 100
ON THE
FAST TRACK … FOR NOW
Private brands are thriving in sales and units in several segments, from pest control to wine to hair appliances (hair appliances?)
BUT CAN THESE PRODUCT SECTORS SUSTAIN THEIR GROWTH?
A
BY LAWRENCE AYLWARD
s I glanced through a list of the top 100 fastestgrowing private-branded product sectors in the 2019 Store Brands' Growth 100, I thought of Carl Spackler from the 1980 film “Caddyshack.” OK, I know … you’re wondering where I could possibly be going with this (unless you’re a big “Caddyshack” fan like me.) Let me explain: Three of the top 25 fastest-growing product sectors in the top 100 — based on information supplied by Information Resources Inc. (IRI) — are rodent and insect control products under the pest control category. Ranked 13th on the list is “multipurpose insect/rodent chemicals,” ranked 17th is “outdoor insect/rodent control chemicals” and ranked 25th is “insect/rodent control device.” When I saw the words “rodent control” listed three times early on in the list, I immediately thought of Spackler, Bill Murray’s hilarious character from “Caddyshack,” who as a greenskeeper at the fictional Bushwood Country Club was on a mission to eradicate gophers because the burrowing rodents were destroying the golf course. Spackler, though, used something a little stronger (dynamite) to control the “varmints.” So, in the spirit of Spackler, all I can say is, “Freeze gopher!” 20
OK, back to reality. I realize that insect and rodent control chemicals may not be the most innovative of private brands, but there is clearly a need for them and private brands are carving a niche in the category. Sales of “multipurpose insect/rodent chemicals” are up more than 67% for the latest 52 weeks ending July 14, 2019, when compared to the same period last year. Sales of “outdoor insect/rodent control chemicals” are up about 60%, and sales of “insect/rodent control devices” are up 45%. Incidentally, our Growth 100 list features product sectors and categories where private brands post dollar sales and unit sales gains of 5 percent or more and account for $5 million or more in total sales in the last year in data taken by IRI from supermarkets, drugstores, mass market retailers, military commissaries, and select club and dollar store retail chains. The list draws from food, beverage and non-food categories. If you’re surprised about the performance of insect/rodent control products as private brands, don’t be. Last year, the No. 1 fastest-growing product segment in private brands was “multipurpose insect and rodent chemicals.” Sales were up 698% from July 15, 2017, through July 15, 2018. While they aren’t huge categories for private brands (“outdoor insect/rodent control chemicals” is the largest at $53.7 million), they are growing and probably will continue to grow, especially as more retailers realize an opportunity for their own brands in the category. More consumers clearly trust these products, which are most likely national brand equivalents, and are probably pur-
Store Brands /September 2019 / www.storebrands.com
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STORE BRANDS' GROWTH 100 100 categories where private brands had dollar/unit sales gains of 5% or more and accounted for $5 million or more in total sales (52 weeks ending July 14, 2019). Includes supermarkets, drugstores, mass market retailers, military commissaries, and select club and dollar chains. n FOOD - YELLOW n NON-FOOD - GRAY n BEVERAGE - BLUE DOLLAR SALES (IN MILLIONS)
INCREASE VS. YEAR AGO
UNIT SALES (IN MILLIONS)
INCREASE VS. YEAR AGO
DOLLAR SALES (IN MILLIONS)
INCREASE VS. YEAR AGO
UNIT SALES (IN MILLIONS)
INCREASE VS. YEAR AGO
1
HAIR APPLIANCES
$10,679,618
35824.1%
177,758
3275.2%
51
FROZEN PIES
$19,317,809
26.0%
4,627,571
5.8%
2
VACUUM BAGS/BELTS
$14,447,376
134.6%
2,665,478
135.5%
52
EXTERNAL ANALGESICS RUBS
$71,003,149
25.8%
17,887,349
22.4%
3
FZ DRINK/COCKTAIL DRINK CONCENTRATE
$6,236,354
134.3%
2,610,632
42.2%
28.3%
4
DOMESTIC TABLE/STILL WINE
5
CAT SNACKS/BEVERAGES
$12,230,260
108.6%
5,691,313
130.5%
6
DRIED MEAT SNACKS (NOT JERKY)
$27,152,065
92.3%
7,449,385
45.1%
7 8 9 10
PORK RINDS SS BOTTLED ORANGE JUICE RFG FRUIT DRINK POWER TOOTHBRUSHES
$10,930,161
$32,994,719 $17,-26,523 $22,114,872 $69,553,918
110.2%
90.4% 87.0% 81.7% 81.6%
2,275,519
16,284,990 7,469,128 8,504,331 6,586,166
233.7%
51.2% 64.3% 54.9% 33.5%
53
RFG LEMONADE
$66,315,991
25.1%
47,377,404
54
NAIL POLISH
$15,968,194
24.9%
4,806,130
8.5%
55
SS BOTTLED OTHER FRUIT JUICE
$15,222,670
24.5%
6,339,884
67.0%
56
BATH FRAGRANCES/BUBBLE BATH
$36,389,053
24.4%
12,047,549
15.1%
57
TESTING ACCESSORIES
$45,896,805
24.3%
6,494,635
23.1%
58
LIP GLOSS
$11,706,594
24.0%
1,679,415
25.4%
59
GROOMING/SHAVING SCISSORS
$61,844,715
24.0%
16,618,812
34.3%
60
DATES
$9,783,659
23.9%
3,207,705
28.9%
61
OUTDOOR/LAWN FERTILIZER/WEED KILLER
$31,127,983
23.8%
3,954,093
24.4%
62
CHOCOLATE CANDY BOX/BAG/BAR < 3.5 OZ
$22,708,262
23.8%
14,999,486
26.6%
63
WAXED PAPER
$41,517,132
23.7%
13,299,236
6.8%
64
RFG DIPS
$228,861,613
23.7%
68,029,150
20.6%
65
DRIED FRUIT CHIPS
$24,220,795
23.6%
9,567,358
22.3%
66
RFG SAUCE/GRAVY/MARINADE MIXES
$114,992,630
22.9%
29,596,320
15.1%
11
SHERRY/VERMOUTH/CHAMPAGNE
$5,230,864
81.3%
598,867
86.1%
12
SS BOTTLED SPARKLING JUICE
$7,864,834
74.4%
5,805,734
91.7%
13
MULTIPURPOSE INSECT/RODENT CHEM
$8,645,323
67.2%
1,655,833
57.1%
14
RFG VEGETABLE JUICE
$7,014,458
60.7%
2,574,139
51.8%
15
SS BOTTLED CHERRY JUICE
$6,300,108
57.5%
1,497,188
37.2%
16
READY-TO-DRINK COCONUT MILK
$17,254,329
55.7%
9,626,231
51.9%
17
OUTDOOR INSECT/RODENT CONTROL CHEM
$53,711,059
53.9%
13,714,694
39.7%
67
RFG MEAT/CHEESE/CRACKER/DESSERT
$132,284,508
22.6%
50,956,767
35.4%
18
SS BOTTLED PINEAPPLE JUICE
$17,221,550
53.4%
5,804,352
64.0%
68
BREAKFAST/CEREAL/SNACK BARS
$151,683,527
22.6%
63,508,074
15.3%
19
RFG HANDHELD NON-BREAKFAST ENTREES
48.4%
69
READY-TO-DRINK ALMOND MILK
$6,325,186
22.5%
3,258,784
25.2%
70
DRIED CRANBERRIES
$35,341,615
22.3%
11,424,551
27.3%
71
BOTTLES
$130,462,317
21.9%
56,461,544
21.1%
72
LIQUID VITAMINS/MINERALS
$45,990,358
21.7%
10,986,843
71.8%
73
CAPPUCCINO/ICED COFFEE
$12,197,699
21.4%
7,423,970
28.3%
74
DIARRHEA MEDICINE
$19,092,325
21.0%
4,171,663
21.9%
75
MARINATED VEGETABLE/FRUIT
$29,966,959
20.6%
12,022,830
19.5%
76
EAR CARE PRODUCTS
$32,006,884
20.4%
6,338,036
28.8%
77
LIQUID COCKTAIL MIXES
$7,622,853
20.4%
2,407,500
15.0%
78
POTPOURRI/SACHETS
$182,648,938
20.3%
87,579,296
13.3%
79
SPIRITS
$15,032,191
20.1%
1,086,888
7.8%
80
READY-TO-SERVE RICE
$15,773,484
20.1%
8,701,064
14.7%
20 FRUIT BUTTER 21
CAROB/YOGURT-COATED SNACKS
22 DEODORANTS 23 SS MICROWAVE POPCORN 24 TOOTHPASTE 25 INSECT/RODENT CONTROL DEVICE
$219,204,748 $6,171,373 $24,453,303 $8,138,816 $122,999,594 $23,975,423 $14,621,676
49.8% 48.8% 47.2% 47.0% 46.2% 45.5% 45.4%
46,194,682 2,091,319 9,568,344 2,104,580 53,313,307 7,576,948 4,820,981
38.5% 44.6% 60.3% 16.4% 45.7% 86.4%
26 HAIR CONDITIONER/CREME RINSE
$37,674,320
45.1%
6,115,035
23.2%
27 COOKIE/COOKIE BAR MIXES
$5,133,337
43.2%
1,896,619
9.0%
$1,110,954,490
43.0%
160,220,629
28.7%
29 STOMACH REMEDY TABLETS
$23,698,371
41.8%
5,940,657
21.7%
30 LIQUID ENERGY DRINK MIXES
$12,107,972
41.3%
5,305,114
45.4%
$92,504,833
41.3%
11,154,538
35.9%
32 RFG NON-SLICED LUNCHMEAT
$17,300,177
41.0%
4,957,613
55.2%
FZ/RFG TURKEY/TURKEY 33 PROCESSED SUB
$30,013,756
40.4%
5,002,385
42.9%
34 ASEPTIC JUICE DRINKS
$15,435,087
38.4%
6,155,375
44.2%
35 FRUIT-FLAVORED SYRUP
$12,794,588
37.9%
5,801,274
15.1%
$6,758,079
35.2%
2,424,786
30.3%
37 ALL-PURPOSE CLEANER/DISINFECTANT
$71,907,408
33.2%
35,571,106
38 SS PREPARED DINNERS/ENTREES
$36,885,384
32.9%
39 REGULAR SHAMPOO
$36,900,123
40 NAIL ACCESSORIES/IMPLEMENTS FZ/RFG MEAT SUBSTITUTES
28 DOG/CAT NEEDS
31
36
41
RFG APPETIZERS/SNACK ROLLS
SEASONAL CHOCOLATE CHRISTMAS CANDY
42 FACIAL ANTI-AGING 43
INDOOR INSECT/RODENT CONTROL CHEM
44 NATURAL CHEESE-ALL OTHER FORMS
81
RFG ALMOND MILK
$227,825,734
20.0%
88,672,628
24.9%
82
PIZZA CRUST/SHELL
$9,596,021
19.9%
2,984,603
27.3%
83
CLOTH ALL-PURPOSE CLEANER
$223,037,624
19.6%
53,072,141
17.5%
84
RFG FRANKFURTERS
$70,201,222
19.4%
24,535,679
6.3%
85
SS DIP
$31,151,186
18.8%
22,166,113
21.7%
86
ALL OTHER FISH/SEAFOOD
$16,477,033
18.6%
9,910,432
31.4%
87
SPECIALTY NUT BUTTER
$91,212,549
18.6%
17,747,213
26.1%
44.7%
88
RFG COCONUT MILK
$5,366,805
18.3%
1,988,343
17.5%
14,665,239
20.6%
89
FZ OTHER PLAIN VEGETABLES
$130,426,513
18.3%
87,984,781
19.8%
31.6%
7,543,138
26.7%
90
RICE CAKES/POPCORN CAKES
$31,026,591
18.0%
15,634,959
15.8%
$143,946,172
31.4%
51,522,350
33.6%
91
FACIAL CLEANSERS
$173,059,608
17.7%
45,708,876
18.3%
$12,404,523
31.2%
3,078,898
24.4%
92
EYELASH CURLER
$6,873,309
17.6%
1,732,844
27.1%
$109,208,282
31.0%
6,025,237
10.1%
93
RFG FRESH SOUP
$17,074,470
17.6%
46,190,065
20.4%
8.0%
94
FACIAL MOISTURIZERS
$52,083,848
17.6%
6,042,056
14.0%
95
SPECIALTY NUT/COCONUT CANDY
$17,502,160
17.4%
4,843,811
7.3%
96
ICE CUBE TRAYS AND ICE BUCKETS
$13,254,658
17.2%
5,928,915
19.6%
$9,280,366 $103,216,216
29.1% 28.8%
2,846,857 31,837,294
14.0%
& CONDITIONER COMBO 45 SHAMPOO PACK
$8,039,463
28.8%
1,493,822
31.1%
46 FZ SQUASH/ZUCCHINI
$10,178,429
28.3%
5,482,580
11.3%
47 SS SPORTS DRINK MIX
$5,752,281
28.3%
4,117,728
33.3%
$408,013,106
27.9%
130,256,296
24.7%
49 FACIAL BODY SKINCARE DEVICE
$5,388,234
27.7%
595,961
90.5%
OTHER SS ASIAN SAUCE/ 50 ALL MARINADE
$26,865,575
26.2%
10,339,367
20.9%
48 NON-AEROSOL WHIPPED TOPPINGS
97
OTHER ANTI-FUNGAL
$15,910,416
17.1%
2,017,182
14.9%
98
NATURAL CHEESE-CUBE
$56,511,505
16.6%
17,578,865
23.0%
99
RFG BUTTER BLENDS
$17,062,542
16.3%
6,501,228
13.2%
100
WET BROTH/STOCK
$402,783,330
16.1%
243,254,663
9.5%
www.storebrands.com /September 2019 / Store Brands
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STORE BRANDS' GROWTH 100 TOP 10 FOOD CATEGORIES Categories where private brands had dollar/unit sales gains of 5% or more and accounted for $5 million or more in total sales (52 weeks ending July 14; IRI data). 1]
Dried meat snacks other than jerky
2]
Pork rinds
3]
Refrigerated hand-held non-breakfast entrees
4]
Fruit butter
5]
Carob/yogurt-coated snacks
6]
Shelf-stable microwave popcorn
7]
Cookie/cookie bar mixes
8]
Refrigerated appetizers/snack rolls
9]
Refrigerated non-sliced lunchmeat
10]
Processed frozen and refrigerated turkey
TOP 10 NON-FOOD CATEGORIES Categories where private brands had dollar/unit sales gains of 5% or more and accounted for $5 million or more in total sales (52 weeks ending July 14; IRI data). 1] 2] 3] 4] 5] 6] 7] 8] 9] 10]
Hair appliances Vacuum bags/belts Cat snacks/beverages Power toothbrushes Multi-purpose insect/rodent chemical Outdoor insect/rodent control chemical Deodorants Toothpaste Insect/rodent control device Hair conditioner/crème rinse
chasing them because they cost less than the national brands. OK, on to some of the other fastest-growing products segments. Considering the private brands industry is on an innovation kick, you might think the top-ranked product segment on this year’s Store Brands Growth 100 list is really, really cool. But actually, it’s quite hot … as in hair dryer and curling iron hot. The No. 1 fastest-growing product segment in private brands is … “hair appliances.” Surprised? Thought you would be. Sales of private label “hair appliances” are up a whopping 35,824% from the previous time period with sales of about $10.7 billion. Unit sales increased 3,275%. According to IRI, the “abnormally large percentage change” is most likely the result of a retailer introducing a new private label product during the period. IRI noted that “hair appliances” is “definitely more of a new introduction to private label” than an actual “gain” versus sales from a year ago. Could it be a burgeoning product sector? Let’s wait and see what the numbers bring next year before calling it that. “Hair appliances” could be an anomaly. One of the biggest stories in this year’s Store Brands Growth 100 is private label “domestic table/still wine,” a product segment that continues to flourish. Sales of store brand wine totaled more than $10.9 million, an increase of more than 110% from the previous year. In last year’s Store Brands Growth 100, sales of store brand wine increased 44% from the previous year.
SALES OF STORE BRAND WINE TOTALED MORE THAN
MILLION, AN INCREASE OF MORE THAN 110% FROM THE PREVIOUS YEAR. More retailers continue to add store brand selections to their wine lines. Retailers such as Costco Wholesale, Trader Joe’s, Lidl, ALDI and 7-Eleven are setting a high standard by offering award-winning quality wines at very reasonable prices. Regarding the latter, get this: Last year, the average price per unit of wine was $7.62, down 34 cents from the previous year. This year, the average price is $4.80, minus $2.82 from last year. Interestingly, despite its considerable growth, private label wine was not the top growth product sector in beverages. That honor went to “frozen drink/cocktail drink concentrate,”
22
Store Brands /September 2019 / www.storebrands.com
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TOP 10 BEVERAGE CATEGORIES Categories where private brands had dollar/unit sales gains of 5% or more and accounted for $5 million or more in total sales (52 weeks ending July 14; IRI data). 1] Frozen drink/cocktail drink concentrate 2] Domestic table/still wine 3] Shelf-stable bottled orange juice 4] Refrigerated fruit drink 5] Sherry/vermouth/champagne 6] Shelf-stable bottled sparking juice 7] Refrigerated vegetable juice/cocktail 8] Shelf-stable bottled cherry juice 9] Ready-to-drink coconut milk 10] Shelf-stable bottled pineapple juice
STORE BRANDS' GROWTH 100 a more than $6 billion category that grew about 134% in sales from the previous year. The fastest-growing food item in private brands, which ranked sixth overall on the Store Brands Growth 100 list, was “all other dried meat snacks.” According to IRI, those products include products that aren’t jerky, like processed beef sticks. Retailers can and are doing a lot in this segment, such as adding trendy flavors to beef sticks. They can also use different proteins like turkey and chicken. IRI’s statistics show that sales of “all other dried meat snacks” are up more than 92% in the past year with sales of $27.1 million. There’s plenty of room for growth as private brands own only 4% of sales in the category. Considering the increase in market share achieved by store brands salty snacks, it’s no surprise that “pork rinds” rank seventh on the list and second as the fastest-growing food item. Nearly a $33 billion category, “pork rinds” saw increased sales of 90.4% from the previous year. Unit sales are up 51%. The largest product sector in the Store Brands Top 100 is “dog/cat needs,” which nearly doubled in growth the past year and is the only billion-dollar category on the list. According to IRI, sales increased 43% and now stand at about $1.1 billion. Private brands now own 41.5% of the market share in the product sector. SB SP ON SOR E D C ON TE N T
PBC: A one-stop shop for a retailer’s private label baby and toddler food needs If you’re a retailer looking to add a private label baby and toddler food line, look no further than PBC Nutritionals Inc. The Montrealbased supplier offers an array of organic baby and toddler products, including rice rusks, smoothie melts, whole grain puffs and pouches/ jars of nutritional foods for babies, to organic entrees, Toddler formula and much more. PBC also offers organic and conventional products, including liquid nutritionals crackers, aseptic broths and aseptic plant based beverages. All of the products feature a variety of textures, flavors and packaging options. “We’re a one-stop shop for all baby and toddler feeding,” says Scott Thornton, vice president and sales for PBC. “You name it, and we have it. So rather than retailers having to work with many different vendors for their private label needs, they only need to work with us. We can service all of their needs.” PBC, which has been in business for more than 30 years, is also up on store brand trends— namely increased quality and innovation — which have permeated private brands the past few years. “We’re always looking at the trends to see what new and creative products we can bring to the market,” Thornton notes. “We’re constantly keeping our portfolio updated.” Ultimately, PBC aims to gratify the parents of babies and toddlers by offering them healthy and nutritious private-branded products they can
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trust. A wide range of organic products is at the top of that list. “Organic products are better and healthier, and parents today believe they are the right options for their children,” Thornton adds. Considering those parents, PBC is also offering sustainably packaged products to appease their environmental concerns. For instance, PBC offers baby food packaged in glass jars, not just plastic pouches. “Who would have thought that with all the innovation in packaging that baby jars would be coming back in style and becoming unique again,” Thornton says. “But many moms and dads are looking for jars as an option rather than plastic pouches because they believe they are better for the environment.” More retailers are embracing baby and toddler food for private brands, Thornton says, noting that a store brand line of such would make sense for dollar stores looking to offer more affordable products for parents. For retailers looking to create a private label baby and toddler food line, Thornton suggests they work with PBC to initially supply several basic items such as baby food in pouches and/or jars and a few snacks. By offering multiple products, rather than one or two SKUs, retailers can build consumer confidence more capably, Thornton points out.
Store Brands /September 2019 / www.storebrands.com
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9/10/19 9:58 AM
RETAILER PROFILE
‘Ambitious’ about own brands 118-year-old Walgreens aims to lead, not follow
By Lawrence Aylward
Walgreens, which began offering its In three very simple but powerful own brands in the early 1900s, currently words, Helayna Minsk describes offers several thousand SKUs of private the state of Walgreens’ private branded products across several brands program. categories, with the biggest category “We are inventing,” says Minsk, the being health and wellness with around group vice president of retail brands for 2,200 SKUs ranging from over the the Deerfield, Ill.-based drugstore chain, counter medicines to home health care which operates about 9,500 stores in all products. One of Walgreens’ most popular 50 states. lines is Nice!, which debuted in 2011 and was Minsk didn’t say “we are following the name rebranded in 2017 with more products Helayna Minsk, brands” or “we are creating cheaper products group vice president and new packaging. Nice! has nearly 500 than the name brands.” Realizing that the of retail brands, has brought products in three core tiers: everyday, store brands industry is flourishing and ripe a new thinking to Walgreens’ premium and organic. Many of the for innovation, Minsk wants Walgreens to be private brands team. products are free from hydrogenated oils, a player in the future. trans fats and artificial ingredients. Her words — “We are inventing” — affirm what the The retailer also offers many SKUs under its Walgreens top grocery retailers of private brands have become in Beauty & Personal Care line, and pet food and related consumer packaged goods (CPG). They are leaders in products under its PetShoppe Premium line. Complete the modern private brands movement. Minsk wants Home, a brand launched in April, includes bath tissue, Walgreens, which has been in business for 118 years, to paper towels and household cleaners. be one of those retailers. Minsk joined Walgreens about three years ago. “We are ambitious,” Minsk says. “As a company, Since then, she says she and her team of 40 people have we are ambitious, and with our own brands we are been “culling the portfolio” and upgrading it where the ambitious.” opportunity is present, from product quality to packaging. When Minsk arrived, she brought with her new thinking to the private brands team. “My coming here was to deliberately bring some classic brand management to the team,” she says. Minsk knows brands. She spent more than seven years with Johnson & Johnson, including as vice president of marketing and vice president of business development for the company’s consumer health-care products. Minsk spent the last two years of her career with Johnson & Johnson in Shanghai, China, where she oversaw all commercial, marketing and operational results for the company’s $600 million CPG business there. Minsk also spent four years as marketing director for Unilever’s laundry product division. “I’m used to marketing world-class brands,” says Minsk, who worked on brands such as Neutrogena, Clean & Clear, Dabao and Listerine at Johnson & Johnson. “So I can’t imagine coming to a company and working on products that would be something less.” Walgreens’ private brands were in 120 categories when Minsk arrived, but she wanted to scale back that number a 26
Store Brands / September 2019 / www.storebrands.com
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RETAILER PROFILE
(Above) Walgreens has an expansive test kitchen at its Deerfield, Ill., headquarters where it tests products for lines such as Nice! and Complete Home.
tad and get out of categories where she believes consumers aren’t looking for private brands. She cites toothpaste as an example. Her branded expertise told her that Walgreens didn’t need a product in a category dominated by brands, some with low prices. “We thought we could provide more value by getting out of that market and providing that shelf space to the national brands,” she says. Walgreens is increasing its store brands offerings in other categories such as snacks and focusing more on better-for-you products. “Certain categories are no brainers for us to lean into,” Minsk says. “And getting out of some categories frees us up to do that. There are plenty of categories where customers are more open to an own brand. [Those are the categories] where we want to bring new benefits. We’re always in discussion with our merchants on where we can add value.” Minsk didn’t elaborate on specific products in the pipeline for competitive reasons. “We have a certain amount of space for each category,” she adds. “It’s about putting together that balance of national brands and own brands.” Minsk and her staff believe in testing products several times to make sure they meet the retailer’s strict code for quality and safety. Much of that testing, from buffalo wings to socks, is done in the retailer’s expansive testing laboratory at its Deerfield headquarters. Products are tested against their national brand counterparts. If it’s a food product, it’s tested to confirm that it tastes as good if not better than the national brand. If it’s a non-food product, it’s tested to confirm that it performs as well if not better than the national brand. Walgreens also requires its suppliers to test products and then has a third party test them again. A potential new private brand product begins with a brief — a simple document that details the product, its audience and their needs, and the quality that needs to be delivered. There’s no shortcutting when it comes to value, Minsk stresses.
“If [consumers buy] something cheaper but feel like they are getting something less for less, that’s not a good value,” she says. Walgreens works strictly with suppliers and isn’t currently interested in self-manufacturing any of its own brands. The goal is to work with suppliers to deliver the right products at the right price and, more importantly, to offer value. “If we can’t find a vendor that can give us a quality product, we’re not just going to put that product on the shelf,” Minsk says. Minsk also realizes that Walgreens’ store brands are competing with other retailers’ store brands so it’s crucial to differentiate. “We want to be the first to market,” she says. Walgreens’ private brands could also benefit from the partnership it has formed with The Kroger. Co. The two retailers will begin piloting a program in October in Tennessee where they are featuring each other’s products. Several Kroger stores in Knoxville, Tenn., will carry Walgreens’ own-brand products across several categories, including beauty, personal care, over-the-counter medications and wellness. Walgreens encourages all of its more than 240,000 employees to use its own brands. The retailer also offers its employees a discount on products, including four days a year when employees can purchase the retailer’s own brands for 40% off. “We really encourage them to use our own brands, not only for company pride but also because they are the people on the front lines who see our customers on a dayto-day basis and have to field their questions or be asked for referrals,” Minsk says. While the competition has intensified across all mass retail, it’s a great time to be in store brands, Minsk agrees. “The number of private brands are expanding and consumers are leaning into own brands,” she adds. “It’s a golden age of innovation, and we have a lot of innovators on our staff.” SB
www.storebrands.com / September 2019 / Store Brands
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CATEGORY INTELLIGENCE ICE CREAM AND NOVELTIES
HERE’S THE SCOOP …
DO consider offering more premium products.
I scream, you scream, we all scream for low-calorie, low-sugar, high-protein, plant-based, super-premium, dairy-free, indulgent, vegan, good fat, superfruit, highbutterfat, real-fruit, portion-controlled, mini-sized, alcohol-infused, savory, vegetable-infused, prebioticadded, probiotic-added, unique flavors and textures of … ice cream. And frozen novelties. The ice cream and frozen novelty category is diverse, crowded and complex, declares market researcher Mintel. And even though recent innovations have provided something for practically everyone, sales growth has been relatively static for some time, according to Mintel’s May report, “Ice Cream and Frozen Novelties, U.S.” Encouraging, however, is the category’s 90% household penetration rate, which reflects continuing consumer devotion to these beloved indulgences, Mintel notes. Ice cream and sherbet is eaten by 86% of households, frozen novelties are consumed by 54% of households and packaged frozen yogurt by 21%, according to data cited by research firm Packaged Facts. Even though sales growth has been low and volume declining for a long time, dollar sales have spiked “slightly” in the last few years, according to Packaged Facts’ just-released August report update, “U.S. Food Market Outlook, 2019.” Consumers are treating themselves to more higher-priced, high-end, indulgent ice cream and specialty novelties, the report says. And, indulging in a different sort of way, they are flocking to low-
DON’T forget to offer “healthier” than regular ice cream and frozen desserts made from oat, almond,coconut and cashew milks.
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calorie, low-sugar, high-protein ice creams like the phenomenally successful Halo Top brand, which beckons consumers by suggesting they can eat more of its ice cream while consuming significantly fewer calories than if they were eating regular brands. A Lightspeed/Mintel online survey of 1,796 adults conducted in January asked what attributes would prompt respondents to try a new frozen treat product. Number one, at 34%, was new textures. Coming in second was mini sizes, cited by 25%. Tart flavor was favored by 22%; high-protein content by 21%; salty flavor, functional benefits and plant-based by 20%; and internationally inspired by 17%. HEALTH CONSCIOUSNESS Billed as “healthier” than regular ice cream, frozen desserts made from oat, almond, coconut and cashew milks and boasting nutritional benefits like high protein and low sugar are the fastest growing in the segment, says Stephanie Schultz, marketing coordinator for Fort Walton Beach, Fla.-based G.S. Gelato & Desserts. “Where in the past, consumers would have to go to a specialty aisle to find non-dairy, plant-based products, the ice cream freezer now has an abundance of flavors to choose from,” Schultz adds. “Now that plant-based products have entered the mainstream, it’s important for retailers to adapt to the trend by ensuring they have their own selection of non-dairy flavors that are a good mix of classic and unique innovations.” Founded by Italian couple Guido Tremolini and Simona Faroni, G.S. Gelato creates authentic, artisanal Italian gelato, sorbet and non-dairy frozen desserts from oat milk and coconut milk for private label and foodservice clients. According to the company, it’s the largest foodservice distributor of gelato and sorbet in the U.S. TO INDULGENCE “We see a future in the more decadent things,” says High Road Craft Brands Chief Brand Officer Nicki Schroeder. The Marietta, Ga.-based maker of handcrafted, high-butterfat, “luxury” ice creams and frozen novelties, founded by Schroeder and her chef-businessman husband Keith Schroeder, started as a supplier to high-end restaurants before entering the retail and private label world. Sam’s Club is a client, and High Road creates Tanzanian vanilla ice cream, sourced from small farms
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in Tanzania, exclusively for the retailer. Indulgence in moderation is what many consumers are after, Schroeder says. “People want something that makes them feel satisfied. It’s exciting to discover things and bring them to market so people can” fall in love with them. High Road acquired Ciao Bella Gelato last year, and has overhauled the recipes (some back to their original formulations), flavor lineup, graphics and packaging, returning the brand to more sustainable paper pints. The new holiday sorbet line includes apple cider, tangerine, holiday punch (cranberry, tangerine and a splash of prosecco) and other flavors. High Road is currently working on its new 2020 flavors. CLEAN AND ARTISAN Old-world methods differentiate frozen desserts by improving the taste and appearance while also producing clean-label product, says Daniel Salazar, marketer for Emila Foods in Modena, Italy. Emila’s gelatos; fruit, yogurt and gelato bars; mini cones and gelato sandwiches are made in small batches and instantly frozen to lock in flavor intensity, according to the company. Crafted from all-natural, organic and non-GMO ingredients, the products are free from artificial ingredients, colors and flavors. “Consumers are becoming more aware of healthy and ethical choices, and their search for transparent and clean labels is relentless. Offering a quality product that embodies the values praised by new generations of consumers is the most reliable way for a retailer to sympathize with its customers,” Salazar says. STAYING AHEAD OF TRENDS G.S. Gelato’s research and development team monitors the global ice cream market to keep ahead of the trends and create customized private label programs, Schultz says. The category has a lot of potential to showcase innovation and is very adaptable to change as the ice cream industry evolves, she adds. Some of G.S. Gelato’s flavors include amaretto, Sicilian pistachio, espresso chocolate chunk, toasted coconut, triple chocolate, bananas foster and peach guava. Seasonal flavors include sweet potato marshmallow, cinnamon brown sugar and cherry cobbler. High Road’s in-house research and development and design teams keep it ahead of the trends, Schroeder says “We look at the trends, but we also ask ourselves, ‘What do we want to do with the culinary knowledge we have and the travels we’ve taken to Italy and Tanzania? How do we translate that into products?’ ” Salazar advises to keep things fresh by introducing exciting seasonal flavors, either based on a theme or made from exotic ingredients such as yuzu, açai and passion fruit. New flavors and combinations may seem
unusual at first, but have the potential to be appreciated in the long run, he adds. STORE BRAND GAINS Private label is on the move in this category, as consumers continue to choose private label overall more than individual brands, Packaged Facts states. In 2018, 28% of households consumed private label ice cream and sherbet, up from 22% in 2008, according to Packaged Facts. Additionally, consumption of “other brands” of ice cream increased by nearly 10% as consumers increasingly gravitated toward new brands, many of which are small players in the super-premium niche, Packaged Facts reports. Some retailers are becoming bolder with their private label ice cream offerings, Packaged Facts notes, offering more premium products with on-trend flavors, ingredients and forms. For example, Walmart’s Great Value brand is offered in trendy flavors such as banana pudding and sea salt caramel truffle. Target introduced a Halo-like, low-calorie, high-protein line under its private brand. Albertsons’ upscale Signature RESERVE brand offers seven flavors of super-premium ice cream featuring globally sourced ingredients. And Kroger’s Private Selection brand went upscale with flavors like wildberry lavender mascarpone. SB
Ice Cream/Sherbet
Private Brands
All Brands
Dollar Sales (in millions)
$1,186.5
$6,229.6
Change vs. Year Ago
0%
-2%
Dollar Share
19.1%
100%
Unit Sales (in millions)
393.3
1,662.1
Change vs. Year Ago
-0.6%
-2.5%
Avg. Price Per Unit
$3.02
$3.75
Frozen Novelties
Private Brands
All Brands
Dollar Sales (in millions)
$578.9
$4,532.6
Change vs. Year Ago
3.4%
4.8%
Dollar Share
12.8%
100%
Unit Sales (in millions)
180.3
1,228.9
Change vs. Year Ago
4.3%
2.0%
Avg. Price Per Unit
$3.21
$3.69
Source: Market Advantage, IRI Liquid Data, 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 July 14, 2019.
www.storebrands.com / September 2019 / Store Brands
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CATEGORY INTELLIGENCE FROZEN AND REFRIGERATED MEAT
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DIFFERENT MAKES A DIFFERENCE
DO educate consumers on private brand options and what makes them different.
Solid shopper demand for meat and poultry is providing private brand retailers with greater revenue opportunities — and operational challenges. Grocers are in position to boost store brand activity by offering proteins with unique flavors, textures, portion sizes and health attributes. Yet, hampering efforts is limited meat case space and a large base of shoppers that remain loyal to national brands. “Finding the balance between national and store brands isn’t easy when space is so hotly contested between different cuts, kinds and brands of meat and poultry,” says Anne-Marie Roerink, principal of 210 Analytics LLC, a San Antonio-based market research and marketing strategies firm and preparer of the “Power of Meat 2019” report. “Add plant-based items to the mix, and space becomes even more at a premium.” It’s important for retailers to offer a mix of brands as younger shoppers are much more brand oriented than older consumers, Roerink says. Research for the “Power of Meat 2019” found that 64% of Generation Z meat buyers have a brand preference, as do 60% of young millennials, 57% of older millennials, 46% of Generation Xers and 42% of baby boomers. The “Power of Meat 2019” is published by the Arlington, Va.-based Food Marketing Institute, and the Washington D.C.-based Foundation for Meat and Poultry Research and Education. “If consumers already have emotional connections
DON’T forget to market store brand meat and poultry in specific portion sizes to better attract shoppers.
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with national or regional brands, it’s hard and not beneficial to change those attitudes” Roerink says. “Meat is less and less about the cheap, unbranded commodity and increasingly about immediate consumer recognition that translates into perceived quality and eating experience. It’s important to provide a different offering rather than a me-too product.” Indeed, unlike the center store where private brands are often a lower-cost alternative, meat department operators should differentiate store brands with distinctive options and offer selections that target each location’s specific customer base, Roerink states. “Private brands provide a chance to showcase a local supplier, regional flavor, the butcher’s favorite or simply something different,” she notes. “The biggest opportunity is to tie the private brands in meat to store brands in produce and the rest of the store. While national brands have very strong positioning and emotional connections, private brands provide an opportunity to drive store loyalty, story tell and innovate on flavors.” CREATIVE MARKETING IS A MUST Newer merchandising initiatives also can help spark store brand activity, says Jason Jerome, senior director of retail and foodservice engagement at the Centennial, Colo.-based National Cattlemen’s Beef Association (NCBA). Some retailers, for instance, are taking cuts “that have been around for ages,” such as strip steak and cutting it into a strip filet, also known as a Manhattan cut, “which gives new life and variety into a very common cut,” he states. Educating shoppers on private brand options also is crucial, Jerome says, noting that “private label has exploded over the last decade with more and more retailers offering different variations of beef.” “The consumer needs to know what sets the private label beef apart from the beef they have been buying for years,” he states. “Offering signage that explains the differences is very important. Multiple facings in the self-service case also can help drive customers to select those products over the conventional items on shelves.” Offering multiple store brand beef choices, however, can cause consumer confusion, Jerome notes, adding that retailers should educate staffers on the
Store Brands / September 2019 / www.storebrands.com
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various options so they can accurately explain the products to shoppers. Retailers seeking to boost store brand sales also need to emphasize the wellness aspects of the proteins while overcoming the perception of many shoppers that meats are less healthy than other meal alternatives, analysts note. Nearly 20% of red meat consumers, for instance, report lower consumption versus the previous year with more than half stating that red meat is too unhealthy for regular use, reports market researcher Mintel in its “March 2019 Packaged Red Meat US” report. Yet, in a protein-centric landscape, “brands can celebrate the nutrition, satiety and taste virtues of red meats, but should steer clear of the pretense of all-around health to help engage more frequent consumption,” Mintel notes. More consumers, meanwhile, are cutting back than are increasing consumption of red meat, Mintel states. Twenty-three percent of persons between ages 55 and 64, for instance, reported eating red meat less often over the past year while just 6% ate more, Mintel found in a January 2019 online survey of 1,860 adults who had consumed red meat in the previous six months. In addition, 28% of individuals 65 and over indicated that they consumed less red meat, while just 1% admitted to an increase. Among all age groups, 19% noted that they ate red meat less often, while 15% consumed the proteins more frequently. Yet, Mintel states that consumers who are largely maintaining or increasing consumption “are providing a window of opportunity for brands to make solid and lasting connections.” HEALTH IS A HOT TOPIC While seeking additional protein is the leading purchase driver for those eating more red meat, just 15% of such consumers are following a specific high protein diet, “indicating a more widespread appeal of protein as a nutritional powerhouse,” Mintel notes. In addition, red meat shoppers are seeking freshness and cleaner ingredient labels, “particularly those that are recognized and proven, such as no additives and preservatives,” Mintel reports, though quality and ethical treatment claims, which may come with an inflated price, garner lower interest. “Supplementing initiatives that convey a lessprocessed product from the farm to the retailer with secondary benefits, like protein or even minerals and vitamin content, can help balance some good with a less-than-healthy reputation,” Mintel notes. Marketing private label meat and poultry in specific portion sizes also will enable retailers to better attract shoppers who are focusing on calories, convenience and wellness, says Maeve Webster,
president of Menu Matters, an Arlington, Vt.-based food industry consulting firm. “Consumers continue to have trouble understanding and identifying proper portion sizes for any ingredients, and this includes meat,” she notes. “Solutions-based innovations that assist consumers are going to continue to grow in importance, including for new and value-added cuts.” Packaging, meanwhile, also is a major red meat purchase driver, with consumers showing strong interest in vacuum-sealed packs and individual-sized options that can ensure freshness for households of all sizes, Mintel adds. Despite shopper health concerns, Mintel notes that the category “is holding its own. It all boils down to what consumers love about red meat — great taste and satiety.” SB
Refrigerated Uncooked Meats (No Poultry) Private Brands All Brands Dollar Sales (in millions)
$4,058.1
$5,240.8
Change vs. Year Ago
11.7%
3.9%
Dollar Share
77.4%
100%
Unit Sales (in millions)
614.6
796.7
Change vs. Year Ago
12.5%
5.4%
Avg. Price Per Unit
$6.60
$6.58
Frozen Meat (No Poultry) Private Brands
All Brands
Dollar Sales (in millions)
$751.2
$1,654.7
Change vs. Year Ago
3.8%
1.3%
Dollar Share
45.4%
100%
Unit Sales (in millions)
81.0
212.1
Change vs. Year Ago
7.1%
1.4%
Avg. Price Per Unit
$9.27
$7.80
Frozen/Refrigerated Chicken/Chicken Substitute Private Brands All Brands Dollar Sales (in millions)
$974.9
$2,528.1
Change vs. Year Ago
-0.1%
-5.5%
Dollar Share
38.6%
100%
Unit Sales (in millions)
126.8
385.3
Change vs. Year Ago
-11.8%
-7.8%
Avg. Price Per Unit
$7.69
$6.56
Source: InfoScan Reviews, IRI, a Chicago-based market research firm. Total U.S. supermarkets, drugstores, mass market retailers, military commissaries and select club and dollar retail chains for the 52 weeks ending July 14, 2019.
www.storebrands.com / September 2019 / Store Brands
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CATEGORY INTELLIGENCE VITAMINS AND SUPPLEMENTS
HEALTHY INFORMATION
DO offer in-store and online assistance to help consumers navigate through the many products in the category.
Consumers are becoming educated and are taking a more proactive approach to their health than in the past, says Jose Torres, marketing manager for Mason Vitamins in Miami Lakes, Fla. They are looking for key information related to products and brands. They favor supplements that have quality certifications and natural, non-GMO and organic ingredients, Torres adds. They are looking for innovation and products that are backed up by clinical studies. Driven by strong demand, growth is steady in the vitamin, mineral and supplement (VMS) market, which includes herbs and botanicals, according to market researcher Mintel. Mintel found that consumers, especially younger consumers, crave professional guidance to help them navigate this sometimes daunting category, according to its September 2018 report, “Vitamins, Minerals and Supplements U.S.” According to data from market researcher Information Resources Inc. (IRI), sales of store brand letter vitamins increased 7.4 % in 2018 when compared to the previous year. Private brands now own 37.5% market share in the category. Store brand sales of multi-vitamins increased 3.6% in 2018 from 2017 and own 16.6% market share in the category, according to IRI.
DON’T forget that consumers are looking for innovation and products that are backed up by clinical studies.
PROACTIVE CONSUMERS Reactive responses to health issues are becoming passé, as consumers increasingly take charge of managing their own well-being. They continue to adopt (or at least, aspire to adopt) healthier lifestyles that include more exercise, nutritional whole foods and vitamins, according to Euromonitor International’s February report, “Vitamins in the U.S.” Rising health care costs undergird the trend, as consumers become more interested in long term health and wellness. They are shifting their focus from treatment to prevention in order to maintain good health, Euromonitor states. More than two-thirds of U.S. adults take dietary supplements, with vitamins and protein supplements leading growth in the market, according to Hamburg, Germany-based market and consumer data provider Statista. Broken out by age group, Statista’s August 2018 survey found that 69% of adults 18 to 34, 77% of adults 35 to 54 and 78% of adults 55 years old and older took nutritional supplements. INTEGRATED MARKETING Retailers should consider an integrated approach with online and offline (store level) communication to educate and guide consumers through this category, Torres advises. Consumers often research online before making a purchase, and that offers retailers a wonderful opportunity to capture their attention by offering a website section to discuss health and wellness topics and offer solutions, Torres explains. At the store level, Torres recommends putting together a well-assorted layout with key communication elements like shelf talkers and power wings to help consumers in their purchasing journey. Manufacturers can aid retailers with information and educational tools that will help them provide consumers with health tips and other information to help them make informed choices, Torres adds. FEELING, LOOKING GOOD Consumers are looking for solutions that will help them support their hectic lifestyles, Torres says. Citing IRI data, he notes steady growth in demand for probiotics, melatonin, collagen and supplements that support brain function.
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PL Buyers Mag Ad 08-29-2017.ai 1 9/20/2017 3:32:06 PM
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CATEGORY INTELLIGENCE VITAMINS AND SUPPLEMENTS “This comes as no surprise, as more people are suffering from digestive and sleep disorders and need extra support to be mentally focused, alert and sharp, [as well as to] keep looking young inside and out,” he adds. Considering how the category has evolved over time and understanding what consumers are looking for, targeting specific supplements seems to be the next logical big thing in the VMS category, Torres says. In an effort to develop new solutions targeting consumers’ personal health profiles, probiotic manufacturers are investigating specific strains to address specific conditions, he adds. Also, more
1 & 2 Letter Vitamins
Private Brands
All Brands
Dollar Sales (in millions)
$476.3
$1,271.4
Change vs. Year Ago
7.4%
2.6%
Dollar Share
37.5%
100%
Unit Sales (in millions)
73.9
164.3
Change vs. Year Ago
4.1
-0.3%
Avg. Price Per Unit
$6.45
$7.74
Multi-Vitamins
Private Brands
All Brands
Dollar Sales (in millions)
$320.9
$1,931.1
Change vs. Year Ago
3.6%
4.1%
Dollar Share
16.6%
100%
Unit Sales (in millions)
43.9
183.2
Change vs. Year Ago
-0.3%
1.8%
Avg. Price Per Unit
$7.32
$10.54
Source: InfoScan Reviews, IRI, a Chicago-based market research firm. Total U.S. supermarkets, drugstores, mass market retailers, military commissaries and select club and dollar retail chains for the 52 weeks ending July 14, 2019.
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research is being done into the ability of collagen to support beauty and wellness. Dozens of companies have introduced a range of CBD oil (cannabidiol) products. CBD supplements featured at the show were promoted for enhancing memory, cognition, relaxation, focus, stress relief and as sleep aids. CVS Pharmacy, the retail division of CVS Health, introduced 300 new items this year in six new health and wellness categories in an effort to be a “leader in the proactive wellness space,” according to a company statement released in May. The new product assortment includes collagen protein, essential oils, aromatherapy stress spray, bone broth protein, beetroot powder, weighted blankets, yoga mats, free weights, bee pollen and honey immunity products, available in more than 3,000 stores and online. According to Woonsocket, R.I.-based CVS, its new products emphasize “cognitive, nutrition, mood and sleep therapies that focus on allowing consumers to treat themselves well and make it more accessible and convenient for consumers across the nation to do so.” CVS also launched its ”Tested to Be Trusted” program last May. The program requires third-party testing of all vitamins and supplements sold in-store and online. The program confirms the accuracy of the dietary ingredients listed on the supplement facts panel and confirms that products are free from certain additives and ingredients. As of May 15, 1,400 vitamins and supplements from 152 brands across 11 categories, including diet, nutrition, pain and digestive, have completed testing, according to a company statement. As part of this marketing effort, CVS also launched its “Treat Yourself Well” campaign to promote the idea that self-care is a critical part of health maintenance for all, regardless of age, gender or income. The “Treat Yourself Well” initiative is being promoted on social media and in-store with “healthy hour” events to educate consumers on new trends and brands, according to CVS. SB
Store Brands / September 2019 / www.storebrands.com
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CATEGORY CLOSEUP
Breakfast Foods
69% $8.49 BILLION
Sales of cold cereal in 2018, down 6% from five years earlier. Source: IRI
Percentage of Americans who love to eat breakfast for dinner. Source: OnePoll
$68 MILLION
Sales of breakfast items in grocery-prepared foods sections in 2018, a whopping
sales also increased
The number of new private-branded breakfast foods that Trader Joe’s has launched so far in 2019 (out of a total of 87 new private brand products launched so far in 2019). Source: Eater
Percentage increase in sales of breakfast meats over the past year (unit sales increased more than 3%). Source: IRI
increase 403% from 2017. Unit
19
1.6%
404% in 2018. Source: Nielsen
57%
Percentage of Americans who think breakfast is more important than lunch and dinner. Source: Packaged Facts
WHAT THEY’RE SAYING “Increasingly, many Americans are subscribing to a dietary lifestyle that eliminates gluten, dairy and other allergens. Or they are adopting vegetarianism or veganism as ways to approach health. These characteristics suggest an overall healthy approach to one’s diet. Ultimately, finding future success in the breakfast market will require greater innovation that combines consumer focus on healthier food options with their need for portability and on-the-go breakfast products.” David Sprinkle, research director for Packaged Facts
www.storebrands.com / September 2019 / Store Brands
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WELCOME TO OUR FAMILY OF PRODUCTS all From The Hearth!
Expanding our assortment and our capabilities
www.fromthehearth.com
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