Store Brands - November 2019 by ensembleiq

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Top stories of 2019

Tops hits refresh button

Private Label Trade Show preview November 2019 | www.storebrands.com

And the WINNER is...

‘Store Brands’ serves up its annual awards to some of the industry’s top newsmakers

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Volume 42 No. 11 November 2019

DEPARTMENTS 6

Editor’s Take

Viewpoint

Around the Industry

Getting Social

Endcap

CONTENTS

COVER STORY And the winners are …

‘Store Brands’ serves up its annual awards to some of the industry’s top newsmakers

FEATURES 30 YEAR IN REVIEW By popular demand

CATEGORY INTELLIGENCE 65

Cheese

Jams, jellies and preserves

Laundry

Private brands have never been more favored by consumers, which is indicated by several of our top 10 stories of the year

41 RETAILER PROFILE Tops transforming Retailer is remodeling stores and investing in its future — with private brands playing a key role

52 PRIVATE LABEL TRADE SHOW PREVIEW A crop of cannabidiol and plant-based products — and more More than 2,500 exhibit booths from store brands manufacturers of every size and description will be featured at the Private Label Trade Show

60 TRENDING Building a wardrobe Private label clothing is catching the attention of retailers on the hunt for higher proﬁt margins and brand growth

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. 4

Store Brands / November 2019 / www.storebrands.com

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

Group Brand Director

DIVERSITY MEANS OPPORTUNITY

John Schrei

248-613-8672

jschrei@ensembleiq.com

EDITORIAL Editor-in-Chief

Lawrence Aylward

(330) 635-2586

laylward@ensembleiq.com

Managing Editor

Dan Ochwat

(773) 992-4416

dochwat@ensembleiq.com

Digital Editor

After listening to demographic trends expert Brad Edmondson speak at the Private Label Manufacturers Association’s 2019 Washington Conference in September, it occurred to me that there should be no shortage of jobs for future innovators in the private label industry for consumer packaged goods (CPGs). That said, some CPG categories as we have known them may not be as nearly opportunistic as they once were. During his talk, Edmondson, the editor-in-chief of American Demographics magazine, provided insight into the 2020 Census, the first census to be taken (next April) in 10 years, and what he expects some of the results to be. One of two major trends currently shaping the U.S., he said, is the baby bust, which is having and will continue to have a dramatic impact on CPGs in the baby care category. In the U.S., births usually rise in a strong economy, but that hasn’t happened the past few years. Births, in fact, are down and are at the lowest rate in 32 years, and that trend could continue. “Obviously, this changes the game if you sell baby food or diapers,” Edmondson said. In the past year I’ve noticed some retailers that have rolled out private branded baby care lines. Clearly, these retailers have done their homework, but they might want to keep a close eye on this category for the next few years and pick and choose the products to introduce. Perhaps more innovative premium private label products that offer value make more sense in the category at this time so private brands can differentiate. (As a fine example, Target recently introduced a new premium diaper under its Cloud Island brand that features a newly developed and trademarked TriWrap fold, which has no middle crease and allows the diaper to cradle closely to a baby’s body for less sagging and a better fit.) While fewer babies are being born, the baby boomers are getting older, which is the second major trend that Edmondson mentioned. He expects the census to show that the number of people aged 65 to 74 will have grown 56% over the last decade. While the industry has been prevalent with talk about catering more private branded products toward millennials because they are less devoted to national brands, retailers and manufacturers shouldn’t discount baby boomers. It’s been said that boomers might be more inclined to purchase brands because they grew up on them. That may be true, but the people in that generation have never seen the quality level of store brands that they’re seeing now. Boomers can be swayed. Another statistic Edmondson expects the census to reveal is that only 13% of the new U.S. households in the next decade will have children. Empty nesters and single people will dominate. Looks like food retailers may have to expand their fresh sections even more, and with an emphasis on smaller portions and meal kits. Edmondson presented other statistics that could affect private brand development. He said population diversity is “taking over the country” (immigration will account for nearly 50% of the population growth in the U.S. in 2020), and that the majority of children in the U.S. in 2020 under 18 will be non-white or Hispanic. The population has never been more varied. But despite the challenge of change in demographics, it can all add up to more opportunities for private brands.

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

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jhayes@ensembleiq.com

Regional/International Sales Manager 248-514-9500

Tammy Rokowski

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Senior Sales Manager

Theresa Kossack

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Business Development Manager 773-992-4410

Natalie Meehan nmeehan@ensembleiq.com

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

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EVENTS • MARKETING • DIGITAL • RESEARCH • CIRCULATION CORPORATE OFFICERS Chief Executive Officer - Jennifer Litterick Chief Financial Officer - Dan McCarthy 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 6

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Store Brands / November 2019 / www.storebrands.com

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VIEWPOINT

By Todd Maute

Private label industry veteran Todd Maute is a partner at CBX, the New York-based brand strategy and design agency. He works with clients across multiple channels of trade including grocery, pharmaceutical, mass, pet specialty, consumer electronics, convenience, office, home improvement, clubs and auto parts supply; tmaute@cbx.com.

What’s in a name? A lot Top retailers are taking the “store” out of store brands — at least when it comes to the name. On one hand, this phenomenon is not exactly new: The Canadian pharmacy and food leader Loblaw first put President’s Choice on the shelf in 1984 without using “Loblaw.” Craftsman and Kenmore grew into massively valuable assets without ever containing the word “Sears.” The naming rationale for supermarkets and certain other operators back then often was about operational efficiency. When you have multiple banners, it makes no sense to try to create store brands for each and every one. Consider the challenge this would pose for Loblaw with its 22 different supermarket and pharmacy nameplates. Operationally, leaving the store name out of the equation — as with President’s Choice, Simple Truth (The Kroger Co.) or O Organics (Albertsons Cos.) — allows you to leverage existing economies of scale. You can sell the same brand in all of your locations, regardless of what those stores happen to be called. And that, in turn, gives you a greater degree of freedom. In Loblaw’s case, marketing and product genius Dave Nichol used this blank canvas to innovate on product development and turn President’s Choice into a powerful brand. Today, operational concerns are a consideration, but not driving the decision-making process. Some retailers are de-emphasizing the store because they just want to create brands — independent entities that command attention on their own terms — and then leverage these brands to strengthen the overall perception of their stores. And on that score, beloved retailers like Target and Wegmans Food Markets have a number of attractive options. Wegmans, for example, is well aware of its reputation for

quality and customer satisfaction. That’s why Wegmans puts its name all over its owned brands. Think of it as equity by association. Target takes a different tack. The retailer has built a portfolio of owned brands that support its image. Target’s basic idea is to say: We’re a cool retailer. Let’s create brands that further build on our image. This is surely part of the reason Target’s new Good & Gather store brand involves phasing out previous brands, Archer Farms and Simply Balanced, as well as paring back Market Pantry. The latter three brands were just a bit old school. One gets the sense that Target wants to create something fresh and new — independent building blocks in its increasingly impressive brand portfolio. Retailers are careful about names in other ways, as well. For a while now, they have tended to avoid the term “private label,” preferring instead “owned brand” or “private brand.” Certainly, you could argue that it doesn’t matter what you call it. However, I do understand why retailers’ internal teams are fastidious about nomenclature: Names shape how you think and, ultimately, act. These days, the goal is to get everyone on board in the mission of being brand creators, leaders and innovators. When you think of yourself as a brand creator, you tend to treat your owned brands differently. Kroger created its men’s personal care brand Bromley’s to compete with Gillette in the store. However, Kroger also saw the opportunity to compete in the direct-toconsumer market against the likes of Harry’s and Dollar Shave Club. That’s how you act when you see your brand as an asset and a category leader. Pop-ups, guerilla marketing, selling to consumers via online channels — if Nike can do it, retailers are asking, why can’t we? There’s no reason why innovation — whether in sourcing, infrastructure, development, packaging or promotion — should be limited to the national brands. Forget about mere margin enhancement. By shifting their mindsets and paying careful attention to their consumers and market dynamics, retailers are creating powerful brands with enduring value that can foster loyalty to their stores. SB

Store Brands / November 2019 / www.storebrands.com

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AroundtheIndustry

Excellence in private brands PLMA announces winners of annual awards The Private Label Manufacturers Association (PLMA) said that the results of its 2019 Salute to Excellence Awards reveal that retailers are increasingly relying on innovations in store brands products and packaging to attract and keep shoppers. In this year’s competition, more than 750 private branded foods and non-foods were submitted by 62 U.S. and Canadian retailers. The products were evaluated by eight panels of industry professionals and consumers, and the judging resulted in 44 food and 23 non-food winners in categories including gourmet and indulgence, products for healthy eating, plant-based, sustainably sourced and organics on the food side as well as free-from, eco-friendly and more in non-foods. “This year’s Salute to Excellence Awards submissions continue to reflect the shift away from national brands as consumers gravitate to more unique and affordable products from the stores they know and trust,” said PLMA President Brian Sharoff. The winning products will be showcased at PLMA’s 2019 Private Label Trade Show, Nov. 17-19.

Here are the winners: FOOD FOR THE FAMILY Appetizers & Hors d’Oeuvres Metro Irresistibles — Pesto Seafood Gratin Breakfast Cereal Retail Business Services Limited Time Originals — Limoncello Inspired Granola Breakfast Foods Price Chopper PICS — Honey Walnut Soft Cream Cheese Spread Deli/Prepared Foods 7-Eleven 7-Select — Gourmet Snack Trio: Genoa Salame, Provolone Cheese & Olives Main Dishes ALDI Specially Selected — Spinach & Mozzarella Ravioli Mexican/Latin American Foods 7-Eleven 7-Select — Fresa Paleta Pasta & Pasta Dishes Walmart Sam’s Choice Italia — Trompetti Pasta

Pizza BJ’s Wholesale Club Wellsley Farms — Organic Spinach & Feta Wood Fired Pizza Soup & Broths Walmart Marketside — Lobster Bisque BAKERY & DESSERTS Breads, Rolls & Muffins (tie) ALDI Specially Selected — Brioche Bagels Raley’s Raley’s — Garlic Bread Cakes & Pies Sobeys Sensations by Compliments — Ultimate Suprême Dutch Apple Pie Cookies & Crackers 7-Eleven 7-Select — French Macarons SNACKS Asian-Inspired Foods The Kroger Co. Private Selection — Black Sesame & Ginger Turkey Jerky

Candy & Chocolate Hy-Vee ZÖET — Dark Chocolate with Almonds & Sea Salt Children’s Foods Save A Lot Pickwell Farms — Pineapple Tidbits in 100% Juice Fair Trade Lidl US Preferred Selection — Dark Chocolate Infants & Toddlers Foods BJ’s Wholesale Club Wellsley Farms — Organic Baby Food Variety Pack Nuts & Trail Mixes H-E-B H-E-B — Texas Heat Trail Mix Salty Snacks The Kroger Co. Kroger — Cuban Style Sandwich Kettle Chips Spreads & Dips Walmart Marketside — Dark Chocolate Hummus Sweet Snacks Weis Markets Weis Quality — Caramel Rice Minis BEVERAGES Coffee Price Chopper PICS — Chocolate Lovers Single Cup Assortment Juices & Flavored Drinks Wegmans Food Markets Wegmans Organic — Raspberry Lemon Ginger Kombucha Soda, Carbonated Drinks & Water CVS Gold Emblem — Passion Fruit Seltzer Water Tea Publix Super Markets GreenWise — Blackberry & Sage Brewed Black Tea HEALTHY OPTIONS Free-From Foods CVS Gold Emblem abound — Dark Chocolate Edamame

Store Brands / November 2019 / www.storebrands.com

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AroundtheIndustry Gluten-Free Southeastern Grocers SE Grocers Naturally Better — Organic Gluten-Free Caramel Crunch Ice Cream

Rice & Grains The Kroger Co. Simple Truth Organic — Southwest Style Quinoa

Healthy Eating (tie) Dollar General Good & Smart — Dried Apricots

DAIRY Cheese (tie) Schnuck Markets Schnucks — Farmhouse Style Shreds

Save A Lot Portside Seafood Co — Lemon & Pepper Light Tuna Pouch

Weis Markets Weis Quality — Classic Cubed Pepper Jack Cheese

Natural Foods Meijer Meijer — Veggie Spirals

Dairy & Non-Dairy Milk Products Whole Foods Market 365 Everyday Value — Organic Almond Chocolate Almondmilk Beverage

Organic Foods Boxed Prince & Spring — Organic Applesauce Pouches Peanut Butter & Nut Butters Thrive Market Thrive Market Non-GMO — Creamy Almond Butter GLC_PLMA_ad_2019_BITES.pdf

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Vegetables Albertsons Cos. Signature RESERVE — Three Varietal Marinated Mushrooms

Dressings/Marinades/Oils Walmart Great Value — Carne Asada Fajita Marinade

HEALTH & BEAUTY Baby & Toddler Care Albertsons Cos. O Organics — Wild Berry Pediatric Electrolyte Solution

Ingredients & Flavors Save A Lot Marcum — Gourmet Beer Can Chicken Seasoning Rub Jams/Jellies/Preserves Southeastern Grocers SE Grocers Prestige — Raspberry Amaretto Spread Pasta Sauces & Cooking Sauces Wakefern Food Corp. ShopRite Trading Company — Imported from Italy Basilico Genovese DOP Pesto Sauce

Ice Cream & Frozen Novelties Harris Teeter HT Traders — Caramel Cookie Crunch Gelato 1

MEAL PREPARATION Condiments Trader Joe’s Trader Joe’s — TJ’s Ghost Chili BBQ Sauce

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Bath & Shower (tie) Walmart equate — Kids 3-in-1 Watermelon Shampoo, Conditioner & Body Wash Whole Foods Market Whole Foods Market — Break Apart Lavender Bath Bomb Beauty Care/Cosmetics CVS beauty 360 — On-the-Go Blender

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AroundtheIndustry Body Care Fresh Thyme Farmers Market Fresh Thyme Farmers Market — Unscented Shea Butter

OTC & Healthcare Albertsons Cos. Signature Care — “Secret Life of Pets 2” Bandages

Disposable Tableware Albertsons Cos. Open Nature — Compostable Assorted Utensils

Hair Care & Accessories BJ’s Wholesale Club Berkley Jensen — Shampoo & Conditioner Combo

Skin Care (tie) Boxed Prince & Spring — Makeup Remover Towelettes

Home & Kitchen Target Made By Design — Stemless Wine Glass Set

Health & Wellness Trader Joe’s Trader Joe’s — Organic Sparkling Apple Cider Drinking Vinegar

Five Below Terryrichards — Plush Comfort Eye Mask

Household Cleaners & Products Brandless Brandless — Cucumber Mint Refillable Glass Cleaner Starter Kit

Sun Care & Toiletries ALDI Lacura — Kids Continuous Spray Sunscreen

Men’s Grooming Target Goodfellow & Co. — Beard Oil Oral Care Whole Foods Market 365 Everyday Value — Cavity Fighting & Whitening Fluoride Toothpaste

HOME & HOUSEHOLD Children’s Playthings & Toys Walmart Spark Create Imagine — Peek-a-Boo Elephant

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Laundry & Dish Soaps Bed Bath & Beyond Bee & Willow Home — Rosemary & Mint Dish Soap Mobile & Tech Accessories Walmart MOTILE — Vegan Leather Tassel Keychain with Lightning Connection

Outdoor Living & Garden Products Amazon AmazonBasics — 3 Piece Grilling Barbecue Tool Set Paper Products Sam’s Club Member’s Mark — Facial Tissue Pet Food & Pet Supplies Smart & Final First Street — Premium Salmon & Sweet Potato Dog Food Plastic Bags & Container Topco Associates LLC Simply Done — Hawaiian Scented Trash Bags SB

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GETTING SOCIAL

Q A with Angel McPherson Own Brands Manager, BJ’s Wholesale Club

How did you come into the world of private brands? For a little over a decade, I worked for retail corporations in product development and marketing for a consumer electronics company and then on a store brands team with a major retailer. This experience gave me the insight and expertise in the private label industry to pursue and gain a position with BJ’s Wholesale Club. Describe the private brands industry in one word. Competitive. What do you like most about the industry? Private brands are now more than just the “generic” versions my parents bought to save money. They still deliver incredible value, but they have grown into brands that consumers love and trust. Angel McPherson on a photo shoot for private brands at BJ’s.

What one great thing does the industry have going for it? There’s a lot of opportunity for growth. Products have become more innovative and consumers — especially millennials — are more open to buying private label brands. Who is your hero and why? I don’t have one hero, but rather I have many people from whom I’ve learned and have taken inspiration. My grandmother and mother were true matriarchs, caring for their families despite hardships, multiple jobs and battles with cancer. My

former boss taught me everything I know about product development, project management and, most importantly, being your authentic self without apology. Friends who dream of something more and pursue their dreams are reminders that I, too, can accomplish anything. What trait in yourself do you attribute most to your success? I’m always curious and never stop learning, personally and professionally. What is the biggest obstacle you have ever overcome? Being a teen mom. Finishing high school while working and taking care of a child wasn’t easy. I had to grow up fast, and the overall experience was mentally and emotionally difficult. Thankfully, I had my mother’s support so I could work and go to college, and provide a healthy and happy home for my daughter. She graduated from college this year, and I am very proud of the young woman she has become. What’s the best advice someone ever gave you? Nothing changes if nothing changes. It’s 5 o’clock (or later), what do you do for fun? I have an hour commute, so I am listening to an audio book or catching up with family (using Bluetooth, of course) on the ride home. Once home, I like to unwind and enjoy the quiet. You have a week off. Where do you go and why? My next vacation is to Thailand. However, if I have a week off without a planned vacation, I will likely re-organize something at home. SB

Store Brands / November 2019 / www.storebrands.com

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COVER STORY

And the WINNER is... ‘Store Brands’ serves up its annual awards to some of the industry’s top newsmakers BY LAWRENCE AYLWARD

Store Brands / November 2019 / www.storebrands.com

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These people know private brands: (From left) Geoff White, Jennifer Jesser, Nancy Cota, Elizabeth Strydom, Chad Coester and Don Davidson.

THE “PRIVATE BRANDS PROWESS AWARD” GOES TO …

Geoff White, Chad Coester, Don Davidson, Nancy Cota, Jennifer Jesser and Elizabeth Strydom of Albertsons Cos.— For their executive leadership and store brand savvy In terms of innovation, differentiation and exclusivity in private brands, Boise, Idaho-based Albertsons Cos. stands out. In the past few years, Albertsons Cos., which operates stores across 34 states and the District of Columbia under 20 well-known banners (Albertsons, Safeway, Vons, Jewel-Osco and others), has made a concerted effort to upgrade its store brands, called Own Brands, which include its Signature lines, O Organics, Open Nature, Lucerne Dairy Farms and others. That upgrade was clearly evident in 2019, a year in which the retailer grew its private brands portfolio to more than 11,000 products across 550 categories and increased its Own Brands penetration to a record 25.3%. When Geoff White became president of the retailer’s Own Brands in mid-2017, his goal was to take Albertsons’ store brands to another level and another level after that. White assembled a management team, located at the retailer’s campus in Pleasanton, Calif., comprised of smart and seasoned grocery professionals who were just as zealous as him about making Albertsons’ store brands prominent in the grocery world. “I want our store brands to have a cult-like following where people just talk about them constantly,” White said. Albertsons Cos.’ private brands may be achieving

that position, thanks to the executive team, which also includes Don Davidson, Nancy Cota, Chad Coester, Elizabeth Strydom and Jennifer Jesser. The team has created one of the nation’s top private brands programs. Four of Albertsons Cos.’ private brand lines — Signature SELECT, Signature Café, Lucerne and O Organics — have achieved more than $1 billion in sales. Open Nature will soon achieve that status. “Everybody brings something different to the table,” said Nancy Cota, Albertsons’ vice president of Own Brands, who has spent 43 years in the grocery industry. “That’s what makes us so strong. And when you trust each other like we trust each other, you want to win together.” White, who began his career at Albertsons Cos. as a general clerk at a Safeway store in Canada in 1981, did so well in leading the team that he earned a promotion. In September, he was named executive vice president and chief merchandising officer for Albertsons Cos. A few days after White’s promotion, Albertsons Cos. promoted Coester to senior vice president of Own Brands. He was most recently the group vice president for the Own Brands team. “Chad brings infectious energy to everything he does,” White said. “His versatile background and deep commitment to innovation will serve him well as he leads our extraordinarily talented Own Brands team.” Coester, who began working with Safeway in 1995 and joined the Own Brands team about two years ago, epitomizes the team’s enthusiasm. “I love what I’m doing,” he said. “I get to interact with this team, evangelize their ideas and bring them to life within our divisions.”

www.storebrands.com / November 2019 / Store Brands

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COVER STORY THE “WITH MUCH FANFARE AWARD” GOES TO …

Target is counting on its Good & Gather line to pump some life into its grocery business.

Target — For its new Good & Gather private brand, which USA Today announced in an exclusive story on Aug. 19 Store brands often make the mainstream news, but not with this much fanfare. On Aug. 19, USA Today was the first media channel to report on Target’s sweeping new private brand line, Good & Gather, in a major story that USA Today said the Minneapolis-based retailer shared exclusively with the media outlet. USA Today has an approximate daily readership of 2.6 million, the second largest in the country

behind the Wall Street Journal. The story was picked up by many other mainstream news outlets after USA Today broke it. Wow. What a way to get out the word to the public about your new product line. Give Target credit for making it happen. USA Today’s willingness to work with Target on the story is also a boon for the private label industry, which is no longer taking a backseat to name brands. In fact, private label is very much in the front seat. As for Good & Gather, which began to appear on the shelves of Target’s 1,800-plus locations on Sept. 15, it is the biggest private label introduction of the year for any retailer. The line will include more than 2,000 products across food and beverage — from dairy to produce to ready-made pastas and meats to granola bars and sparkling water — by the time the rollout is completed in late 2020. All of the products under Good & Gather will be made without artificial flavors and sweeteners, synthetic colors and high fructose corn syrup, and have a money-back guarantee. The assortment will also include trendy products such as avocado toast salad kits and beet hummus. Target is counting on Good & Gather to pump some life into its humdrum grocery business. Thanks to USA Today, the private brand line came out of the gate like a thoroughbred at the Kentucky Derby.

While Lidl has endured growing pains in the U.S., ALDI has been on a rampage by opening new stores and renovating others.

THE “STORE BRANDS WARS AWARD” GOES TO … Lidl and ALDI— For stoking a rivalry by opening new stores on the same day that are a mile apart In the summer of 2017 and with much fanfare, deepdiscounter Lidl U.S. opened its first stores on the East Coast. Germany-based Lidl, which has more than 10,000 stores in 28 European countries, had planned its U.S. arrival for several years and at that time aimed to open 100 stores by mid-2018. That same week, Germanybased ALDI, Lidl’s main rival in Germany and several other European countries, announced that it would

expand its network of stores in the U.S. from 1,600 to 2,500 stores by the end of 2022, obviously trying to steal a little thunder from the new kid on the block. A lot has happened since then. Lidl U.S., based in Arlington, Va., has endured growing pains stateside and it didn’t come close to opening 100 stores by mid-2018. It currently operates about 70 U.S. stores. Batavia, Ill.-based ALDI, meanwhile, has been on a rampage — opening new stores, updating old ones and adding a slew of new products, many of them on the premium level. By the end of 2022, it will be the third-largest grocer in the U.S. While the rivalry hasn’t been much of a rivalry in America, it was stoked a bit in September when ALDI and Lidl U.S. held grand openings of their new stores

Store Brands / November 2019 / www.storebrands.com

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COVER STORY on the same day in Lacey, N.J., that are located just a mile apart. The ribbon cuttings for the two openings were only minutes apart. Considering ALDI and Lidl are both private brands powerhouses, not to mention arguably the biggest rivals in the world of grocery, it was a day to remember in industry history. But the real winners had to be consumers who are store brand aficionados, considering that ALDI and Lidl both offer more than a 90% assortment of private brands.

THE “LONG LIVE PRODUCE AWARD” GOES TO … Apeel’s technology provides produce with an “extra peel.”

The Kroger Co. and Apeel Sciences — For extending the life of produce to cut down on food and energy waste The Kroger Co. announced a pilot program with Apeel Sciences last year to offer the company’s longerlasting avocados in more than 100 of the retailer’s hometown Cincinnati stores. Apeel’s plant-derived technology gives produce an extra “peel” that slows the rate of water loss and oxidation, the primary causes of spoilage, while doubling the ripe time. The technology is right in Kroger’s wheelhouse to eliminate food waste across the company by 2025. In September, Kroger announced it was expanding the program and making Apeel’s longer-lasting avocados available in more than 1,100 of its 2,759 U.S. retail food stores. Kroger also said it would introduce two new produce categories — Apeel asparagus and Apeel limes — in Cincinnati stores. According to Kroger and Apeel, the partnership is expected to prevent millions of pieces of produce from ending up in landfills every year, resulting in more preserved farmland, water savings and energy reductions. It’s a ground-breaking achievement that could have a positive impact on produce for years to come.

THE “FREE AS A BIRD AWARD” GOES TO … Walgreens — For its new drone home-delivery program Walgreens is aiming for the sky to offer improved product delivery. The Deerfield, Ill.-based drugstore chain announced in September it was partnering with Wing Aviation LLC to “offer unparalleled speed and convenience of store-to-door delivery of health and wellness, food and beverage and convenience items — via state-of-the-art drone technology — in minutes.” As part of the pilot program, Walgreens made its first drone delivery on Oct. 18 to a home in Christiansburg, Va., that included cough drops, tissues, a powdered-drink mix vitamin supplement and bottled water. Wing Aviation LLC is the first drone operator to be certified as an air carrier by the Federal Aviation Administration. “This industry-first drone delivery pilot with Wing expands our omnichannel offerings to provide customers the products they need wherever, whenever and however they may want them,” said Vish Sankaran, chief innovation officer of the Walgreens Boots Alliance. The companies will utilize the pilot program to further explore the future of health and wellness product and retail delivery through the air, offering product availability and home delivery minutes after placing orders via the Wing app. Walgreens said it is in a unique position to capitalize on the convenience of drone delivery because about 78% of the U.S. population lives within 5 miles of a Walgreens-owned store. Walgreens operates about 9,560 drugstores with a presence in all 50 states.

“Air” Walgreens made its first drone delivery in October.

Store Brands / November 2019 / www.storebrands.com

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COVER STORY

Retail Business Services — For its new Nature’s Promise Kids private brand line Retail Business Services wants to help parents feed their children well. The Salisbury, N.C.-based company, which operates under Ahold Delhaize USA, recently launched Nature’s Promise Kids, a new justfor-kids natural food line within its private label assortment. The products, aimed at children ages 4 and up, are available at Ahold Delhaize USA banners that include Stop & Shop, Giant Food, Giant/Martin’s, Food Lion and Hannaford. The range is an extension of the retailer’s current Nature’s Promise free-from line, which includes many organic options. “Families should be able to provide their children with products they feel confident in,” said Juan De Paoli, senior vice president of private brands for Retail Business Services. Nature’s Promise Kids is a result of conversations with our grocery retail partners about

what they are hearing from their customers. Nature’s Promise Kids is an answer to the demand from today’s families for products free from unwanted ingredients at an unsurpassed value.” Delivering on the commitment that Retail Business Services made last year to remove all synthetic colors, artificial flavors, artificial preservatives, sweeteners, MSG and high fructose corn syrup from all private brands products by 2025, the Nature’s Promise Kids products do not include any of these items. Products in the line also contain no more than 500 milligrams of added sodium per serving, no more than 40% of calories from added sugar and no more than 10% of calories from saturated fat (except for nut, meat, poultry and dairy products).

Chinese consumers — For forcing the club store chain’s first store in China to close early because too many of them showed up to shop When Costco Wholesale opened its first store in China in August, it was like a Black Friday on steroids. Hordes of Chinese consumers poured into the store, located in Shanghai, the second after it opened and pulled products from shelves as if they were made of solid gold. Videos showed them plucking Costco’s private label Kirkland Signature rotisserie chickens from the deli as if they were the last cooked birds on the planet. And it’s probably safe to say that other Kirkland Signature products were among those flying off the shelves (“flying” in the literal sense). While there was plenty of running and even some pushing and shoving, video revealed that the crowds were also orderly. Still, there were several police officers on hand, blowing whistles to instill calm and shouting to the crowds to remain “rational.” Police also had to issue warnings about traffic conges-

Costco’s Kirkland Signature rotisserie chickens proved popular with Chinese Costco shoppers. tion around the store. And if you arrived at the store shortly after it opened, you had to wait for up to three hours for a parking spot. But people did. Because the crowds kept coming, the Costco had to close early. The store sent a mobile alert to members saying: “To provide you with a better shopper experience, Costco will suspend business in the afternoon. Please don’t come.” Surely, “please don’t come” are three words that no retailer never wants to utter. But on this day, because Chinese consumers loved Costco that much, the retailer had no choice but to call it quits for the day.

Store Brands / November 2019 / www.storebrands.com

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COVER STORY

THE “SO CHEESY THAT IT’S COOL AWARD” GOES TO … ALDI took innovation in product and packaging to a very cheesy level that was dang fun.

ALDI — For its Happy Farms Preferred ’80s Smash Hits Cheese Assortment Who says you can’t get a little cheesy to differentiate your store brand products? Cheesy can be cool — and downright entertaining — as ALDI proved. The Batavia, Ill.-based retailer added a new twist to its Happy Farms private brand cheese line last February.

Just in time for the 61st-annual Grammy Awards, ALDI introduced its Happy Farms Preferred ’80s Smash Hits Cheese Assortment. The six varieties in the line, part of the retailer’s popular “ALDI Finds” limited-time offering program, featured names with takes on some of the 1980’s most popular rock and pop songs. Some of the varieties included: • Wake Me Up Before You Goat Goat, a play on Wham!’s 1984 song “Wake Me Up Before You Go-Go.” While the song was a “hit,” it’s also perhaps one of the cheesiest songs ever, which made it perfect for the line. • Sweet Cheddar of Mine was a play on Guns N’ Roses 1987 rock anthem “Sweet Child O’ Mine.” Note to ALDI: We would’ve made this cheese sharp to match the shrill in Guns N’ Roses vocalist Axl Rose’s voice. • Billie Goat Is My Lover, a play on Michael Jackson’s “Billy Jean” from 1982. ALDI had to have the king of pop — the “big cheese,” if you will — represented in this line. Billy Goat Is My Lover combined goat and cheddar cheeses for a sweet and tangy taste. • Pour Some Gouda on Me was a take on Def Leppard’s 1987 song “Pour Some Sugar on Me.”

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COVER STORY

THE “YOU CAN’T BUY THIS KIND OF INDUSTRY PROMOTION AWARD” GOES TO … Warren Buffett: “Private label is getting stronger.”

Warren Buffett — For talking up the store brands industry Everybody’s favorite billionaire, Warren Buffett, made headlines last winter for lauding the private brands industry. The industry could have spent millions and not received the praise that Buffett provided for free in an interview with CNBC. Buffett’s comments —that private brands are winning over more customers — were not news to grocery

industry insiders, but they may have caught the attention of consumers and even investors. In the interview, the Berkshire Hathaway CEO basically acknowledged that Kraft Heinz and other national brands are taking it in the teeth from store brands sold by retailers, such as Costco Wholesale and Walmart, that offer a solid array of private brands just as good or better than the national brands and cost less. Buffett noted that Costco, behind its Kirkland Signature private brand, does 50% more business than all of the Kraft Heinz brands. Sales of Costco’s Kirkland Signature brand grew to $39 billion in 2018 from $35 billion in 2017, and Kirkland Signature accounts for onethird of the retailer’s sales. “When you’re going toe to toe with a Walmart or a Costco or maybe an Amazon pretty soon ... you’ve got the weaker bargaining hand than you did 10 years ago,” Buffett told CNBC. “So house brands, private label, is getting stronger. It varies by country around the world, but it’s bigger. And it’s gonna keep getting bigger.” Mr. Buffett, the private label industry would like to thank you for your words of wisdom. SB

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www.storebrands.com / November 2019 / Store Brands

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THEYEARINREVIEW2019

BY POPULAR PRIVATE BRANDS HAVE NEVER BEEN MORE FAVORED BY CONSUMERS, WHICH IS INDICATED BY SEVERAL OF OUR TOP 10 STORIES OF THE YEAR BY LAWRENCE AYLWARD

DEMAND With the economy maintaining its strength this year, private branded consumer packaged goods have flourished, which is a reflection of how far the private label industry has come. Private brands are no longer just known as cheap products to buy during a soft economy, thanks to retailers and manufacturers focusing on innovation and differentiation. Private brands have also gained a reputation for their value by

offering quality at excellent prices. Several industry pundits have mentioned that the growth trends of private brands are no longer cyclical. â&#x20AC;&#x153;[The growth trends] are real, and they will continue,â&#x20AC;? said Garett Chau, senior vice president of professional services for market researcher Nielsen. The continued growth of private brands is a major theme in several of our top 10 stories of the year.

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THE PRIVATE BRANDS PUSH Brooke Hodierne, vice president of own brands for Pittsburghbased Giant Eagle, said she wants to grow Giant Eagle’s private label market share to a European-esque 40%. “It’s super inspirational,” Hodierne admitted during a presentation she gave in April at the Efficient Collaborative Retail Marketing’s (ECRM) second-annual Store Brands Leadership Summit in Las Vegas. But why not be super inspirational in what might be the golden age of store brands in consumer packaged goods? Several studies this year touted the continued growth of store brands. According to the Private Label Manufacturers Association (PLMA), store brands have never been more popular among consumers. Nearly one of every four products sold in the U.S. today is a retailer’s own brand. In 2018, sales of private label grew by 4.4%, four times as much as national brands, representing a gain of $5.5 billion, the PLMA found. Store brands’ market penetration set records, advancing to 18.5% in dollar share and 22.3% in unit share. According to market researcher Nielsen, store brands accounted for $129 billion worth of retail sales across all major retail channels. It’s estimated that an additional $40 billion in private label sales occurred in retailers not included in the Nielsen figure, which brings total private label sales to about $170 billion, the PLMA noted. Retailers like Giant Eagle are changing their go-to-market approach with their private brands. “We are thinking about our own brands differently,” Hodierne said. “We used to be the me-too [product] and the fast-follower. But we’ve taken that model and thrown it out the window.”

Giant Eagle is stepping up its private brands and has goals to increase market share.

Derek Gaskins, senior vice president of merchandising and procurement for Des Moines, Iowa-based Yesway, a fast-growing convenience store chain that will soon have about 500 stores in nine states, also has lofty goals for private brands. Gaskins, who also spoke at ECRM’s event, said he wants Yesway to be the ALDI or Lidl of the convenience store channel when it comes to store brands. ALDI and Lidl, of course, offer more than a 90% assortment of private brands. “We want to be one of the innovative retailers,” Gaskins said. “Why can’t we be the Lidl or ALDI of the convenience channel? It’s an aspiration that we are treating very seriously.” Two supermarket chains excelling at private brands are The Kroger Co. and Albertsons Cos. Last March, when announcing earnings for the 2018 fiscal fourth quarter, Cincinnati-based Kroger reported that its private brands, known as Our Brands, achieved a unit sales share of 30.5% for the first time ever. In September, when announcing secondquarter earnings, Kroger said Our Brands sales grew 3.1%. Kroger also said it introduced 203 new Our Brands items during that quarter. In October, Boise, Idahobased Albertsons Cos. reported an identical store sales increase of 2.4% and profit increases during its second fiscal quarter, attributing much of that growth to its Own Brands program, which reached a sales penetration of 25.3%.

www.storebrands.com / November 2019 / Store Brands

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THEYEARINREVIEW2019

MORE PREMIUM PRODUCTS, PLEASE More retailers are introducing premium store brand lines or adding to them. This trend will continue in 2020 as retailers aim to offer products that are not only better than the national brands,

Retailers realize that premiumization equals differentiation.

but also exclusive to them. Retailers realize more than ever that premium equals differentiation. “We’ve witnessed over the last two years a complete resurgence and growth in the private label industry in the U.S. driven by retailers wanting to be more relevant to their customers and a shift from a need to focus on having the right price point to establishing private brands that are top of mind to consumers and build intimacy with consumers,” Bahige El-Rayes, a partner in the consumer and retail practice of A.T. Kearney, a strategy and management consulting firm, told Store Brands earlier this year. Premium store brands are spurring overall private label growth, representing more than 19% of store brand sales, according to

ALDI’S CONTINUED RISE Perhaps no other retailer was in the mainstream news more in 2019 than ALDI. That’s because ALDI is in the midst of a rapid expansion that will see its footprint grow from more than 1,800 to about 2,500 stores by 2022, making it the third-largest grocery chain in America behind Walmart and The Kroger Co. So when ALDI opened a new store in a community in 2019, the local news reported it. Considering ALDI’s expansion and its more than 90% assortment of

private brands, its future impact on the industry could reign historically in grocery industry annals. Batavia, Ill.-based ALDI, which opened its first U.S. store in Iowa in 1976, has always been known for its low prices of private branded consumer packaged goods. But in the last five years ALDI has gained a reputation for its quality of private brands in addition to its low prices. It is also garnering recognition as an innovator of store brands and a place to shop for premium and exclusive items.

market researcher Nielsen. “The rise of higher-end store brand products has come hand-in-hand with consumers’ inclination to spend more on store brands,” Nielsen reported. “Discount products still represent the majority of store brand sales in America, but they have ceded three share points in the last three years. Fortypercent of surveyed Americans said they would pay the same or more for the right store branded product, while only 26% of those surveyed feel that name brands are worth the extra price.” Retailers that offer more premium private private brands are seeing more sales, Nielsen noted. “With a premium facelift on many private label products, we’ve seen an interesting impact on discount grocery stores,” Nielsen said. “U.S. value grocery outlets have collectively seen a 4% decline in private label share of wallet. Meanwhile, stores with premium products have continued to see lifts in private label sales.”

“I’m extraordinarily impressed with ALDI,” Carl Jorgensen, executive vice president of Chicago-based market researcher Linkage Research & Consulting and an expert on thought leadership in private brands, told Store Brands earlier this year. “ALDI has raised the profile of private brands and raised its own reputation among consumers.” Simon Johnstone, director of retail insight for Boston-based retail consultant Kantar Consulting, told Store Brands that it took a while for grocery industry pundits to start talking about ALDI’s impact, considering the retailer has been in the U.S. for more than 40 years. But the talk is happening now and is growing louder.

Store Brands / November 2019 / www.storebrands.com

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THEYEARINREVIEW2019

“ALDI didn’t come to the U.S. with a lot of fanfare,” Johnstone said. “It has been sort of a sleeping giant in that sense. … But retailers are really starting to take ALDI seriously as a competitor.” ALDI Co-President Brent Laubaugh is aware of the praise coming the retailer’s way from industry pundits, consumers and even unnerved competitors. But the modest Laubaugh, who’s in his 25th year with ALDI, doesn’t let on much. “Success is never something that is achieved,” Laubaugh told Store Brands in an exclusive interview earlier this year when Store Brands named ALDI as its 2019 Retailer of the Year. “It’s something that you are always working on.” ALDI’s push to offer better quality and more innovative products has resonated with consumers — all consumers, according to Jorgensen. Citing statistics from Linkage Research & Consulting, Jorgensen said, “Contrary to what one might expect of discount grocery, ALDI does not skew toward low-income shoppers. In fact, ALDI under-indexes on shoppers with incomes less than $30,000. Its sweet spot is households making $30,000 to $99,000.” ALDI’s shopper base has blossomed to about 40 million customers monthly from 25 million in 2014. It will continue growing that base. ALDI, a pioneer of private brands, has morphed into a powerhouse of private brands. “They are part of our DNA,” Laubaugh said of store brands. “That core concept will stay exactly the same.” ALDI has upped the quality of its private brands.

HERE COMES AMAZON … AGAIN When Seattle-based Amazon acquired Whole Foods Market more than two years ago for $137 billion in cash, many industry pundits expected the mega-retailer to turn the grocery industry on its head. That didn’t happen. But Amazon isn’t done in grocery. Not even close. As industry consultant Brittain Ladd, who previously worked on Amazon’s grocery operations, told the New York Times earlier this year: “People really need to understand — Whole Foods is the beginning, it’s not the end. It’s not everything.” Speculation began earlier this year that Amazon would launch a new brick-and-mortar venture that is separate from its Austin, Texas-based Whole Foods Market chain. In October, the Wall Street Journal reported Amazon has reportedly signed more than a dozen leases on store locations in the Los Angeles area. Initial locations are expected in the densely populated

ORGANIC OPPORTUNITY STILL KNOCKING The U.S. organic market continues to grow with no signs of slowing down, which bodes well for store brands in many categories. The Organic Trade Association (OTA) reported in May that the U.S. organic market broke the $50 billion mark for the first time last year, with sales hitting a record $52.5 billion, up 6.3% from the previous year. Organic food sales reached $47.9 billion, for an increase of 5.9%, and sales of organic non-food products jumped by 10.6% to $4.6 billion. Organic fruits and vegetables are still “the stalwarts” of organic products, according to OTA, with sales increasing 5.6% in 2018 when compared to 2017. The overall fruits and vegetables category, including both organic and conventional products, grew by just 1.7% in 2018. Retailers of private brands have been capitalizing on organic products for several years and continue to do so. Sales of The Kroger Co.’s Simple Truth natural and organic brand, which the Cincinnati-based grocer launched in January 2013,

Store Brands / November 2019 / www.storebrands.com

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areas of Woodland Hills and Studio City, as well as Irvine in Orange County. Other locations are expected to open in Chicago and Philadelphia. Kevin Sterneckert, chief marketing officer for Symphony RetailAI, which offers artificial intelligence-enabled solutions for retailers and manufacturers, said he expects the new Amazon grocery

continue to climb and now exceed $2.3 billion. Sales for Albertsons Cos.’ O Organics store brand are more than $1 billion. Both retailers continue to add products to their respective lines. “With consumers across demographics seeking more affordable natural and organic products, store brands have the advantage over name brands in being able to offer better prices,” Mintel noted in its July 2019 “The Natural/Organic Food Shopper US” report. “As consumers become more convinced of the quality of these products, there is potential for private label organics to continue moving in on name brand shelf space.” The expansion of organic into a wider array of food channels is further strengthening sales opportunities, Mintel noted. Retailers of organic private brands are benefitting from the increasing availability of organic ingredients, which is reducing the cost barriers of producing USDA-certified organic products. “It has allowed us to expand our

stores will likely differ in assortment from what’s already established in Whole Foods and will include more of Amazon’s private branded products. On its website, Amazon currently offers several private label consumer packaged goods lines including Wickedly Prime, Happy Belly, Solimo and Presto. Neil Stern, who specializes in strategic

planning and the development of new retail concepts for retail consulting firm McMillanDoolittle, agrees. In an article for Forbes about Amazon’s new stores, Stern wrote: “Amazon has continued to grow its private brand presence with roughly 7,000 products; however, less than 2% are food and beverage items. … This new move allows an even greater focus on private label, with a greater focus on fresh.” Sterneckert also expects Amazon to extend additional benefits and privileges to Prime members that will encourage and reward shopping behavior at the new grocery locations. “Amazon will [also] push the envelope on grocery delivery, accelerating convenience as they’ve done with online shopping experiences,” Sterneckert added. “I expect Amazon to offer delivery of goods in less than two hours, which is typically much faster than most grocers can commit to today.”

More retailers like ShopRite continue to expand their organic store brand programs across more categories. O Organics portfolio throughout the store,” Geoff White, executive vice president and chief merchandising officer for Boise, Idaho-based Albertsons Cos., recently told Store Brands. “While most shoppers enter organic categories in fresh produce, dairy and baby prod-

ucts, offering O Organics across the entire store gives us many opportunities to tell shoppers about the benefits that organics provide.” Five years ago, the sky was the limit for private branded organic products. Five years later, that is still true.

www.storebrands.com / November 2019 / Store Brands

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THEYEARINREVIEW2019

CBD: WAITING ON THE FDA

The CBD market needs more clarity, experts say.

The cannabidiol (CBD) market is ready to explode. It’s just waiting on the Food and Drug Administration (FDA) to give it the green light. Unless you’ve been living under the bushy leaves of a hemp plant, you’ve heard about CBD, a naturally occurring cannabinoid compound found in marijuana and hemp plants that is nonpsychoactive and being touted for its health benefits. Non-food topical products made with CBD, including lotions and creams, are deemed lawful by the federal government and seem to be selling everywhere, including grocery outlets. But it’s food and beverage products made with CBD that could really send the market skyrocketing.

BITING INTO PLANT-BASED FOODS With their “bleeding” veggie burgers, Beyond Meat and Impossible Foods created a genuine fervor surrounding plant-based foods in 2019. It seems everybody wants a piece of plantbased foods, including retailers of private brands.

Kroger’s new plant-based line includes myriad products that are 100% plant-based. 36

And why not? Recent data by the Plant Based Foods Association and The Good Food Institute shows U.S. retail sales of plant-based foods have grown 11% in the past year, bringing the total plant-based market value to $4.5 billion. The total U.S. retail food market grew just 2% in dollar sales during the same period, according to the data, which covers the total U.S. grocery marketplace and was commissioned from SPINS, a wellness-focused data technology company and retail analytics provider. The plant-based meat category alone is worth more than $800 million, with sales up 10% in the past year, according

The CBD market is projected to be valued at $16 billion by 2025, according to Miriam Guggenheim, a Washington, D.C.-based food regulatory lawyer, who recently spoke at the Private Label Manufacturers Association’s 2019 Washington Conference. “And that’s despite the tremendous lack of clarity as to the legal status of these products,” Guggenheim said. That lack of clarity has stopped a number of companies from entering the CBD market and others from beginning research and development on CBD products, Guggenheim noted. This is especially true in the food and beverage arena where the FDA has ruled that CBD can’t be used.

to the data. Plant-based meat now accounts for 2% of retail packaged meat sales. In September, the Kroger Co. announced it was taking a big bite into the plant-based foods market. The Cincinnatibased retailer is in the midst of rolling out an extension of its popular Simple Truth private brand called Simple Truth Plant Based, which includes fresh meatless burger patties and grinds as well as plant-based cookie dough, pasta sauces, sausages, deli slices, dips and other items. “Kroger’s commitment to innovating and creating new plant-based food mirrors the growing number of customers exploring meat and dairy alternatives,” said Nicole Davis, Kroger’s senior category strategy and innovation manager for Our Brands. “Taste is and will always be our number one focus, and you can expect Kroger to

Store Brands / November 2019 / www.storebrands.com

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But market researcher Nielsen believes clearer federal guidelines for CBD products, inclusive of edibles and beverages, may come from the FDA by the end of the year, which could spur development soon. Guggenheim said the FDA is under tremendous pressure from Congress to enact federal guidelines that open the CBD market to food and beverage products. FDA stated earlier this year it would take three to five years to come up with guidelines, but Congress poo-pooed that timetable. “So the FDA is taking a hard look at it,” Guggenheim said. “But it’s possible the FDA could throw up its hands and say, ‘Congress, you have to figure this out.’ But I don’t think [that will happen].”

continue to invest in this category as we are committed to providing our customers with products that support their eating preferences and health and wellness goals.” A few days after Kroger’s announcement, Boise, Idahobased Albertsons Cos. revealed it would be become the first grocer to introduce private branded Certified Plant Based foods in collaboration with the Plant Based Foods Association (PBFA). PBFA, which has offices in Washington, D.C., and San Francisco, worked with the grocer on the certification and launch of the new product line, which is also USDA-certified organic. On the packaging for each food item, the Certified Plant Based seal is prominently displayed. The products are part of Albertsons Cos.’ popular O Organics line. Count on more retailers to introduce store branded plantbased foods in 2020.

IS THE NATIONAL BRAND EQUIVALENT A DINOSAUR? “I don’t like store brands that just try to copy a national brand or those that are just fake versions of a national brand.” That’s what one consumer told Magid, a consumer-centered business strategy company, which issued a report called “Consumer Attitudes Toward Private Label” early in 2018. But that’s not the only consumer who feels this way. Magid found that many shoppers are shunning private brand products that are national brand equivalents like a kid would a bad bowl of knock-off Cheerios. Magid’s survey of 3,000 consumers found that many consumers expect store brands “to offer unique and trendy styles that are ahead of national brands.” But the finding that really jumps out from Magid’s research is that national brand equivalent products can lower the overall evaluation of a retailer “and cause more harm than good,” particularly among millennials. It’s a finding that’s an ear-splitting wake-up call for retailers. Does this mean that retailers that offer national brand equivalent products are losing their allimportant shoppers’ trust? And considering that many retailers have national brand equivalent programs in place, how should they react to this finding? “It’s a finding that provides tremendous insight,” David Bilicic, Magid’s senior vice president, told Store Brands. Bilicic stressed that national brand equivalent products can indeed decrease customers’ trust of a retailer, especially when the emphasis on that national brand equivalent is on it being lower priced. Magid’s message is clear: Retailers selling national brand equivalent store brands and differentiating them only by price had better stop. Apparently,

Costco’s Kirkland Signature line features many products that aren’t “fake” versions of national brands. shoppers are perceiving them as inferior products, not just cheap products. “It’s a strategy that has been in place for decades, but I think we can agree it’s coming to the end of its lifespan,” Bilicic said of the price-only-to-differentiate factor. “Retailers that have national brand equivalents need to invest in these brands and differentiate them in ways that draw consumers in.” There is a drawing board for this, Bilicic noted. Just look at what Costco Wholesale has done with its Kirkland Signature private brand line and what Wegmans Food Markets has done with its Wegmans brand. They have taken products in these lines beyond national brand equivalents by adding simple twists, from upping product quality to introducing eye-catching packaging. “They’ve established their own identities,” Bilicic says.

www.storebrands.com / November 2019 / Store Brands

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THEYEARINREVIEW2019

THE BRANDING OF PRIVATE LABEL Grocery industry expert Don Stuart believes it’s time to refer to several products and product lines in private label simply as “brands.” Period. Late last year, Cadent Consulting Group, the Wilton, Conn.-based consulting firm where Stuart is managing director, issued a report called “The Branding of Private Label.” In the report, the word “brand” is defined as “the elements, both tangible and intangible, that identify and differentiate a product from the competition.” The report mentions that a brand “is a promise

of good value” and “a promise to consumers that it will consistently deliver the quality expected of its product at an acceptable price.” The report also stresses that brands can enact positive consumer emotions that kindle shopper loyalty. The point is that many private label products and lines offer value and quality to consumers while helping retailers to differentiate and attract consumer loyalty, Stuart said. So why not just refer to them as brands, he asked. Take Trader Joe’s, which offers mostly private label products. The Monrovia, Calif.-based retailer has built its reputation on private label. But those products are known by its shoppers as “Trader Joe’s brands,” not private label products. And Trader Joe’s customers are

THE PLMA TURNS 40 The Private Label Manufacturers Association (PLMA) has been celebrating 40 years of existence this year. The PLMA, which began in 1979, has been the captain of the ship that is store brands. Those familiar with the PLMA’s beginning and existence said the industry wouldn’t be as nearly as advanced without the PLMA. “The PLMA has done wonders for the store brand industry in the

PLMA has grown to about 4,200 member companies.

U.S.,” said Nick Hahn, the former director of corporate brands for The Kroger Co., who spearheaded the success of one of the grocery industry’s top private brands programs in the country. “The PLMA gave both suppliers and retailers a voice that they never had.” Bob Anderson, who began Walmart’s Great Value private brand in 1992, said PLMA was instrumental in bringing retailers and suppliers together to create quality private brands. “For 40 years, the PLMA has been the marketplace for growth and collaboration for manufacturers and retailers,” he added. In 1979, America was plunged into recession, but that didn’t stop a group of about 50 industry suppliers from meeting in New York to set the stages for forming an association for private label products. And in 1980,

proud to shop there. And they like to tout on social media that “we are shopping at Trader Joe’s today” and even post photographs of the products they purchased there. “They feel a badge of honor,” Stuart said of Trader Joe’s shoppers. “They think the quality is better and the value is better, and that shopping at Trader Joe’s defines them as smart shoppers.” Other retailers have also earned the distinction with their private label products, Stuart said. “They all have common denominators,” Stuart stated. “[Their products] have a look and feel that is consistent. And they offer quality and value. But it’s not just about making better products, it’s about making products to meet the needs of more people.”

that group staged its first Private Label Trade Show in the basement of the Ramada Inn near O’Hare Airport in Chicago. The first show featured about 40 vendors, who displayed 40 small tables. The association struggled early on. But PLMA’s members, which had grown to about 200 in 1980, kept pushing the importance of private label. And then, in 1981, the PLMA hired Brian Sharoff to lead the association as its president. Marvin Benjoya, who spent his career in private label and was one of the PLMA’s early supporters, said Sharoff’s hiring led directly to the association’s success. “I don’t think anybody you talk to who was part of the association and the board of directors during those early years would say anything different,” Benjoya added. “Brian created an avenue of constant interaction.” Under Sharoff’s leadership, the PLMA has grown from 200 member companies to about 4,200 member companies. SB

Store Brands / November 2019 / www.storebrands.com

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RETAILER PROFILE

TOPS

RETAILER IS REMODELING STORES AND INVESTING IN ITS FUTURE — WITH PRIVATE BRANDS PLAYING A KEY ROLE

TRANSFORMING BY L AW R E N C E AY LWA R D

Thanks to a four-month remodeling project that began earlier this year, the Tops Friendly Markets store in Cheektowaga, N.Y., near Buffalo, has been transformed and rejuvenated. And it’s not the only Tops’ store receiving an extreme makeover. On June 4, the Cheektowaga store celebrated a grand reopening to show off its new and modern look, including a major floor-to-ceiling interior renovation and updated exterior facades. It was the first of many stores the Williamsville, N.Y.-based retailer — which operates 159 supermarkets with five additional

Tops’ key leaders — (from left) Nicky Walsh, John Persons, Kristen Hanson and Diane Colgan — realize the importance of delivering innovative and exclusive private branded products, such as pizza made in Italy and premium chocolate.

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franchise stores in New York, northern Pennsylvania and western Vermont — has updated or will update to contemporize its stores while meeting the current demands of its customers. Tops Markets LLC, the retailer’s parent company, is investing about $40 million into the stores. “The response we’ve received from putting money into the stores is really gratifying,” says Frank Curci, Tops’ CEO, who has worked in the grocery arena for more than 40 years. “It’s like something I’ve never seen before in this business. Tops is a big

www.storebrands.com / November 2019 / Store Brands

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RETAILER PROFILE part of the community, and people want to see us succeed. They have responded in a positive way.” For Curci and other top executives, including President and Chief Operating Officer John Persons, who has worked at Tops since he was a teenager, it’s like the retailer has been reborn. Tops underwent Chapter 11 reorganization last year — obviously a challenging time — but it emerged in late 2018 with a stronger balance sheet, including reducing its debt by about $445 million and gaining $100 million in liquidity. The financial restructuring has allowed Tops to do the things it must do to compete in the ever-competitive grocery market. “Everything is going well,” Curci says in an upbeat tone. “If you look at the past, it really wasn’t our business that was the problem. It was our balance sheet and our debt structure that was the problem.” With the financial restructuring in the rearview mirror, Tops is pushing forward. And the retailer’s private brands are playing a key role in its resurgence. THE FRESH FACTOR Like most all other grocers, Tops is dealing with consumers’ increasing demand for more fresh products, which has

Tops offers an array of grab-and-go products to appease on-the-go consumers.

spurred store brand development in the area. While fresh offerings differ from store to store to meet the needs of their respective clienteles, most of the stores have or will increase their square footage and refrigeration devoted to fresh. At the Cheektowaga store, Tops doubled the size of its deli and Carry Out Cafe departments and is now selling an increased variety of grab-and-go items such as meals to go, pre-sliced and pre-packaged meats, sandwiches, hot meals, signature pizzas and pre-made salads to appease

www.storebrands.com 42 Store Brands / November 2019 / www.storebrands.com / December 2018 / Store Brands

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OKA Products has over 18 years production and distribution experience in the food and beverage industry. Our high quality portfolio of brands offers innovative products options at the best possible prices. We also do private labels projects leaded by our company Private Projects. Since consumers are always looking for new brands that are nutritious, great tasting, and high in quality, we made sure that OKA Products ticked all those boxes. We offer premium products with the highest profit margins on the market.

We make it happen! okaproductsofficial.com

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RETAILER PROFILE consumers who want fresh food but who want to get in and out of the store quickly. “Convenience is growing in every way and every category,” says Jeff Culhane, Tops’ senior vice president of sales and merchandising. “Customers are busier than ever, yet still desire the products they love. But they don’t want to spend a lot of time waiting for them. So speed, consistency and selection are the keys to success.” The produce section is also larger and pops with vivid and radiant colors. Ditto for the bakery, which now offers more freshly baked breads and an expanded line of gourmet desserts as well as donuts that are fried fresh on site. And throughout the perimeter, shoppers continue to find the Tops’ fresh store brand staples, including its popular fried chicken, Buffalo wing dip and signature breakfast pizza. During a visit to the renovated Cheektowaga store, Persons was beaming as he scanned the revamped fresh areas. He pointed to a fresh fruit and vegetable station on the sales floor, where shoppers can also buy produce and have it sliced and packaged for them in minutes. “That area has become a destination in the store,” Persons says. “Largely, we wanted to open up the fresh space to make the shopping experience as easy and effective as it could be.” The “open up” strategy is working. Sales are up 30% to

“Local helping local” is a Tops’ philosophy for fresh products and consumer packaged goods.

40% in certain areas on the store’s perimeter thanks to the new format. One of the fresh areas emphasizes locally sourced and farm fresh foods. To further differentiate, Tops is focusing more than ever on increasing such items. Tops partners with more than 200 local farmers in-season to attain its produce. “The product is literally coming out of the fields and going into the stores in many instances within 48 hours,” says Diane Colgan, Tops’ senior vice president of marketing and decision support. A few farmers grow crops only for Tops, including one

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Store Brands / November 2019 / www.storebrands.com

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Visit us at the PLMA Private Labe l Trade Show Rosemont, IL November 18-19, 20 19

Booth F2227 (North Hall)

• Dressings, sauces, salsas, condiments, aioli, mayonnaise, dessert sauces, fruit preserves • Premium and clean-label segments • Customer-focused culinary and R&D teams for recipe development and new product innovation • Two manufacturing plants >150,000 sq. ft. • Specializing in:

Drew’s LLC is now part of Schlotterbeck & Foss

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RETAILER PROFILE farmer that supplies the retailer with Amaize sweet corn, a naturally bred white corn known for its sweet taste. Tops is the only retailer in its area that sells the corn, which is available for two to three weeks in the late summer. The retailer’s private brand line of cage-free brown organic eggs, which it introduced last year, comes from a farm about six miles from its headquarters. “Many times the eggs are actually laid in the morning, and they are in our stores in the afternoon. How much fresher can you get?” Colgan says. Kristen Hanson, Tops’ vice president of center store sales and merchandising, says the retailer is reaching out to more local partners, including those from consumer packaged goods, because it presents a win-win situation.

“People like to buy local products,” she says. “Local helping local is extremely important to who we are and how we go to market.” In the fresh meat section, Tops struck a deal earlier this year with Georgia-based chicken processor Springer Mountain Farms to co-brand its antibiotic-free, nonGMO and certified humanely raised products. On the packaging, which includes 100% recyclable trays, Tops shares its logo with Springer Mountain Farms. Persons calls the line “a gem that has enhanced our portfolio.”

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Tops offers several lines of private brands within its consumer packaged goods portfolio. The anchor brand is the mainstream TOPS brand, which features mostly national brand equivalent or better products and accounts for about 80% of sales. “It is our No. 1 brand,” Hanson says. “To me, it’s important to protect that name because that’s also the name on the building.” Tops has paid loads of attention to the brand in the last three years. In 2016, it began a major reformulation of the TOPS line to simplify product ingredients and offer cleaner labels and to improve quality and packaging. The three-year project touched about 2,200 products. Tops also introduced about 250 new products during that time. Three years might seem like a long time, but it wasn’t, Colgan says, considering that many products were completely overhauled from packaging to ingredients to flavors. The goal was to create a more modern packaging design and to rid products of undesirable ingredients and make them more nutritious without sacrificing taste. While Tops doesn’t offer a separate premium line,

Store Brands / November 2019 / www.storebrands.com

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YOUR YEAR STARTS HERE. May 19-21, 2020

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RETAILER PROFILE itâ&#x20AC;&#x2122;s steadily introducing more premium products with premium packaging under the TOPS line and will continue to do so. In the ice cream sector, the retailer recently introduced a premium ice cream line that has become its best-selling line. The all-natural ice cream is made by a local company and features several distinct flavors, including Dirt Pile (chocolate ice cream with chocolate chunks and swirls of chocolate cookie crumbs), Rainbow Unicorn (bubblegum ice cream in fun

Tops is emphasizing fresh produce considerably in its remodeled stores.

PASTA SAUCE PIZZA SAUCE SALSA

colors) and Coconut Dream (sweet coconut ice cream with fudge flakes and fudge-coated almonds). â&#x20AC;&#x153;Our ice cream was kind of run of the mill before,â&#x20AC;? Curci says. â&#x20AC;&#x153;The new line is much more innovative.â&#x20AC;? Last year Tops debuted a premium line of frozen pizzas made in Italy under the TOPS line. The wood-fired pizzas feature a hand-made thin and airy crust and contain 100% natural ingredients and contain no artificial colors and preservatives. Priced at $4.99, they are selling well. Also imported from Italy, Tops recently introduced three varieties of gelato bars. The retailer also partners with Topco Associates LLC, a retail group food purchasing organization that offers an assortment of private brands, to sell Topcoâ&#x20AC;&#x2122;s Full Circle organic line and its premium Culinary Tours line. Tops has had ongoing success with Full Circle, which Hanson says continues to experience double-digit growth with no signs of slowing down. Tops and Topco are consistently communicating on potential new products for the line and adding to it. Tops also recently added a website, topsorganic. com, for consumers to purchase Full Circle and other natural and organic products online. Tops added Culinary Tours to its mix about two years ago. In some categories, the retailer doesnâ&#x20AC;&#x2122;t have the volume to justify introducing its own line of niche premium products, but Culinary Tours has filled that void. The store brandâ&#x20AC;&#x2122;s â&#x20AC;&#x153;taste of the worldâ&#x20AC;? products cross an array of categories, including sweet snacks; frozen appetizers, entrees

Â Â? Â?Â? Â? Â Â ÂÂ&#x20AC; Â&#x201A; Â? Â&#x192;

Store Brands / November 2019 / www.storebrands.com

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Help Save over 5.9 Million Trees and 100 Million Gallons of water* *If every US household changed out one 85 sheet virgin paper towel roll, one 350 sheet virgin bath tissue 4 pack and one 160 sheet virgin facial tissue box per month to an equivalent recycled product

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RETAILER PROFILE

“While we need to have a good mix of private brands and national brands, we will differentiate with our own brands.” — KRISTEN HANSON, TOPS’ VICE PRESIDENT OF CENTER STORE SALES AND MERCHANDISING

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EXPERTS! Meet our new Plant Manager, Ken Pond. For over 22 years, Ken has learned everything there is to know about the formulation of ketchup. It’s a science & an art. What does that mean for our private brand ketchup customers? Everything. Ken, along with our entire team of Ketchup Experts, can expertly craft your ketchup brand into serving your customers what they crave. Better-for-You ingredients and a high-quality taste that your customers want along with the flexibility and complete focus that you need. Partner with The Fremont Company for all of your private brand ketchup needs and give your customers what they want. CAPABILITIES INCLUDE:

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and sides; condiments; pasta; and sauces. “We really see the need for premium indulgent products,” says Nicky Walsh, director of business development for Daymon, a Stamford, Conn.-based company that specializes in building successful private brands programs for its retail partners. Although an employee of Daymon, Walsh has worked exclusively with Tops for the past 11 years and is responsible for all facets of private brands. Walsh says Tops is willing to take chances on new products like these. “Many of them have done extremely well,” she adds. Tops also offers a value line of staple products that it recently changed its name from ValuTime to That’s Smart. The retailer also sells Topco’s TopCare line, which features health and beauty products, and recently switched from offering its own line of household products to offering Topco’s Simply Done line of products, which includes plastic bags and wraps; disposable tableware; cleaning supplies and laundry care; household paper supplies; and home and kitchen supplies. “These changes allow us to offer a wider breadth of products than we did before,” Hanson says. “The customer adoption rate has been very good.” A BALANCING ACT Tops’ private label penetration rate is about 25.5% and on the rise. Curci says store brands are critical to Tops’ overall growth and vital to how consumers perceive the retailer. “Private brands are part of our identity,” he adds. “They are how people view us. So it was important to do all the things we’ve done to upgrade them.” Tops’ main competitors are Wegmans Food Markets, based in nearby Rochester, N.Y., Walmart and ALDI. “They are all private brands-oriented retailers,” Persons says. “So it’s incumbent upon us to be able to compete in that arena, but also to make sure that we are the national brand option for our customers. So for us it’s about making sure we have the right balance. We don’t have to say we are only going to be this or only going to be that. We can be both. Our private brands penetration is very healthy. Do we intend on growing it? Absolutely.” While offering a choice is vital, Hanson notes, the opportunity to differentiate through private brands is just as crucial. “Private brands have to be — and will be — a strong goforward for us,” she adds. “While we need to have a good mix of private brands and national brands, we will differentiate with our own brands.” SB

Store Brands / November 2019 / www.storebrands.com

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It’s No Secret. Woeber’s Knows Private Label.

We all know how secretive the private label industry can be, so we don’t talk directly about all the companies that we do private label for. Big companies, little companies and everything in between. It’s private. But here’s what we can tell you. Behind the labels of some of your favorite products is one company: Woeber’s. We’re one of the largest family-owned private label manufacturers in the country. We’ve been producing high-quality, cost-effective products for over 100 years and our expertise can help you grow your private label sales. Our facility is equipped to produce a variety of mustards, pure horseradish, sauces, vinegars, lemon juice, and more. We can use your recipe, one of our own, or we can custom formulate a recipe that’s packaged for your brand. We’d love the opportunity to meet you and learn more about your company. Please stop by our booth (#8415) and let’s have a chat. If you’re lucky, we may even teach you our secret handshake.

For more information, visit WoeberMustard.com.

PLMA Booth #8415

Fancy Mustards, Vinegars, and Specialty Sauces. Woeber Mustard Company • Springfield, Ohio • www.woebermustard.com

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Contact Wally Miller 1-800-548-2929 wallymiller@woebermustard.com Made in the U.S.A.

10/22/19 9:35 AM 11/4/19 10:12 PM

A CROP OF CANNABIDIOL AND PLANT-BASED PRODUCTS — AND MORE MORE THAN 2,500 EXHIBIT BOOTHS FROM STORE BRANDS MANUFACTURERS OF EVERY SIZE AND DESCRIPTION WILL BE FEATURED AT THE PRIVATE LABEL TRADE SHOW

HHHH Cannabidiol (CBD) products and plant-based meats will be highlighted — along with thousands of other products — during the the Private Label Trade Show on Nov. 17-19 at the Donald E. Stephens Convention Center in Rosemont, Ill. More than a dozen CBD suppliers from across the U.S. and Canada have signed up for the show, which will spotlight them in a dedicated section on the show floor. The companies include Mile High Labs, Contract Pharmacal, Shikai, Blue Sky Hemp Ventures, Elixinol and others. “There is currently intense interest and curiosity on the part of American consumers with regard to the uses and

benefits of CBD, coupled with a growing awareness of the availability of these products,” PLMA President Brian Sharoff said. “Visitors to the show will have the opportunity to see first-hand what all the buzz is about.” Several plant-based meat product companies will also exhibit their products in a dedicated section on the show floor. The companies’ products will range from burgers, sausages and sliders to meatballs, meatloaf, breaded and non-breaded chicken-less tenders, strips, nuggets, cutlets, hot dogs, sausage burgers, mini “pork” tacos and entrees. CBD will also be the topic of a seminar to be presented

Store Brands / November 2019 / www.storebrands.com

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“There is currently intense interest and curiosity on the part of American consumers with regard to the uses and beneﬁts of CBD, coupled with a growing awareness of the availability of these products. Visitors to the show will have the opportunity to see ﬁrst-hand what all the buzz is about.” BRIAN SHAROFF, PRESIDENT OF PLMA

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on Sunday, Nov. 17. Virginia Lee, CBD research manager with Brightfield Group, a source of market intelligence for the CBD and cannabis industries, will speak about CBD’s proliferation in non-foods; formulations beginning to appear in pet products and supplements; and CBD and hemp-derivatives which are expected to follow soon in food products. Also on that day, which PLMA has tabbed “Seminar Sunday,” plant-based meat will also be the topic of a presentation by Jim Wisner, president of Wisner Marketing Group, who will report on how retailers need to adapt their product assortments to rapidly expanding consumer interest in plant-based foods. In addition, Sam Mayberry, former head of product development for Amazon retail consumables and private label, will speak on winning the competitive battle for the last mile to the consumer, delivering online orders to shoppers, and how e-commerce continues to change the rules of retail. Dr. Scott Gottlieb, who served as the 23rd commissioner of the U.S. Food & Drug Administration (FDA) from 20172019, will deliver the keynote for the opening breakfast at the show on Monday, Nov. 18. Ali Dibadj, a partner at AllianceBernstein global asset management company, will be the featured speaker for the Retail Trends Breakfast on Tuesday, Nov. 19. Dibadj’s speech will focus on “How Retailers Are Building Billion Dollar Brands” and what that means for the retailing and consumer brands strategies. Overall, PLMA’s 2019 trade show will present more than 2,500 exhibit booths from the best store brands manufacturers of every size and description, while more than 5,000 visitors to the PLMA will include buyers and executives from U.S. supermarkets, mass merchandisers, drug chains, discount, club, convenience and dollar stores, in addition to online and specialty retailers, foodservice distributors and wholesalers. SB

Store Brands / November 2019 / www.storebrands.com

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PRODUCT SHOW GUIDE 2019 ★★★★ CHECK OUT SOME OF THE NEW PRODUCTS THAT WILL BE SHOWCASED AT THIS YEAR’S SHOW:

Catania Oils PLMA Show Booth #2211 Catania Oils is featuring its Marconi Fresh Harvest Bag-In-Box Extra Virgin Olive Oil. The box blocks harmful light from hitting the product directly, preserving the flavor and integrity of the oil, and the airtight bag seals in freshness. It is available in 1.5 liters for retail and 10 and 20 liters for professional kitchens.

Baxters North America/ Wornick Foods PLMA Show Booth #F7614 Baxters’ new line of USDA Organic-Certified Stage 2 and Stage 3 Baby Food delivers the balance between real, wholesome foods that also fit well within a parent’s tight budget. Each recipe blends a variety of fruits and veggies that are crafted with simple, tasty ingredients and only the vibrant colors of nature’s garden and orchard goodness.

Baxters North America/Wornick Foods www.wornick.com 513.552.7462

Crofter’s Food Ltd. Blueberry Blast SuperFruit Spread combines Québec wild blueberries, cranberries, morello cherries and red grapes into a super-tasty spread. With 75% fruit content and only 4 grams added Fair Trade cane sugar per serving, the spread has 33% less sugar than preserves, is certified organic and Non-GMO Project Verified. An organic pioneer for 30 years, Crofter’s Organic offers more nutritious options made with high-quality varietal fruit.

BOV Solutions PLMA Show Booth #H1117 BOV Solutions is a pioneer and leading-edge bag-on-valve and traditional aerosol manufacturer servicing the personal care, OTC, sun care, baby care, senior care, cooking spray, food, beverage, pet care, air care and household channels. The facility is SQF Certified and FDA Registered: Third-party CFR 110/210/211 audited.

BOV Solutions www.bovsolutions.com 704-872-7277

Catania Oils www.cataniaoils.com 800.343.5522

Crofter’s Food Ltd. www.croftersorganic.com 705.746.6301

Furlani’s Food Corporation PLMA Show Booth #3719 Furlani’s is North America’s leading manufacturer of value-added bread. Our specialties are garlic bread, garlic toast, biscuits and breadsticks. We are the largest supplier of frozen grocery private label programs and the “Side-Bread Experts” to the foodservice trade.

Furlani’s Food Corporation www.furlanis.com 877.317.7146 SPONSORED CONTENT

★★★★

Store Brands / November 2019 / www.storebrands.com

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Global Tissue Group Inc. PLMA Show Booth #H1506 Through excellence in product delivery to innovative manufacturing processes, Global Tissue Group (GTG) has become a leading converter of household paper products. GTG is one of the few converters to provide three levels of paper quality: standard, premium and ultra-premium. With all the success in innovation, GTG is the low-cost provider of high- quality store brand paper products for all retail channels.

Global Tissue Group, Inc. www.globaltissuegroup.com 631.419.1300

J&J Snack Foods Corp. PLMA Show Booth #F1317 Our delicious Funnel Cake Sticks are everyoneâ&#x20AC;&#x2122;s favorite carnival treat to eat. This nostalgic, bite-size dessert is great for entertaining. Just serve them up traditionally with powdered sugar or your favorite topping or dip.

J&J Snack Foods Corp. www.jjsnack.com 888.JJSNACK

Great Lakes Cheese PLMA Show Booth #F9510 Our new On-The-Go Snacks are perfect for grab-n-go convenience! With three unique cheese, nut and dried-fruit combinations, snackers everywhere will rejoice. Flavor combinations include: sharp yellow cheddar cheese with cherry-infused cranberries and roasted sea-salted cashew pieces; pepper jack cheese with raisins and honey-roasted peanuts; and sharp white cheddar cheese with dried cranberries and roasted sea-salted almonds.

Great Lakes Cheese www.greatlakescheese.com 440.834.2500 Italian Rose Garlic Products LLC PLMA Show Booth #F7610 Italian Rose, the leading producer of fresh, refrigerated, produce-based salsa and bruschetta, introduces a full line of natural salsas available to store brand customers. Using cold pasteurization technology, these items offer fresh flavor and a 90-day shelf life.

Italian Rose Garlic Products LLC www.italian-rose.com 800.338.8899

Massimo Zanetti Beverage USA PLMA Show Booth #F7405 Join us as we travel the world one cup of coffee at a time! Highland Village Reserve contains only the best 100% Arabica whole beans derived from mountainous regions at high altitudes. Sourcing these superior coffees at origin means that our buyers get first choice of the finest, hand-picked 100% Arabica coffee beans. Naturally dried in the sunâ&#x20AC;&#x2122;s warmth, our super-premium coffees are expertly milled to create the purest cup available.

Massimo Zanetti Beverage USA www.mzb-usa.com/corporatebrands 757.215.7300 Marketing By Design (MBD) PLMA Show Booth #6603 Founded in 1990, MBD is a branding and packaging design firm with offices in Boston, San Diego, Phoenix, China and the United Kingdom. MBD has a proven track record for creating intuitive design systems for retailers, while rolling out over 10,000 SKUs per year.

Marketing By Design (MBD) www.mbdesign.com 978.998.6600

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SPONSORED CONTENT

With the ketchup category seeing a significant push toward reduced or no sugar options, the Ketchup Experts at The Fremont Company will be featuring an Organic 50/50 recipe. By reducing the sugar and sodium content by 50%, this ketchup formulation appeals to a broad spectrum of new consumers such as diabetics and keto and paleo dieters, among others.

The Fremont Company www.PLKetchup.com 419.334.8995

★★★★

Store Brands / November 2019 / www.storebrands.com

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Solving Big Problems, Inspiring Bold Ideas

U.S. Alliance Paper Inc. PLMA Show Booth #H2105 Island U.S. Alliance Paper will feature its full range of custom household private label products and paper grades, and its Ultra-Premium Azure control brand — ready to shelve in eye-catching packaging.

U.S. Alliance Paper Inc. www.usalliancepaper.com 631.254.3030

Westrock Coffee Roasting LLC PLMA Show Booth #F3246 Enjoy a variety of coffees from around the world with Westrock Coffee’s Mixed Brew Box. This 100-count box of single-serve pods is packed with four coffees unique in roasts levels, taste profiles and origins, giving you a plethora of coffees sure to fit the preferences of any palate.

Westrock Coffee Roasting LLC www.westrockcoffee.com 501.975.1514

Woeber Mustard Manufacturing Company PLMA Show Booth #8415 Woeber’s Simply Supreme Honey Mustard is premium tier honey mustard blended with real clover honey, pure cane sugar, imported mustard flour and select spices. Blended to perfection, this exceptional mustard can be the perfect complement to your brand portfolio. It’s a gold medal winner! With more than 100 years of experience, our expertise in producing high-quality, cost-effective products can help your brand grow its private label sales. We can use your recipe, one of our own, or custom formulate a flavor that’s perfect for your brand. Woeber’s — since 1905!

Woeber Mustard Manufacturing Company www.woebermustard.com 800.548.2929

EnsembleIQ is a premier business intelligence resource that believes in Solving Big Problems and Inspiring Bold Ideas. Our brands work in harmony to inform, connect, and provide predictive analysis for retailers, consumer goods manufacturers, technology vendors, marketing agencies and service providers.

Magazines | Events | Digital Media Solutions Research | Custom Content SPONSORED CONTENT

www.storebrands.com / November 2019 / Store Brands

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TRENDING

BUILDING A WARDROBE

Private label clothing is catching the attention of retailers on the hunt for higher profit margins and brand growth BY NEVENKA JEVTIC

Let’s face it: Consumers love affordable clothing. Trends may come and go but getting a good deal on a great outfit never goes out of style. In fact, some folks even like to brag about it. Who could blame them? Looking like a million bucks without spending a fortune is just so gratifying. Now, more retailers are catching on that private label clothing draws in customers, builds loyalty and captures higher profit margins. Seems like a nobrainer, right? But, as with most things, the reality is often very different. The fact is food retail and clothing retail do not have a lot in common. “The core competencies associated at being a good food retailer and clothing retailer only partially overlap — even less if you are talking about fashion retail,” says Tory Gundelach, vice president of retail insights for Kantar Consulting. But many retailers have taken the leap anyway with some managing to find and maintain success for years. “Fifteen years ago, you would not have identified Costco as a major apparel retailer,” says Matt Sargent, senior vice president of Magid, “but now [its] Kirkland Signature [store brand] is a wardrobe staple.” Fred Meyer stores have also been selling clothing for quite some time. Its parent company, The Kroger Co., is also offering own brand clothing. Last year, the retailer announced the rollout of its Dip clothing line to 300 of its Fred Meyer and Marketplace stores. “During the product development process, we were intentional about creating a brand that’s unique and resonates with our shoppers — and we believe we’ve done just that,” said Christina Groth, Kroger’s vice president of general merchandise, in a statement. PLANNING IT OUT The higher margins associated with private label clothing can also give retailers that competitive edge to keep up

with the inevitable changes to the retail landscape. “Particularly, as online grocery rolls out, grocers are looking for ways to compensate for those additional costs, [and] selling a more profitable merchandising mix is one of those ways,” Gundelach says. With so much potential upside, private label clothing seems worth the risk. What could go wrong? Without a plan, plenty. “The most critical element will be store planning, and not just dropping this new category into the store,” Sargent says. “Retailers will need to ensure that they have enough space in the store to create a separate clothing area rather than it feeling as if it is right on top of the milk and oranges.” Kantar Consulting Senior Analyst Tiffany Hogan agrees. “Successful fashion brands run on merchandise planning systems, which operate very differently than category management employed in traditional grocery,” she says. “Grocers will need to think about the type of apparel they want to offer (whether it’s more fashion- and trend-driven or focused on basics), and employ the right type of planning system to avoid issues with in-stocks or inventory management.” The type of apparel should line up with what customers already expect from that retailer. But the likelihood of success is found in the basics. “There is a spectrum here,” Gundelach explains. “Selling basic socks and underwear or even T-shirts and flip flops is a lot more achievable than a grocer succeeding in selling jeans and women’s shoes.” Robert Anderson, president and CEO of Store Brand Consulting, also suggests that retailers stick to the basics but could also offer seasonal items like swimsuits, gloves and winter hats. Price points should remain under $20 and the quality needs to be above average without being too trendy. “They need an entry and exit plan and should have

Store Brands / November 2019 / www.storebrands.com

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TRENDING

Kroger introduced its Dip clothing line last year. The line features items for the whole family that the retailer says are “simple, stylish and comfy.” a markdown schedule to keep inventory fresh and current,” advises Anderson, a former Walmart executive who began the retailer’s Great Value food private brand line. Seasonality and scarcity play an important role in driving consumer browsing behavior and engagement in apparel and other non-grocery categories. “Knowing that an item may not still be available on their next trip can increase impulse buying,” Sargent explains. AVOID THOSE SNAGS In any store brand product category, consumer confidence is integral to success. Gaining and retaining that trust takes time. “I think the key for grocers to be successful in apparel, and particularly private label apparel, is to build up credibility with shoppers over time,” Gundelach says.

For those retailers in more of a rush, consider a namebrand apparel partnership, she suggests. But do so thoughtfully. “Partnering with a well-known apparel brand could also be a way to build credibility more quickly,” she explains. “But this doesn’t always work if the store experience or the brand equity pairing doesn’t make sense to shoppers.” Kroger, for instance, recruited fashion designer Joe Mimran, best known for Club Monaco, Pink Tartan and Joe Fresh, to lead the creative and design vision of its Dip clothing line. For some retailers, however, the addition of private label clothing might not fit at all with their focus and would potentially dilute their brand. “For example, Whole Foods Market has built its brand with a specialty focus of natural foods and wellness, and would likely struggle to introduce an apparel offering,” Sargent says.

www.storebrands.com / November 2019 / Store Brands

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TRENDING Instead, retailers known for their broad selection would be more successful in expanding to other categories like apparel, he adds. Just look at Target. The Minneapolis-based retailer recently launched not one but three new lingerie brands and will phase out an existing brand of lingerie and sleepwear called Gillian & O’Malley. Target has been selling private label clothing successfully for years, adding new lines and removing others. In addition to the launch of the lingerie brands, Target recently added “Bra Fit Studios” in retail locations to help customers find the right fit. This type of interactive merchandising and promotion will likely serve Target well as its customer base has come to expect a lot from the retailer. Store Brand Consulting’s Anderson has a few more suggestions regarding merchandising and marketing. “I’d put the seasonal items on the endcaps with a nice point of purchase on top calling out the seasons,” he says, adding that clothes could be organized by gender, i.e. mens, womens, boys and girls. Also have a set section to put markdowns in, and again do those by gender and sizes, Anderson notes. According to Sargent, promotions should center on the store’s unique product offering and limited avail-

Target has been selling private label clothing successfully for years, adding new lines and removing others. ability in order to create a sense of urgency. “From a marketing and product selection perspective, it’s important to understand what the customer expects from your brand,” he explains. “[It’s important] to align your apparel offerings and messaging with those already-held beliefs. Retailers have to keep in mind just how different the apparel category really is from grocery. “Apparel has a much longer lifecycle and requires an understanding of shifting trends, as well as a longer

Sustainable packaging today for a better tomorrow

Today’s consumers enjoy great choices when purchasing fresh beverages. But what about the sustainable packaging they seek?

For store brands wanting to be more relevant to their customers, the PlantCarton™ package is a plant-based solution that can reduce plastic use by about 80%.* The sustainability edge comes from the fact that PlantCarton™ packaging is made with at least 70% renewable material; paper made from trees where responsible forestry practices are used.

North American Packaging for Evergreen Packaging. “This is a sustainability story that retailers can take advantage of today when they switch to PlantCarton™ packaging,” he added.

PlantCarton™ packaging is also recyclable. The line includes Traditional and also RenewablePlus™ which offers options made with up to 99% renewable materials when a barrier coating produced from sugarcane is used.

• Reduce your plastic use by about 80% *

PlantCarton™ packaging means you can: • Offer a sustainable packaging option to meet consumers’ growing demands

• Distinguish store brands on the shelf with slimmer carton profiles with SmartPak™ options • Bring in a natural fit for clean label products

“We are already seeing companies express interest in transitioning to PlantCarton™ packaging from petroleum-based packaging,” said DeWitt Clark, Vice President of Sales PlantCarton.com Sustainable packaging today for a better tomorrow. *PlantCarton™ packages 52-64oz use about 80% less plastic than comparably sized plastic packages. RenewablePlus™ line is higher.

Store Brands / November 2019 / www.storebrands.com

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Store Brand Foods – Perimeter of Store Program Apr 19-21, 2020 in Lombard, IL

Store Brand Foods – Center Store Program Apr 20-23, 2020 in Lombard, IL

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TRENDING shelf life which may require more management to move product via markdowns,” Sargent explains. Gundelach agrees, noting that the in-store merchandising of apparel needs to feel different than the experience shoppers get in the grocery aisles. “From a marketing perspective, it’s important that grocers recognize the need to take a different approach with apparel, from the way promotions are messaged to the style of photography they are using,” she says. CHANGE OF CLOTHES When it comes to differentiation in clothing, store brands need to both stand out and blend in — stand out with unique style and attractive pricing, and blend in with the retailer’s overall brand. “In a competitive apparel market, grocery’s biggest advantage is convenience,” Kantar Consulting’s Hogan says, noting that grocery’s biggest differentiator is its ability to provide an easier, faster way to access the product. “Incorporating apparel into an online assortment,

making it available for BOPIS (buy online, pickup in-store) services, and offering additional loyalty perks for purchasing the category are all ways grocers can provide differentiated and unique value,” she adds. But according to Anderson, differentiation isn’t always necessary. “Get too far out of the box on colors, styles and buying too much of a fad versus keeping more to the basics will only build inventory and increase markdowns leading to reduced profits,” he warns. To those retailers that are just now rolling out their own brand apparel, Sargent suggests taking things slow. Consumers know that it takes a different expertise to drive authority in fashion versus food, according to Hogan. “While private label apparel may take a while to gain shoppers’ trust, grocers can lean on common trends such as organic or sustainable products or easy, low-price solutions that will let their shoppers know that the retailer’s ethos and priorities are consistent across the two offers,” Hogan adds. SB

Store Brands / November 2019 / www.storebrands.com

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CATEGORY INTELLIGENCE CHEESE

BEYOND THE BASICS The cheese sector is becoming an increasingly active private brand battleground. More retailers are seeking to have their store brands stand out in the crowded sector by offering unique selections that are developed in the U.S. and internationally. Monrovia, Calif.-based Trader Joe’s, for instance, is spotlighting its imports from Italy, France, Spain, Holland, Germany and New Zealand, while Rochester, N.Y.-based Wegmans Food Markets is highlighting such Italian offerings as Taleggio, Piave and Basajo Blue. Italian cheeses will account for about 44% of sector revenues in 2019, with mozzarella generating about 35% of dollar sales, reports John Madigan, lead industry research analyst for market researcher IBISWorld in its July “Cheese Production in the US” report. American cheese, he notes, will generate about 39% of industry revenues, with cheddar accounting for approximately 28% and brick, Colby and cheese curd comprising about 11%. “There is growing demand for gourmet and specialty cheeses, particularly from France and Italy,” Madigan states. “Shifts in consumer preferences will continue to drive industry sales.” Yet, getting consumers to purchase unfamiliar cheeses, and especially specialty varieties, still can be vexing, and requires merchandisers to take much of the guesswork out of newer options, analysts say. Indeed, one of the biggest merchandising challenges is displaying cheese in a way that both educates shoppers and invites them to make a purchase, says Michelle Trowbridge, channel marketing manager for the Madison-based Dairy Farmers of Wisconsin. “Cheese cases may seem intimidating to consumers who don’t know cheese,” she states. “Many products look the same and without knowledgeable staff, shoppers may not know what to look for. They feel comfortable in only buying what they know.” Retailers can increase activity by holding sampling and demo events, as Dairy Farmers of Wisconsin research reveals that shoppers are nine times more likely to purchase cheese they tasted, Trowbridge says. “Stores then can continue to engage with shoppers through meal tips and recipes to encourage repurchase or the trying of new cheeses,” she states. “Showcasing diverse cuts and assortments layered with merchandising and signage also will draw shoppers in and allow them to easily find what they are looking for.” In addition, retailers should collaborate with their suppliers on all aspects of category management,

including assortment, pricing and promotions, says Neil Stahurski, senior customer insights manager for Great Lakes Cheese Co., a Hiram, Ohio-based supplier. “It is essential that retailers treat their store brands like national brands, with effective packaging, creative signage and proper product placement,” he states.

MONITOR THE PRODUCT MIX

Suppliers have the expertise to pinpoint the optimal products that retailers should offer and detail how the operators can educate consumers about the cheese, says Arturo Nava, marketing director for Nuestro Queso LLC, a Chicago-based supplier of Hispanic cheeses. “Retailers need to differentiate their offerings from competitors,” he says. “You want to offer the staples while also innovating with more flavors.” More shoppers, he notes, are seeking betterfor-you natural cheeses that are developed from hormone-free animals. “Consumers want cleaner labels that are easy to understand and to have products that are not too deeply processed,” Nava states. That growing wellness consciousness is leading more merchandisers to offer a range of reducedfat or low-fat products, Madigan says, noting that processed cheese is declining in popularity as more consumers opt for healthier options. “Increasing nutrition and dietary awareness among

DO offer better-for-you natural cheeses developed from hormone-free animals.

DON’T forget that cheese needs to be merchandised in a way that both educates shoppers and invites them to make a purchase. www.storebrands.com / November 2019 / Store Brands

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CATEGORY INTELLIGENCE CHEESE consumers is a strong determinant for demand of products,” he says. “While cheese offers protein and calcium, it can also be high in sodium and fat.” Because it’s crucial to determine the best mix of cheese options for each store and the right balance of items on shelves including shreds, slices and chunks, operators should conduct shopper research to learn the cheese purchase decision hierarchy, Stahurski states. “Minimizing the amount of duplication between brands across forms, flavors and sizes will help streamline the overall shopping experience,” he says. While Stahurski reports that unique blends with new, bold and spicy flavors are generating greater activity, he adds that “we still see solid growth in the tried and true cheese types like mozzarella, cheddar and Swiss.”

Natural Cheese/Shredded Private Brands

All Brands

Dollar Sales (in millions)

$3,043.7

$4,818.4

Change vs. Year Ago

4.7%

1.7%

Dollar Share

63.2%

100%

Unit Sales (in millions)

997.2

1,599.9

Change vs. Year Ago

5.5%

3.1%

Avg. Price Per Unit

$3.05

$3.01

Natural Cheese/Chunks Private Brands

All Brands

Dollar Sales (in millions)

$1,173.4

$3,550.3

Change vs. Year Ago

1.9%

0.9%

Dollar Share

33.1%

100%

Unit Sales (in millions)

362.8

912.5

Change vs. Year Ago

4.6%

1.1%

Avg. Price Per Unit

$3.23

$3.89

Natural Cheese/Slices

Private Brands

All Brands

Dollar Sales (in millions)

$1,016.7

$2,285.3

Change vs. Year Ago

7.3%

1.9%

Dollar Share

44.5%

100%

Unit Sales (in millions)

376.6

737.2

Change vs. Year Ago

8.5%

3.4%

Avg. Price Per Unit

$2.70

$3.10

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 September 8, 2019. 66

Yet, a focus by younger shoppers on more adventurous eating and innovative selections is helping to trigger launches of novel offerings, Stahurski states.

AN AVALANCHE OF ALTERNATIVES

“Cheese is very dynamic and versatile, and people also are looking beyond its traditional uses, such as just being part of a sandwich,” says Eric Richard, industry relations coordinator for the Madison, Wis.-based International Dairy-Deli-Bakery Association (IDDBA). The use of cheese for snacking is a potentially strong growth category, he notes, particularly if products are available in single-serve or on-the-go packaging. Offering smaller portion sizes also enables retailers to generate trials of specialty or other higher-priced items “that shoppers normally would stay away from because of the cost,” Richard says. Retailers can expose shoppers to different selections by including a variety of cheeses in stores’ prepared foods offerings, he says. “Those consumers might then check out those cheeses in their more original form in the cheese department and on cheese islands,” Richard states. The most effective merchandising will emphasize cheese health attributes, such as being a good source of protein with minimal ingredients, along with its role as a snack or meal component while offering wider arrays of unique options, he says. “Consumers are more open to trying new selections and the younger generations are particularly exploratory,” Richard adds. Indeed, Trowbridge notes that some of the fast-growing cheeses offer unique consumption experiences, including raclette (traditionally melted on the wheel and scraped over boiled potatoes); juustoleipa (a toasted cheese that can be heated by dunking it in coffee); quark (a fresh, spoonable cheese that can be eaten like yogurt); burrata (a parcel of fresh mozzarella stracciatella and sweet cream that oozes over the contents of a plate when cut); and natural cheese crisps (natural cheese that has been baked or dehydrated to form a crunchy snack). “Carefully curating the own brand offering can address shopper trends from snacking to specialty cheese,” Trowbridge says. “Accessible specialty varieties at accessible price points can attract shoppers new to the specialty cheese case and generate trial and incremental sales of gourmet accompaniments too.” SB

Store Brands / November 2019 / www.storebrands.com

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MA 2019 PL

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CATEGORY INTELLIGENCE JAMS, JELLIES AND PRESERVES

GONE PREMIUM

Fruit-forward, lower-sugar products with cleaner labels take center stage

DO offer store brands in the “big six” flavors of strawberry, raspberry, blackberry, blueberry, cherry and apricot.

Some time ago, jams, jellies and preserves began an evolution from rather ordinary pantry staples into something decidedly more glamorous. The ingredients got more exotic, and formulations started including unique fruits, hot peppers, spices, flowers, herbs and spirits. The flavor combinations became more exciting. Packaging and labeling grew more lovely and inviting. The category moved upscale, up the ladder, uptown. Meanwhile, consumers broadened their view of jams, jellies and preserves and have welcomed them in more places — paired with meats and cheeses for simple snacks or in more elaborate charcuterie creations, as glazes for main-course meats, as savory condiment additions to meaty sandwiches or as ingredients in desserts and cocktails. The expectation is for jams, jellies and preserves to feature fuller, more intense flavors, organic ingredients and cleaner ingredient decks — in other words — to be more premium. Hovering over all these trends, as in other categories, is the continuing consumer concern over sugar. Retailers are responding by introducing lower-sugar fruit spreads.

NATURE’S CANDY

Swapping in more fruit to make up for less cane sugar is how Crofter’s Food crafts its fruit spreads to have onethird less sugar and calories than other fruit preserves, says Gerhard Latka, co-founder and co-owner with

wife Gabi of the Parry Sound, Ontariobased manufacturer. The family business includes the couple’s sons: Daniel, Sebastian and Lukas. Crofter’s products “definitely taste fruitier because of the high fruit and low sugar content,” and because of that, are a bit more delicate and should be consumed within 20 days of opening, Latka says. “The fruit is what makes the spread, so we source for flavorful varieties that are carefully cultivated and tended to. You can’t make a good jam without good fruit. Our suppliers are one of the most important parts of our business,” Latka adds. Crofter’s buys its fruit from small, independent organic farmers in Serbia, Chile, Canada, Poland, Spain, Argentina, Sicily, Brazil, Mexico, California and Turkey. Crofter’s makes the high-end Signature SELECT Preserves for Boise, Idaho-based Albertsons Cos. Launched in October 2018, the Signature SELECT line includes cherry, apricot, wild blueberry, four fruit, blackberry, raspberry and strawberry flavors, with three more slated for future introduction. All Crofter’s spreads are certified organic and nonGMO Project Verified, and for the company what was old is new again. Its products have been organic and low-sugar since the company introduced its first organic fruit spreads to the U.S. in 1991. It would not be until 2000 that the U.S. Department of Agriculture (USDA) would publish its National Organic Program (NOP) organic regulations, Latka points out. “Today buyers are asking for organic, premium products. Today organic is the new specialty,” Latka says. Because of Crofter’s long history producing organic product, it has established a sustainable organic supply chain and is able to service growing demand, Latka says. Crofter’s own brands include premium spreads made with Fair Trade Certified cane sugar and Just Fruit Spreads made with 100% fruit ingredients sweetened with organic grape juice concentrate.

FLAVOR TRENDS

DON’T forget to tell a story about what’s behind your product, such as how and where it’s made.

A store brand fruit spread selection should be based in the “big six” flavors of strawberry, raspberry, blackberry, blueberry, cherry and apricot, Latka advises. “Adding a more exotic fruit as an in-and-out for a limited time is a winning strategy for retailers — for instance, mango during the summer months,” Latka adds. “That way, the jam aisle stays interesting, and if the consumer really accepts the flavor, you can make it permanent.”

Store Brands / November 2019 / www.storebrands.com

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Jellies/Jams/Honey

Private Brands

All Brands

Dollar Sales (in millions)

$483.2

$1,643.1

Change vs. Year Ago

1.1%

0.4%

Dollar Share

29.4%

100%

Unit Sales (in millions)

139.3

453.4

Change vs. Year Ago

2.5%

-0.7%

Avg. Price Per Unit

$3.47

$3.62

Shelf-Stable Jam/Jelly/Preserves Private Brands

All Brands

Dollar Sales (in millions)

$180.3

$969.0

Change vs. Year Ago

0.7%

0.6%

Dollar Share

18.6%

100%

Unit Sales (in millions)

77.7

336.0

Change vs. Year Ago

2.0%

-0.3%

Avg. Price Per Unit

$2.32

$2.88

Monrovia, Calif.-based Trader Joe’s recently introduced its Apple Cider Jam for the fall. Made with Maine and Washington apples, New England apple cider, cinnamon, allspice, cardamom, cloves, coriander, ginger and mace, it’s sweet and tart with chunks of apples, according to the company’s website. In addition, Trader Joe’s carries an extensive line of organic and reducedsugar fruit preserves. The Kroger Co.’s Private Selection brand, promoted by the Cincinnati-based grocer as “authentic, artisaninspired” and gourmet, has a fruit spread lineup that includes: Sweet Honey Fig Spread, California Red Pepper Jelly, Pineapple & Red Pepper Jelly, Bitter Sweet Orange Marmalade Preserves, Triple Berry Preserves and Oregon Strawberry Preserves. There is a revival in the ways people are using jam for more than just toast or PB&J sandwiches, Latka says. “Jam is now a featured ingredient for cheese boards and fancy appetizers,” he says. Retailers should make their branding lively, Latka advises. “Show that you can use jam for this, you can use jam for that. React to trends — otherwise you’re missing the boat,” he adds. SB

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*IRI Total US Mulo+Conv: 52 Week Ending 9-8-2019 Unit Sales **December 2016 Penn State University Sensory Study

Store Brands / November 2019 / www.storebrands.com

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CATEGORY INTELLIGENCE LAUNDRY PRODUCTS

A CLEAN SLATE When it comes to merchandising laundry products, private brands have hardly anywhere to go but up. Indeed, store brands account for fewer than 4% of sales in most sector categories. But by offering lowerpriced selections with attributes that match or exceed those of the national brands while still responding to evolving shopper demands, retailers will be in position to boost activity, analysts note. Those demands include products with unique scents and better clothing protection, states market researcher Mintel in its September “Home Laundry Products US” report. While Mintel notes that the market is active, with 99% of laundry doers purchasing products and the majority of users maintaining a repertoire of three to four laundry selections, it states that altering consumer purchasing patterns is not easy as two-thirds of laundry buyers usually choose the same brand, and one-quarter seek products with the lowest prices. “While the market enjoys strong penetration, consumers take a fairly routine approach to shopping the category, relying on familiar brands they trust with little motivation to change,” Mintel reports. Because consumers prioritize stain removal and scent when shopping for laundry detergent, Mintel states that offering products with those claims is “a cost of entry in the category,” and that it is essential for brands to also tout other attributes in order to stand out in a crowded market, such as being eco-friendly. “Ethical and moral brand qualities are fast becoming expectations rather than a value-added feature for younger adults, an important demographic for the laundry market,” Mintel reports. “This is driven by ingredient concerns as well as their familiarity and trust in the performance of natural options being on par with the mainstream.” There also is greater interest in convenience-oriented selections with single-dose detergent packs growing in popularity, says Brian Sansoni, senior vice president of the Washington, D.C.-based American Cleaning Institute (ACI). “They are extraordinarily convenient for busy households,” he states, noting that the packs eliminate the need for consumers to pre-measure detergent before washing. Because the packs are ultra-concentrated, users require less water and there is less packaging necessary to transport products to retail outlets, Sansoni says. “The product forms have an identifiable sustainabil-

ity profile,” he states, which is important because the “green factor is a stronger consideration for many shoppers” and is resulting in a larger array of plant-based laundry and fabric care products. In addition, more detergents are supporting cold water cleaning, enabling consumers to save energy when washing, Sansoni says. The 2019 ACI National Cleaning Survey found that 52% of consumers use cold water half the time or more for their main wash cycle; 32% use warm water and 14% use hot water. The nationally representative online survey of 1,000 adults included an oversample of 500 millennials. Merchandisers, meanwhile, are seeking to generate higher profit margins for their eco-friendly lines by using recycled materials and organic compounds, states Kush Patel, research analyst for market researcher IBISWorld, in its “July Soap & Cleaning Compound Manufacturing in the US” report. “Although standardized products typify the industry, consumers perceive eco-friendly products as differentiated, thereby lowering competition within the segment,” he notes. “As disposable income grows, more consumers will purchase high-cost, environmentally friendly cleaning products.” Marketers will increasingly emphasize such factors as biodegradability and aquatic toxicity, Patel states. He adds that retailers of store brands are set to generate

DO consider offering products with novel ingredients to differentiate from national brands.

DON’T forget the convenience factor, such as offering single-dose detergent packs that continue to grow in popularity. www.storebrands.com / November 2019 / Store Brands

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Laundry Prewash/Additive Private Brands

All Brands

Dollar Sales (in millions

$22.1

$1,336.4

Change vs. Year Ago

-4.1%

8.3%

Dollar Share

1.7%

100%

Unit Sales (in millions)

5.7

226.5

Change vs. Year Ago

-2.1%

3.0%

Avg. Price Per Unit

$3.88

$5.90

Liquid Laundry Detergent Private Brands

All Brands

Dollar Sales (in millions)

$140.4

$5,482.9

Change vs. Year Ago

7.9%

1.6%

Dollar Share

2.6%

100%

Unit Sales (in millions)

19.6

742.6

Change vs. Year Ago

8.3%

-1.7%

Avg. Price Per Unit

$7.16

$7.38

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 Sept. 8, 2019.

progressively greater income as industry consolidation will enable the operators to garner lower prices from their suppliers and offer lower-cost items to consumers. Many retailers are competing on price and only providing store brand products that mimic the national brands, instead of launching selections with novel attributes, says Drew Harrison, CEO of Value Smart Products, a Suwanee, Ga.-based laundry products supplier. Itâ&#x20AC;&#x2122;s also difficult for products to stand out in the congested laundry detergent sector, Harrison adds, as â&#x20AC;&#x153;there is so much advertising, so many brands and so many price points.â&#x20AC;? Many retailers also are making merchandising mistakes that limit private label activity, he states. Instead of situating a lower priced store brand next to the comparable high priced national brand, for instance, operators often place a smaller-sized national brand selection next to the private brand. Shoppers might unwittingly compare a $4.99 store brand with a smaller $3.99 national brand instead of a similar $6.99 national brand, Harrison says. SB

SFI-01867

Store Brands / November 2019 / www.storebrands.com

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ADVERTISER INDEX Agropur Ingredients...................................................15 B.O.V. Solutions...........................................................17 CaseStack......................................................................23 Catania Oils..................................................................18-19 Colordyne Technologies............................................44 Crofterâ&#x20AC;&#x2122;s Food Ltd.......................................................69 Delgrosso Foods Inc...................................................48 Disc Graphics...............................................................47 ECRM............................................................................63 EVERGREEN PACKAGING....................................62 Furlaniâ&#x20AC;&#x2122;s Food Corporation......................................7 Global Tissue Group...................................................2-3, 76 Great Lakes Cheese Co...............................................12 Italian Rose Gourmet Products................................25 Italian Trade Agency..................................................39A-T J&J Snack Foods Corp................................................27 JTM FOODS.................................................................70 Massimo Zanetti Beverage USA...............................9,64 MBD Design.................................................................67

National Confectioners Association........................47 OKA Products..............................................................43 Private Brands Consortium PBC.............................11 Red Gold, LLC.............................................................75 Request Foods Inc.......................................................29 Resolute Tissue.............................................................72 Royal Paper Converting Inc......................................49 Schlotterbeck & Foss...................................................45 Seneca Foods Corporation........................................46 Snack Innovations, Inc...............................................13 Snak King Corp...........................................................53 The Fremont Company..............................................50 The Spice Lab................................................................54 The Wornick Company..............................................40,42 Tower Laboratories.....................................................14 US Alliance Paper.......................................................5 Westrock Coffee..........................................................28 Woeber Mustard Mfg. Co..........................................51 Woodstock Farms.......................................................33

United States Postal Service

Statement of Ownership, Management, and Circulation (Requester Publications Only)

1. Publication Title

2. Publication Number

Store Brands 4. Issue Frequency

5. Number of Issues Published Annually

Monthly 7. Complete Mailing Address of Known Office of Publication

EnsembleIQ 8550 W. Bryn Mawr Suite 300 Chicago, IL 60631

(Not printer) (Street, city, county, state, and ZIP+4)

8. Complete Mailing Address of Headquarters or General Business Office of Publisher

9. Full Names and Complete Mailing Addresses of Publisher, Editor, and Managing Editor Publisher

10/1/2019 6. Annual Subscription Price

Neal Kahn

(Do not leave blank)

(Name and complete mailing address)

John Schrei EnsembleIQ One GateWay Center 11-43, Raymond Plaza, 16th floor Newark, NJ 07102

Editor

Published Nearest to Filing Date

Total Number of Copies

23,936

24,200

16,785

16,477

(Net press run)

(Include direct written request from recipient, telemarketing and Internet re-

quests from recipient, paid subscriptions including nominal rate subscriptions,

Legitimate Paid

employer requests, advertiser's proof copies, and exchange copies.)

Paid and/Or

(2) In-County Paid/Requested Mail Subscriptions stated on PS Form 3541

Requested

(Include direct written request from recipient, telemarketing and Internet re-

Distribution

quests from recipient, paid subscriptions including nominal rate subscriptions,

(By Mail

employer requests, advertiser's proof copies, and exchange copies.)

and

(3) Sales Through Dealers and Carriers, Street Vendors, Counter

Outside

Sales, and Other Paid or Requested Distribution Outside USPS

the Mail)

(4) Requested Copies Distributed By Other Mail Classes Through the USPS

Total Paid and/or Requested Distribution [Sum of 15b. (1), (2), (3), and (4)] (1) Outside County Nonrequested Copies as stated on PS Form 3541 (include

(Name and complete mailing address)

Gina Acosta 8550 W. Bryn Mawr Suite 300 Chicago, IL 60631

Premium Sales and Requests including Association Requests, Names

Nonrequested

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Distribution

(2) In-County Nonrequested Copies as stated on PS Form 3541 (include

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Outside

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Total Nonrequested Distribution (Sum of 15d (1), (2), (3), and (4))

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Copies not Distributed (See Instructions to Publishers #4 (page #3))

Total (Sum of 15f. And 15g.)

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EnsembleIQ

Complete Mailing Address

8550 W. Bryn Mawr Suite 300 Chicago, IL 60631

PS Form 3526-R, July 2014 (Page 2 of 4) 16

Electronic Copy Circulation

Requested and Paid Electronic Copies

Total Requested and Paid Print Copies (Line 15c) + Requested/Paid

16,785

16,477

7,107

7,723

23,892

24,200

23,892

24,200

70.3%

68.1% No. Copies of Single Issue

Percent Paid and/or Requested Circulation (Both Print & Electronic Copies)

12. Tax Status (For completion by nonprofit organizations authorized to mail at nonprofit rate) (Check one) The purpose, function, and nonprofit status of this organization and the exempt status for federal income tax purposes: x Has Not Changed During Preceding 12 Months o Has Changed During the Preceding 12 Months (Publisher must submit explanation of change with this statement)

7,723

Published Nearest to Filing Date

Electronic Copies (line 16a) (16b divided by 16c X 100)

7,107

During Preceding 12 Months

Total Requested Copy Distribution (Line 15f) + Requested/Paid

Average No. Copies Each Issue

Electronic Copies (line 16a) c.

PS Form 3526, July 2014(Page 1 of 3 (Instructions Page 3)) PSN 7530-01-000-9931

Sample Copies, Requests Over 3 years old, Requests induced by a

Managing Editor (Name and complete mailing address)

EnsembleIQ

No. Copies of Single Issue

During Preceding 12 Months

(1) Outside-County Paid/Requested Mail Subscriptions stated on PS Form 3541.

Telephone

773-992-4407

Sep-19

Average No. Copies Each Issue

Extent and Nature of Circulation a.

(e.g. First-Class Mail)

Lawrence Aylward 8550 W. Bryn Mawr Suite 300 Chicago, IL 60631

Full Name

14. Issue Date for Circulation Data Below

Store Brands

15.

$125.00 Contact Person

(Not printer)

EnsembleIQ 8550 W. Bryn Mawr Suite 300 Chicago, IL 60631

13. Publication Title

3. Filing Date

0190-9851

2,400

2,233

19,185

18,710

26,292

26,433

73.0%

70.8%

I certify that 50% of all my distributed copies (electronic and print) are legitmate requests or paid copies.

17. Publication of Statement of Ownership

PRIVACY NOTICE: See our privacy policy on www.usps.com

Publication of the Statement of Ownership for a Requester Publication is required and will be printed in the issue of this publication. 18. Signature and Title of Editor, Publisher, Business Manager, or Owner

Date

I certify that all information furnished on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/or civil sanctions (including civil penalties). PS Form 3526-R, July 2014 (Page 3 of 4)

www.storebrands.com / November 2019 / Store Brands

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CATEGORY CLOSEUP

Frozen Snacks

1924 WHAT THEY’RE SAYING “To gain a portion of the $16 billion incremental growth in snacking, retailers should consider the following strategies: • Be mindful of the four ways consumers snack (planned,impulse, on demand and experiential). • Channel strategies should be comprehensive and include top influencers, as well as assortment and innovation variations to avoid cannibalization. • All generations are important so cater to their differences and needs.” — Sally Lyons Wyatt, executive vice president and practice leader for Client Insights, IRI

The year that Clarence Birdseye developed the modern method for flash-freezing, which led to the first frozen food. Source: The New York Times

$2.3 $209 BILLION

MILLION

Size of the overall

Size of the private brand frozen appetizers and snack category, up 5.3% for the 52 weeks ending May 19.

frozen appetizers and snack category, up 3.8% for the 52 weeks ending May 19. Source: IRI

Source: IRI

$57BILLION

Size of the overall frozen food category in the United States. The top three frozen segments with the largest percentage of dollar growth through the end of 2018 are soups/sides, up 9.8%; appetizers/snack rolls, up 5.8%; and breakfast food, up 5.7%. Source: : American Frozen Food Institute and the Food Marketing Institute

47%

The percentage of consumers who say they often have three or more snacks a day. Source: IRI

Store Brands / November 2019 / www.storebrands.com

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