THE PULSE OF PRIVATE LABEL
MARCH/APRIL 2022
www.storebrands.com
HOW INFLATION AND SUPPLY CHAIN CHALLENGES ARE TESTING PRIVATE LABEL
P. 22
SPECIAL REPORT
For the second time, Store Brands is honoring the people, brands and products that are changing the private label landscape
001_SBR_Cover_0422.indd 1
4/7/22 9:52 AM
At Seneca, we're still doing things the way we always have - the right way. Think globally, grow locally.
99%
of our produce is grown by AMERICAN FARMERS
Please visit www.SenecaFoods.com to learn more about our company, people and products.
SB_FullPg_temp.indd 1
4/6/22 8:27 PM
Supercharging YOUR PRIVALE LABEL PROGRAM
100% Virtual
A Series of Niche Learning to Help You Grow Your Private Label Brand!
The 2022 Lineup of Topics Has been Announced!
SAVE THE BELOW DATES! A P R I L 2 7: Cosumer Trends J ULY 2 7: Sustainability SE P T 28 : Supply Chain
D EC 1 4 : Store Brands Industry Summit ON DE M AND: Nonfood Innovations
Learn more at StoreBrandsIndustryForums.com Interested in speaking or sponsoring? Natalie Filtser | National Sales Manager | 917-690-3245 | nfiltser@ensembleiq.com
SB_IndustrySummit_HA_0422.indd 1
4/7/22 11:30 AM
VOLUME 45 NO.2
13
28 Inside PLMA Global Retailers talk products, experts give industry forecasts and insight
COVER STORY
33 Food Waste Report How retailers are using private brands, technology to curb food waste
SPECIAL REPORT
For the second time, Store Brands is honoring the people, brands and products that are changing the private label landscape
10 Breakfast Update
Plant-based items, unique flavors fuel breakfast category
22 The State of Private Label
Industry experts weigh in on the current economic climate and its impact on the private label industry at large
06
Editor’s Note
08
Industry News
12
Questions/Answers with Kevin Pruitt, Food Lion’s beverage category manager
26
Questions/Answers with James Butcher, CEO, S4RB
32
Questions/Answers with Juan De Paoli, VP of Kroger’s Own Brands
Store Brands (ISSN-0190-9851; USPS # 0488-370) is published monthly, except January, May, July, December by EnsembleIQ, 8550 W. Bryn Mawr, Suite 200, Chicago, IL 60631. Subscriptions: One year, $100; two years, $182. One year, Canada $118; two years, $215 One year, foreign $135; two years, $225. One year, digital $70; two year, $130.Single copies $14 US, Canada & foreign $16. 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 Chicago, IL and additional mailing offices. Printed in USA. POSTMASTER: send all address changes to Store Brands PO Box 3200 Northbrook, IL 60065-3200. Copyright 2020 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. 44
Store Store Brands Brands ● January/February ● March/April 2022 2022 ● www.storebrands.com ● www.storebrands.com
004_SBR_Contents_0422_v1.indd 4
4/7/22 10:33 AM
U YO R
LABEL H
ERE
Your Label Belongs on Our Paper.
We may be soft when it comes to household paper. We are unwavering when it comes to making sure our customers’ shelves are stocked. That’s why we are one of the fastest-growing private label paper manufacturers in the country – we deliver what you need, at the best price, when and where you need it. And we’ll put that on paper. • Full range of ultra, premium, FSC® Certified, recycled and traditional paper grades • Paper towels, bath tissue, napkins, and facial tissues • Flexible, custom manufacturing, packaging and displays. For lower volume requirements, we offer our pre-packaged store brands: Azure® Ultra Premium, Daisy®, Delicate Touch®, and Earth One™ 100% Recycled.
www.usalliancepaper.com 631.254.3030 • info@usalliancepaper.com
SB_FullPg_temp.indd 1
©
2022 U.S. Alliance Paper, Inc.
4/6/22 8:28 PM
INTRODUCING MYSELF TO PRIVATE LABEL REFLECTING ON MY TIME AT STORE BRANDS SO FAR AND LOOKING AHEAD AT WHAT’S NEXT Prior to joining Store Brands in August of last year, I didn’t know a whole lot about the world of private label. When shopping at my local Kroger or Meijer, I never put much thought into the development, marketing and overall brand strategy of the store’s own brand products. Ignorantly, I never stopped to consider that maybe these products aren’t “generic alternatives” at all. Nearly nine months into my role as associate editor at Store Brands, I’ve learned more than I could have imagined about private label by covering the industry everyday. This knowledge has without a doubt influenced the way I look at products and shop in my personal life, and given me a new appreciation for store brand products. It’s always fun to see something on the store shelf that I wrote about on the Store Brands website, whether it be new flavors of a store brand product I already enjoy, or a new release entirely. I’m now aware of the nuances and details that go into expanding private label offerings. In a way, I feel that this March/April issue uniquely reflects all aspects of the private label landscape. In our State of the Industry feature, we examined the ongoing pressures impacting the category, such as supply chain issues and inflation. Our cover story is a feature on our 2022 Game Changers, giving shine to products, people and brands that are innovating private label amid uncertain times. Additionally, we covered the Private Label Manufacturers Association’s PLMA Global online trade show, which allowed retailers to detail award-winning products, and industry experts to share research on the latest trends in grocery and retail. The issue also includes Q&A’s with industry leaders that I’m sure you will learn something from. I hope that this edition gives you a complete look at the private label landscape. As summer approaches, there’s no doubt we will continue to see new products, innovations and partnerships that will shake up the industry. As always, Store Brands would love to hear from its readers. Whether it be about new developments in the industry or potential solutions to existing problems, we encourage you to share your perspectives with us, either for our Viewpoints guest blog series, or in the form of a speaking appearance at one of our several upcoming industry forum events. With your help, we are looking forward to continuing to provide the most in-depth coverage of all things private label. If we haven’t connected yet, I look forward to meeting you!
6
Store Brands
●
March/April 2022
006_SBR_EditorsTake_0422_v1.indd 6
●
An EnsembleIQ Publication 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631 Publisher, Grocery Group John Schrei (248) 613-8672; jschrei@ensembleiq.com
EDITORIAL Associate Editor Zachary Russell (313) 622-1565, zrussell@ensembleiq.com
ADVERTISING & SALES National Sales Manager Natalie Filtser (917) 690-3245, nfiltser@ensembleiq.com
PROJECT MANAGEMENT/PRODUCTION/ART Creative Director Colette Magliaro cmagliaro@ensembleiq.com Advertising/Production Manager Pat Wisser (973) 607-1322, pwisser@ensembleiq.com
LIST RENTAL MeritDirect Marie Briganti (914) 309-3378, mbriganti@meritdirect.com
SUBSCRIBER SERVICES/ SINGLE-COPY PURCHASES contact@storebrands.com TOLL-FREE: 1-877-687-7321 FAX: 1-888-520-3608
REPRINTS, PERMISSIONS AND LICENSING Please contact Wright’s Media at ensembleiq@wrightsmedia.com or (877)652-5295
CORPORATE OFFICERS Chief Executive Officer Jennifer Litterick Chief Financial Officer Jane Volland Chief Innovation Officer & Managing Director of Path to Purchase Institute Tanner Van Dusen Chief Human Resources Officer Ann Jadown EVP of Operations Derek Esty Senior Vice President, Content Joe Territo
The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.
www.storebrands.com
4/6/22 5:25 PM
UNCAP YOUR PRODUCT’S POSSIBILITIES Mold-Rite Packaging is the leading provider of high-quality jars and closures used every day by millions of consumers around the globe. The packaging experts at MRP can support your nutraceutical, pharmaceutical, food, personal care, household chemical and automotive packaging projects. Count on Mold-Rite to deliver safety, compliance, shelf impact and consumer satisfaction.
Innovative. Reliable. Responsive. It’s all part of our package.
CONTINUOUS THREAD · CHILD RESISTANT · DISPENSING · DISC TOPS · JARS
www.mrpcap.com
SB_FullPg_temp.indd 1
4/6/22 8:29 PM
Target launches sustainable Target Zero collection Target has announced a new initiative to help consumers identify products designed to reduce waste. The Target Zero collection features products and packaging designed to be refillable, reusable, or compostable, made from recycled content, or made from materials that reduce the use of plastic. Guests will now see a Target Zero icon in stores and online that will signal products and packaging across Target’s assortment, including hundreds of new and existing products from the beauty, personal care, and household products categories, with plans to expand the collection in the future. The company aims to have 100% of its owned brand plastic packaging be recyclable, compostable or reusable by 2025. The Target Zero icon will be seen by guests on shelves instore, and through a dedicated online experience at target.
com. Hundreds of products from brands including Burt’s Bees, PLUS, Pacifica and more are among the first to be featured. Select products from Grove Co. and Target’s owned brand Everspring will join the collection beginning in April. “Target Zero unlocks important progress toward our Target Forward ambitions, each of which require collaboration from our partners and action from our guests to be realized,” said Amanda Nusz, SVP of corporate responsibility and president of the Target Foundation, Target. “By making it easier for our guests to identify which products are designed to reduce waste, Target Zero helps them make informed decisions about what they purchase and advances a collective impact across our brand partners, our product shelves, and within our homes and communities.”
Walmart launches virtual fitting room technology Walmart has announced a new and innovative shopping experience that will allow customers to better shop for private label and exclusive apparel online. The retailer acquired virtual fitting room provider Zeekit last year, and the technology is now available to Walmart shoppers through the Choose My Model feature. The technology allows online shoppers to select from 50 models between 5’2” – 6’0” in height and sizes XS – XXXL. Customers can determine the model who best represents their height, body shape and skin tone to understand how an item will look on them. Choose My Model is now available on select items across Walmart’s portfolio of exclusive and private brands, including Free Assembly, Scoop, Sofia Jeans by Sofia Vergara, EL8
Store Brands
l
March/April 2022
008-009_SBR_IndustryNews_0422_v2.indd 8
l
OQUII Elements, Time and Tru, Athletic Works, Terra & Sky, No Boundaries, Avia and The Pioneer Woman. “One of the most frustrating aspects of shopping for clothes online is understanding how an item will actually look on you,” said Denise Incandela, EVP of apparel and private brands at Walmart U.S. “With Zeekit, our goal is to deliver an inclusive, immersive and personalized digital experience that will better replicate physical shopping. We will continue to expand our model selection, with nearly 70 additional model options launching in the weeks ahead to offer an even wider range of sizes, skin tones and hair colors."
www.storebrands.com
4/6/22 5:26 PM
Ad vertISeMeNt
Three new Banza products land exclusively at Whole Foods
Chickpea-based pasta brand Banza is bringing new products exclusively to Whole Foods Market. The brand will debut three new items from their mac & cheese line, which Banza says has doubled in sales in the last year alone. In February, a new pasta shape from Banza, Cascatelli, also made its exclusive debut at Whole Foods. Banza pastas are made from chickpeas instead of wheat, making for a healthier plant-based alternative with higher protein and fiber and fewer carbs. The three new items include: • Banza Microwavable Elbows & Yellow Cheddar Mac: Banza’s first-ever microwavable product has the same great taste, creamy sauce, and cheesy flavor as the boxed edition, but is made to be eaten on-the-go or when strapped for time for the ultimate convenience. Compared to leading instant mac, Banza Microwavable Mac has 1.5x the protein, 4x the fiber, and 25% fewer net carbs. The new Banza Microwavable Mac is sold in the company's first plant-based fiber cup, made of renewable resources which will break down faster than a plastic-based product. • Banza Plant Based White Cheddar Mac & Cheese: Similar to the Banza Plant Based Cheddar Mac & Cheese, the White Cheddar variety uses Banza’s own veggie-packed, dairy-free cheese recipe made from plants such as parsnips and potatoes. • Banza Deluxe Shells Cheddar Mac & Cheese: Banza fans enjoyed the Cheddar Mac & Cheese offering so much, the company is now introducing a deluxe version with an additional serving per box, bringing more velvety, rich mac & cheese to the table.
Getting Products to Market Faster and Better Superior Pack Group Offers Single-Source Contract Packaging
When it comes to packaging, Superior Pack Group has it covered. The full-service, single-source contract packaging company helps manufacturers get the package they want and need with the quickest turnaround, in order to deliver optimum quality and shelf appeal to the consumer. Based in Harriman, NY, Superior Pack Group provides top quality packaging solutions to get products onto shelves quickly, accurately and cost effectively. “We have experience in all types of co-packing and can cover everything – with over 100 pieces of equipment in our facility we service a wide array of companies in the food and CPG industries,” reports company president Israel Schiff. In addition to its turnkey packaging solutions and state-oftheart technology, Superior Pack Group offers warehousing, distribution and fulfillment as well as ingredient sourcing, bulk purchasing and fully automated inventory control systems, among other services. Continually striving to offer the best and most updated services to manufacturers, the company maintains with pride the Safe Quality Food (SQF) certification and is now both Kosher and Organic certified. Because of its extensive system of equipment and its end-toend services, Superior Pack Group is able to help companies develop custom packaging according to their standards and needs. “We understand that packaging is a very important part of their business. Once we help customers design their package, we work with them closely to put the product on the shelves, with a quick turnaround,” Schiff says. For more information, visit http://superiorpackgroup.com, call 845-534-1015 or email sales@superiorpackgroup.com.
www.storebrands.com
SPG vert.indd 1 008-009_SBR_IndustryNews_0422_v2.indd 9
l
March/April 2022
l
Store Brands
9
3/1/16 9:24 AM 4/6/22 5:27 PM
BREAKFAST UPDATE
PLANT-BASED ITEMS, UNIQUE FLAVORS FUEL BREAKFAST CATEGORY WITH MORE PEOPLE HEADED TO WORK IN-PERSON AS THE PANDEMIC WANES, SHOPPERS ARE LOOKING FOR MORE WAYS TO KEEP BREAKFAST INTERESTING
A
By Zachary Russell
s the Covid-19 pandemic appears to be on the downswing, more and more Americans are headed back to work in-person. As breakfast becomes more important for those heading into the office, two trends that seem to be driving many categories, inclduing breakfast: plant-based foods and unique flavors. Like much of the CPG industry in the last handful of years, new plant-based items continue to hit the market, including in the private label breakfast category. In March, Amazon added five new almond milks to its Fresh brand perfect for cereal, coffee or on its own. The new items are vanilla and plain almond milk, offered both sweetened and unsweetened, along with a chocolate almond milk. United Natural Foods Inc., a Rhode Island-based food wholesaler, recently added plant-based items to its own brand collection as well. UNFI recently introduced four new plant-based products to the Wild Harvest brand, one of which being breakfast patties made from pea protein and free of soy, gluten and palm oil. Slowly but surely, private brands are continuing to incorporate more plant-based breakfast offerings into their selections. Own brands have been a key part of Kroger’s success, as the chain offers plant-based products like the egg & cheddar sausage croissant sandwich, along with meatless breakfast patties. Outside of plant-based items, new and unique breakfast flavors are of growing demand for shoppers. Fuchs North America, a leading supplier of flavor solutions for private label, is helping lead said trends. Last September, the company released the Rise & Dine Collection, a limitededition line of four seasonings meant to innovate in the breakfast category. The collection 10
Store Brands
l
March/April 2022
010_SBR_BreakfastUpdate_0422_v2.indd 10
l
included the Red Hot Cereal Seasoning, the Mushroom & Cheese Biscotti Seasoning, the Blood Orange Coriander Instant Shake Mix, and the Coffee Pancake Seasoning. 7-Eleven is a chain that is keeping coffee interesting, offering seasonal and limited-time coffees that keep shoppers anticipating what the next item will be. Most recently, 7-Eleven released two coffee drinks: Churroccino and White Chocolate Caramel Mocha, offering customers sweet flavors. Pumpkin spice, caramel apple, and s’mores flavored coffee made for great seasonal breakfast beverages last fall. The fall flavors followed 7-Eleven’s summer beverage releases: coconut coffee and s’mores hot cocoa. Outside of the unique flavors of sweetened coffee, the chain recently offered a Guatemalan brew as part of the 7-Reserve collection. The sustainable, single-single sourced medium blend showcased beans grown in the volcanic soil of Guatelamala’s Huehuetenango region, known for higher elevations. Since 2016, 7-Eleven has introduced extoic Rainforest Alliance Certified coffees from El Salvador, Nicaragua, Mexico, Peru, Sumatra, Colombia, Kenya, as well as an African blend from Ethiopia and Rwanda.
www.storebrands.com
4/6/22 5:53 PM
.
SB_FullPg_temp.indd 1
4/6/22 8:29 PM
QUESTIONS/ANSWERS
FOOD LION’S ONE-OF-A-KIND PEPSI PRODUCT
A RECENT PARTNERSHIP BETWEEN FOOD LION AND PEPSI HAS LANDED A UNIQUE SODA FLAVOR EXCLUSIVELY ON THE RETAILER’S SHELVES, POTENTIALLY CHANGING HOW GROCERS STAND OUT FROM THE PACK WITH THEIR INVENTORY
I
n late 2021, North Carolina-based grocery retailer Food Lion announced a partnership with Pepsi to give customers a unique offering in the beverage aisle. Food Lion wanted to work with the soft drink giant to create a soda to sell exclusively at its 1,100+ locations in the mid-atlantic and southeastern regions. The creation was Mountain Dew Uproar, named with Food Lion’s mascot Leo the Lion in mind. The strawberrykiwi flavor of Mountain Dew will be available exclusively in Food Lion stores until 2023. Food Lion beverage category manager Kevin Pruitt says sales of Uproar are already exceeding expectations, adding that continued strong performance from the beverage could lead to more exclusive flavors with Pepsi. Pruitt has been with the company for 22 years, and has 35 years of experience in the grocery industry, including 27 years in category management. Store Brands spoke with Pruitt about the exclusive beverage partnership and how it’s changing the retailer’s beverage category.
STORE BRANDS: What was the state of Food Lion's exclusive collection prior to the Pepsi partnership? KEVIN PRUITT: This is a first for Food Lion in the beverage category, but we have been interested in an exclusive offering like this for some time in the category. We have partnered with several other suppliers on limited-release offerings, specifically in the beer category, and our customers have responded well. SB: How did the partnership come about? KP: Mountain Dew has been a longtime partner of ours and a very popular item at many Food Lion stores. Through our partnership, we wanted to bring something unique 12
Store Brands
●
March/April 2022
012_SBR_FoodLionQ&A_0422_v2.indd 12
●
and personal to our loyal customers by developing a limited-edition flavor, exclusively sold at Food Lion stores. Our goal from the beginning was to offer our neighbors a new and exciting choice in the drink aisle and in the cooler. Mountain Dew is a popular product with Food Lion customers, so
we thought it was a great place to start. SB: How was the flavor developed? KP: We worked with Mountain Dew’s insights, research and development teams to determine which flavors best resonated with the Food Lion and Mountain Dew consumer. We narrowed down a few flavors that looked like they’d resonate well based on the consumer data. After further testing, the Strawberry-Kiwi flavor profile in Mountain Dew Uproar was the clear winner and a perfect fit for our customers. It was a fun process developing something truly unique. SB: What has the reception been like with customers? KP: Many of our customers are big fans of Mountain Dew, and they’ve appreciated that Uproar is a unique opportunity to experience something different. We’re always looking to offer products our customers want, and it’s important to us that our customers know we are listening to their needs and offering items they want. SB: Are any more exclusives with Pepsi in the works? KP: I can’t share any specific details at this moment, but we’re always looking to offer products and services that resonate with our customers. SB: What makes a great retailer-exclusive product? KP: Products that our customers love and can’t do without! Exclusive offerings are a unique and different way to show our appreciation for our customers and offer an experience they can’t get anywhere else. It all comes back to listening to our customers, understanding what they’re looking for and then working with our supplier partners to try and offer it. SB
www.storebrands.com
4/6/22 5:29 PM
COVER STORY BY Z AC H A RY R U S S E L L
SPECIAL REPORT
For the second time, Store Brands is honoring the people, brands and products that are changing the private label landscape
Just as we did last year, Store Brands is honoring those in private label who are pushing boundaries. During a difficult time for the grocery industry, with supply chain issues lingering and inflation at new highs, these products, brands and industry leaders are still innovating. Here are Store Brands’ 2022 Game Changers:
PRODUCT INNOVATIONS SIGNATURE RESERVE PASTA SAUCE, ALBERTSONS COMPANIES In late 2021, Albertsons Companies added two new pasta sauce items to its Signature Reserve collection: Porcini & Black Truffle Arrabbiata and Mascarpone Vodka. The sauces add unique and developed flavor options to the premium private label line. Both additions to Signature Reserve are products of
Italy, and more specifically the Pochettino family of sauce makers, who have passed the recipes down since the 18th century. They are made by layering quality ingredients and traditional slowstirring, which brings out a smooth texture and complex flavors. Adding premium flavors and ingredients to the pasta sauce category, Signature Reserve is changing the game for customers looking for authentic at-home meals. www.storebrands.com
013-019_SBR_CoverStory_GameChangers_0422_v2.indd 13
●
March/April 2022
●
Store Brands
13
4/6/22 10:08 PM
COVER STORY
RECYCLABLE PLASTIC PALLET, iGPS iGPS is changing private label from the supply chain side of things with its 100% recyclable plastic pallet. The product is lighter, more environmentally friendly and safer than traditional wood pallets, and due to its size and design, is ideal for automated facilities. The pallets are used by major retailers Costco and Kroger, and since 2013, iGPS has invested in recycling more than 212 million pounds of post-consumer resin into developing its innovative, safer, and greener pallets. The lighter pallets have also made for less truck miles on the road, and thus fewer emissions. The nonporous surface of the 48 x 40 inch iGPS pallet does not absorb moisture, making it easier to clean and sanitize. The uniform design and dimensions also allows them to run through automated supply chain equipment with ease, adding to a number of attributes that make it a game-changing supply chain product.
SUSTAINABLE COFFEE PODS, SMILE BEVERAGE WERKS Smile Beverage Werks came up with an innovative solution to the problem of plastic coffee pod pollution as many states changed laws and removed the single-use cups from the recycling stream. In response, the company created a full turnkey program where retailers can add their own brand coffee to a commercially compostable, climate neutral, plant-based and renewable coffee pod. The company says that the pods will help private label brands meet sustainability goals, while still appealing to Millenials and others with sustainable packaging. The product boasts no ink toxins, a certified compostable and cellulosebased filter, and a patented plant-based green pod. The pod has a shelf life of over 12 months, comparable to plastic pods.
SE GROCERS PRESTIGE 100% GROUND SINGLE ORIGIN COFFEE, SOUTHEASTERN GROCERS SE Grocers is changing the private label game with several products that take key steps forward in regards to sustainability. With this collection of coffee, SE Grocers is changing private label by setting a higher environmental stan14
Store Brands
●
March/April 2022
013-019_SBR_CoverStory_GameChangers_0422_v2.indd 14
●
dard for own brand coffee. Through supporting sustainable, single-origin coffee, the product is decommodified, which allows for positive opportunities for farmers and sustainable growth for the crop. The coffee is Fair Trade Certified, meeting rigorous environmental, economic and social standards, and comes in three blends: Peru Cajamarca, Ethiopia Yirgacheffe and Sumatra Mandheling. Peru Cajamarca comes from coffee beans grown in the Andes mountains of northeastern Peru, Ethiopia Yirgacheffe is a sweet coffee that is grown in the town of Yirgacheffe in southern Ethiopia and Sumatra Mandheling is an balanced coffee blend that originates from the mountainous region in the Aceh Province.
SE GROCERS NATURALLY BETTER CAGE-FREE EGGS, SOUTHEASTERN GROCERS Like SE Grocers’ single origin coffee, Southeastern Grocers is meeting sustainability goals with its cage-free eggs. SE Grocers Naturally Better cage-free brown eggs, egg substitute and egg white substitute products are produced by cage-free hens that are fed a certified organic vegetarian diet. To ensure the health and safety of animals in the egg production process, SE Grocers’ suppliers must adhere to the American Humane Certified CageFree Standards or Humane Farm Animal Care Standards. All SE Grocers eggs are 100% cage-free, and the company says it is committed to working with its supplier partners to ensure a sustainable transition to 100% cage-free eggs across all branded eggs the chain carries by 2025.
SE GROCERS PRESTIGE CHOCOLATE BARS, SOUTHEASTERN GROCERS Coming in a variety of flavors, SE Grocers Prestige chocolate bars are designated with the Rainforest Alliance Certified Cocoa Label. Third-party certifications, like on these chocolate bars, help hold retailers accountable to environmental, social and governance (ESG) commitments. SE Grocers Prestige chocolate bars come in a variety of flavors including 85% pure dark chocolate, 72% pure dark chocolate, 54% dark chocolate with a hint of Himalayan sea salt, 54% dark chocolate cold brew and milk chocolate caramel toffee. Like many commodity ingredients, including coffee, the chocolate supply chain has humanitarian and sustainability risks, and cocoa farmers often do not make a living wage. The Rainforest Alliance Certification tracks the origins of cocoa products to ensure any humanitarian and sustainability risks are avoided.
www.storebrands.com
4/6/22 10:09 PM
celebrates our 2022 Store Brands Game Changer
...changing the game in the produce aisle.
SB_FullPg_temp.indd 1
4/6/22 8:30 PM
COVER STORY
SE GROCERS NATURALLY BETTER PAPER PRODUCTS, SOUTHEASTERN GROCERS SE Grocers continues its sustainability initiatives with its collection of Natural Better paper products, including dinner plates, oval platters, compostable bowls, paper straws and sustainable cutlery. The Naturally Better paper straws and compostable bowls were honored in Store Brands’ 2021 Editors’ Picks feature. SE Grocers Naturally Better paper products drive change by offering shoppers a high-quality, sustainable store brand solution for household kitchenware. All these paper products are Forest Stewardship Council Certified, meaning that the paper used comes from forests that are responsibly managed, socially beneficial, environmentally conscious and economically viable. Naturally Better paper straws are made from foodgrade safe paper, sold in a recyclable cardboard box. Naturally Better dinner plates are made from sugar cane fiber, avoiding the use of trees altogether, and are biodegradable and compostable. Naturally Better compostable bowls are made from natural, renewable sugarcane fibers. These items are tree-free, compostable, and soak-resistant, yet are still microwave and freezer safe.
SE GROCERS BAP CERTIFIED SEAFOOD, SOUTHEASTERN GROCERS All of SE Grocers’ private label seafood, both frozen and fresh, is Best Aquaculture Practices (BAP) certified or equivalent, a game-changing initiative in private label. This certification addresses the four key areas of sustainability at each step of the aquaculture production chain. Seafood which carries the BAP designation has been reviewed by a third-party auditor for environmental, social, food safety and animal health and welfare standards at the hatchery, feed manufacturer, farm and processor. SE Grocers’ BAP certified seafood lessens the demand for wild-caught alternatives which many experts report are overfished. By allowing wild fish to flourish, oceans have greater biodiversity and store more carbon, ultimately supporting efforts to mitigate climate change.
SE GROCERS TUNA (CANNED AND POUCHED), SOUTHEASTERN GROCERS Just like its fresh and frozen private label seafood, SE Grocers extends sustainability to its canned and pouched private label tuna. 16
Store Brands
●
March/April 2022
013-019_SBR_CoverStory_GameChangers_0422_v2.indd 16
●
SE Grocers tuna is Dolphin Safe Certified which means it meets all U.S. regulations that require a written statement from the captain of the vessel, in most fisheries worldwide, certifying that no fishing equipment was intentionally deployed on or used to encircle dolphins during the fishing trip in which the tuna were caught, and that no dolphins were killed or seriously injured during the trip as well. The environmentally-conscious tuna comes in a variety of flavors including original solid white tuna, chunk light tuna, hickory smoke, lemon pepper and sweet & spicy.
SE GROCERS COMMUNITY BAG AND GIVING TAG PROGRAM, SOUTHEASTERN GROCERS Rounding out SE Grocers’ Game Changer selections is the Community Bag and Giving Tag Program. The new community bags are available for purchase ($2.99) in all Fresco y Más, Harveys Supermarket and Winn-Dixie locations for customers who want to make a difference in their local communities, while also helping the environment by reducing the use of paper and plastic bags. With each purchase, customers can direct a $1 donation to the nonprofit of their choice within seven days of purchase by visiting MySEGcause.com and following the instructions on the giving tag to make their selection. If the customer does not choose a nonprofit to receive the $1 donation within seven days, it will automatically be donated to the store’s chosen nonprofit of the month. Each month, the store will select a new organization to benefit from the program, including educational, civic, health and wellness, hunger and disaster relief, veterans and military families as well as belonging, inclusion and diversity organizations serving the local community.
PACKAGED SEASONING BLEND SETS, THE SPICE LAB The Spice Lab has created gift sets of assorted spices and seasonings for retailers to brand and sell to customers as attractively packaged collections. Each set aims to be reflective of the brand while offering consumers a convenient way to discover new products, changing the way customers can interact with the private la-
www.storebrands.com
4/6/22 10:09 PM
bel brand at their local grocery store. The Spice Lab’s sets feature colorful and attractive designs on the sets, while still allowing customers to see the seasoning products included in the set. The company has worked with Spice Bazaar, Chef Nancie and Nom Nom Paleo already, and is looking to work with retailers on their private brands.
DIPHENHYDRAMINE CHEWABLE OTC, USPHARMA, LTD USpharma has innovated in the OTC medicine category with the launch of its chewable gummy format, aiding consumers who have trouble swallowing pills especially in large doses or don’t like the mess of oral liquid medications. USpharma has drawn upon decades of innovative drug formulation experience from its senior management and figured out the ideal gummy technology formula for pharmaceuticals, launching the diphenhydramine chewable bar with leading retailers in the U.S., including CVS Health. Having been developed, validated and launched by USpharma,
the product is formulated to meet FDA requirements for OTC medicine.
TOOTHPASTE TABLETS AND WHITENING GEL, WSD LABS USA In the personal care category, WSD Labs has innovated teeth whitening with two products that are available for private label use: toothpaste tablets and teeth whitening gel. The toothpaste tablets are an eco-friendly alternative to traditional tubed toothpaste, and contain a high concentration of hydroxyapatite, the main component of enamel which gives teeth a bright, white color. WSD Labs USA’s formula works to brighten and prevent the build up of new stains. The PAP whitening gel is a strong teeth whitening alternative for those who are restricted from use of hydrogen or carbamide peroxide due to regulatory restraints or personal incompatibility. Based on the science behind food-grade processing of grains, the ingredients known as
Congratulations
2022
Josianne Légaré
Josianne’s leadership propels the success of our private brand portfolio
1 Collins Drive, Suite 200, Carneys Point, NJ, 08069 https://lassondepappas.com/
www.storebrands.com
013-019_SBR_CoverStory_GameChangers_0422_v2.indd 17
●
March/April 2022
●
Store Brands
17
4/6/22 10:10 PM
COVER STORY
PAP are deemed safe enough to deliver equivalent or better whitening results than peroxide based formulas. WSD Labs USA offers end-to-end ‘custom smile solutions’ for retailers including creating custom formulas, products, packaging and services, backed by various certifications and an FDA-registered facility.
PEOPLE JOSIANNE LEGARE, SENIOR VICE PRESIDENT OF SALES, LASSONDE PAPPAS
so they understood what the issues were, and brought forward solutions. Legar is a sales leader with over 20 years of experience in the CPG industry, and has a track record of developing store brand products. Her leadership skills and strong business acumen have contributed to Lassonde’s success in both Canada and the U.S., and she is passionate about developing and maintaining strong relationships centered on trust with each of her customers.
BRANDS SUNPOP WINE, TARGET
Covid-19 has challenged many in the food & beverage industry professionally and personally, but Josianne Legare of Lassonde Pappas, a producer of private label juice products, has put her team, customers and company before herself. During the pandemic, Legare ensured that retailers understood any challenges in the production and supply process, and had weekly meetings with her staff and partners
Target’s SunPop brand of fruity wine was introduced in March 2021, and saw quick success. It won a Growth Brands 2022 award from The Beverage Information Group as a “Rising Star,” and became Tar-
Changing the game with
award-winning Award winner!
sustainability
2022
available exclusively at
18 StoreWinner Brands ● Page March/April 2022 ● www.storebrands.com 288134 OB Award Half Ad_7.25x4.875.indd 1
013-019_SBR_CoverStory_GameChangers_0422_v2.indd 18
3/28/22 1:02 PM
4/6/22 10:10 PM
get’s third most popular private label wine brand. SunPop changed the category by offering fruit-flavored Moscato, frozen cocktail pops and a soon-to-be released Bubbly Brut at a competitive price of $6.99. There are currently four flavors: Peach Moscato, Strawberry Moscato, Tropical Moscato and Carmel Apple Moscato, with more flavors slated to launch in 2022 and 2023. With its sleek yet vibrant and eye-catching packaging, SunPop is already a hit with customers, and has a large potential for growth.
BASKET & BUSHEL, TOPCO ASSOCIATES Basket & Bushel, a private brand from Topco Associates available at the company’s grocery chains including HyVee, who also nominated the brand themselves, offers high-quality produce in clean packaging. The straightforward font, bold green-on-green logo and simplified leaf and bushel basket illustration help to reinforce the freshness of the brand, and the clear packaging allows the bright and colorful products themselves to serve as part of the package design, highlighting freshness and simplifying shopping in the produce aisle. The Basket
and Bushel private label was designed to allow multiple Topco members across the nation to implement this fresh new look into their stores as their proprietary produce store brand. From fresh berries to pre-cut vegetables, gourmet potatoes and tomatoes to fresh grapes, Basket & Bushel boasts a wide variety of products. Most importantly, by creating one unique UPC for each SKU no matter the packer, Topco has enabled retailers to track sales more easily, giving greater visibility to inventory levels. Retailers are now able to capture lost sales and shoppers are able to easily find the quality fresh items they seek in the online ordering process.
Gels Proudly Made in the USA
Toothpaste Tablets
16 LED Whitening Kit
We are the #1 Choice for Delivering Safe, Innovative
Custom-Branded Smile Solutions for Businesses who love to make people smile!
webcontact@wsdlabsusa.com
1-855-210-1110
www.wsdlabsusa.com
www.storebrands.com
013-019_SBR_CoverStory_GameChangers_0422_v2.indd 19
●
March/April 2022
●
Store Brands
19
4/6/22 10:12 PM
ADVERTORIAL
Bringing “MADE IN ITALY” Prestige to Private Label Products When “Made in Italy” and private label converge, the result is a win for consumers — especially when it comes to the foods that grace their family table. It is also a win for retailers who want to create their own, high-quality store brand that will help them capitalize on consumers’ love of Italian cuisine. U.S. consumers, after all, think quality and flavor when they think of Italy. About 71% of Americans perceive Italian products to be of higher quality than those of other countries — so much so that more than 8 out of 10 are willing to pay a higher price to get the “Made in Italy” guarantee.1 Offering private label products from a top Italian producer is one way stores can capture customers looking for high-quality Italian foods at affordable price points. THE PROFIT IN PRIVATE LABEL Sales of private label products are strong and show no sign of waning. In 2021, private label sales increased by $1.9 billion in volume over the previous year, and store brands accounted for $199 billion worth of dollar sales across all the major retail channels — an all-time record.2 More than 80% of U.S. customers rated private brands as good as or better than equivalent branded products, and private brand sales are growing at twice the speed of national brands. Only 6% of shoppers today exclusively
buy national brands, and more than a third say that private brands comprise most of their shopping carts, increasing 11% over the last two years.3 And that’s likely to continue as inflation continues to escalate prices for most every category, including food. With living expenses taking a larger cut of consumers’ paychecks, private label products may take spending away from staple national brands. LA DORIA: DECADES OF TRADITION WITH A “MADE IN ITALY” GUARANTEE Italy is a country rich in culture and tradition — qualities that La Doria brings to products designed to help retailers boost the premium appeal of their store brand offerings. As the leading European producer of peeled and chopped tomatoes and preserved legumes at retail, and of “Made In Italy” prepared pasta sauces and pestos, the company’s legacy ensures that consumers will find the quality and flavor they seek in every La Doria private label product they purchase. “La Doria’s history is a family tale of inspiration, courage and hard work,” says Diodato Ferraioli, Head of Export Sales, La Doria S.p.A. “In 1954 in Angri, a small town in the south of Italy, my grandfather Diodato Ferraioli founded the company with his wife Anna by his side. Still today, all our products reflect the passion that we bring to our work in our desire to see the best of Italian traditions appreciated and stand out in terms of quality and excellence.” La Doria tomato products contain only 100% Italian tomatoes, and its pasta sauces and pestos are made using the same authentic Italian recipes the family has used since 1937. All raw materials are processed at the company’s Italian facilities, ensuring the “Made in Italy” guarantee. “We are committed to exporting the values and typical flavors of Italy, in particular Southern Italy, to a broad
About 71% of Americans perceive Italian products to be of higher quality than those of other countries — so much so that more than 8 out of 10 are willing to pay a higher price to get the “Made in Italy” guarantee.1 base of consumers across the world,” says Ferraioli. “Private brands are increasingly being developed and managed as real brands — vehicles of value, quality and sustainability. The trend is increasingly aimed at premium products that focus on the quality of raw materials and on the ‘Made in Italy’ claim.” The success of La Doria-produced private label products at retail speaks for itself. “Eight of our top 10 Italian customers (who in the last two years have contributed to over 75% of La Doria’s turnover) have been customers for at least 10 years,” Ferraioli reports. “Looking abroad, if we exclude the subsidiary LDH, the top 10 customers represent over 57% of foreign turnover. Of these, nine customers have been choosing La Doria for at least 10 years.” 1
ItalianFOOD.net
2
PLMA/IRI3 The Future of Private Brands; Daymon Private Brand Intelligence Report 2020
3 The Future of Private Brands; Daymon Private Brand Intelligence Report 2020
For more information, visit www.gruppoladoria.it or email commerciale.estero@gruppoladoria.it
STOREBRANDS_ La Doria.indd 2
3/7/22 1:41 PM
SB_FullPg_temp.indd 1
4/6/22 8:30 PM
SB_FullPg_temp.indd 1
4/6/22 8:31 PM
STATE OF THE INDUSTRY
THE
STATE OF
PRIVATE LABEL INDUSTRY EXPERTS WEIGH IN ON THE CURRENT ECONOMIC CLIMATE AND ITS IMPACT ON THE PRIVATE LABEL INDUSTRY AT LARGE BY ZACHARY RUSSELL
22 22 22
Store Store Store Brands Brands BrandslllMarch/April March/April February 2021 2022 2022 l www.storebrands.com llwww.storebrands.com www.storebrands.com
022-025_SBR_StateOfIndustry_0422_v4.indd 22
4/6/22 10:00 PM
S
ince March of 2020, the private label industry has felt the effects of the Covid-19 pandemic. Product and labor shortages, inflation and supply chain challenges have all impacted the retail and grocery sector, often in a combined fashion. Nearly four months into 2022, as Covid-19 cases continue to fall for the time being, the problems associated with the virus that impact the global supply chain still remain. “Some of the main strains on the global supply chain that are expected to continue into 2022 are semiconductor supply shortages, shortages in container shipping, and shortages in professional labor for transportation carriers and at seaports,” said Carman Allison, VP of sales and development at NielsenIQ. “The rising costs of transportation, labor, and energy are challenging the global supply chain while also impacting financial institutions and governments all over the world. The reason: rising costs
are another way to describe the next point of our predictions, inflation.” The yearly inflation rate for the United States is 7.9% for the 12 months ended February 2022, the highest since January 1982, which was 7.5% according to U.S. Labor Department data published March 10. When it comes to a solution, retailers are eager for more action to be taken by the government. “There is a bit of challenge for many economists and the Federal Reserve to try to distinguish between real inflation of the economy or transitional inflation in the economy due to the effects of the pandemic and the global supply chain challenges,” added Allison. “This might explain why the Fed has focused on keeping a low-interest-rate environment, as it is more concerned with battling the pandemic and global supply chain strains than with real inflation striking the economy. It’s not clear how long the Fed will be able to keep its current position if real inflation keeps its momentum and does not slow down. If the effects of the global
supply challenges and its inflationary triggers do appear to be cooling off, and real inflation is causing havoc, we can expect the Fed to begin increasing interest rates.” Despite challenges, overall private label sales are increasing, which is common during inflationary periods. According to IRI’s 2021 Consumer Demand for Private Brands report, from October of 2019 to October of 2021, the share of store brands in total grocery sales had shrank from 17.5% to 17.3%, but total sales rose from $828 billion to $963 billion. While the overall market share of private label brands as a whole shrank slightly during the period, certain categories of store brands have seen major gains during the past two years. Top growing edible store brands categories include shelfstable breakfast foods (+274% vs. 2YA), ham (+736% vs. 2YA), sporks drinks (+182% vs. 2YA) and more. Top growing non-edible categories include hair conditioner (+196% vs. 2YA), baby toys, gifts and furniture (+131% vs. 2YA) and external pain
According to IRI’s 2021 Consumer Demand for Private Brands report, the share of store brands in the total grocery sales has shrunk from but total sales rose from
$828 billion to $963 billion.
www.storebrands.com
022-025_SBR_StateOfIndustry_0422_v4.indd 23
l
March/April 2022
l
Store Brands
23
4/6/22 10:00 PM
STATE OF THE INDUSTRY relieving rubs (+110% vs. 2YA). During an inflationary 2021, store brand product sales hit a record $199 billion in 2021, according to data from IRI provided to the Private Label Manufacturers Association, a 1% total sales growth from 2020. Private label saw growth in six categories: Refrigerated foods saw store brand sales increase by 0.7%, followed by general merchandise (+1.7%), health care products (+0.2%), frozen (+0.8%), produce (+11.4%), and beverages (+2.7%). The growth didn’t stop when the calendar changed either. In January of 2022, private label sales grew 4.2% in dollar volume across all U.S. retail channels, compared to the same period in 2021. The increase was about equal to the 4.4% growth of national brands, according to the IRI data. “Private Label is poised to benefit as we begin to see high inflation in consumer packaged goods,” said Krishnakumar “KK” Davey, president of
UNITED STATES ANNUAL INFLATION RATE % (2012-2022)
7.9% 7.0%
2.1% 2.1%
1.7% 1.5%
2012
1.9%
2.3% 1.4%
0.8% 0.7%
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022*
SOURCE: U.S. DEPA RT MEN T OF L A BOR
24
Store Brands
●
March/April 2022
022-025_SBR_StateOfIndustry_0422_v4.indd 24
●
www.storebrands.com
4/6/22 10:01 PM
In January of 2022, private label sales grew
in dollar volume across all U.S. retail channels. client engagement at IRI. “ Private Label lost share during the pandemic, but is seeing improving trends now with most retailers. After many years of investing, retailers have a moredeveloped private label portfolio now with presence in most categories and multiple price tiers that contributes to slower private label growth, but a couple retailers are renovating or expand-
ing their offerings and gaining share.” Davey added that as inflation continues, so will private label sales, especially in categories hit the hardest by inflation. “Generally, categories experiencing high inflation are doing the strongest in private label, and private label growth in these categories is generally lower than name brands,” he said. “There will be a higher demand for value due to high inflation. We will see continued investment from retailers in enhancing private label offerings in 2022.” For retailers looking to overcome these challenges, technology could be part of the solution. Philip Melson, client partner at Fractal Analytics, a leading AI technology provider for retailers such as Mondelez, Mars, and more, said that retailers are continuing to utilize AI to develop private label strategies. These priorities for retailers include investments in product assortment, item localiza-
tion for customer preferences, optimal pricing mixes, and finding cost efficiencies in the supply chain. “The assortment opportunity with store brands is not just to compete with national brands on price but range and innovation,” said Melson. “Store brands have been shifting the last few years to be more than just a price play and have become a key differentiator for the retailer. We expect this trend to continue in the long term. Leveraging data to understand customer preferences, shifts in needs is critical to determining the next step in developing that strategy. Again, machine learning is perfectly equipped to identify the most important drivers that result in optimal sales levels and make recommendations to maintain that balance at very granular levels.” Though the current state of the economy is worrying for many, it’s clear that the private label industry is continually trying to adjust to meet the needs of consumers.
ALL OUTLET, TOTAL DOLLAR SALES AND STORE BRAND SHARE
Total Name Brand + Store Brand Dollar Sales: $828B $927B $963B 17.5%
52 WE 10-6-2019
Store Brand Share of Total
+12%
+4%
Dollar Change
Dollar Change
52 WE 10-4-2020 National Brand
52 WE 10-3-2021
Private Label www.storebrands.com
022-025_SBR_StateOfIndustry_0422_v4.indd 25
17.3%
17.7%
●
March/April 2022
●
Store Brands
25
4/6/22 10:01 PM
QUESTIONS/ANSWERS
EXPLORING THE RETAILER-SUPPLIER RELATIONSHIP AN IN-DEPTH LOOK AT HOW PRIVATE BRANDS ARE MANAGING THE CURRENT ECONOMIC MOMENT WITH SOLUTIONS 4 RETAIL BRANDS
S
hopping behaviors during the pandemic, labor shortages, freight costs and much more have turned the supply chain upside down, and it’s no doubt testing the relationships between retailers and own brand suppliers. Store Brands spoke with James Butcher, CEO, S4RB, on the ways these two parties can better work together during a stressful time.
STORE BRANDS: Describe the state of private label supplier and retailer relationships today. JAMES BUTCHER: I think it is fair for many to describe retailer-supplier relationships as “strained” after almost two years of supply chain disruption. The whole supply chain is still in recovery. Against a backdrop of a 13-year high for U.S. inflation and price concerns and “sticker shock” for families, discussions are focused on cost and availability. In many cases, this is at the expense of new products and innovation. More so than at any time in recent memory, retailers have had to put more effort into alternate supply, acting as a further barrier to innovation. SB: What are some pain points you see in how retailers and store brand suppliers communicate? JB: When you consider communication between retailers and suppliers, it is essential to think in terms of people rather than companies. Through our work helping retailers drive performance through supplier engagement, pre-pandemic, we would typically see over 15% churn in the retailer’s 26
Store Brands
●
026_SBR_S4RBQ&A_0422_v2.indd 26
March/April 2022
●
supplier contacts each year as people change roles, change companies, take parental leave, etc. Therefore, our approach puts at its heart maintaining an accurate list of supplier contacts for private brand retailers and automating this as much as possible. The pandemic has accelerated both supplier company churn and supplier contact churn. This churn generates considerable noise, disruption, and inefficiencies that stop retailer private brand teams from focusing on the highest value tasks, resulting in successful, sustainable growth. The consequence is that retailers need to put even more effort into maintaining an engaged supplier audience. The risk of not doing so will result in retailers failing to tap into the wealth of experience of their supply base and the initiatives failing. SB: Explain the “Consumer Experience Score” that S4RB and Consumer Science has partnered on. JB: The value in the Consumer Experience Score reflects that products should not just be benchmarked on traditional value but on the value
metrics specific to a particular brand. Sustainable and responsible business practices — whether that be green energy, efficient use of resources, protecting human rights, enhanced animal welfare standards — has never been more important for consumers. Therefore, private brand teams need to consider growth that cannot be from lower-cost volume as it drives over-consumption, which is likely unsustainable. The Consumer Experience Score allows a product comparison based on brand values in a way that can help to drive a comparative competitive value across ranges and categories that enables retailers and suppliers to work more collaboratively as ‘one team’. SB: What are some other tools or strategies that retailers can use to better communicate or engage with suppliers? JB: At S4RB we talk about the three pillars of supplier engagement: communication, transparency and support. Too often, in my experience, retailers use just one or two of these in isolation. Whenever people align behind a shared message, a shared view of how they are performing, and an interest in getting better, great things happen for all parties involved. SB: What are some things suppliers can do to improve how they communicate with retailers? JB: We see suppliers who attempt to drive communications through a commercial account manager alone. We find this to be inefficient and ineffective. One key area where suppliers have just as much value to add as their retailer counterparts is sustainability. There is no one-size-fits-all solution, and, as such, a huge amount of variation between brands, categories and even products will be required to implement appropriate sustainability solutions that don’t result in unintended negative impacts. This level of complexity is only impossible with supplier engagement at scale where the answers come from the suppliers themselves. SB
www.storebrands.com
4/6/22 10:02 PM
The path to purchase has become infinite. We map the journey and give you back control.
Shopper Journey AscendanceTM from EIQ Insights & Innovation shows you how your customers navigate the omnichannel experience and empowers you with a strategic plan to influence behavior. Partner with us to master your view and elevate your performance. ascendance@ensembleiq.com
Ascendance_HA_SB.indd 1
4/6/22 9:15 PM
PLMA COVERAGE
INSIDE PLMA GLOBAL RETAILERS TALK PRODUCTS, EXPERTS GIVE INDUSTRY FORECASTS AND INSIGHT By Zachary Russell
F
ollowing the pandemic-related cancellations of both its Chicago and Amsterdam trade shows, the Private Label Manufacturers Association (PLMA) held its PLMA Global event. The event, hosted online from March 28-31, began with a Buyers Day event meant to showcase products available for private label use, followed by three days of speaking appearances from retail leaders and industry experts. “Our online show is the perfect place where agile suppliers and innovative retailers can partner together and develop successful store brand programs across all product categories and continue to gain/build market share,” Anthony Aloia, VP of PLMA, told Store Brands in the lead up to the event. “We’ve themed the show ‘connecting the private label industry.’ We believe that during the last four days of March, our platform will become the digital hub of the retailer brands business.” RETAILERS TALK AWARD-WINNING PRODUCTS As part of the PLMA Global online event, four major retailers sat down with Suzanne Caputo, director of retail trade relations at PLMA, to discuss products that debuted in 2021 and earned PLMA’s Salute to Excellence Awards. Albertsons Companies, Walmart, Whole Foods and Walgreens detailed their award-winning products and what went into the private label expansions. Albertsons took home four Salute to Excellence Awards
28
Store Brands
●
March/April 2022
028-031_SBR_PLMACoverage_0422_v2.indd 28
●
for its products released in 2021: Signature Select Restaurant Classics Old Fashioned Brown Bread; Signature Select Moose Tracks Ice Cream Cake; Open Nature Broccoli Crust Chicken & Kale Pizza; and Signature Select Bar Mix Sweet & Spicy. Beto Galvan, vice president of own brands innovation & product management at Albertsons Companies, spoke about how the chain’s award-winning brown bread aimed to recreate the dining experience at home, specifically the brown bread found at many steakhouse restaurants. “We knew that our consumers and our guests were looking for these dining-style experiences,” said Galvan. “What we’re trying to deliver is a restaurant style quality product that they can enjoy in their homes. As it relates to inspiration [for new products], it’s everywhere. Then you work with your manufacturing partners to bring the product to life.” Albertsons gluten-free broccoli crust chicken & kale pizza won the Salute to Excellence award in the natural food category. The product from Albertsons’ Open Nature brand built on and innovated the cauliflower crust trend of years past. “We pride ourselves on being innovation leaders,” said Galvan. “After the success we had with our cauliflower crust pizza, we went looking for what other things customers are looking for. We’re using these plant-based crusts and including them with meat to make it a perfect pairing. We want to continue expanding our flavors within these crusts. When leaning into these trends, it’s important that
www.storebrands.com
4/6/22 5:45 PM
1] Open Nature Broccoli Crust Chicken & Kale Pizza; Signature Select Restaurant Classics Old Fashioned Brown Bread 2] Marketside Kickin’ Chicken Chowder; ReliOn Analog Insulin 3] Whole Foods Market Organic Umami Seasoning; 365 by Whole Foods Market Mini Rose Hydrosol
you don’t go overboard, but as shoppers start giving traction to these products, they’re giving you permission to expand into more of these spaces.” Walmart took home an impressive 10 awards for its products spanning several categories last year. Walmart’s 2021 Salute to Excellence Winners include: Great Value French Vanilla Almond Granola; Marketside Kickin’ Chicken Chowder; Marketside Decadent Dark Chocolate Cookies made with Peanut Butter M&M Candies; Great Value Lowfat Mixed Berry Yogurt Pouches; Marketside Blueberry Lemonade; Equate Eucalyptus Shower Spray, Congestion Relief & Aromatherapy; Equate Rechargeable Silicone Facial Cleansing Device; Great Value Scented Candle, 3 Wick, Blue Lava; ReliOn Analog Insulin; and Great Value Strong Flex Tall Kitchen Trash Bags. “We always have a pulse on the customer and know there’s always a demand for variety in this category,” said Tiffany Quast, director of Walmart private brands, speaking about prepared deli items and the soup category. “Our Kickin’ Chicken Chowder takes a classic and gives it flavor with poblano chiles, creating a meaty, mild spice that’s well-rounded. It contrasts the heat with sweet corn and rich cream stock. There’s a growing consumer demand for little to no effort meals that can be made at home or away from home that offers variety. But, it’s also just as important to provide quality at a value.” Another winner in the food category, Marketside Decadent Dark Chocolate Cookies made with Peanut Butter M&M Candies, was created to meet demand as customers crave indulgence. It was Walmart’s second year in a row winning in the cookies category. “Around the globe, customers are turning to these small
indulgences such as cookies and candies,” said Quast. “We really observed this behavior during the recent times of uncertainty. We love that our customers turn to us for this sweet moment of joy.” Walmart won five food and five nonfood Salute to Excellence Awards, and perhaps its most important winner came in the pharmacy category, with Walmart’s ReliOn analog insulin earning the honor alongside Walgreens’ Pulse Oximeter + Respiratory Rate Monitor in a tie. “This is the first private brand insulin on the market,” said Simone Parry, senior director of Walmart private brands. “In the U.S., a patient is diagnosed with diabetes every 21 seconds, typically requiring them to buy insulin twice a month. The price of insulin has risen substantially since 2017, so affordability is a major concern for many of our customers. Customers can save an average of almost $7,500 per year with this item. Together with our Equate brand offerings across related health categories, we strive to offer customers a total solution with our products. Our customers, pharmacists and store associates all trust the ReliOn brand.” Whole Foods took home four Salute to Excellence Awards for its products released in 2021: Whole Foods Market Organic Umami Seasoning; 365 by Whole Foods Market Organic Hazelnut Cocoa Spread; 365 by Whole Foods Market Mini Rose Hydrosol; and 365 by Whole Foods Market Leave-In Conditioner. “Our team saw the umami flavor trending and identified it as a spice option that would be good for our customers,” said Heather Salzgeber, sourcing leader for exclusive baking brands, referring to the winning Japanese-inspired spice blend. “We were pleased to find organic mushroom www.storebrands.com
028-031_SBR_PLMACoverage_0422_v2.indd 29
●
March/April 2022
●
Store Brands
29
4/6/22 5:46 PM
PLMA COVERAGE powders and spices that we could blend together that resulted in a savory and versatile blend. Since the start of the pandemic, customers are looking for seasonings that will make their meals taste more like a restaurant-style meal. This [umami seasoning] aligned with one of our top food trends, ‘basics on fire,’ which is any new take on a basic pantry staple.” Whole Foods’ fourth and final award came in the beauty care and cosmetics category with the 365 Mini Rose Hydrosol, a French-made, less-concentrated byproduct of rose oil made for facial use. “This is a really fun project to work on for me and my team as we continue to see a focus on beauty during the Covid environment,” said Abbey Kaine, sourcing leader for exclusive body care and supplements brands. “We wanted to offer something differentiated and organic. Some of our favorite uses for the hydrosol are an uplifting mist or facial toner, or you can use it as a substitute for water for your do-it-yourself beauty preparations. Lastly, we love this size because everyone is getting back to travel, and it’s convenient to bring on-the-go.” Finally, Andrea Collaro, senior director of owned brands at Walgreens, discussed the pharmacy retailer’s four awardwinning products with Caputo. Walgreens’ 2021 Salute to Excellence Winners include: Walgreens Sun Moisturizing Lotion SPF30; Walgreens Pulse Oximeter + Respiratory Rate Monitor; Infinitive USB A to USB C Braided Cable 9 ft.; and Wexford 30ct Gel Pens. Walgreens’ four awards all came for nonfood products, as the pharmacy retailer has expanded its own brand portfolio to make itself more of a ‘one stop shop’ for all necessities. Walgreens Sun Moisturizing Lotion SPF 30 won the Salute to Excellence Award in the sun care & toiletries category. “In addition to offering your typical spray sunscreens you would use at the beach, we have further expanded our range to include sunscreens specifically for your face that are going to support anti-aging and dark spots,” said Collaro. “These types of products are going to continue to help solidify our position in the market as a serious skin health destination.” When designing the packaging for their own brand sunscreen, Collaro said that certain attributes are key to grab the attention of customers. “Key callouts we generally make on these products include hydrating, hypoallergenic, oxybenzone-free, paraben-free…” said Collaro. “Some of our items this year are also going to have a ‘does not leave a white cast’ callout, which is really targeted towards our consumers with darker skin tones who have traditionally struggled with standard sunscreens’ failure to blend in properly.” In the home healthcare category, the Walgreens Pulse Oximeter + Respiratory Rate Monitor was honored alongside Walmart’s ReliOn Analog Insulin for its dual features that became essential for many during the pandemic. “The product is a non-invasive way to measure the amount of oxygen in the blood, and it shows whether the heart 30
Store Brands
●
March/April 2022
028-031_SBR_PLMACoverage_0422_v2.indd 30
●
Walgreens Sun Moisturizing SPF 30; Walgreens Pulse Oximeter + Respiratory Rate Monitor
and lungs are supplying enough blood to meet the body’s demands,” said Collaro of the product, which offers two important medical features in one. “The base pulse oximeter measures both oxygen saturation and pulse, while the new unit measures oxygen saturation, pulse and respiratory rate. That respiratory rate measures ventilation. It was a cool addition to the product during Covid because it really helped consumers detect if their respiratory rate was in the normal range or if it was deteriorating.” HOW THE CURRENT ECONOMIC DIVIDE IS IMPACTING PRIVATE LABEL As part of the PLMA Global online event, Genevieve Aronson, global head of thought leadership at NielsenIQ, discussed how retailers can navigate a ‘divided consumer landscape.’ In her presentation titled Private Label and the New Economic Divide, Aronson discussed shifting buying preferences brought on by the pandemic and changing consumer behavior, as well as the global state of private label and how to move forward. “Consumers have landed in a very divergent economic reality,” she said. “There is a new and widening economic divide across consumer circumstances, mindsets and priorities. To stay ahead, it’s important for retailers to really understand the nuances of this divide.” In the last several months, inflationary pressures continued to hit consumers hard, impacting purchasing power. These pressures, Aronson says, are making for a very cautious society moving forward, as where and how to spend becomes increasingly important. “Private label has historically been a safe harbor during economic downturn,” she said. “This is where we see that flight to value. Let’s keep that in mind when we speak about how to move forward.”
www.storebrands.com
4/6/22 5:47 PM
NielsenIQ data shows that the financial polarization is ongoing, with 23% of those surveyed reporting that they have and continue to suffer financial insecurity. 21% said that they experienced income or job loss, but are back on track. 38% said that they have not been impacted financially by the pandemic and its associated cost pressures, but are cautious about spending. “Cautious spends are setting the tone for how consumers are spending in 2022, this is very important to consider going forward,” said Aronson. “When we look at buying preferences, it’s important to look at how, when and why. Affordability is front and center as a priority. However, we see an expansion of priorities…they’re prioritizing familiarity. People are going back to brands and products that have proven success and that they’re familiar with. For cautious consumers, affordability and fresh produce are priorities. With the fresh produce, it reinforces that prioritization of health and wellness.” In regards to health and wellness trends, NielsenIQ data shows that globally, more consumers are seeking healthy options proactively. 30% of those surveyed said that if a healthier option is offered they will generally take it, and 18% said that they actively make decisions to look after their health on a regular basis. Only 6% said they generally didn’t think about health. Aronson said that while private label brands are los-
ing some “attitudinal connectivity,” scores are still high for quality and value. Data showed that private label demand has been tested, but still strong among countries where brand names have been historically dominant. Most American consumers said that private labels are a good alternative to name brands and are usually as good as name brands in terms of quality, but fewer consumers found that private label products are good for people on tight budgets, a sign of the economic times. “There’s been an increase in the quality and value perceptions that consumers hold for store brands,” said Aronson. “Survey responses over the last six years through early 2021 show store brands continue to connect on value and quality, but have slipped in the past two years.” Other factors for private label to watch in 2022 include retail consolidation in Europe, fickle loyalty of Millenials and Gen Z with the rise of eCommerce, quick innovation models and affluent individuals being a “test” audience for trial and innovation. “We know that healthy and fresh offerings are key [for affluent individuals],” said Aronson. “We see Amazon Fresh and their announcement of plant-based private label offerings. We see that there is movement and growth there. How can you tap into that for the more affluent consumers who have interest in health and wellness and sustainability?”
www.storebrands.com
028-031_SBR_PLMACoverage_0422_v2.indd 31
●
March/April 2022
●
Store Brands
31
4/6/22 5:47 PM
QUESTIONS/ANSWERS
WHAT'S TRENDING AT KROGER? JUAN DE PAOLI, VP OF KROGER’S OWN BRANDS, SAT DOWN WITH STORE BRANDS TO DISCUSS THE TRENDS THAT ARE IMPACTING THE RETAILER’S ASSORTMENT AND FUTURE OFFERINGS OF PRIVATE LABEL ITEMS
S
ince joining Kroger in late 2021 from Ahold Delhaize USA, De Paoli has been leading the company’s private label operations. He spoke with Store Brands about product development, and which flavors or categories are driving trends at the grocery store, citing Kroger’s 2022 Food Trends report.
STORE BRANDS: Juan, since we last talked, congrats on your new role at Kroger. How have the first few months been going? JUAN DE PAOLI: Thank you. My first few months at Kroger have been exciting and full of learning opportunities. Our 2022 Food Trends Report created the perfect moment to jump right in with the Our Brands team and understand both tastes and trends that we foresee customers flocking to in the new year, and the products that we’re developing behind the scenes to meet those needs. I’ve been so impressed with the Kroger Our Brands team, they are truly an amazing group of well-versed, bestin-class innovators and merchants. The team does a tremendous job keeping its pulse on what our customers want and how these trends will grow and adapt moving forward. SB: Describe the process of how these trends predictions come about: the research involved, how the various Our Brands team members play a role, etc.? JDP: It all starts with having a finger on the pulse of our customers’ wants. 32
Store Brands
●
March/April 2022
032_SBR_KrogerQ&A_0422_v2.indd 32
●
Our team brainstorms around the hottest sellers, and what our customers are sharing, talking and posting about. Add in a keen awareness of the food industry as a whole and our industry-leading customer insights, and you have a pretty good baseline for understanding consumer habits and predictions. On top of that, our team digs through consumer polls, industry data, demographics, consumer behaviors, etc. to see how these habits are likely to evolve. It’s not just about seeing what is popular today, but also understanding your consumers and the industry well enough to see how that will transform tomorrow. SB: Among all the trends listed, what are the biggest ones to impact the Our Brands program, in your opinion, in terms of types of products and the amount of products you’ll introduce? JDP: We are especially excited about the PLANet-based foods trends. Consumers are not only being more conscious of what they are putting in their bodies and how it impacts the planet, but they are looking at plant-based foods for comfort, nostalgia and in-
dulgence. That means we need to offer plant-based products that are just as good, if not better than their animalbased counterparts. Our partnership with Kipster is especially exciting. With this partnership, we’re bringing the world's first carbon-neutral, cage-free eggs to retail shelves in the U.S. They’ll be a great addition to our already stellar lineup of planet-friendly products. On top of that, we are closely watching the flavors that our customers are favoring. Umami and other savory flavors - including tequila – will continue to gain popularity this year. Seeing this shift towards savory allows us to look at every meal of the day, snack, drink and side dish to see how we can incorporate the savoriness people are craving. It provides an opportunity to rethink and innovate on classics and bring brand new options into the fold. Items like our premium truffle butter, wild mushroom ravioli, tequila serrano beef jerky are favorites to satisfy the taste buds. SB: Can you speak on how these trends might be marketed to shoppers in the coming months, any exciting campaigns, initiatives or programs in the works? JDP: At Kroger, we’re focused on staying at the forefront of innovation and are continually releasing new products that follow our trend predictions as well as testing items even further out from the mainstream. In 2021 alone, the Our Brands team launched more than 630 new products. One thing we’re very proud of which speaks to our PLANet-Based trend is our partnership with TerraCycle, making 100% of our Our Brands packaging recyclable. We are also looking forward to bringing back our Go Fresh & Local event for 2022 and are working toward announcing those plans in the coming months. We’re proud to offer premium quality products at a lower price than national brands under our family of brands and this has become increasingly important to customers as economics shift and more meals are being consumed at home. SB
www.storebrands.com
4/7/22 10:35 AM
FOOD WASTE REPORT
HOW RETAILERS ARE USING PRIVATE BRANDS, TECHNOLOGY TO CURB FOOD WASTE RETAILERS ARE BEGINNING TO USE NEW TECHNOLOGY TO BETTER ASSESS THEIR INVENTORY, LEADING TO LESS FOOD WASTE AND A MORE SUSTAINABLE COMPANY MODEL By Zachary Russell
F
ood waste continues to be a problem in America. According to the hunger-relief nonprofit Feeding America, 108 billion pounds of food is wasted annually in the United States, equating to 130 billion meals worth $408 billion. Manufacturers, farmers, grocery stores and consumers all play a role. Alone, grocery stores waste about 30% of all food inventory, accounting for 16 billion pounds annually, according to waste collection and tracking service Recycle Track Systems. “Food waste is not just a moral concern but a business one,” said Michael Jaszczyk, CEO at GK Software USA.
“Food waste can not only result in lost sales, it can also create a negative image regarding corporate responsibilities. Unfortunately, for retailers, there are too many perishable SKUs on their private label brands that have varying shelflives to manually navigate inventory management.” As sustainability becomes an increased focus for both retailers and consumers alike, food waste management will become a way for retailers to not only take steps towards sustainability, but increase profit margins as well. Some retailers, such as ALDI, known for its expansive private label selection, already have limiting food waste in mind. “As a private label pioneer, our business model gives www.storebrands.com
033-034_SBR_FoodWaste_0422_v3.indd 33
l
March/April 2022
l
Store Brands
33
4/7/22 10:38 AM
FOOD WASTE REPORT prevalent, and therefore detrimental to retailers’ bottom line, as the market sees increased consumer demand for healthier prepared and fresh foods. With fresh food in particular, grocers need to understand demand for individual private label items, and then properly allocate resources across the supply chain to ensure these items are delivered in an effective and timely manner.”
us a leg up on reducing waste,” said Joan Kavanaugh, vice president of national buying at ALDI. “When people visit an ALDI store, they will see that we only fill our shelves with the most-popular products in the most-popular sizes. This approach helps us minimize the number of wasted products by only selling exactly what our customers need and want. Our efforts to minimize food waste start with our buying team. They work hard to determine accurate projections so we can avoid buying excess food from the start. As part of this process, we use a perishable food ordering program, which is continuously updated with data that focuses on balancing availability and customer purchases over time.” ALDI says it aims to reduce its food waste by 50% by 2030. For retailers looking to follow ALDI’s model, emerging technology can be a tool to reduce food waste, potentially by leveraging private brand products, and in turn save money. “Instead, retailers can use AI-based dynamic pricing, which can help them use sales and transaction data to understand demand factors on private label brands and non-private label brands alike,” added Jaszczyk. “From there, retailers can use best-before or target dates to recognize when items will be sold out, and optimize price according to demand and target date. For example, AI can predict when a private label brand item will expire and establish optimal price as that expiration date draws near. That way, they can ensure the price inspires shoppers to buy the item before it ends up in the garbage.” AI-powered services can give retailers a more complete look into their own brand selection of perishable food, allowing staff to detect and adapt to demand fluctuations, which is critical to reducing waste. “Despite retailer demand for insights on quality, waste, traceability and the daily production of fresh foods, many grocers have little to no visibility into their fresh inventory, both private label brands and otherwise,” said Troy Prothero, VP of project management at Symphony RetailAI. “And the issue with this visibility gap will become more and more 34
Store Brands
l
March/April 2022
032-034_SBR_FoodWaste_0422_v3.indd 34
l
Prothero added that forecasting for prepared food production, in addition to meat and produce SKUs, can be used to minimize risks. This can help maintain data integrity and help facilitate collaborative communication around item availability, movement and end-to-end traceability across the supply chain.” While AI seems to be at the forefront of how retailers can eliminate food waste, Grocery Shopii, a service that aims to streamline meal planning and fuel grocery eCommerce, said it can help curb waste as well. The service is helping to reduce food waste and improve sustainability by allowing farmers to more quickly and efficiently move their surplus produce through grocery channels, which is an added benefit as supply chains continue to struggle due to Covid-19. “When a retailer employs a recipe shopping experience like Grocery Shopii on their website, they turn on an engine that fuels private label sales at volume,” said Katie Hotze, CEO and co-founder of Grocery Shopii. “Why? Because the ingredients in a recipe can be fulfilled in many ways. Some recipe technology providers sell those ingredient slots to brands, creating a fulfillment nightmare for the retailer. Grocery Shopii empowers the retailer to define the private label fulfillment selection for nearly every ingredient, opening a powerful channel to place store brand products into every recipe added to cart. Combine this retailer benefit with the speed and convenience of a single-click, add-to-cart recipe shopping experience for shoppers, and it’s easy to grasp how quickly recipe technology can fire up online sales.”
www.storebrands.com
4/6/22 5:32 PM
THE RIGHT KEY TO GET YOUR PRODUCT
ON THE SHELF
SUPERIOR PACK GROUP 2 Bailey Farm Rd. • Harriman, NY 10926
The Turn Key Solution To All Your Contract Packaging Needs
SB_FullPg_temp.indd 1
845.534.1015 sales@superiorpackgroup.com
4/6/22 8:32 PM
SB_FullPg_temp.indd 1
4/6/22 8:33 PM
