Inside PLMA Global

RETAILERS TALK PRODUCTS, EXPERTS GIVE INDUSTRY FORECASTS AND INSIGHT

By Zachary Russell

Following 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 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

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

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 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.”

Walgreens Sun Moisturizing SPF 30; Walgreens Pulse Oximeter + Respiratory Rate Monitor

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.”

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 losing 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?”

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

Since 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 fl avors 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. 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 indulgence. 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