Store Brands - Sept by ensembleiq

THE PULSE OF PRIVATE LABEL

CONTRACT MANUFACTURING GUIDE P. 29

SEPTEMBER 2021

www.storebrands.com

PRIVATE BRAND DISRUPTORS

FOXTROT, A RISING CHAIN OUT TO MODERNIZE CONVENIENCE, LEADS A LOOK AT RETAILERS SHAKING UP STORE BRANDS

001_SBR_Cover_0921_Options.indd 1

9/14/21 5:44 PM

SB_FullPg_temp.indd 1

9/14/21 8:15 PM

SB_FullPg_temp.indd 1

9/14/21 8:19 PM

VOLUME 44 NO.6

COVER STORY:

Private Brand Disruptors

Foxtrot leads a look at retailers shaking up store brands, including HelloFresh and more

29 Contract

14 Q&A: IRI

Manufacturing Guide:

A sit down with IRI on how inflation is impacting private label

Packaging Report: Uncovering new materials for private brand packaging

25 Beverage Report:

Private brand beverages are leading the way in function and flavor

A listing and resource guide to leading companies in contract manufacturing

Editor’s Note

Industry News

Viewpoints

Dispatches

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. 4

Store Brands

004_SBR_Contents_0921_v5.indd 4

●

September 2021

●

www.storebrands.com

9/14/21 5:02 PM

U YO R

LABEL

Your Label Belongs on Our Paper.

E R

During the recent supply chains upheavals, we ran our plants at full capacity to honor our commitments and to make sure our customers’ shelves were stocked. That’s why we are one of the fastest-growing private label paper manufacturers in the country – we deliver exactly what you need, at the best price, when and where you need it. And we’ll put that on paper.

For lower volume requirements we offer, pre-packaged Azure® Ultra Premium, Daisy®, Delicate Touch®, and Earth One™ Recycled control brands.

www.usalliancepaper.com 631-254-3030 info@usalliancepaper.com

SB_FullPg_temp.indd 1

• 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 display units

2021 U.S. Alliance Paper Inc.

9/14/21 8:20 PM

SPOTLIGHTING CREATIVE CAMPAIGNS STORE BRANDS IS ON A QUEST TO FIND THE MOST INNOVATIVE PRIVATE BRAND MARKETING EFFORTS Before coming over to Store Brands as an editor, roughly two years ago now, I had spent several years with Shopper Marketing magazine, a print publication under the Path to Purchase Institute that eventually became the print magazine it is today, Path to Purchase IQ. The publication remains a stalwart one, confessedly part of the EnsembleIQ family that owns Store Brands. But it’s an incredible resource for seeing how national consumer goods companies are marketing products across the entire path to purchase, inside stores, online, outdoor, you name it. I remain fascinated by how brands go to market, and now at Store Brands, I’m very interested in how private brands merchandise inside stores, how they leverage social media, TV spots and more. As private brands become more and more sophisticated, it’s only a matter of time they become tremendous brand marketers themselves. We’re already seeing examples, of course. Early this year, Albertsons ran a very creative campaign around its Soleil sparkling water, tying it into a set of Spotify playlists and unique packaging art, featuring up-and-coming artists, and Walmart has been creatively using augmented reality in stores tied to the Netflix show “Waffles + Mochi.” Save A Lot ran a fun music video and campaign around its rebranding that included dedicated animated “adlets” to its store brands. In the November issue of Store Brands, we aim to highlight the best in private brand marketing and recently launched an online submission call for companies to submit the best private brand marketing examples that run across social media or influencers, digital and mobile efforts, TV, in-store merchandising, all-encompassing integrated campaigns, and more. We want to see any innovative marketing examples and feature them. The feature is called Creative Campaigns 2021 and the submission form can be found on the homepage of storebrands.com, and companies have well into October to nominate. When talking about my days at Shopper Marketing, I’d be remiss to point out that I actually first started out at the magazine when it was called P-O-P Times, a publication dedicated to how national brands merchandised and leveraged point-of-purchase displays in-store. I make the point because it’s been incredible to see marketing grow over the last two decades. That publication evolved into Shopper Marketing, which I helped launch, and then Path to Purchase IQ, as a direct result of marketers expanding from displays, and print and TV, to meeting shoppers along the full shopper journey, pre-shop, in-aisle and at home. Today, private brands are doing it all from mobile campaigns, e-commerce, social and more. We want to highlight the best. Send us your best examples in marketing. 6

Store Brands

●

September 2021

006_SBR_EditorsTake_0921_v3.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 Editorial Director, Grocery Group Mike Troy (813) 857-6512; mtroy@ensembleiq.com Executive Editor Dan Ochwat (773) 992-4416, dochwat@ensembleiq.com 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 Vice President, Production Derek Estey (877) 687-7321 x 1004, destey@ensembleiq.com 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 Executive Vice President, Events & Conferences Ed Several 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

9/14/21 5:03 PM

Target Debuts Pet Food Private Brand

Walmart releases exclusive, inclusive baby products Walmart and Dove have announced a new exclusive line of baby products that aim to fill a gap in the market. Baby Dove’s new inclusive line of shampoo, conditioner, baby wash and skin cream is designed for children with multiracial babies who may not benefit as much from traditional products. “As a parent of multiracial children, I understand the frustration with the lack of baby care products formulated for little ones whose darker skin and textured hair are more prone to dryness,” said Ralph Clare, VP of merchandise, baby, consumables, Walmart. “There was, and has continued to be, a gap in the market for gentle yet effective baby products made specifically for the skin and hair care needs of diverse and multiracial babies — until now. We’re thrilled to announce the launch of Baby Dove’s new inclusive line of products designed to meet the specific needs of babies with melanin-rich skin and textured hair, available exclusively at Walmart.” Walmart is the first major retailer to introduce a multicultural category to address the gap in the market for inclusive baby care. Through a partnership with Unilever, Walmart was able to develop a potential solution for diverse families to better meet the needs of customers. Due to the unique composition and distribution of melanin, dryness is more visible on skin with high-melanin. Textured hair is also more prone to dryness and an increased number of spontaneous knots due to its hair follicle’s structure. Baby Dove Melanin-Rich Skin Nourishment products, which include a hypoallergenic wash, hypoallergenic cream, and soothing baby oil, are designed to deliver moisturization at every touchpoint and help prevent baby skin dryness. The Baby Dove Curl Nourishment hair products include a hydrating shampoo, softening conditioner, and caring detangler cream to deliver nourishment for textured hair.

Target’s looking to take a bite out of the growing pet category, introducing Kindfull, a line of more than 50 wet and dry foods, treats and dry toppers for cats and dogs. The pet category is one that’s seemingly unphased by inflation, per a recent report from IRI that showed the category climb in dollar sales by more than 7% vs. a year ago and earn nearly $40 million in sales throughout the past year. Pet food specifically ranked fifth among CPG sales in the second quarter report. Target’s Kindfull store brand joins nearly 50 from the mass merchant, and the clean packaging carries a gentle, natural feel, similar to its Good & Gather staple in food and beverage. The retailer said the products have been more than a year in the making and more than half of the products are priced under $10. Some Kindfull items include Kindfull Chicken & Brown Rice Recipe Dry Dog Food, Wild Caught Salmon Recipe Wet Cat Food, and Chicken, Pumpkin & Turmeric Recipe Toppers. The Minneapolis-based chain worked with pet food and nutrition experts to present a pet food store brand option with no artificial colors, flavors or preservatives and no wheat, corn or soy. Ingredients include real poultry, pastureraised beef and fish that are wild-caught using sustainable practices that help protect ocean resources, Target said. “Kindfull highlights Target’s continued commitment to providing our guests with an incredible cross-category portfolio of owned brand options to choose from alongside their favorite national brands,” said Jill Sando, executive vice president and chief merchandising officer, Target. “With Kindfull, our newest owned brand offers guests pet food for their furry family members that showcases our commitment to quality, value and thoughtfully selected ingredients.” Stepping in line with Target’s sustainability plan Target Forward, more than 40% of Kindfull items are in recyclable packaging.

www.storebrands.com

007-009_SBR_IndustryNews_0921_v3.indd 7

●

September 2021

●

Store Brands

9/14/21 5:07 PM

Kehe’s Made With Enters Bakery Set Made With, the exclusive brand of Kehe Distributors, is hot out the oven with its first bakery lineup. The Boulder, Colo.-based company that produces more than 100 products under the Made With name exclusively for Kehe Distributors and its roster of independent grocery retailers has previously focused on product development within the frozen foods, shelf-stable foods and fresh food perimeter categories, but has unveiled a new line of bakery products. The Made With bakery items are described as “attributedriven bakery products,” by the Made With company, developing dairy-free, Kosher and non-GMO brioche hamburger buns, hot dog buns and a braided challah loaf. We’ve seen an increased demand for products without artificial flavors, preservatives, or colors in the marketplace,” said Ben Friedland, executive director of exclusive brands at Kehe, based in Naperville, Ill. “This new line fits that con-

Store Brands

September 2021

007-009_SBR_IndustryNews_0921_v5.indd 8

sumer demand but also our ingredient philosophy of a clean and great-tasting product. We took these items a step further by also catering to different dietary needs like dairy-free, nonGMO, and Kosher, which makes them truly unique in the market right now.” The distributor is Certified B Corp and is a pure-play distributor of natural and organic, specialty, and fresh products to more than 30,000 natural food stores, chain and independent grocery stores, e-commerce retailers, and other specialty products retailers throughout North America.

www.storebrands.com

9/15/21 8:51 PM

Can Coupons Drive Premium Private Brands Post-Pandemic? One of the trends to emerge out of the COVID-19 pandemic is the rise of e-commerce and online shopping. Along with the growth in online shopping spending came the increased use of digital discounts and promotional codes — and it’s having a direct impact on private label products. CouponFollow, a group that tracks coupon codes and aims to help consumers save money, released its latest research on couponing trends with the goal of helping retailers better understand the role of digital discounts in how Americans shop online in 2021, and determine whether or not the shopping patterns of the last 12 months are here to stay. The trends impact how retailers orient their selections, including for private label products. “Today, there are more private labels on the market than ever before,” Marc Mezzacca, founder of CouponFollow, told Store Brands. “Not only are there an increasing number of

private label products, but many have also transformed into ‘premium’ goods, building a solid reputation with customers. Offering coupons or discounts specifically for their store brand products is how large retailers might entice customers to try their private label products. According to our research, as many as two-thirds (66%) of consumers claim to discover new brands through coupons. In fact, as many as 82% of consumers are more likely to try a new product or brand if a coupon is available” CouponFollow said consumers are much more likely to forego purchasing nationally recognized brands when a store brand option is available because they know they’ll enjoy the quality and save money at the same time. CouponFollow’s latest research includes: • Nine in 10 (96%) Americans stated they search for a promo code or a digital coupon before making an online purchase, with only 4% stating they never do. • Around 73% admit that receiving discounts from brands makes them more loyal customers, twothirds (66%) discover brands through promo codes, and equally, as many (66%) state they’d be more likely to visit a store in-person if they had a coupon to redeem there.

www.storebrands.com

007-009_SBR_IndustryNews_0921_v5.indd 9

September 2021

Store Brands

9/15/21 12:43 PM

VIEWPOINT

UNDERSTANDING COMPOSTABLES Retailers with own brands have steps to take when procuring compostable products

Susan Thoman, managing director, Compost Manufacturing Alliance (CMA)

ultural, legislative and consumer-driven initiatives are increasing interest in more sustainable single-use packaging at retail. Food scraps make up as much as 40% of landfill waste, and with a growing number of states adopting plastic reduction pacts, compostables and curbside compost collection interest is on the rise. Oh, the thrill of tossing onion skins, rib bones, stale chips, and compostable plates and forks into a bucket, taking it to the curb, and making compost out of it to grow your own food — that’s as good as it gets! Even better, the compost made from the effort, when applied, minimizes chemical usage, saves water, and sequesters carbon in the soil to fight climate change. Composting programs are community built, where soil amendments made from gathering yard clippings, coffee grounds, and compostable ware supports job growth, circular economy practices, and a better environment. When retailers offer compostable single-use packaging, they promote higher food scrap recovery while providing greener options for consumers looking for better alternatives to landfill bound plates, cups and forks. When procuring a compostable line of products, it is crucial to understand the importance of purchasing only cer10

Store Brands

●

010_SBR_Viewpoint_0921_v3.indd 10

September 2021

●

tified products (CMA or BPI) to comply with emerging labelling legislation, while also considering the challenges compost manufacturers often face in accepting them. The Compost Manufacturing Alliance is the only third-party certifier of compostable products made up of a network of compost facilities throughout North America. CMA was formed to ensure that products marked “compostable” meet established laboratory standards for compostables (ASTM D6400/D6868), that they break down adequately in the facilities they are destined for, and that they do not contain PFAS (chemicals of concern in foodservice products that are subject to growing legislative bans along with media and public concern).

WHEN RETAILERS OFFER COMPOSTABLE SINGLE-USE PACKAGING, THEY PROMOTE HIGHER FOOD SCRAP RECOVERY WHILE PROVIDING GREENER OPTIONS FOR CONSUMERS.

Certification on products ensures compostables will biodegrade naturally in the environment and do not contain metals or harmful chemicals. In addition to certification, some compostable labelling legislation encourages markings and color systems that address issues with sorting and identification at the compost facility. When loads come into facilities, being able to identify what is compostable means it meets the “ten foot rule” so that the workers on loading equipment can identify accepted compostables through colors, patterns or markings. In some states, the use of the word “biodegradable” is not allowed on retail items sold and intended for industrial composting systems. The reason? Many things are biodegradable, while compostable materials must break down within an active composting cycle timeframe so that they are not left to be screened out as a contaminant and landfilled at the end of the process. When that happens, the products take a long and expensive ride to the landfill, at both the consumer’s and compost facility’s expense. In addition, retailers are at risk of receiving fines and negative press if products sold are not compliant with growing regulations and Federal Trade Commission guidelines. CMA’s growing network of compost manufacturers take a systems approach with retailers, distributors, hauling companies and compost manufacturers to provide vital education and feedback on the complexities, laws, and importance of procuring only certified products. In circular economy systems, all parties must engage in collaborating to create the most environmentally and economically viable systems. Retailers play an important role in expanding and improving composting growth through thoughtful procurement policies. When local grocers are connected to the local composter by working with CMA, the connection between the buying consumer and the compost producer is complete. SB

www.storebrands.com

9/14/21 5:22 PM

SB_FullPg_temp.indd 1

9/14/21 8:20 PM

VIEWPOINT

BEING ‘FLEXIBLE’ With the rise of e-commerce, packaging looks to play a role in the online experience

Sarah Stieby, Fresh Lock marketing manager

ccording to eMarketer, U.S. retail e-commerce sales exceeded $799 billion in 2020, a 33.6% increase over the previous year. Even with the country opening back up and consumers enjoying instore shopping again, eMarketer forecasts that sales for 2021 will surpass $908 billion. The importance of providing a seamless online shopping experience cannot be understated. For private brand manufacturers and retailers, packaging may not be top of mind when brainstorming ways to improve their e-commerce efforts. However, the right packaging can play a significant role in consistent brand messaging, performance and the consumer experience. When combined with a robust online shopping platform and delivery service, flexible packaging can enhance a private label’s offerings. WHY IS FLEXIBLE PACKAGING GOOD FOR E-COMMERCE? While the virtual shopping experience may not allow consumers to physically interact with products before purchase, store brands can still use flexible packaging to stand out among competing brands. Photography plays a significant role in attracting online shoppers. Ad12

Store Brands

●

012_SBR_Viewpoint_0921_v3.indd 12

September 2021

●

vancements in digital printing have made it possible to include eye-catching graphics and clear, legible product information on flexible packaging. Store brands that have a consistent look and feel across their product lines and physical locations can incorporate that online. The more attractive a package is in person, the more attractive it will be online. Sometimes brands and retailers do not offer the highest-quality imagery on their online shopping platforms, making flexible packaging and large product images a perfect opportunity to stand out. Another benefit of a consistent look and feel across all channels is the ability to manage consumer expectations. Shoppers expect products and their packaging to be the same regardless of how they were purchased. If packaging and imagery differ from in-store to online, consumers may wonder if something has changed with the product or if they bought the wrong product. Since flexible packaging is suitable for both digital and in-store shelves, store brands can offer a high level of consistency. Once consumers find the product online, the next step is delivery. The durable and lightweight nature of flexible packaging makes it an ideal option for shipping. Where legacy packaging options can be bulky, heavy or prone to damage, flexible packaging offers the ability to efficiently deliver and

protect its contents. Flexible packaging requires less space for warehousing and storage and can reduce energy consumption for manufacturing and transport. Properly sealed packaging can help preserve the product and maintain freshness throughout the delivery process. When the package arrives at its destination undamaged, the consumer will have a positive outlook regarding the brand. PRODUCTS THAT CAN BENEFIT FROM FLEXIBLE PACKAGING There are many applications for flexible packaging as store brands continue to expand their CPG offerings. Products that come in a bag within a box can reduce the amount of packaging required to achieve proper delivery. For example, if cereal was placed in a resealable flexible pouch, it could be shipped without additional packaging. Once the package is opened by the consumer, the closure on the pouch could then help extend the product’s shelf life by keeping air out, something that can be difficult to do in non-sealable packages. Additionally, healthcare items like feminine care products and over-thecounter medicines can be placed in flexible pouches thanks to compatible child-resistant closures. Healthcare products are prone to extreme consumer inspection due to their nature. If a package arrives in poor condition, the consumer may worry about the integrity of the product or form a negative opinion about the brand. PACKAGING FOR A POSITIVE CONSUMER EXPERIENCE The goal with all packaging is to keep the product safe and provide the enduser with a positive experience. Retailers that can implement quality packaging across their various channels and create an intuitive online shopping experience can do just that. Thanks to ongoing advancements in flexible packaging materials and closures, chances are the right packaging partner can provide the solution you need. SB

www.storebrands.com

9/14/21 5:23 PM

Na�onal Towele�e has been manufacturing EPA Registered disinfectant wipes in the USA for over 15 years!

Durable Diamond Pa�ern Fabric!

Ask for Erin! phone... 215-245-7300 or email...erin@towele�es.com

During the Pandemic, did your Private Label Disinfectant Wipe Manufacturer let you down? A second source is the solu�on to Place Your Company Name Here supply-chain challenges New, state of the art produc�on lines! Conveniently located in the North East USA We manufacture 35 count, 40 count and 75 count CANISTERS EPA approved and tested formula #6836-336 Available in your store brand or our Flexwipe Brand

All components Proudly Made in the USA Na�onal Towele�e Company 1726 Woodhaven Drive Bensalem, PA 19020

Effec�ve against the virus that causes COVID-19 This formula cleans and disinfects in one easy step. Effec�ve against SARS-CoV-2 virus, the cause of Covid-19 An effec�ve way to clean and deodorize against odor-causing bacteria KILLS 99.9% OF BACTERIA IN 15 SECONDS!

SB_FullPg_temp.indd 1

EPA Est. No. 70930-PA-001

9/14/21 8:21 PM

QUESTIONS/ANSWERS

STORE BRANDS GO PREMIUM TO BATTLE INFLATION EXCLUSIVE TALK WITH IRI ON THE CURRENT STATE OF STORE BRANDS IN THE FACE OF RISING PRICES

ore than a decade ago, the retail market faced rising prices and inﬂation. But amid the COVID-19 pandemic, the inﬂation period underway is revealing a different strategy for store brands. Previously, the strategy was to promote value brands and the lowest price possible. The current situation is revealing an opportunity to promote premium private brand products, according to Krishnakumar Davey, president, strategic analytics, IRI, who sat down with Store Brands. Here’s an edited version of the conversation:

STORE BRANDS: DESCRIBE THE SITUATION RIGHT NOW AS YOU SEE IT. KRISHNAKUMAR DAVEY: The price index continues to increase. This year it is running roughly at about a 4% increase vs. a year ago, and up about 8.5% to 9% vs. two years ago. That’s significant inflation because typically we run about two to two and a half points of inflation a year by price mix. Many large manufacturers have announced price increases, like Tyson and others, who are expected to increase prices throughout 2022 because there’s significant cost inflation. At the retail level the price increases have been 1% to 2.5% in terms of just the everyday price. SB: You mentioned Tyson, which has a branded business and a private brand business. How does that play out? 14

Store Brands

●

014-015_SBR_Q&A_0921_v5.indd 14

September 2021

●

KD: I think they have already added significant pricing in foodservice. In retail, they have said they have implemented it, but it's going to take a month for it to escalate down to the consumer, so I would assume their private label will also go up. So far this year, private label pricing has been more in the fresh, meat and deli department, but not as much in packaged goods, but that's also picking up because at the end of the day a bottle is a bottle, whether private label or branded. Right now, store brands are taking prices up about one to one and a half points below national manufacturers. Earlier, there was a lot more in fresh, but I think that's moderating. The packaged goods, the center store, is what is growing right now in terms of pricing for national brands significantly and store brands also quite a bit.

SB: How does today’s situation compare to years past? KD: We looked at the last recession when pricing really shot up quite a bit, 2008, 2009. In that period, private label, believe it or not, added about $8 billion in increase in sales, over a two-year time period, 2008 to 2010. The share grew 0.8 points and also the category grew whatever their normal growth, so they grew both from category growth but also from share growth, both in edible and non-edible. It was $3.4 billion in non-edible and the rest in edible. What happened at that time was a lot of the mass and club retailers started building private label brands so they were growing through distribution, introducing store brands in categories that they didn't have and so on, which all helped them. This time is different in the sense that there's a lot of stimulus money still in the system and the other

“So far this year, private label pricing has been more in the fresh, meat and deli department, but not as much in packaged goods, but that's also picking up because at the end of the day a bottle is a bottle, whether private label or branded.”

www.storebrands.com

9/14/21 5:24 PM

factor, until recently, consumers didn’t have a lot of other avenues to spend money. They couldn’t go out to eat as much as they did before, they couldn’t entertain themselves, etc. Everybody traded up, particularly in terms of food at home and better quality of pasta sauce and better quality of beverages. The further complication, more recently, as we all know, is this whole Delta variant, so there’s going to be continued increased consumption at home so there is uncertainty of demand. The supply situation more or less has stabilized in many categories but still not completely. You see that in foodservice still. SB: Which categories do you see having the best opportunities for store brands? KD: One of the things that we have studied in store brand growth over the years, the categories that already have a strong store brand development, are the ones who gain the most during the switch from national brands to store brands. That may be because of ubiquity, presence, established brand name, people may have tried it and come back to it. Even though retailers are systematically trying to introduce more store brands in more categories, they are introducing more variety and more flavors. For example, from a variety perspective, there's a lot of interest in ethnic cooking. We are seeing more premium, more variety in already established categories, and then retailers are dipping their toes in where there's no big supply constraint right now. SB: How do retailers prepare for what's next? KD: Our read of the situation suggests we may see price mix growth of even close to 7% to 10% by the end of the year for many categories, and that's pretty significant compared to anything that they have seen for the last 10 years. But on the other hand, foodservice, out-of-home food inflation is even higher because not

“Our read of the situation suggests we may see price mix growth of even close to

7% to 10%

by the end of the year for many categories, and that's pretty significant compared to anything that they have seen for the last 10 years.” only are they paying more for these things, but they're also paying more for the labor and the shortage of labor. The labor costs are going up in addition to the raw material ingredients, so out-of-home food is already running much higher than in-home food and will continue to run. Consumers will be forced to trade down, at least a certain segment, and look for value channels, value-seeking behavior, value brands, or premium brands, which offer value. Value doesn't really mean right away lowest price point, but instead of buying two Kit Kats can I buy a bulk bag of Kit Kats? SB: And the foodservice issue there feeds that premium store brand strategy because that's still a better value vs. going out to eat. KD: Yes, and they’re doing a good job because that innovation also helps differentiate one retailer from another. We had Albertsons on one of our interviews and they talked about how their cauliflower pizza is really sought after. Once you have a differentiated store brand, then that just offers a number of other benefits in terms of driving the basket, attracting shoppers, retaining the

shopper and driving loyalty, and also driving their price position in the marketplace. SB: Is there an opportunity for store brands to gain share during this period? KD: As the price gap between the national brands and store brands widens, store brands start to gain share. In the last two, three months of data, we are seeing the widening of the price gap as national brands keep taking price and store brands are not following as aggressively and widening their price gap. Some retailers have spoken openly about the fact that, "Hey, if the national brands take too much price then we will double down on our store brands to make sure our consumers still get value." The other thing I would say, mass merchant and club retailers are the ones who are doubling down on value and on store brands. Think of Target, think of Walmart, think of Costco, Sam’s Club, and BJ’s. They have been investing in store brands for the last five years before COVID, and we see them continuing to do so now as supply stabilizes to continue to grow in that. SB

www.storebrands.com

014-015_SBR_Q&A_0921_v5.indd 15

September 2021

Store Brands

9/14/21 5:24 PM

COVER STORY

PRIVATE BRAND DISRUPTORS FOXTROT, A RISING CHAIN OUT TO MODERNIZE CONVENIENCE, LEADS A LOOK AT RETAILERS SHAKING UP STORE BRANDS

oxtrot, a regional chain of boutique markets that began six years ago, is widely considered a disruptor in retail. The company is aiming to “redefine convenience for a modern consumer,” and the retailer is certainly one to take notice. This year, Foxtrot announced it would be adding 50 stores over the next two years, growing from a dozen locations in Chicago, Dallas and Washington, D.C., into New York, Austin, Boston, Miami, Los Angeles and Houston. The retailer also launched a national online gift box service with curated craft items, including its private brand products. And consider the private brands — disrupting the fast food era of convenience chains with an eye on trendy cafe foods and premium packaged goods in fun, bright packaging. To achieve a store brand approach of this magnitude, Foxtrot hired Mitch Madoff in the spring of 2021. Madoff is the former vice president of exclusive brands at Whole Foods Market, and will lead Foxtrot’s private label and supply chain. He was added alongside the announcement of Tae Strain, a chef at acclaimed David Chang restaurant Momofuku, to be its culinary lead for exclusive prepared items and more. Madoff discussed with Store Brands his strategy for Foxtrot’s private label program, as the company builds from its $42 million funding round in February, and begins to quadruple its store count. “It’s been an exciting and busy first few months,” Madoff said about his early days on the job. “I’m happy to be part of a company that’s rapidly growing and expanding. We’re agile and nimble across all depart-

Store Brands

●

September 2021

016-020_SBR_CoverStory_Foxtrot_0921_v5.indd 16

●

W A T

ments, and it’s been rewarding to oversee the private label division as both a developer and leader during this time of growth.” So far, the store brand products stepping up during this time lean into desserts, a go-to among the convenience store set that Foxtrot is disrupting. Foxtrot’s namesake brand includes six original flavors of ice cream including Roasted Banana & Caramel, Extreme Cookie Dough Sprinkle, Chocolate Hazelnut Chunk, Big Riff Coffee, Mint Sprinkle Brownie, and Strawberry Cheesecake Crumble. Additionally, the company teamed with Los Angeles-based CoolHaus for exclusive dual-branded Foxtrot and CoolHaus ice cream sandwiches and novelty bars. The retailer even has bundles to buy its own brand ice cream treats alongside a bottle of wine (the chain proudly touts a selection of more than 200 bottles) and carries a private brand wine under the Kid Sister label. Madoff said the ice cream flavors have been very successful, and they’re continuing to look to collaborate with local chefs and small producers and suppliers to bring new offerings into its private brand mix. The company, for example, also partnered with Dolcezza Gelato in Washington, D.C., and Pretty Cool Ice Cream in Chicago. In coffee, Foxtrot partnered with Metric in Chicago for its own whole bean blend. “Expanding into ice cream has given us credibility to explore other novelties and frozen treats,” said Madoff. “Above all, we love food and we always approach private label with the goal of uncovering and creating delicious, high-quality items we know our customers will enjoy.”

www.storebrands.com

9/14/21 5:27 PM

COVER STORY

www.storebrands.com

016-020_SBR_CoverStory_Foxtrot_0921_v5.indd 17

●

September 2021

●

Store Brands

9/14/21 5:28 PM

COVER STORY

Other Foxtrot brand indulgent treats include scratchmade brownies, gummy candies in hip packages, chocolate mixes, cookies and cream pies. The breadth of private brand products extends into snacks too, with extremely modern and slick-looking packaged chips in flavors like Spicy Dill Pickle, Back Porch BBQ and Sea Salt. The company has a line of granola as well. Madoff describes the assortment as taking customers along a food journey that’s nostalgic and aimed to help them uncover new trends. The packaging has fun animated characters and perhaps a kid-like, nostalgic feel. “Our customers are curious and open to new trends and flavor profiles,” he said. “We develop products that are craveable and delicious. Our goal is to create an experience that they didn’t even realize they were missing before.” In reference to the company’s swift growth and plans ahead, Madoff said scale is the key. “Scale will make things easier. The larger we get, the faster we’ll be able to move and we’ll continue to streamline our supply chain,” he said. “Growth supports exactly what we’re trying to achieve, allowing our suppliers and the upand-coming brands we work with to grow with us as well. A lot of our partners have taken a leap of faith to work with us and they continue to grow and develop alongside us.”

FELLOW DISRUPTORS

HelloFresh. The New York-based meal-kit company announced late in the summer that it would be offering a mix of private label pantry items as part of its move into becoming a fullservice online grocer. The company told Store Brands that its HelloFresh Market service, an add-on to its mealkit delivery, will include fresh produce, snack foods, dessert items, packaged spice blends, grocery essentials and ready-to-heat meals. The new market offerings will include a mix of private label products from HelloFresh as well as partnerships with branded companies such as Intelligentsia Coffee, Annie’s, Vive Wellness Shots, Epicurean Butter and Pillsbury. Imperfect Foods. The e-commerce company founded on the idea of delivering produce deemed imperfect 18

Store Brands

●

September 2021

016-020_SBR_CoverStory_Foxtrot_0921_v5.indd 18

●

by brick-and-mortar retailers added to its disruption by using imperfect produce to develop store brand products, including namesake cooking oils, quinoa, grains, and even bath and body products like facial oil, avocado honey body butter, and shampoo. The San Francisco-based com-

pany recently generated $95 million in a round of financing to build out its private brands. Martha Hale, chief merchandising officer at the company, previously told Store Brands during a Q&A: “When it took off in 2019, our private label

www.storebrands.com

9/14/21 5:29 PM

COVER STORY Foxtrot’s building its private label program from its

$42 million funding round in February, and is adding 50 stores over the next two years, including entering new markets such as New York, Austin, Boston, Miami, Los Angeles and Houston.

From its own brand suppliers, Foxtrot is looking to work with emerging producers, and ones that spark new ideas and take risks, he said. The suppliers should align with the Foxtrot mission: “People who enjoy creating delicious, high-quality food with an entrepreneurial spirit,” he said. The latest from Foxtrot is its Foxtrot Anywhere nationwide shipping program. The program is framed as curated

that each item has to taste good and delight the customer as well. From our chocolate-covered pretzel pieces to our dried mango, the main ingredients have a story that helps drive our mission.”

program was focused on food rescue buys and as we began to expand, we evolved into what we offer today. To us, private label is where companies gain their distinction from other companies. We knew that our private label should be about storytelling but also

Walmart. Strange to call a global leader like Walmart a disruptor, but the mass merchant does have a few tricks up its sleeve, including its entry into streaming devices that will challenge Roku and Amazon Fire Stick. Walmart also will launch its first-ever store brand insulin product, disrupting the pharmacy industry. In electronics, Walmart introduced Onn in 2010 and eventually consolidated its store brand electronics under the brand in 2019. This year, it branched out with an Onn streaming device. Leigh Stidham, spokesperson for Walmart, told Store Brands that www.storebrands.com

016-020_SBR_CoverStory_Foxtrot_0921_v5.indd 19

●

September 2021

●

Store Brands

9/14/21 5:30 PM

COVERSTORY STORY COVER FELLOW DISRUPTORS Continued

the brand and product is meant to be “an industry-disruptive entertainment brand to better serve customers and create a simplified shopping experience through thoughtful product design, elevated and compelling packaging design and simplified communications about product attributes, all at affordable prices.” Also this year, Walmart rolled out ReliOn NovoLog, a private brand first in diabetes care. The store brand analog insulin vial and FlexPens is said to save consumers between 58% and 75% more money compared to branded packages. Aldi, Trader Joe’s, Lidl. Perhaps the original disruptors, with stores that are 90%, 85% and 80% private label, respectively, the three grocers continue to elevate products, branding and assortment at a major value, arguably getting retailers to step up private brand programs over the years. Loblaw. The Canadian retailer can also be looked at as a legendary disrupter with its No Name brand, which to this day stands out with its cheeky marketing and “lack of branding,” although it’s branding without branding (it’s all very meta). The brand relies on its black and yellow colors and that’s it. For example, go to the website for No Name and all it reads is, “website” in black lettering against bright yellow. The products carry the same mantra, only they stand for high quality, as the retailer introduced two years ago its Simple Check symbol on the No Name packages, signifying that the products are made without 10 ingredients including synthetic colors, artificial flavors and monosodium glutamate.

Store Brands

September 2021

016-020_SBR_CoverStory_Foxtrot_0921_v5.indd 20

gift boxes with a mix of its top-selling products and items that fit certain themes such as a Pasta Night box. The program gets the Foxtrot products out to consumers nationwide as it continues to grow into new markets. Additionally, Foxtrot has been evolving its culinary program that inspires its grab-and-go food items that are a core of the store, taking great care within its recipe department, Madoff said, and sourcing to revamp the prepared foods and cafe menu. “We’ll continue to introduce new items and new collaborations across our current categories throughout the year, and you can expect some exciting new items and partnerships tied to the holiday season,” he said. “We’re also expanding our private label brands outside of food. We will have more to come on that soon.”

www.storebrands.com

9/14/21 5:30 PM

PACKAGING REPORT

EXPLORING NEW MATERIALS SEAWEED FIBERS, CORN-BASED PLASTICS AND MORE, PACKAGING COMPANIES TEST THE VIABILITY OF ECO-FRIENDLIER OPTIONS IN OWN BRAND PACKAGING

By Zachary Russell

n recent years, companies have shifted their focus toward a future of sustainability in an effort to mitigate climate change and pollution. The packaging industry is no exception. There is an urgency to meet both consumer demands and environmental benchmarks, shown in a move away from traditional plastics and in sourcing more alternative materials for both branded and private label products. And there are a range of material options that retailers with private label brands and suppliers of private label products are looking to test — some of which are as creative as sourcing material from seaweed, hemp and corn. However, as companies test packaging with these more eco-friendly options, the industry is learning what could be a realistic fit or not. “We see biodegradable plastics made out of corn or seaweed, recycled plastics mixed with biodegradable elements, aluminum, cardboard and glass options,” said Jordan Erskine, president and co-founder of Dynamic Blending Specialists. “There are pros and cons to each material, and not every sustainable packaging solution is a good fit for every product.

Currently, biodegradable plastics are still expensive and the options are limited. It’s still a kind of niche industry, but as more and more brands adopt these kinds of solutions, you will see prices start to drop and options increase.” Erskine said that Dynamic Blending, a Vineyard, Utahbased manufacturing company that creates both private label and contract manufactured personal care products, is looking to move away from traditional plastic, and toward new solutions for its customers. “This is one reason we are investing heavily in aluminum packaging equipment and offering price breaks on aluminum packaging,” said Erskine. “The cosmetics and beauty industry uses primarily plastic packaging. This needs to change. When we have clients ask for sustainable packaging, we first ask, ‘Why are you doing it? Why do you need it? Why would it matter? Is it important to you or your customers? The answers to these questions make a difference in how we move forward.” Though companies may crave sustainable packaging materials right away, it may be easier said than done for www.storebrands.com

021-024_SBR_PackagingReport_0921_v5.indd 21

September 2021

Store Brands

9/14/21 5:32 PM

PACKAGING REPORT

“A lot of companies will make products out of hemp-based plastic, but mix it with petroleum based polymer. That reduces the amount of traditional plastic used, but downstream, it may not be able to be recycled and will end up in a landfill.”

any thermo-formal material.” Baker said the new design has been successful among its clients, but that isn’t stopping Jamestown Plastics from looking to the future with the materials they use. Baker said that the company is looking at the use of starch and corn-based plastics for its future products, a shift away from traditional plastic materials. “We are taking a look at some of the starch-based, cornbased plastics that have come onto the market,” he said. “The development of these plant-based plastics has been going on for some time, but there have been some real challenges from the chemistry side of getting the performance out of these materials up to the expected standards of the consumer and the manufacturer. They’ve come a long way, and we’re greatly hoping that they get to the point where they become a viable alternative. If that’s something the market would like to see, we’re all for it. They have a little bit to go as far as performance. That’s not unusual when going toward something new. It takes time to figure these challenges out.” Michael Duffy, global creative director, Equator Design, Chicago, said a move away from plastics and alternative materials will impact the design of packages as well. He cited premium tier packaging with glitter and foils are being increasingly replaced by more sustainable options, while explorations are underway to improve standard

— RON BASAK-SMITH, SANA PACKAGING

companies to revamp their packaging toward being ecofriendly right off the bat. “One piece of advice never changes,” Erskine said. “Always progress instead of digress. Start with packaging you can afford, and improve the quality as the brand grows. If you digress in packaging quality, that key part of your brand image can be irreparably damaged.” Jamestown Plastics, a Brocton, N.Y.-based manufacturer which has been a producer of thermo-formal plastic packaging for over 50 years, recently unveiled its newest product, the “Clamtainer,” featuring a new “Click It” closure technology designed to use less material than traditional clamshells. The Clamtainer differs from traditional hinged containers by only using one lock instead of two. The product is made from durable, recycled plastics. “What we are currently using today is rPET (recycled polyethylene terephthalate) — both a combination of industrial and reclaimed plastic,” said Jay Baker, president of Jamestown Plastics. “We can make this product out of 22

Store Brands

September 2021

021-024_SBR_PackagingReport_0921_v5.indd 22

www.storebrands.com

9/14/21 5:32 PM

The commercial seaweed market was valued at an estimated

$40

billion

in 2020, and is expected to rise by nearly

10%

021-024_SBR_PackagingReport_0921_v5.indd 23

by 2027.

packaging formats for easier post-consumer recycling. “This could include the removal of plastic elements, or where visibility is essential to sales, replacing plastic panes with biodegradable transparent/translucent substrates,” he said. “Brands will continue to respond in myriad ways to public concerns over plastics pollution and climate change — often returning to traditional cans and boxes — and these ‘low tech’ adjustments will go hand in hand with modern, digital advances,” Duffy said. “Tech platforms and AI-enabled tools that reduce waste in production and distribution phases are being bookended on the opposite end of the consumer journey by technological propositions that support the efficiency of post-consumer recycling, including digital watermarking.”

SEAWEED FIBERS

International packaging company DS Smith, based in London, is one company that has taken concrete steps toward a plastic-free, renewable future. As part of the company’s fiveyear, $140 million circular economy research and development plan, DS Smith is in the early stages of developing packaging alternatives using seaweed fibers. If successful, seaweed could be the latest material that would serve as a clean and renewable packaging alternative. The commercial seaweed market was valued at an estimated $40 billion in 2020, and is expected to rise by nearly 10% by 2027. “The focus of the research and development is on materials and processes that we can innovate to help us accelerate our goals,” said Mindy Myrick, head of corporate affairs at DS Smith. “We’re at the early stages of looking at seaweed fibers for packaging. For us and our customers, it starts with the consumers. We are starting to see this demand for sustainability. Just like people want to know where their food comes from, people want to know where their packaging comes from. A key focus for us as a packaging provider is bringing these innovations to the market.” While the seaweed fibers may still be in its development stage, DS Smith already has two green packaging alternatives under its belt. Greencoat is a coated, water-resistant packaging solution that provides the same performance characteristics as wax-coated boxes, but is 100% recyclable. “Wax boxes don’t break down well in a landfill,” said Myrick. “We want to provide alternative solutions for companies who need water-resistant packaging before going to wax. We developed this proprietary Greencoat coating and have started supplying it across our footprint, offering the same performance but in a product that can now be recycled and save that material from a landfill. Once uncoated paper gets wet when stacked, product can get damaged in the process. This product allows for the same products to be shipped while withstanding the weather.” In DS Smith’s European market, the Eco Bowl is a plastic replacement option that can be used in place of microwavable plastic containers. The product is paper based,

9/14/21 5:33 PM

PACKAGING REPORT

“There are pros and cons to each material, and not every sustainable packaging solution is a good fit for every product.” — JORDAN ERSKINE, DYNAMIC BLENDING SPECIALISTS

and can be frozen as well as microwaved. The company hopes to soon bring the product to the U.S. It’s clear that the food and beverage industry is looking to a more sustainable future with its products and packaging, but even in more niche markets, sustainability is becoming increasingly in demand. Sana Packaging is a Wheat Ridge, Colo.-based cannabis packaging company that produces white label and branded packaging for its clients. Instead of traditional plastics, Sana uses reclaimed ocean plastic and plant-based hemp plastics for its containers. “Our goals as a business are different because we only sell sustainable packaging instead of whatever product has the highest profit margin,” said Ron Basak-Smith, co-founder and CEO of Sana. “We started this company as disgruntled cannabis consumers and now the market is growing for sustainable cannabis packaging four years later.” While packaging for both private label and branded 24

Store Brands

●

September 2021

021-024_SBR_PackagingReport_0921_v5.indd 24

●

products is trending toward sustainability, Basak-Smith says that it’s important to consider both sides of sustainability — both upstream, what goes into the packaging, and downstream, what happens to the product after the consumer has interacted with it. “This is kind of the missing piece in how people think about packaging,” he said. “What might be sustainable upstream might not be sustainable downstream. A lot of companies will make products out of hemp-based plastic, but mix it with petroleum based polymer. That reduces the amount of traditional plastic used, but downstream, it may not be able to be recycled and will end up in a landfill. The materials need to match at both ends of the process.” As companies continue to brainstorm new ways to create sustainable packaging for private label clients, eco-friendly disposal will be just as important as what the product is made out of.

www.storebrands.com

9/14/21 5:33 PM

RESEARCH POINTS TO FUNCTIONAL BEVERAGES PROPRIETARY DATA FROM STORE BRAND BEVERAGE PRODUCERS, NIELSENIQ SHOW SUGARFILLED DRINKS ON THE DECLINE, HEALTHY ONES ON THE RISE By Dan Ochwat

e it coffee, tea, dairy products, sparkling water or even alcohol, consumers want added nutritional or functional benefits in their beverages, and private brand suppliers are putting an emphasis on this in the drinks they innovate for retailer private label lines. A slew of research supports this trend: SunOpta, a global producer in the fruit and plant-based category that works with private brand partners, found that plant-based foods are growing at a faster rate than total U.S. food retail sales, up 27% in 2020 vs. 2019, compared with a 15% year-over-year increase in total U.S. food. Within that plant-base segment, oat milk was the star, SunOpta said, growing more than 100% in the last year, per Nielsen data, and is the second

most popular plant-based milk in the country. Michael Buick, senior vice president and general manager, at SunOpta told Store Brands that the company expects to see a continued focus on key functional areas that have been on the rise for several years now, including clean label, organic, responsible sourcing, digestive and gut health, healthy fats, keto and less sugar across the board. “Consumers are looking for immune support, performance-boosting benefits, energy and hydration, and new ways to enhance emotional health and boost brain health, focus and relaxation,” he said. “Certainly, a collective awareness around sustainability, animal welfare and health are influencing consumers as they shop and eat.” The Canadian company with U.S. headquarters in Ediwww.storebrands.com

025-028_SBR_BeverageReport_0921_v7.indd 25

September 2021

Store Brands

9/15/21 12:55 PM

Private label sports drinks sales increased

54.6% during the year ending July 31 vs. a total branded increase in sales of

13.5% Private label ready-to-drink coffee sales increased

46.8% on the year (nearly $5 billion) compared with a near

20%

increase of total branded RTD coffees. 26

Store Brands

September 2021

025-028_SBR_BeverageReport_0921_v7.indd 26

na, Minn., also produces frozen fruit, saying that 60% of the frozen fruit that gets purchased is used for at-home smoothies, a growing trend within functional beverages, too. Innophos, a specialty ingredient company in Cranbury, N.J., launched two new plant-based solutions for high-protein beverages, citing an Innova statistic that found 68% annual growth in food and beverage launches that include a plant-based claim. ADM, a nutritional food and beverage company that produces for private label, conducted its own research that found eight in 10 U.S. consumers are trying to reduce their sugar intake, and of those beverage drinkers in its ADM Outside Voice research, 83% say sugar reduction is the most important characteristic in a beverage. This opens a door for more tea and sparkling water consumption. Kerry, a private label beverage supplier, also did its own proprietary research, surveying 1,460 U.S. food and beverage private label consumers, finding that the COVID-19 pandemic has propelled consumers into private label beverages, and those consumers primarily want nutritional and functional beverages, refreshing and alcoholic beverages, and coffee and tea. The research finds private brand drinkers fall into two categories: “adventure seekers” and “practical traditionalists.” The research found consumers are seeking function and flavor. Nearly 50% of “adventure seekers,” had purchased a nutritional and functional beverage in the last 30 days of being surveyed, 76% had purchased alcohol and 69% bought coffee and tea, per the study. Looking at practical traditionalists, only 31% had purchased a functional and nutritional beverage in the last 30 days of being surveyed, whereas nearly 80% bought alcohol or coffee and tea. “The disruptive nature of today’s beverage market means that new private label products have a strong opportunity to gain market share by innovating in these categories in order to attract consumers who, in rising fashion, want beverages that offer new taste experiences and functional benefits,” said Shawn Gerstenkorn, strategic marketing director, beverage, at Beloit, Wis.based Kerry, when announcing the study.

NIELSEN NUMBERS

Functional or not, private brand beverages are finding their way into the homes of consumers, according to exclusive data provided by NielsenIQ, looking at sales for the latest 52 weeks ending July 31. The numbers show total private brand beverage sales (excluding alcohol) surpassed $7 billion, up 2.3% from a year ago. By comparison, total branded beverage sales passed $84.5 billion, an increase of more than 10%, year over year. The numbers exclude sales at convenience stores, which is a hotbed for single-serve beverage sales. Nielsen also looked at the beverage enhancers category and private label sales there reached $462 million, up 8% compared with the year before, and total branded sales generated $2.4 billion, up 7.6%, year over year. By category, Nielsen found some segments within beverage overall that stood out over others during the sales period ending July 31. Notably: • Total private label ready-to-drink coffee sales increased 46.8% on the year (nearly $5 billion), compared with a near 20% increase of total branded RTD coffees; • Total private label sports drinks sales increased 54.6% during the annual period vs. a total branded increase in sales of 13.5%; • Value-added waters in private label increased sales 17.6% on the year vs. a 16.7% increase in total branded;

www.storebrands.com

9/15/21 12:55 PM

RE PO

O RCED.

GROW .

When you choose to partner with Massimo Zanetti Beverage for your coffee program, you ensure that your brand delivers what today’s consumers demand. With triple certiﬁcations that promote that we adhere to rigid standards of sustainability, you can conﬁdently trust that every coffee product on your shelf was grown, manufactured and packaged with care and consideration for our global resources.

CONTACT MZB TODAY TO MAKE THE MOST OF YOUR COFFEE PROGRAM www.mzb-usa.com | 757-215-7300

V I S I T

SB_FullPg_temp.indd 1

U S

A T

P L M A

9/14/21 8:21 PM

•

Sales of private label coconut water increased 14.1% annually, passing $5 billion; • Dairy-based private label drinks increased sales by 18.6% on the year vs. total branded sales increasing 12.7%; • Total private label sparkling water sales increased nearly 8% on the year. There were categories that showed steep declines, however. The Nielsen numbers highlighted year-over-year declines within private label sparkling juice (-14%), private label soft drinks (-11%) and store brand energy drinks (-19.4%). By comparison, the total branded sales in those categories sales increases of 8% or more. Perhaps not surprisingly, those categories are the ones with the most sugar and fewer functions added, an area private brands seem to be moving away from.

NEW TWIST ON CITRUS

“Consumers are looking for immune support, performanceboosting benefits, energy and hydration, and new ways to enhance emotional health and boost brain health, focus and relaxation.” — MICHAEL BUICK, SUNOPTA

Store Brands

●

September 2021

025-028_SBR_BeverageReport_0921_v7.indd 28

●

ADM, based in Chicago, shared with Store Brands a range of innovative and notable flavors to use across beverages and which beverages provide the most function. Micah Greenhill, beverage marketing director, ADM, said sparkling waters are on the rise and the category continues to get crowded, especially options that contain prebiotics, probiotics, postbiotics, caffeine or antioxidants. “Ready-to-drink tea is another trending category,” Greenhill said. “Consumers are turning to tea for its health halo and clean-label appeal with a short list of close-to-nature ingredients. Some teas are stimulating with natural caffeine while others promote a calming effect.” Coffee kombuchas and other coffee-forward beverages with functional solutions like protein and postbiotics are ones to watch, too, per Greenhill. In flavor types, Hélène Moeller, vice president, global product marketing flavors, ADM, said citrus flavors that are associated with health and wellness have gained traction in the last year. Moeller highlighted these citrus profiles with new twists: • Black limes, also called loomi or dried limes, are rooted in Persian and other Middle Eastern cuisines. The lime is boiled in a saltwater brine and then dried in the sun until it darkens and becomes brittle. Black limes have a tart and earthy flavor that is both sweet and savory. • Preserved lemons, inspired by Italian and Moroccan dishes, are cured in salt to deliver a more intense flavor. • Yuzu kosho is a Japanese condiment made by fermenting yuzu peel, chili peppers and salt, developing a unique spicy and citrusy flavor. • Flamed orange was influenced by Patagonian open-flame barbeque cooking styles. Oranges are tossed into a bonfire, caramelizing the internal juices and sugars, until the fruit is completely charred. The juice and pulp have a complex smoky sweetness. Greenhill said the biggest challenge facing private brand beverage brands is finding a way to stand out in a crowded market. The ADM Outside Voice research said three-fourths of consumers prioritize appealing or interesting tastes and 53% are wary of potentially unappealing aftertastes. “With the increasing consumer desire for more nutritional benefits, many beverage developers may find challenges in balancing fortification with an appealing sensory experience,” Greenhill said. The company attempts to balance that out by using taste modulators and mouthfeel enhancers, mixing in a vast ingredient portfolio with scientific expertise and technical ingenuity, he said.

www.storebrands.com

9/15/21 12:56 PM

CONTRACT

MANUFACTURING

GUIDE 2021

LEADERS IN CONTRACT MANUFACTURING A RESOURCE GUIDE TO CONTRACT MANUFACTURERS IN FOOD, BEVERAGE AND NONFOOD

cousin of private label manufacturing, contract manufacturing offers retailers the benefit of working with a supplier to execute based solely on the product specifications they set and own. It’s not the collaborative workflow seen within a private brand relationship, but contract manufacturing can fit retailers looking for bulk orders of items vs. innovation, for example.

Contract manufacturers also produce for consumer goods companies, executing the formula given. Contract manufacturers can also fill a need as a back up in the supply chain, called on to execute a private brand product already developed and executing the product to help fill orders. Store Brands has pulled together a select list of contract manufacturers across multiple categories as a resource guide for future contract manufacturing projects. www.storebrands.com

029-032_SBR_ContractGuide_0921_v3.indd 29

●

September 2021

●

Store Brands

9/15/21 12:58 PM

American Fiber & Finishing 225 North Depot Street Albemarle, NC 28001 (704) 984-9228 chancock@afﬁnc.com affcottonballs.com

Crystal Geyser Water Company 501 Washington Street Calistoga, CA 94515 (909) 226-4422 stevew@crystalgeyser.com www.crystalgeyserwatercompany.com

Manufacturer and distributor of 100% cotton and 100% certiﬁed organic cotton balls, pads and swabs for the health and beauty industry for more than 35 years.

The company operates two facilities for corporate brands in California with capabilities in glass, PET plastic and cans.

Custom Bottling & Packaging 101 S Parker Drive PO Box 9 Ashley, IN 46705-9649 kriss.stackhouse@cbpIN.com cbpin.com facebook.com/CUSTOMBOTTLINGPKG Custom Bottling & Packaging manufactures national brand and private label liquid household cleaning products. The company also manufactures Evolve bleach tablets and is located in the northeast corner of Indiana.

Butternut Mountain Farm 37 Industrial Park Drive Morrisville, VT 05661 (800) 828-2376 sales@butternutmountainfarm.com butternutmountainfarm.com The company has been a trusted supplier of pure maple syrup with a full array of turnkey services, including packaging options, inventory management and year-long capacity.

Store Brands

●

September 2021

029-032_SBR_ContractGuide_0921_v3.indd 30

●

DelGrosso Foods 632 Sauce Factory Drive Tipton, PA 16684 (814) 684-5880 tfubio@delgrossos.com DelGrosso Foods is the oldest major family-owned producer of pasta sauce in the U.S., with more than 30 years of manufacturing experience. The company specializes in mainstream, organic and ultra-premium pasta sauces and salsa.

Great American Snacks 216 8th St. Nampa, ID 83687 guy.verrona@mccain.com appetizer.com Great American Snacks manufactures a complete line of quality frozen battered and breaded appetizers including hand-packed breaded onion rings, cheese sticks, poppers, vegetables and assorted coated appetizers for the retail and foodservice industries.

Kruger North America 1010 Lake Street Oak Park, IL 60301 (708) 851-3619 jennifer.lieberman@ krugernorthamerica.com krueger-group.com/en linkedin.com/company/kruger-northamerica/mycompany/ The Kruger Group is one of the world’s leading family companies in the food industry with more than 5,000 employees and over $2 billion in revenue. The company is independent, globally networked and produces semi-ﬁnished products to ﬁnished products at 20 manufacturing facilities. Kruger supplies contract manufacturing in many categories such as chocolate confectionary products, sweet spreads and coffee capsules while continuing to grow its portfolio in the U.S. market.

www.storebrands.com

9/15/21 12:58 PM

McCain Foods USA Inc. 1 Tower Lane 11th Floor Oakbrook Terrace, IL 60181 tom.czoschke@mccain.com (630) 857-4372 mccainpotatoes.com McCain Foods produces and markets the innovative prepared potato and appetizer products to consumers and customers in retail, foodservice and quick service restaurant (QSR) sectors. The company brings enjoyment to people’s lives through great tasting food. McCain: Celebrating real connections, through delicious, planet-friendly food.

Mold-Rite Plastics 30 North LaSalle Street Suite 245 Chicago, IL 60602 (518) 561-1812 marketing@mrpcap.com mrpcap.com Mold-Rite Plastics is a leading provider of high-quality, rigid-plastic packaging components used every day by millions of consumers around the globe.

Overnight Labels 151-15 West Industry Court Deer Park, NY 11729 (631) 242-4240 overnightlabels.com

National Towelette 1726 Woodhaven Drive Bensalem, PA 19020 (215) 245-7300 info@towelettes.com towelettes.com The company can take a client’s superior cleaning ﬂuid, established brand, or new idea and turn it into a wipe.

Northern Quinoa Production Company 815 66th Street #174 Saskatoon, SK S7P 0E6 Canada (855) 778-4662 quinoa.com A vertically integrated company that produces a range of quinoa products, Northern Quinoa Production Corporation or NorQuin, is a specialty grain and food processing company that began in 1992, when the founder and a few likeminded friends began growing quinoa on the Canadian prairies.

A full-service label and flexible packaging printer, Overnight Labels began in 1987, a manufacturer of custom labels, shrink sleeves, flexible packaging and packaging prototypes. In addition to its Platinum Level GMI certification, the firm is also a Disney and Walmart certified printer and a Sustainable Green Printing Partnership (SGP) printer. All of the company’s material is domestically sourced and everything is done in-house.

Red Gold 1500 Tomato Country Way Elwood, IN 46036 (765) 557-5500, ext. 1127 info@redgold.com redgoldfoods.com/retail/store-brands Four generations of the Reichart family have been producing premium quality tomato products for more than 75 years, when in 1942 they began producing tomato products for the soldiers overseas. Since then, Red Gold has become the largest privatelyowned tomato processor in the nation. They partner with family farms to sustainably produce premium quality canned tomatoes, ketchup, sauces, salsas and juices.

www.storebrands.com

029-032_SBR_ContractGuide_0921_v3.indd 31

●

September 2021

●

Store Brands

9/15/21 12:58 PM

Snack Innovations 41 Ethel Road West Piscataway, NJ 08854 (718) 509-9366 sales@snackinnovations.com snackinnovations.com

facilities in Phoenix, the company delivers household paper products at a competitive advantage over national brands to its retailer customers with award-winning service, ﬂexibility and reliability.

The company produces a wide range of better-for-you snacks from a betterfor-you supplier. Snack Innovations specializes in popped technology and is a leader in savory snack products.

Season Brand 1099 Wall Street West Suite 280 Lyndhurst, NJ 07071 (973) 681-9000 contact@seasonproducts.com seasonproducts.com facebook.com/SeasonSardines

The Spice Lab 4000 N Dixie Highway Pompano Beach, FL 33064 (954) 275-4478 sales@thespicelab.com spices.com

For over 100 years, Season Brand has been committed to producing responsible, heart-healthy products including sustainably harvested superfood sardines, mackerel, anchovies, and other canned ﬁsh. The ﬁsh are all natural, wild caught, and in BPA-free cans.

The company is a manufacturer of exclusive, custom seasoning blends and barbecue rubs and is a familyowned, women-led business. The Spice Lab operates a 75,000-squarefoot facility that includes a design department, research and development kitchen, business ofﬁces and a product showroom. The facility’s six production lines enable the company to produce more than 25,000 units per day.

Seattle Gourmet Foods 19016 72nd Avenue S. Kent, WA 98032 (425) 656-9076 sales@seattlegourmetfoods.com seattlegourmetfoods.com With more than 160,000 square feet of production facilities, and more than 20 years of manufacturing experience, Seattle Gourmet Foods provides expertise in chocolate lines, sauce and liquids such as jams and jellies, a dry soup line and more.

U.S. Alliance Paper 101 Heartland Boulevard Edgewood, NY 11717 (631) 254-3030 info@usalliancepaper.com usalliancepaper.com

West Liberty Foods 228 W 2nd Street West Liberty IA 52776 (319) 627-6381 sales@wlfoods.com wlfoods.com twitter.com/westlibfoods facebook.com/WestLibertyFoods linkedin.com/company/west-libertyfoods A meat and poultry producer that recently announced it is a Landﬁll Free Company, diverting less than 0.05% of waste to landﬁlls.

Wonton Food Inc. 220-222 Moore Street Brooklyn, N.Y. 11206 (718) 628-6868 wontonfood.com Wonton Food was started in 1973 by Ching Sun Wong in the basement of a small store in New York City’s Chinatown. Since then it has become the largest manufacturer of noodles, wrappers, and fortune cookies in the United States. Wonton Food has called East Williamsburg home since the 1980s.

Headquartered on Long Island, N.Y., with additional plant and distribution 32

Store Brands

●

September 2021

029-032_SBR_ContractGuide_0921_v3.indd 32

●

www.storebrands.com

9/15/21 12:59 PM

Solving Big Problems, Inspiring Bold Ideas EnsembleIQ is a premier business intelligence resource that believes in Solving Big Problems and Inspiring Bold Ideas. Our brands work in harmony to inform, connect, and provide predictive analysis for retailers, consumer goods manufacturers, technology vendors, marketing agencies and service providers. EnsembleIQ’s integrated suite of solutionsbased, total-market resources give you all the tools you need to achieve a strategic market advantage, giving you the insights, positioning, focus, and access, along with a team of dedicated strategic consultants to help you bring it all to life.

Magazines

EIQ Group FP ad.indd 11 SB_FullPg_temp.indd

Events

Digital Media Solutions

Research

Custom Content

5/22/20 9/14/21 10:07 8:25 PM

DISPATCHES Vol. 13

Sprouts ‘Hatches’ Summer Inspiration This summer, Sprouts Farmers Market was one of a few grocers that introduced new store brand launches inspired by the release of Hatch Chiles from New Mexico, including Sprouts Hatch Chili Flavored Peanuts and Sprouts Cheese Curls spiced with green chiles and cheese, and more. While visiting a Sprouts location in Denver, beautiful farmer-feel merchandising showcased the luscious green Hatch Chiles and positioned them nearby impressive merchandising showcasing own brand summer snacks ideal for the hikers of Denver. The location had two large, beautiful wooden merchandising units shelving the retailer’s packaged Sprouts brand dried fruits and nuts, as well as its packaged bulk items as part of a summer callout. Also near the summer merchandising, and just before the Sprouts butcher shop, an incredibly relevant and smart display advertised a local Colorado grower of fingerling potatoes. The retailer paired the potatoes with Sprouts store brand briquets for grilling and Sprouts brand seasonings to inspire shoppers for grilling season.

Signage told the story of a local Colorado potato farm, positioned with Sprouts store brand seasonings and more.

Circular headers called attention to the summer Sprouts store brand snacks, proclaiming, “So much goodness to share this summer!”

Sprouts store brand nuts, seeds, dried fruits dominate the snack nut aisle. 34

Store Brands

034_SBR_Dispatches_0921_v3.indd 34

September 2021

The fresh Hatch Chiles welcomed shoppers to the produce section.

www.storebrands.com

9/14/21 5:26 PM

Fall Experience Your Categories. Your Schedule. Your Success.

OCTOBER 18 - 22

Join us for this unprecedented product discovery experience covering all categories within health, beauty, food, beverage, and general merchandise.

SB_FullPg_temp.indd 1

9/14/21 8:22 PM

UNCAP YOUR PRODUCT’S POSSIBILITIES Mold-Rite Plastics 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 · 330-425-4206

0602-StoreBrand Magazine ad-final.indd 1 SB_FullPg_temp.indd 1

6/7/16 5:50 PM 9/14/21 8:22 PM

Store Brands - Sept

Articles inside

Q&A: IRI

Contract Manufacturing Guide:

Beverage Report