August 2011 Issue of Private Label Buyer Patrick Rodmell weighs in on Private Label Buyer Article

1. Cover Story PL 4TH QUARTER OUTLOOK
BY JOHN N. FRANK
White is everywhere on private label
packaging today, is that a good thing?
Maybe not, say some experts.
Read why not, and also read what other
trends are impacting private label as
2011 enters its final quarter.
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2. PL 4TH QUARTER OUTLOOK Cover Story
W
hen it comes to
private label
packaging, white is
the new white. White is also the
new black, and the new yellow.
In short, white is everywhere on
new private label packages.
Retailer after retailer has
been rolling out new lines and
new products in packaging
that is either all white,
predominately white or includes
white accent areas. The trend
has become so pronounced that
some are concerned private
label may be entering a new
A 2011
generic era, a time when all
private label packaging is so
similar that consumers feel no
PL SCORECARD
particular brand affinity for one
retailer’s offering compared PL WINNERS PL LOSERS THE JURY IS
with how they feel about
national brands.
Kroger Walmart
Not clear where PL fits
STILL OUT
Knows how to execute in-store Supervalu
Not only packaging, but in its retail strategy
Will Essential Everyday
naming of new private label Safeway
Fresh & Easy
succeed?
is echoing a certain sameness Good product concepts
Its problems are bigger
as well, adds one industry Target
Family Dollar than private label
watcher. Are increased PL food sales
Rolling out new packaging CVS
“We are on the precipice helping the bottom line?
Wegmans Design of new Just the
of entering a new age of Ahold
Always innovative Basics line is me-too white
generics — Essential Everyday PL design sameness
[Supervalu], My Essentials Meijer 7 Eleven
[Delhaize]—there’s no Good work with Meijers Gold Is 7-Select getting
personality to these brands,” Sam’s Club another redesign?
complains Christopher Durham, Attractive new PL products Walgreens
creator of the mypbrand.com
What roll with Duane Reade
blog and a member of PLBuyer’s
PL play across the country?
editorial advisory board.
In their rush to tell
consumers their private labels
deliver value, retailers are
missing the opportunity to
create emotional connections shelf,” recalls Maute. Ironically
to their brands, says Patrick name] are a sure sign of a private Paula Rosenblum, managing now, Walmart is bringing more
Rodmell, CEO and president of label program,” says Rodmell, partner with RSR Research agrees. colors into the Great Value line.
Watt International, a Canadian who will be co-chairing PLBuyer’s “Retailers believe consumers are Indeed, some retailers are
design and marketing firm. new Design Excellence Awards more price sensitive than ever, so using colors to stand out from
“Everybody’s trying to find later this year. they [retailers] are going to try the white movement. “Use of
words that have specific Others, however, point out that to focus on more value messages vivid color continues to be a
meanings,” he says of new there is method behind the white than ever,” and white says value. critical design element for us,”
private label names that often wave sweeping over private label Walmart with its Great Value Mary Rachide, divisional vice
include words such as essential. packaging. private label redesign in 2009 president for private brand at
National brands don’t try “You’re seeing more and and Publix with its Publix brand Family Dollar, tells PLBuyer.
to describe their products in more white, I think, because it’s in 2003 generally get kudos “Despite the whitening trend
their brand names, Rodmell recognizable,” says Todd Maute, as the originators of the white across many other retailers, and
notes. Rather, they work to senior vice president/partner movement. When they did it, it in our national brand equivalent
emotionally connect shoppers to with New York design firm CBX was novel. quality products, leveraging the
their brands through marketing. Retail, and a judge for PLBuyer’s Walmart’s Great Value went Family equity is critical to helping
“I think those more generic Design Excellence Awards. “It just from “being somewhat invisible our shoppers connect the product
descriptive words [in a product merchandizes better.” on the shelf to screaming on the back to Family Dollar.”
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3. Cover Story PL 4TH QUARTER OUTLOOK
Is white being over-used in private label packaging today? Some say yes, it looks generic.
Others say no, it conveys value and a certain chic.
Beyond white packaging and •Continued introductions of and community relations with
packaging redesign in general, private label line extensions into Lakeland, Fla.-based Publix.
other trends evident this year new niches and new categories. • Increased promotional
include: At Publix, for example, “Similar activity for private label
•Retailers, such as Supervalu, to the national brands, most new offerings. Contests and in-
opting to create one private label products are line extensions to store events, long staples in
that spans multiple categories and existing [Publix] lines,” says the national brand marketing
banners. Maria Brous, director of media arsenal, are migrating to
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4. PL 4TH QUARTER OUTLOOK Cover Story
advisory board. “The media is That could spell flat private label The New Lines
talking about branded products as sales for the year compared to the Supervalu’s May announcement
if they were the underdogs.” that it would consolidate its
2 percent gain that the Private
The year began with increased various store brands into Essential
Label Manufacturers Association
national brand promotional Everyday received generally
activity aimed at regaining sales reported PL saw in supermarkets favorable reviews in the business.
lost during and after the recession. last year, several experts predict. The move will produce cost
AS
private label, generally with
positive results.
Looking ahead, expect
Good
AS IT
private label to continue
facing the challenge of high
Gets
commodity prices for the
remainder of the year as it tries
to regain market share lost early
in 2011 to increased national
“We are on the precipice
of entering a new age
of generics — Essential
Everyday [Supervalu],
My Essentials [Delhaize]
—there’s no personality
to these brands.” For over fifty years LiDestri Foods has been as good as it gets
while producing some of the food industries highest quality
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The competition with national Edward P. Salzano • Executive Vice President/COO • 201.944.1233
brands has heated up. “The
biggest surprise for me is the
amount of attention that has been
given to the resurgence of national
brands,” says Carl Munyon, a
veteran private label expert and
www.lidestrifoods.com
a member of PLBuyer’s editorial
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5. Cover Story PL 4TH QUARTER OUTLOOK
savings in the 0.5 to 1.5 percent is reaching out through social
range, experts estimate, while media, working with mommy
also breathing new life into what, bloggers, coupon bloggers and
in some cases, had become rather others, to build buzz for the new
stale banner private labels across line. It also is promoting the new
its various chains (see PLBuyer, private label in circulars and by
March 2011). showing products to consumers.
“I think they’re starting to Drugstore operator CVS
move in the right direction,” says
Jim Wisner, founder of Wisner
Marketing Group, Libertyville, Ill.
“One label will help them if the
label is good, if they promote it
and if they do all the blocking and
tackling. If they start to get price-
driven [however], they’ll blow it.”
Industry veteran Munyon
has some doubts about the new
brand, however. “I would say
it’s a tale of good and bad. On
the one hand, its shear genius to
consolidate all that buying power
into one label. On the other hand,
I’m not impressed by the name
Essential Everyday. That doesn’t
seem to be a label that goes across
all formats and projects an image
of quality or brandness to the Supervalu, with its new Essential Everyday line, and Family Dollar with its Family Gourmet new packaging,
product.” are using bold colors with only white accents, breaking away from a private label packaging pack that
increasingly is seeing all-white designs.
Sam Mayberry, Supervalu’s
vice president of private brands,
tells PLBuyer the new name Caremark announced in February Dollar has been extending it to the Kidget’s expansion this
conveys key attributes of the that it would roll out its new Just Kidget’s brand beyond diapers year, Family Dollar has “added
national brand equivalent line. the Basics line, one of the white into training pants, buoyed by its new items to our newly launched
The line includes “products wave. Rival Rite Aid has been diaper sales success. “That we’ve Family Gourmet brand, expanded
consumers use on a frequent and introducing its Simplify line, been able to drive over 50 percent the Tropic Sun line to summer
everyday basis and one they can another white wares line, for the diapers share in our private brand toys and Family Pet into pet food
rely upon for delivering quality,” past year and reported in June has been a very positive surprise,” and treats. In addition, we’ve
he says. that its private label penetration Rachide tells PLBuyer. introduced a new ladies apparel
The new line arose out of rate rose nearly 1 percent in its “The dollar stores are and accessories line – Mix &
consumer research done by 2012 fiscal first quarter. “We’ll
Supervalu. “We started with the continue the rollout of our new
shopper and wanted to make private brand architecture in the “Retailers believe consumers are more
sure we understood what they second quarter,” said CEO John
thought was a value,” explains Standley during an analysts’
price sensitive than ever, so they [retailers]
Mayberry. Supervalu’s “primary call earlier this year. Rite Aid at are going to try to focus on more value
motivator was to provide a brand that point had introduced 250
that was easily identifiable across products with its new packaging messages than ever.”
the store” that consumers could design and also was making some
equate with value and quality, tweaks in its other private labels — Paula Rosenblum, managing partner, RSR Research
he says. Mayberry would not such as Rite Aid Pharmacy health
comment on what level of cost products, Renewal personal
savings Supervalu will realize by care products, Pantry foods and absolutely killing it,” when it Co., and continue to expand
consolidating its various banner Tugaboos baby products. comes to successfully expanding extremely me! in girl’s apparel
private labels into Essential Private label diapers can their private label offerings, says and accessories,” she says.
Everyday. represent a difficult selling RSR’s Rosenblum. Family Dollar,
Addressing package design, he proposition to new parents more for example, has cleaned up its Supermarket Sweeps
says “the label itself will convey worried about their baby’s bottom assortment of products, spruced When it comes to traditional
brand image. A lot of time has than price. But the recession up stores and worked on pricing supermarkets and private label,
been spent on the label itself.” mindset still gripping consumers issues, making it a standout this Kroger this year remains the
The line is rolling out across today may be changing that. year, she says. leader among the large, national
Supervalu banners initially in the “Traditionally diapers have Family Dollar’s Rachide notes holding companies, continuing
breakfast aisle, with cereal and been a high brand loyalty that “we’ve had two sustained to lead the pack with in-store
other breakfast offerings, in pasta category,” explains Family years of aggressive private brand execution of private label. Kroger
and in pasta sauces. Supervalu Dollar’s Rachide. But Family product expansion.” In addition combines two key elements for
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6. PL 4TH QUARTER OUTLOOK Cover Story
have been, experts say. them, from shopping ad items
“Contests to get people to purchasing private label to
to try [private label] are the couponing.”
absolute right thing to do,” At Supervalu, “I definitely
Espelien says. New private label think that shoppers are under a
promotional activity is “being lot of economic pressure,” says
sparked by social media, those Mayberry. “I think shoppers are
kinds of events work well in that still trying to save a dollar.”
medium, I think we’re seeing At the same time people
a lot of experimentation,” says economize with private label,
Wisner. they also seek out what Family
Contests and local promotions Dollar’s Rachide calls affordable
help tie private label to their treats.
private label success that other
retailers would do well to emulate
– it does its consumer research
and it gives store managers
incentives to sell more private
label, say supermarket watchers.
Kroger “really understands
the consumer and is managing
to satisfy how consumers shop,”
says industry veteran Craig
Espelien, a member of PLBuyer’s
editorial advisory board.
Kroger has long worked with
Dunnhumby, a U.K. company
with U.S. offices, that analyzes
customer data and helps retailers
create branding strategies. Kroger At Publix, PLBuyer’s private service area, explains Jonathan Perhaps that’s why retailers
targets new products and lines label retailer of the year, it’s been Asher, senior vice president at continue to move into premium
like its mirra cosmetics, using a stay-the-course year, continuing Perception Research Services, a private label despite the tough
Dunnhumby data, Espelien notes. with promotions that prove Fort Lee, N.J.-based consumer economy. “Premium private label
Then it provides incentives to effective, such as its Store Brand research company. is certainly the most significant
store managers to execute at the challenge, now in its fifth year. “It makes tremendous sense [trend of this year], with all of the
store level. When it comes to new product for retailers to promote this way major retailers almost bordering
“In supermarkets that are introductions, “the past year has as it is far more cost-effective on a religious revival” in their
generally over-SKUed and under- been consistent with the last four than advertising and, more belief that premium private label
utilized, [Kroger has] done an to seven years in that we review importantly, is community based, will sell, and will bring higher
excellent job of execution” with potential categories, evaluate which is a very significant part of profit margins than other PL tiers,
private label, Espelien says. But he the business opportunity, and the retailers’ brand essence and says Wisner.
cautions that he’s not impressed then determine if we will move point-of-difference vs. national Supervalu also is looking to
by Kroger’s repositioning of forward to bring the product to brand manufacturers,” he says. premium for growth, Mayberry
its Private Selection premium market,” says Brous. Looking at which private says. It is adhering to a three-tier
private label, saying it too closely Supervalu’s Mayberry notes label product categories are strategy for private label, slotting
resembles Safeway’s Safeway that he’s seeing an increase in the hot, experts point to appetizers Essential Everyday as its national
Select. number of new products being and dinner offerings touting brand equivalent tier.
Safeway gets high marks offered by processors for potential restaurant-quality fare as And what will become of all
for packaging and product private label sale. “Manufacturers something consumers want as that white packaging? Likely there
innovation. It introduced its Open have realized the potential” they continue to eat home rather will be more before there’s less.
Nature private label in January for private label, he says; even than going out. Packaged deli “A certain amount of it is
and created the world’s largest national brand manufacturers meats also should grow in sales ‘oh isn’t that sheik, isn’t that
picnic table in June to promote it. are now turning to private this year for the same frugal contemporary,’” Asher says of
While that stunt garnered media label production and offering consumer-prompted reason. the use of white. “But no matter
attention, Safeway in general has new products to attract retailer Ditto personal care products. what you did, to some degree it
been focused on private label back business. Shoppers are still worried about harkens back to the old generics.
office details in recent years as their financial well-being. You can use white but you have
it shifted from using an outside Promote Away Says Publix’s Brous, for to use it the right way.” The
firm to managing private label in Publicity stunts like Safeway’s example, “Our markets in right way will depend on brand
house, and so still lags when it picnic table, promotions and the southeast are still very positioning, quality, pricing and
comes to in-store execution, says contests are becoming more the recessionary and customers are promotional muscle put behind
Espelien. norm for private label than they utilizing all options available to the product. PLB
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