The Private Eye
January 14, 2010
Innovation, Growth Take Center Stage at PLMA Show
The new Innovation Hall and the general rosy state of the private label industry combined to make the 2009 Private Label Manufacturers Association’s (PLMA) Private Label Trade Show an exciting event. According to PLMA, the show, held in Rosemont, Ill., Nov. 15 to Nov. 17, attracted 10 percent more retailers — as well as more exhibitors — than the previous year’s event.
“This was our best trade show in several years,” noted Brian Sharoff, PLMA president, in the association’s PLMA e-scanner publication.
Kicking off the show on Nov. 15 was a General Session address from Wes Bray, CEO of New Haven, Conn.-based Retail Optimization Inc. Bray said retailers that innovate on the assortment side — in this case, optimize their stores to better position their own brands — will enjoy the strongest private label growth in the years to come. He pointed to the need for “right-sizing” all categories based on the most productive use of space, not just sales rankings.
“Optimization is all about interpretation of the facts,” Bray said. “Retailers are almost drowning in data.”
Following Bray’s presentation, show attendees were encouraged to choose from a number of different workshops covering the retailing, market research, marketing, packaging and design, and testing and certification areas. Additional workshops followed the PLMA’s Salute to Excellence Breakfast on Nov. 16 and Retail Trends Breakfast on Nov. 17. Workshop presenters represented many of the companies exhibiting in Innovation Hall.
Innovation was the theme everywhere, PLMA noted, from new exhibitors’ inventive products to speaker and workshop programs. And Innovation Hall — featuring 100-plus stands from retail consulting, market research, marketing, technology, packaging and design, and testing and certification companies — opened on Nov. 15 with major fanfare: a ribbon-cutting ceremony led by Rosemont Mayor Bradley A. Stephens.
The show also represented an opportunity to honor existing innovators on the retail side. During the annual PL Buyer/Deeb MacDonald & Associates Private Label Share Group cocktail reception, held on Nov. 16, Editor in Chief Kathie Canning presented several of PL Buyer’s 2009 Retail Executive of the Year winners with their award plaques. — K. Canning
Are Your Green Claims in Compliance?
The Federal Trade Commission (FTC) says it has seen a “virtual tsunami of environmental marketing” during the past few years, reports Peabody, Mass.-based Webster Industries in a recent issue of The Webster Report. And brand owners that fail to comply with FTC’s consumer protection rules in relation to green marketing claims (commonly called the “Green Guides”) face civil prosecution, consumer lawsuits and even potential losses related to negative publicity.
Jack Shields, Webster’s president, told PL Buyer that retailers need to ensure any green claims made around store brand products are not misleading. He added that some “major retailers” already are at risk here.
For example, retailers must be very careful about making product (or packaging) claims related to compostability for plastic trash bags. Because 91 percent of U.S. waste still goes into landfills — which lack the proper environmental conditions for promoting biodegradability — FTC could view a compostable claim as misleading, Shields said.
Retailers and manufacturers really need to be educated on the green marketing side, he added, since their reputation is on the line. Shields also noted that FTC recently looked at 1,700 green-minded product claims, and could substantiate only a few of them.
“There’s a whole list of dos and don’ts of what you can say,” he stressed. “For example, you can’t say ‘eco-friendly.’”
Retailers that do want to send a green message should communicate true benefits, and clearly, Shields said. Retailers might emphasize, for instance, recycled content in store brand trash bags or reduced plastic use in private label storage bag lines, when applicable (Webster offers options for both). Perhaps even more important is a focus on greener manufacturing practices.
Certification also can be very valuable in communicating a positive environmental message to consumers. For its part, Webster relies on certification from Scientific Certification Systems (SCS), which provides independent certification of environmental claims on manufactured goods and materials, Shields said. Webster was the first supplier to offer trash bags and liners with recycled content certified by SCS Products. The products feature SCS’ Green Cross logo on the packaging and an easy-to-read recycled content statement. — K. Canning
PBM Triumphs in Store-Brand Infant Formula Case
PBM Products, a Gordonsville, Va.-based supplier of store brand infant formulas to major retailers, said it received a favorable jury verdict and a $13.5 million damages award in its false advertising lawsuit against Mead Johnson & Co, the operating subsidiary of Glenview, Ill.-based Mead Johnson Nutrition Co., makers of the national brand Enfamil LIPIL infant formula.
PBM said its lawsuit claimed Mead Johnson engaged in false and misleading campaigns against PBM’s competing store brand of infant formulas, suggesting the products do not provide the same nutrition as Mead Johnson’s more costly products. According to PBM, the $13.5 million sum the jury awarded in the United States District Court for the Eastern District of Virginia is one of the largest damages awards ever for a false advertising case.
“This decision by a jury of the people confirms that Mead Johnson’s ads have been false in suggesting that there is a nutritional difference between our store brand formula products and their products, when in fact, the only major difference is price,” said Paul B. Manning, PBM’s CEO. “Despite Mead Johnson’s scare tactics, parents are assured that PBM’s formula products are as high quality and nutritious as Mead Johnson’s.”
PBM said this is the third time it has sued Mead Johnson for false advertising claims. PLB
Damaged Packaging Hurts Trust in Brand
A recent study commissioned by Richmond, Va.-based MeadWestvaco Corp. (MWV) found that damaged packaging can have a profound effect on shoppers’ purchasing decisions. MWV showcased the study’s results at the Private Label Manufacturers Association's trade show, which took place Nov. 15-17 in Rosemont, Ill.
According to Dave Hayslette, director of corporate excellence at MWV, the company commissioned Pittsburgh-based GENCO Supply Chain Solutions to perform the study. Looking at a range of frozen packaged foods in cities known for tough weather conditions, GENCO found that the majority of shoppers will not buy a product if its packaging is damaged. In fact, three-quarters of shoppers in the study passed up a damaged package in favor of an undamaged one.
But the study also revealed that shoppers’ trust in a product or brand declines steeply when its packaging is damaged — up to 55 percent of shoppers left the brand, and 36 percent opted to purchase another brand. Shoppers’ perception of a product as a “brand you can trust” dropped from 73 percent to 41 percent when packages even were slightly damaged.
If retailers want to build consumer trust in their private brands, they need to start putting more care into their package design, Hayslette told PL Buyer. He noted that although it is important for retailers to offer good product quality in their store brand products, research from Mintel International Group, Chicago, says 21 percent of consumers won’t buy a private label product if its packaging looks cheap.
Many of the private brand products GENCO looked at were packaged in recycled paperboard, Hayslette noted, and experienced problems related to packaging inconsistency and damage during freeze-and-thaw cycles. Such packaging is almost twice as likely to become damaged as a solid bleached sulfate board version, he added, and four times more likely than packages made from stronger materials such as MWV’s Custom Kote paperboard packaging.
“In the end,” he told PL Buyer, “the package is the marketing.” — R. Hofbauer
Citadelle Wins 2009 Maple Award of Excellence
Citadelle Maple Syrup Producer’s Cooperative, a Plessisville, Quebec-based group that creates maple products for a variety of food industry customers — including private label — said it was awarded the Golden Maple Leaf Award by the International Maple Syrup Institute (IMSI) for its work in the international promotion of 100 percent pure maple.
Citadelle said company CEO Luc Lussier and Chairman and maple syrup producer Raynald Baril accepted the award during IMSI’s annual meeting in October. The award recognizes outstanding achievement in supporting and advancing the maple syrup industry in North America and internationally. The theme for this year’s award was maple promotion and marketing. PLB
Federated Group Launches Brand Web Sites
The Arlington Heights, Ill.-based Federated Group announced the launch of three consumer Web sites featuring its Hy-Top (www.hy-top.com), Parade (www.myparadebrand.com) and Better Valu (www.better-valu.com) brands. The sites include “fun and useful features” such as recipes, store finders, testimonials, quality assurance information and more.
Retailers that carry these brands are expected to benefit from increased shopper loyalty and a modern user-friendly channel for feedback, Federated Group said, adding that the URLs also will be added to all new and redesigned package labels. PLB
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