- Baby Non-Food Products
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- Household Products
- Kitchen Products
- Paper Products
- Personal Care
- Pet Products
- RESEARCH & AWARDS
It’s been an eventful decade for private label, from Kroger’s decision to go premium to Walmart rethinking which national brands should be on its shelves. Read and learn from the top 10 trends of the ‘00s.
2000 - The Play for Premium: Kroger launches Private Selection, marking a shift away from price and towards quality in the world of private labelling. Today, most major supermarkets feature a more profitable premium line which has enabled them to improve their brand images and drive shopper loyalty. Kroger cemented its status as the first major U.S. supermarket to offer a good, better, best approach. The Private Selection line hit the $1 billion mark in sales in 2008 and today features more than 1,000 SKUs.
2005 - Organic Options: Following strong customer response to premium launches, supermarkets begin to explore other value-added categories such as healthy eating and organics. Safeway launches its O Organics range in 2005; it would go on to become one of the largest organic food brands in the United States. Retailers were much quicker than brand manufacturers to adapt to changes in consumer behaviour, reinforcing that speed-to-market and innovation are key components to a successful private label strategy.
2006 - Brand Consolidation: A proliferation of private labels leads retailers to question whether less can actually be more. Safeway completes the consolidation of its private label assortment from more than 70 brands to 10 power brands. SuperValu also embarks on a brand rationalization process following the acquisition of Albertsons’ 100+ private labels. The cull allows the supermarkets to reduce costs, while focusing on improving the marketing and merchandising of their more promising mega-brands.
2006 - Instilling Confidence: Now focused on quality and other value-added benefits, private labels begin to be viewed among consumers as brands. In 2006, Publix gives away a private label product when shoppers buy a comparable national brand. The 10-week promotion becomes such a success that Publix runs it on an annual basis. Supermarkets today are so confident in the quality of their own lines that they boast product guarantees and, in the case of Giant Eagle, offer double the money back.
2007 - Alternative Formats: The world’s most successful private label supermarket enters the
2008 - Brand Transitioning: Safeway shows America that private label no longer has to be private. The creation of its Better Living Brands Alliance sees its hugely successful O Organics and Eating Right lines distributed to other retailers in the States and overseas. The move sees private labels transition into becoming brands in their own right, an extremely powerful strategy provided that it does not result in dilution of the brand. One of the main draws of private label, after all, is exclusivity.
2008 - Battle for Share of Stomach: With the recession biting and many consumers trading out of restaurants, retailers are suddenly in a prime position to capture share of stomach. SuperValu launches Culinary Circle, a line of ‘restaurant-quality food right at home’ with sleek European-inspired packaging. It’s no surprise that Culinary Circle products are priced up to 25 percent below casual restaurant food and about 10-15 percent lower than other premium national brands.
2009 - Blurring of Drug and Food: Capitalizing on their convenience stance, America’s drugstores always have offered a broad dry grocery selection, albeit one that has lacked in quality and innovation. New York-based Duane Reade changed this in 2009 by launching DR Delish, a premium line featuring gluten-free trail mix, vitamin-enhanced teas, baked potato crisps with zero cholesterol, and soy snacks made without trans fats. Move over dreary drugstore food. Following the acquisition of Duane Reade by Walgreens, DR Delish is now available in more than 6,000 stores nationwide. The same year, supermarkets begin ramping up their private label HBC offerings with Kroger’s Mirra range a classic example.
2010 - Economy Brand Differentiation: Loblaw and Sobeys overhaul the packaging of their economy lines so as to better stand out at the shelf. Changing both the brand and packaging for the economy line has enabled the Canadian grocers to differentiate across tiers, while improving the quality perception of standard and premium lines. Meanwhile, the relaunched Great Value and Kroger Value lines help America’s largest grocery chains to continue winning on price.
2010 - Delisting and Resisting: After reducing its overall assortment by 15 percent, Walmart adds back 300 items that were originally culled. The move indicates that, while there is a major need for reducing complexities in the industry, delisting the wrong national brand can be disastrous because shoppers will take their entire basket elsewhere. SKU rationalization may carve out more shelf space for private labels but it also gives better visibility to brand leaders. Private label manufacturers must continue to innovate.
Natalie Berg is the global research director at Planet Retail London, where she heads the company’s international team of analysts. She has been researching, writing and presenting on global trends in the food sector for the past seven years, with a particular focus on Walmart, Tesco and Carrefour.