PL Buyer's eReport October 21, 2008

October 21, 2008
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PLMA’s 2008 Private Label Trade Show will feature an expanded pavilion of companies offering private label licensing partnership opportunities.

The Private Label Manufacturers Association (PLMA), New York, said direct-to-retail licensing will have an expanded presence in the form of a Licensing Pavilion at its 2008 Private Label Trade Show. The show is slated for November 16-18 at the Rosemont Exhibition Center in Rosemont, Ill.

Introduced on a limited basis at last year’s PLMA show, the licensing section will give retail and wholesale private label decision-makers a chance to explore the fast-growing licensing trend, PLMA said, and meet with 11 licensing companies, publishers, celebrity and artistic management firms, entertainment lawyers and others that own or manage licensing properties.

“Licensing partnerships with private label can be a win-win for the retailer, as well as the licensor,” said PLMA President Brian Sharoff. “Retailers can gain increased sales and consumer awareness by tying their store brand products and promotions to a licensed property.

“At the same time,” Sharoff added, “going direct to a retailer can also benefit license owners by giving them more control and boosting chances that their properties will receive prominent shelf display instead of being buried in a wall of myriad other brands.” A number of retailers already are reaping the rewards of licensing on the private label food side. For example, The Kroger Co., Cincinnati, has an agreement to use Mickey Mouse and other Disney characters for its Disney Magic Selections private label foods. And Safeway Inc., Pleasanton, Calif., relies on Warner Bros.’ Looney Tunes characters to add some fun to its new Eating Right Kids products.

New York-based King Features Syndicate, one of the licensing companies scheduled to exhibit at the PLMA show, noted that private label manufacturers are acquiring licensed brands to capture consumers’ attention on crowded store shelves, “as private labels become more like consumer packaged goods brands.” King Features Syndicate is the licensing agent behind classic brands such as Popeye and Betty Boop.

Our Take: Licensing partnerships stand to infuse additional excitement into the transforming private label arena. Don’t miss PL Buyer’s November 2008 issue, which will feature a special report on the ins and outs of such partnerships.

October 14, 2008 Poll Results

Thom Blischok, president of Consulting & Innovation for Chicago-based Information Resources Inc., contends that retailers and manufacturers need to rethink business as usual during this economic downturn and its resulting consumer ritual changes. Has your company altered its private label go-to-market strategies to account for changing shopper behaviors?

Yes. We’ve made significant changes to strategies here: 33.3 percent

Yes. We’ve made minor or moderate changes to strategies here:  58.3 percent

No, but we will be re-examining strategies here in the months to come: 0 percent

No, and we have no plans to make any strategy changes in the months to come: 0 percent

Does not apply:  8.3 percent

Industry Insider

Consumers Want a Voice in Food Issues
A new global study says food companies will be expected to cede control by 2020, while retaining responsibility for health and well-being.

Today’s consumers want to have a greater say when it comes to food ingredients, food safety and food quality, according to “Food 2020: The Consumer as CEO,” a new study commissioned by Ketchum’s Global Food & Nutrition Practice, San Francisco. Moreover, by the year 2020, consumers around the globe will expect the way they choose and shop for food to be different.

The study, based on survey of consumers in the United States, the UK, Germany, Argentina and China, found that more than half of consumers want more involvement in the use of ingredients and additives, the source of ingredients, nutritional content and the treatment of animals and. More than half of respondents also indicated they wanted a say in who should be responsible for food safety and quality.

“Food companies often ask consumers about food preparation and convenience, but the areas where consumers want more control are the ones where food companies are least likely to seek consumer input,” said Linda Eatherton, director of Ketchum’s Global Food & Nutrition Practice. “These survey results indicate that food companies are asking the wrong questions.”

Among the study’s other key findings are:
  • Taste, quality and price are the top consumer considerations in choosing foods, except in China, where health benefits are most important.
  • Knowledge, taste and availability are key barriers to healthier eating.
  • Consumers want good taste, but they also want to know more about their food and food ingredients.
  • Brands are losing their relevance, except in China and Argentina -- only one-third of consumers cited brand name as one of the factors they consider when buying food.

Our Take: The food landscape has been inching for some time toward greater transparency, thanks to better-educated consumers who are becoming more proactive when it comes to their health and safety. If you’re a retailer (or manufacturer) involved in private label food development, asking the right questions will be key to developing the right solutions in the years to come.

Economy Watch

The Survey Says … Bah, Humbug
All signs point to flat-to-declining sales this holiday season, a new survey says.

If the results from The NPD Group Inc.’s 2008 holiday spending survey are any indication, many consumers will be spending less money this holiday season. The Port Washington, N.Y.-based company said 26 percent of consumer respondents indicated they plan to spend less money this year. For the 2007 survey, only 18 percent of consumers said they planned to spend less.

“This 8 percent decline illustrates that consumers are already focused on the idea of spending less,” said Marshal Cohen, chief industry analyst for The NPD Group. “For the first time, I am predicting flat-to-declining sales for the holiday season.”

Consumers also indicated they would be keeping a careful watch on their credit card spending, Cohen said, with the number of respondents telling NPD they would “spend on credit” down 2 percent this year.

Still, 63 percent of consumers said they plan to spend “about the same” as last year on the holiday season, NPD said, and 11 percent said they actually planned to spend more. Among the top items consumers said they plan to buy as gifts were apparel, toys, movies, books, electronics, video game, accessories, music, food and fragrances.

Our Take: A number of industry observers also suggest that necessities will drive sales this holiday season. Here, private label has an opportunity to give consumers more bang for their holiday buck when it comes to accessories (and stocking stuffers), personal care items, food and more.

Bits and Pieces

  • Spartan Stores Inc., Grand Rapids, Mich., said it entered into an agreement to acquire 17 retail stores, including 15 pharmacies, from VG’s Food Center Inc. and VG’s Pharmacy Inc., Fenton, Mich. The company said it expects the transaction to close near the end of its fiscal 2008 third quarter.
  • The NuVal Nutritional Scoring System now has a Web site,, according to Skokie, Ill.-based Topco Associates LLC. The site includes information about the science behind the NuVal system and shows consumers how to use the system to make informed food choices. NuVal is a joint venture between Topco and the Yale-affiliated Griffin Hospital.
  • Target Corp., Minneapolis, said it opened its first two stores in Alaska, as well as two prototype stores in Minnesota that are compliant with the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) program.
  • OfficeMax, Naperville, Ill., introduced four private label product lines, according to an October 14 ADWEEK article. The office supply brands include Ascend, Canterbury, Divoga and Infuse, and represent OfficeMax’s first private label launch since 2006, the article said.
  • The Great Atlantic & Pacific Tea Co. Inc. (A&P), Montvale, N.J., introduced Hartford Reserve private label products. Among the items in the new upscale lineup is the Hartford Reserve apple pie, which is made from five apple varieties and includes more than a pound of fruit.
  • Giant Eagle, Pittsburgh, announced the receipt of LEED Gold certification for its store in northeast Columbus, Ohio, near New Albany. The energy-efficient, resource-conserving store boasts 82 skylights, air quality improvements, water conservation practices and more.

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