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Bottled water is the 11th largest category in private label, with $1.9 billion in sales and a 28.8 percent share of the category, according to Nielsen records compiled for the 2012 PLMA Private Label Yearbook. Carbonated beverages bring in $1.3 billion in sales with 7.1 percent share, and ranked 19th, while liquid tea accounts for $136 million in sales and has a 6.8 percent share.
PLBuyer sent five of its secret shoppers to check out beverages at an Ingles Markets store in North Carolina, a Price Chopper in Missouri, a Safeway in Colorado, and an Arizona Fry’s and Illinois Food 4 Less, both part of the Kroger family of stores.
We asked them to evaluate how their local grocers market and merchandise their beverage products.
In addition to looking for in-store promotions and advertising, shoppers recorded prices of comparable private label and national brand water, tea, cola, and energy drinks. They then conducted their own product tests in one of these categories.
Here, we provide you with our gathered insight.
Side by Side
Most of the secret shoppers this month reported seeing store brand beverages shelved side-by-side with national brands in some cases, except for Benjamin R. who visited Food 4 Less. However, promotion of those private brand beverages seemed to be lacking based on our shoppers’ reports.
No one reported seeing shelf tags comparing private brand and national brand beverages, except for Bill K. at Ingles’ Market. Sarah C. saw in-store ads at Fry’s advertising private label beverages and Christina R. reported that newspaper inserts were placed by the entrance of the Safeway she visited and all of the beverages she priced happened to be on sale and in the paper, using the Safeway Club Card. The three other secret shoppers saw no in-store ads.
Sarah noted that at Fry’s the retailer shelved national brand Pepsi products on one side of the aisle and Coke products on the other, with private label products located on the Pepsi side and also having the end of aisle shelving (the aisle ended halfway down the regular aisle). Bill noted that private labels at Ingles’ Market were “less expensive, but often located inconveniently on the shelves compared to national brands.”
None of the shoppers reported seeing private label sports or energy drinks, except for Bill who saw a blue Laura Lynn beverage for 37 cents less than the same size Gatorade G2 Arctic Freeze. Safeway offers several flavors of vitamin enhanced waters under its Eating Right brand.
One of the largest gaps in price between brands was seen at Fry’s, where a 24-pack of 16.9-ounce bottles of Arrowhead water retailed at $4.99, while the same size pack of Fry’s brand water was $2.97. At the same store, a 2-liter bottle of Diet Coke was priced 3/$5 while the private label Big K Diet Cola was 84 cents. Big K products received a package redesign, which Kroger says on its website, will give shoppers “the confidence to serve them with pride,” and offer new flavors: Blue Raspberry, Watermelon Kiwi, Pineapple Passionfruit and Blackberry Citrus.
In hot tea, Benjamin saw 100 teabags of Lipton for $3.68, while the Kroger brand cost $4.98. Sarah reported that 48 teabags of Lipton were $3.89, while 24 Kroger teabags were $1.79 and she couldn’t find a 24-box option of Lipton tea. Offering a lower count of private label tea gives shoppers a more affordable choice over the national brand, regardless of the actual savings between brands.
Benjamin reports that he buys Kroger brand tea regularly as it is “always reasonably priced and is the same quality as other leading brands.” Christina was persuaded to try Safeway’s Refreshe bottled water because it was on sale. She reported it tasted better than other name brands, but that Nestle Pure Life is still her favorite bottled water. Bill bought Laura Lynn bottled water and didn’t notice an appreciable difference and saved $1.19 over national brand Deer Park’s 24-pack.
Michael G. said he buys Price Chopper’s Best Choice 2-liter soda bottles (95 cents) occasionally and finds “it’s tasty enough,” but he might choose the national brand if hosting a party (Coca-Cola, $1.49). Sarah said her family sticks to Coke products over the Big K brand of cola.
“I’m sure my children wouldn’t notice the difference between the national and store brand, but my husband and I are the ones who drink soda occasionally and we prefer the taste of Coke or Diet Coke,” she reported.