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Private Eye - Beverages

Private Label Pick-me-ups

Our secret shoppers head to their local retailers to find out what’s happening with beverages in both ready-to-drink and ready-to-brew products.

January 2, 2014
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Both ready-to-brew and ready-to-drink (RTD) beverages are popular among consumers. Private label refrigerated tea is up 6 percent to $96 million, while private label bagged and loose tea were up 2 percent to $88 million, according to SymphonyIRI Group data for the 52 weeks ending November 3, 2013. Ground coffee dropped 7 percent to $406 million, perhaps in favor of convenient private label single-cup coffee, which was up 1,405 percent to $155 million.

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Private eye beverages

PLBuyer sent four of its secret shoppers to check out coffee and tea beverages at a Wal-Mart Supercenter in Colorado Springs, Colo.; a Giant Eagle in North Royalton, Ohio; a SAV-MOR Foods, owned by Ingles Markets, in Asheville, N.C.; and a Cosentino’s Price Chopper, a member of the Associated Wholesale Grocers cooperative, in Kansas City, Mo.

We asked them to evaluate how their local retailers market and merchandise their beverages.

In addition to looking for in-store promotions and advertising, shoppers recorded prices of comparable private label and national brand single cup coffee, refrigerated teas or coffee, ground coffee, and loose tea. They then conducted their own product tests in one of these categories. Here, we provide you with our gathered insight.


Side by Side

This month, all four of the secret shoppers reported seeing private label beverages shelved side-by-side with national brands—at least for some of the beverage products. None of the shoppers saw shelf tags pointing out price comparisons.

Only Bill K. reported seeing private label ads in-store, at SAV-MOR Foods, owned by Ingles Markets.

The fast-growing single-serve coffee cup category has seen private label versions popping upon shelves everywhere. In fact, Bill was the only secret shopper who didn’t see a store brand version. At Walmart, Christina R. saw Great Value K-cups for $3.00 cheaper than national brand Eight O’ Clock, although the store brand box offered eight fewer servings. She noted that it was a surprise to her that Walmart made Great Value single cup coffee. However, she said it was shelved so high she almost missed it.

At Cosentino’s Price Chopper, Michael G. reported the national brand and store brand K-cups cost the same, thanks to a store special on the national brand option. “AWG has a special store brand for beverages called Superior Selections. The basic store brand, Best Choice, is featured only as a small logo on the packaging,” he noted.

At Giant Eagle, Amy K. found Market District Breakfast Blend ($6.99) and national brand Green Mountain Donut House for a $1.00 more on sale (regular price $8.99). The store brand coffee cups are fair-trade certified, and the 100 percent Columbian option was advertised as new via a shelf tag.

In ground coffee, the shoppers didn’t see any more than a dollar difference in price, except for Giant Eagle, where Giant Eagle Original Blend coffee was $8.99 for 35.4 oz. and Folgers Classic Roast was $10.99 for just 27.8 oz.

At Price Chopper, national brand Lipton tea bags were $2.10 more than Best Choice tea bags. At Walmart, the savings was only $1.15, but Walmart’s prices on tea were less than Price Chopper. Meanwhile, SAV-MOR offered Laura Lynn Green Tea for $0.60 less than Lipton green tea. Giant Eagle actually offered its Nature’s Basket Green Tea for the same price as Bigelow—on sale. At regular price, the store brand costs more.

In refrigerated iced tea, a few stores opted to offer more tea in the store brand version than the national brand options surveyed, offering more value if not a huge difference in price.

In refrigerated RTD coffee beverages, Price Chopper offered Superior Selections for $0.50 less than Starbucks Frappuccino.


Product Tests

Proof that store brand coffee is a rather competitive category came via the fact that none of our shoppers this month were wowed with the store brands they tried.

Bill tried the Laura Lynn Premium coffee and found it to be “unremarkable.”

Michael found that the store-brand ground coffee, Cosentino’s French Roast, was “OK, but had less body and smoothness than I like in my preferred national brand” (Seattle’s Best Level 5 Dark & Intense). “In coffee, flavor and preference is subjective, making it more likely to forego the price advantage of a store brand,” he said.

“I purchased the Giant Eagle Original Coffee for my house,” reported Amy. “As compared to the national brand, this coffee is a little bitterer tasting then what I am used to having in the morning,” noting that the grind was a little more coarse than she was used to. “Overall, the coffee is good, but not as good as the national brand that I would normally buy,” she said.

 Michael noted labeling that offering some qualitative advantage would help nudge him to buy a store brand.  “We noticed, for example, that the store brand for tea bags mentions that tea contains antioxidants,” he said. “When purchasing store brands for price, it’s easier to make the purchase decision if there is real or perceived additional value in the store brand, even if it’s nothing more than calling out what is probably true for all products in the category.”  

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