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Category Insight: Store Brand Household Products

Private label trash bags and food storage bags see increased sales and a strong set of desired features.

April 1, 2014

While private label foil and plastic wrap have suffered sales losses as of late, food and trash bags have all seen respectable gains. The overall food and trash bags category was up just 0.42 percent, while both the private label garbage/trash/lawn & leaf bags and sandwich/freezer/food storage bags categories rose just under 4 percent, according to IRI data for the latest 52 weeks ending January 26, 2014.

According to Howard Kirschenbaum, vice president of sales for Trinity Plastics, an Inteplast Group Company, larger companies have been acquiring manufacturers of food contact and trash bags—a move that has strengthened the industry. The acquired manufacturers gain the benefits of capital investment that can advance the segment, increased distribution capabilities and other synergistic advantages. “Consolidation increases competition among the major players in the category,” he added.

With gross margins around 40 percent, said Kirschenbaum, these categories offer stores the potential to double their money over national brands.

So staying fresh in the food and trash bag category is increasingly important.

Online retailer FreshDirect recently added Cloud 9, a private label household goods brand. “We wanted to offer customers a quality product at a low price point,” said Emma Fuerst Frelinghuysen, senior director, private brands for FreshDirect. “We learned in research that our customers associated FreshDirect with food, so we chose to develop a unique brand for non-foods products.”

Among other household goods, the line offers six SKUs of food storage bags, including double zipper and slider-lock options, trash bags, and three tall kitchen bags, including one with SuperFlex technology and odor protection. Fuerst Frelinghuysen noted these were the types of products their customers buy most often and shopper response has been enthusiastic.

Branding Cues

Retailers looking to design a new private label household line, or perhaps just refresh package designs, should utilize colors that work with the retailer’s store brand identity and strategy, Kirschenbaum suggested, while utilizing a well-executed, professional design. If the product is positioned as national brand equivalent (NBE), the graphics should be NBE, as well.

“This may sound obvious, but the packaging should clearly indicate the product, product size and count,” said Kirschenbaum. “Make it as easy as possible for the consumer to identify the product with graphics or a photo. For instance if it is a zipper bag, show the zipper; if it is a slider, show the slider.”

Kirschenbaum suggested retailers take a look at the shelf. “Look at your packaging side by side the national brand. Is it visually as strong as the national brand? If not, opportunities are being missed.”

When displaying private label bags in store Kirschenbaum is a proponent of side-by-side display. “Without that comparison, I think the store brands lose opportunities to capture new customers.”

Online retailers employ other tactics to relay brand messaging. “We have deep consumer insights and the ability to tell a story around our products in a unique and compelling way,” said Fuerst Frelinghuysen.

Cloud 9 product packages feature a white background with bright colors for each product, which in turn makes them pop on FreshDirect’s website. When shoppers click on a product, the details clearly include what national brand the product compares to, be it Ziploc or Glad.

Merchandising Matters

To capture attention in-store, off-shelf displays offer great opportunities for cross-merchandizing outside of the category.

“For example,” Kirschenbaum said, “seasonal pallet or shipper displays, along with clearly featured price advantages, are great for bringing more consumers into the private label fold. And if the store is offering a true NBE product, that consumer can become a loyal private label customer.”

Kirschenbaum suggests retailers take advantage of off-shelf display potential for food contact bags in the produce section during seasons when highly perishable or freezable produce is offered at attractive price points. “National brands do more corrugated, free-standing displays of food contact bags than their store brand competitors. We encourage our store brands to follow suit,” he said.

Of course, the best way to build this private label category is by offering a quality product. “You have to capture the customer on the first try,” said Kirschenbaum. “If you are offering a subpar private label bag, you are not going to build sales or customer loyalty.”

Sometimes a guarantee can help sway purchase decisions. “A few years ago, a retail chain ran a private label campaign telling customers that if they bought one of their private label products and didn’t like it, the store would replace it with a national brand,” said Kirschenbaum. “I always thought it was an exceptionally strong statement in communicating the quality and faith they had in their store brand to customers.”

Quality & Consistency

Throughout the trash bag category and across all brands, bag counts had no rhyme or reason until the past couple of years, said Kirschenbaum, which made it difficult for consumers to compare the cost of national brands against store brands, or to easily calculate the cost advantages of higher-count packs.

However, counts have grown more streamlined, with increased consistency between store brand and national counts.

“For instance, tall kitchen bags are often offered in 45- and 90-count packs; and trash bags in 28- and 56-count,” said Kirschenbaum. “Consumers don’t have to work to do the math. The cost advantages are more obvious.”

National brand Glad has offered high counts for quite some time, while this is a fairly new development for private label.

“For grocery stores, it is early in the game,” said Kirschenbaum. “We’ve seen more private labels offering mega-packs during the past six to eight months. So far, they are happy with the results.

“Overall, I think mega packs are a good option for most stores to offer. By the same token, buying habits will be different based on customer demographics. Stores need to be aware of the desires and buying habits of their customer base.”

Adding high-performance, puncture-resistant, flex trash bags—and/or those with odor-fighting scents—to store brand lines also offers private label growth potential. This adds legitimacy to store brands, Kirschenbaum explained. “We see sales increasing for private label scented and ‘odor guard’ type products.” Popular scents include lavender, vanilla and lemon. Trash bags outfitted with an elastic top are the latest convenience feature, and an important selling point, he added.

“As national brand technology continually improves, private label should follow suit,” said Kirschenbaum.

Today’s Food Storage Flavors

In food contact bags, consumers want to feel thickness and know that the food is protected against leaks, freezer burn and so forth, said Kirschenbaum. “Buying habits and market research show that ‘beefiness,’ meaning thickness of profile, is key,” he said.

According to Kirschenbaum, slider-top food storage bags demonstrated more than 15 percent private label growth this past year—the highest in the category. He noted some customers color-code the slider track.

Slider bags offer shoppers a high level of convenience, as they are easier to close than traditional zipper bags.

Wider seals and double zippers are also important today, said Kirschenbaum, as well as bags marketed as “2 in 1,” meaning for fridge or freezer.

 “Historically, the trend has been—and will continue to be—toward convenience,” Kirschenbaum concluded. “Over the years, bags have gone from fold over to twist tie to zipper to slider. Each one is a step up. We will continue to see premium closures, bags with moving parts.”  

Eye on the National Brands

Last year, SC Johnson & Son added new line of Ziploc compostable sandwich bags—specially designed for use in commercial composting facilities used by curbside composting programs that accept food scraps and compostable bags—in sandwich and quart sizes, along with 2.6-gallon “food scrap” bags. Reynolds Consumer Products added Hefty Ultimate with Arm & Hammer, a new trash bag with patented odor-neutralizing technology. The bags come in scent-free, lavender and “Clean Burst” scents, and a silver, patented, elastic drawstring helps prevent the bag from slipping down into the trash canister.

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