- Baby Non-Food Products
- Baking/Cooking Staples
- Household Products
- Kitchen Products
- Paper Products
- Personal Care
- Pet Products
- RESEARCH & AWARDS
Why not have the best of both worlds?
Over the past several years, the two fastest-growing segments in the food business have been store brands and specialty foods. Most of us know what has happened with store brands, but if you look more closely the real growth star has been specialty foods. The recently released Specialty Food Association “State of the Industry” report notes that specialty foods grew by 18.4 percent over the past two years. This now totals $88.3 billion annually, surpassing the $80.3 billion of private label food items (2014 PLMA Yearbook). Many trends are driving these increases—Millennial buying habits, a growing ethnic population, and individuals simply looking to satisfy their “foodie” cravings without the expense of going out to eat.
Store brands have done well, too, growing by 5 percent over the past two years, double the rate of national brands. If you begin taking a closer look at that growth, much of it has been in the top tier of specialty and premium products. These include not only premium quality items, but lifestyle brands such as Simple Truth and Open Nature (famously launched through social media). Even ALDI has joined the premium club with its recent launch of Specially Selected. This trend is not likely to stop anytime soon.
The emergence of premium and specialty brands may hold the key to future private label growth. In a study that our firm conducted (“Center Store Renewal: Leveraging Private Label to Drive Growth”), nearly 40 percent of the shoppers who said they “rarely buy private label” also said it was “important” (17.9 percent) or “very important” (21.4 percent) that their store “has really unique items in their own brands that you cannot find in other stores…” For private label rejecters, it is the unique private label items that are truly the ticket to converting them into store brand shoppers. It is all about quality, not price. In the same study, we also found that expanding the range of private brand items was the single most important factor correlated to increased private brand share. The lesson here is simple: More premium and specialty private label items is the fastest path to growth.
Now that we know what to do, how do we go about it? Digital and social media marketing is particularly suited to these premium products. Store brands connect the shopper with the store, not the manufacturer; they are part of a broader experience that is easily shared in a social media environment. And, since these products by definition are unique, different and interesting, they are worth talking about. If these new items truly are “buzz-worthy,” then how do you go about creating the buzz?
Creating awareness and getting shoppers talking can create destination-driven shopping trips. Trader Joe’s uses old-school print with its “Fearless Flyer” to promote new items, but they also utilize an email newsletter and mobile app to engage electronically with customers. They show that if your products are good enough and interesting enough, your shoppers will run your social media campaign for you. Trader Joe’s fans—not the company—have launched a whole range of social media sites on Twitter, YouTube, and Pinterest just to connect with one another about Trader Joe’s brands.
Wegmans, certainly one of the leaders in developing specialty private label brands, makes extensive use of YouTube to engage its shoppers. Utilizing its own in-house chefs, they offer dozens of product demonstrations and recipe preparations for its shoppers. Many of the videos begin at the store with the chef shopping for the ingredients. Most recipes feature unique brands and products only available at their stores, each with a story to tell. These videos reach thousands of viewers and really drive the Wegmans brand message.
Harris Teeter recently launched the “Teeter Box,” an opportunity for shoppers to get a home-delivered box of goodies to sample and enjoy. This is a great way to get customers talking about new and interesting items. These endorsements from your shoppers carry a lot more weight than anything you may have to say. Harris Teeter has even created a mobile app that is entirely social-media-focused.
H-E-B “Primo Picks” focus exclusively on unique, specialty and premium H-E-B products. Highlighted by a conversational and well-illustrated digital flyer (with every bit as much personality as the one from Trader Joe’s), “Primo Picks” are promoted through the H-E-B website, Facebook pages and Twitter.
Kroger promotes its “Private Selection” brand with its own website, YouTube promotions, a Pinterest board, Twitter and Facebook. Kroger is among the few retailers now utilizing third-party service companies to maximize their social media impact.
The Summer Fancy Food Show will be held in New York at the Javits Center, June 29–July 1. With more than 180,000 products featured, it’s a good place to brainstorm and think about how you can re-energize your private brands and drive new consumer interest and excitement. It used to be that store brand marketers looked at national brands to determine the next wave of products—now it is specialty foods and their manufacturers that are rapidly becoming the source of new ideas. It’s time to re-imagine, redefine, and re-invent what private brand means to the shopper. It’s a lot more special than before.