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- RESEARCH & AWARDS
Food, drug and mass-merchandise retailers that position their stores as true health and wellness “destinations” will earn the gratitude of health-minded shoppers. Moreover, retailers that emphasize store brand offerings within their health and wellness solutions likely will build sales here.
Building a successful health and wellness destination - starring your store brands - will require a workable game plan and oodles of hard work. Can you build it?
In the words of cartoon icon Bob the Builder: “Yes, you can!”
But Thom Blischok, Consulting and Innovation president for Chicago-based Information Resources Inc. (IRI), points to several critical actions every retailer initially must take. First, retailers must develop a deep understanding of the shopper behavioral changes taking place in this recession. Consumers are seeking out affordable solutions, and the health-and-wellness arena is no exception.
“In a time of economic stress like this, people realize that they have tradeoffs,” Blischok says. “So 25 percent of America is now using the Internet and over-the-counter drugs [for health-care issues]; they’re making fewer doctor visits. … There is a movement toward healthier eating, healthier dining, healthier foods, because they can’t afford to go to the doctor’s, can’t afford to get sick.”
Second, retailers need to develop a health and wellness platform. Blischok points to Hy-Vee’s “immersion-based” health and wellness platform as a great grocery example, and also likes what Hannaford Bros. has done with its Guiding Stars nutrition navigation system.
“I think that Walgreens and CVS are working their strategies around a better quality of life,” he adds. “I think that’s also very important.”
Third, retailers need to establish a believable brand promise for private label health-and-wellness-minded items, Blischok says.
“After brand promise, then you have to organize your marketing strategies and merchandising around the idea that you can fulfill that promise - that you have products that actually meet the needs of the shopper, and they’ve been tried and tested to deliver that promise.”
Matt Walker, director of marketing for Cliffstar Corp., Dunkirk, N.Y., stresses that consumer expectations have changed, too.
“As more and more consumers watch what they put into their bodies, they expect more from every company they purchase from. … Every company that wants to succeed in this economy has to find solutions for every consumer,” he emphasizes.
And retailers are ideally situated to accomplish this with their private label programs, adds Pat Nicolino, vice president of marketing for Carneys Point, N.J.-based Clement Pappas.
“One of the huge opportunities here that private label has is to make good things in life universally available to everybody - because everybody deserves great opportunities,” she says. “[National] brands can’t pull that off all by themselves, but a retailer that’s got 1,000 private label items in a store can really pull together a very strong message.”In addition to Blischok’s minimum requirements, retailers can take a number of steps to enhance the health-and-wellness shopping experience. Read on for some expert advice on both the food and drug sides - and look for the boxes scattered throughout the story to learn about the creative health-minded programs some retailers already have put into place.
Food for Thought
According to “Health & Wellness: The Purpose-Driven Consumer,” a January study released by the Madison, Wis.-based International Dairy-Deli-Bakery Association (IDDBA), two-thirds of consumers polled in 2008 said healthfulness had an impact on their food buying decisions - up 17 percent from 2005. IDDBA notes that health is strengthening as a food purchase “mega” factor. It now ranks third after taste and price - and a notch above the oft-cited convenience factor.
And retailers have taken notice.
Tim Greene, director of sales, branded and private label for Sparta, Wis.-based Century Foods International, notes that many of them are introducing nutritional guidance programs targeted to better-for-you product selection. He points to Nu-Val and Guiding Stars as examples.
“Most of these programs try to simplify the myriad choices and provide guidance through a rating scale or focus on key nutritional drivers for healthy living,” Greene says.
To excel on the store brand side of health and wellness, retailers must ensure their products are both affordable and of high quality. The products also must be easy to identify and understand in terms of benefits.
Pat Regan, senior vice president, marketing and sales strategy for Kansas City, Mo.-based American Italian Pasta Co., points to the need for “strong and meaningful” product claims that meet consumer needs, as well as good taste and performance. And the packaging not only needs to communicate the health claims clearly, but also must stand out on the shelf.
“[Retailers] must plan on a sustainable communication and trial generation plan that brings the product to the forefront for consumers and encourages them to try the product,” Regan adds. “In dry pasta, retailers are focused on delivering the full range of health products for their private label brands. This includes offerings in whole wheat, whole grain, organic and omega-3 added.”
Ron Rash of Danville, Calif.-based Organic Foods International LLC stresses that it’s not enough for retailers to tell shoppers something is good for them - they also must tell them why. He believes consumer education is critical here, and that retailers need to use print and Internet-based communications to inform their shoppers about store brand health-minded foods and beverages.
And Rash isn’t a fan of condition-specific approaches to health and wellness in the food and beverage aisles, noting that folks who are diagnosed with a condition or ailment become very conversant in it very quickly. They tend to locate the right products on their own. Instead, he prefers a “whole health” approach that promotes a healthier lifestyle through eating.
“If retailers are going to talk about a ‘whole health’ program - where they can point consumers to a series of private label food products that provide a healthier lifestyle through eating - then I think they can group products together that aren’t necessarily designed specifically for a diabetic or a heart patient,” Rash says.
Jane Asmar, director–branded retail sales, corporate accounts for Fowler, Calif.-based National Raisin Co., says although sales growth in organics has slowed, her company is confident that the surge of private label introductions will renew momentum here. And she also points to the rising popularity of “green” products that boast healthier, more earth-friendly attributes.
“One easy way to communicate ‘good for you’ is through more consumer-friendly packaging,” Asmar says. "More people are reading ingredient panels, but many private label and branded products boast healthy-product claims such as ‘no fat,’ ‘gluten-free’ and ‘a great source of energy!’ These are simple, easy-to-read messages that hit home with consumers.”
But Bob Johnson, founder of Organic Foods International, cautions retailers to be very careful about the health claims they make in relation to a product. FDA regulations cover myriad claims ranging from low-sodium and low-fat to a “good source of” substance X.
Still, when it comes to the most trusted on-package claims, the American Heart Association’s heart-check is certainly very high on the list. Kimberly F. Stitzel, M.S., RD, is director of nutrition and obesity for the association. She says certifying private label products works well to spur sales and help shoppers locate heart-healthy foods. (Although this move is most definitely condition-specific, heart disease continues to be the number-one killer in the United States, and is something most consumers are attempting to prevent.)
“We’ve found that 72 percent of primary grocery shoppers who are aware of the heart-check mark are more likely to buy a product displaying the mark,” she says. “This proves its worth in the marketplace. Most importantly, it’s socially responsible because retailers are joining in the fight against the nation’s leading cause of death.”
Stitzel also says in-store promotions in partnership with the American Heart Association are an excellent way “to leverage the reputation of the nation’s leader in heart health with retailers’ customer relationships.”
Speaking of promotions, they are critical - along with merchandising - to the success of a health and wellness program. On the heart-health side, Stitzel recommends in-store video and print circular advertisements that promote heart-healthy store brand products, as well as brochures that discuss healthful eating and grocery shopping tips. Retailers also can leverage their customer loyalty programs by providing information reflecting buying habits to customers who want to track their overall health.
“Create displays with healthy shopping tips around the store,” she adds. “Provide contact information at the store’s pharmacy or customer service desk for local health organizations’ offices to obtain more information on a particular disease or health issue.”
Asmar suggests “good-for-you islands” across the store to help draw shoppers to appropriate locations. She also points to ceiling hangars or distinctive flooring that generates additional consumer traffic or “treasure hunting” in these areas.
Rash notes that integrating natural and organic products with conventional products is one of the simplest things a retailer can do to encourage a sale. But again, make the message visible and on the packaging front.
“If you’re shopping for salad dressing, coffee, bread, you name it, and the healthy choices are all off in one section, there’s a good chance you’re not even going to see them,” he says. “But if you’re shopping for a teriyaki sauce and it’s sitting right next to the conventional leader, you can see that it’s organic or has some other health claim.”
Like Rash, Blischok questions the viability of a store-within-a-store concept in the food and beverage aisles.
“That suggests the rest of the store is not healthy,” he contends.
Greene says retailers also should focus on the offerings they have that other formats cannot readily duplicate. For example, food retailers could leverage the produce department - and nurture the retailer/customer relationship.
“If a food retailer were to offer their customers a recipe, for example, that tapped many departments, with produce being the centerpiece, it provides the consumer with a solution that enhances the relationship,” he says. “If the recipe also ties back into consumer trends like fresh, health and wellness, convenient delivery systems, etc., I believe you have a stronger premise to build on and enhance the relationship and the brand.”
Special events also can help draw consumers to private label health and wellness offerings, Asmar notes.
“Retailers can sponsor outside and in-store events such as community weight-offs and lectures,” she says. “The most successful events we’ve seen are those that target families and kids.”
Meanwhile, supplemental merchandising such as retail ad support and in-store displays can help build momentum for such events, Asmar adds, and ultimately help increase store traffic and generate incremental sales. The bonus? The retailer also builds good will within the community.
Elixers for Everyone
But here, retailers are free to pursue more of a condition-specific approach, contends Shane Conti, regional sales manager for Somerset, N.J.-based Reliance Vitamin Co. Inc.
“I think you need to target some of the more common health conditions,” he says.
Conti suggests using signage or even awnings to tag such areas as a diabetic support center or a bone-density section in-store. And although a store-within-a store concept won’t work for every retailer on the drug side of operations, it can be a success when used for natural formulations of traditional supplements, vitamins and remedies.
“More and more people are looking for natural alternatives to help at least reduce the amount of prescriptions they are taking or to help some of the problems that they have,” he adds. “A perfect world would be to have a destination in the store that is advertised, promoted and [billed as] a healthy living section.”
Gary Pigott, senior vice president of marketing for Miami Lakes, Fla.-based Mason Vitamins, says retailers might want to concentrate on increasing visibility for the top 10 or so selling OTC products such as acid reflux remedies, pain killers, cholesterol reducers and sleep aids.
“From this list, identify supplements and group categories around the standard planogram,” he says. “There are tons of digestive supplements stocked in store brands, far more than just probiotics.”
Pigott notes that many retailers rely on vendors without the pharmacy/patient experience that could help enhance store brand marketing programs.
“Retailers should consider stepping away from volume rebate commitments and place more emphasis on marketing performance requirements,” he says. “Just offering a BOGO display does not create long-term consumers.”
To make the selection less confusing for the consumer, Pigott recommends using simple names for products that make sense.
“Why call a product ‘analgesic rub’ instead of ‘pain relief rub’? Having fancy names does not impress the everyday consumer who is seeking products offering solutions," he maintains.
To bring affordable private label front and center in the health and wellness mix, retailers might want to have a shelf or shelves dedicated to store brand products, notes Erin Silva, M.S., RD, technical marketing manager for Irvine, Calif.-based VitaCeutical Labs. These private label products then should be cross-merchandised within the various health-condition sections.
“They should also add these products to their Web sites - customers shop and get information online and then find purchases easier when they get to the store,” she says. “Retailers should use shelf tags and signs to help point out best-sellers, staff picks, one-tab/cap-per-day formulas, vegetarian products and gluten-free products.”
Silva adds that new consumers can find it daunting to come across a wall of calcium products or fish oils, but retailers can help ease their anxiety by creating a way or ways to answer consumer questions. Here, an educated staff is the best bet.
“Train your staff not only about products, but about basic nutrition science,” Silva advises. “Teaching employees how vitamin C affects collagen formation helps them pass on that information to the shopper, and gets them excited to educate others. Well-educated employees are more motivated to move product.”
Make private label items easy to identify, adds Max Maxwell, market analyst for Glanbia Nutritionals, Fitchburg, Wis. He recommends distinct but common packaging for all health and wellness store brand products on the drug side. Displays, calendars, online content and nutritional benefit signage featuring or tied to private label OTC, vitamins and supplements also keep such products top of mind with shoppers.
“Several retailers are using a unified approach to packaging all their health and wellness products in similar packaging,” Maxwell notes. “Often the packaging is white or near white with soft colors like shades of green and brown. The packaging matches the warm, earthy feel.”
Other retailers have developed carbon-neutral approaches, he says, or biodegradable packaging. And he points to one retailer that has put up signs showing how many miles away from the store products were produced or sourced.
With skyrocketing health- care costs, Maxwell notes that a larger retail chain also could boost store brand awareness and sales by offering health services in-store, along with samples of their own supplements and other OTC products. A localized retailer, on the other hand, might want to partner with a smaller health clinic.Some retailers have gotten even more creative with store brand promotions, Silva points out, using jet-sprayer machines to dispense free samples of protein powders or green powders - mixed with either a milk alternative or juice. Others have cross-merchandised powders in the deli or smoothie bar or sponsored local health fairs where they distributed store brand samples.
All Together Now
“One of the biggest issues going forward right now in private label is affordable health and wellness, and how private label plays into that,” notes IRI’s Blischok. “I don’t think there’s a clear path yet or a clear strategy.”
What is clear is that the health and wellness message across the retailer’s store or stores must be consistent for all store brand better-for-you offerings under the same roof. Silva says food, drug and mass merchandisers can use natural food stores as inspiration here.
“Employ knowledgeable, motivated staff,” she says. “Make private label a priority from the top-down, and practice what you preach. Donate to social causes, support ‘green’ initiatives and manage in a way that encourages your own employees to be healthy.”
And don’t be afraid to combine promotional efforts between the food and drug sides of the store in health-and-wellness-related literature and events.
“When you’re sending out your weekly specials, your circulars, do sections on health,” Conti suggests. “You could have a section with an on-staff dietitian, for example, saying, ‘Hey, did you know that beta carotene is good for this? Did you know that resveratrol is good for this?’”
Above all, don’t underestimate your ability to educate consumers in the health and wellness arena - and the power you have to sway them over to your affordable store brand solutions.“Education is key,” Greene emphasizes. “The wellness key programs start the process, but on a very basic level. … As health care costs skyrocket, a huge trend will continue to unfold with regard to consumers finding their own solutions to healthier living as they begin to understand diet as the basis of many health issues.” PLB
Sidebar: Rethinking the Package
ALDI Inc., Batavia, Ill., recently became the first retailer to introduce guideline daily amounts (GDAs) on a private label line - giving consumers key nutrition facts right on the front of the package. ALDI said the packaging boasting the GDA values - or “Fit Facts” - is being phased in for all Fit & Active better-for-you products.
The values, based on the USDA’s recommended daily allowances of calories, fat, sodium and sugar, are noted on the bottom right-hand corner of each Fit & Active package. Meanwhile, the package top provides a “snapshot” of other nutritional facts.
ALDI says its Fit & Active line includes 121 varieties of 58 core-range items. More than 20 additional Fit & Active products will be featured as "special purchase" items in ALDI stores throughout the year.
“Since 2004, ALDI’s Fit & Active line has offered healthy alternatives for smart shoppers on the go,” says Joan Kavanaugh, ALDI’s vice president of corporate purchasing. “Consumers’ growing demand for healthier choices is a significant opportunity for us, and we’re proud to offer products to support families’ active lifestyles.”
Sidebar: They've Got Ideas
“Stop and Shop has placed the Healthy Ideas symbol on more than 5,000 items and shelf tags throughout its stores, including qualifying store brand products such as Stop & Shop yogurt, frozen vegetables and canned vegetables,” says Faith Weiner, the company’s director of public affairs. “These foods have less fat, saturated fat, cholesterol and sodium. … Foods bearing the Healthy Ideas symbol are a good source of at least one nutrient, [including] protein, fiber, vitamins A or C, or the minerals calcium [and] iron.”
Weiner told PL Buyer that the Healthy Ideas program is focused on making a difference in the lives of the retailer’s customers.
“As we work to help consumers navigate the difficult economy, we will demonstrate that commitment and our ability to be a resource and provide a solution to the age-old question of: ‘What’s for dinner?’”
In-store signage and pamphlets communicate key aspects of Healthy Ideas program.
But the program isn’t the only weapon in Stop & Shop’s health and wellness arsenal. Weiner says the company also has partnered with registered dieticians such as Carolyn O’Neil, M.S., RD, and nutrition experts such as Dr. George Blackburn of Harvard Medical School to educate customers about healthful food selection, as well as local schools to educate students about making healthy food choices in school.
Sister retailer Giant Food, Landover, N.J., also said it is implementing the Healthy Ideas program in its 182 stores located in Maryland, Virginia, Washington, D.C., and Delaware.
Sidebar: Score More for Nutrition
The algorithm behind the NuVal Nutritional Scoring System was created by an independent panel of North American nutrition scientists with a sole focus on human health, according to NuVal LLC. It analyzes a food’s content, including vitamins, minerals, antioxidants and fiber, based on more than 30 different nutrient factors.
Price Chopper Supermarkets, Schenectady, N.Y., and West Des Moines, Iowa-based Hy-Vee Inc. are the pioneering retailers for the NuVal Nutritional Scoring System. NuVal LLC also developed a Web site, www.nuval.com, to provide interested retailers with information about the science behind the NuVal system and show consumers how to use the system to make informed food choices.
Hy-Vee said it tested the NuVal Nutritional Scoring System in its Des Moines-area stores last fall, and now is rolling the system out across all its stores in seven Midwestern states.“When we’re in a position to make a difference in people’s lives, we should,” says Hy-Vee CEO Ric Jurgens. “This program has the potential to improve the health of our nation.
Sidebar: Intelligent Choices
According to Susie Bell, corporate affairs manager for Supervalu, nutrition IQ is a comprehensive program that objectively evaluates products against a common set of criteria based on federal guidelines.
“Approximately 30,000 products were evaluated as part of phase 1 of the program, which focused on the center store, where research shows consumers have the most frustrations and questions regarding food labels,” Bell says. “So far, approximately 4,200 items, or about 14 percent of the products already evaluated, have received nutrition IQ tags.”
Of the Phase 1 items deemed worthy of nutrition IQ tags, approximately 500 represented Supervalu’s own brands, Bell notes. Next up for Phase 2 evaluation will be items in the bakery, deli, meat, produce and seafood categories.
“Research shows that consumers are having difficulty making sense of nutritional guidelines and are seeking practical ways to help them eat better,” Bell says. “Nutrition IQ is intended to provide objective, easily understandable, at-a-glance nutrition information at the point of purchase to help consumers evaluate and select better-for-you foods.”Early anecdotal feedback from a pilot test in 20 of Supervalu’s Albertsons stores has been very positive, Bell adds, with customers demonstrating appreciation for an easy-to-understand, at-a-glance shelf guide that minimizes confusion.
Sidebar: Focus on the Family
For 2009, Harris Teeter has expanded on that program to create “yourwellness for families.” The company’s aim, according to the program guide, is to help families get healthy, stay healthy and feel great.The program continues the 15-week regimen for adults, and also serves up healthful meal ideas, with recipes that call for select Harris Teeter store brands. Education is the key here: The company’s program guide explains everything from how to read a food label to how to be successful in long-term weight management. Along with the guide, the retailer provides complete program support on its Web site at www.harristeeter.com/yourwellness/yourwellness_for_life/yourwellness_for_life.aspx