Monday, February 22, 2010
Food, Drug Retailers With Stores in California, Nevada & Arizona Honored for Private Label-Store Brands' Excellence
Store Brands Innovation in the 21rst Century
Six food and grocery retailing companies - Supervalu, Trader Joe's, Target, Smart & Final, Walmart and Whole Foods Market - and two drug chains - CVS and Walgreens -with stores in California, Nevada and Arizona, the three states where Tesco operates its 141 Fresh & Easy Neighborhood Market fresh food and grocery stores, have been honored by the Private Label Manufacturers Association (PLMA) for their store brand products in the trade group's 2010 'PLMA Salute to (private label) Excellence Awards.' Two of the retailers - Trader Joe's and Smart & Final - are headquartered in Southern California.
PLMA is the leading U.S. industry trade association for private label and store brand manufacturing and merchandising.
The PLMA store brand excellence awards are in two sectors: food & drink and home & health (non-foods).
Food & Drink
First, in the food & drink sector, PLMA gave its private label excellence award in the Condiments and Dressings category to Supervalu, Inc., for its Wild Harvest Organic Sweet Pepper Thousand Island Salad Dressing
Supervalu, which is headquartered in Minnesota, operates the Albertsons supermarket chain and the Bristol Farms specialty food and grocery chain in Southern California. Supervalu also owns the small-format, hard-discount Save-A-Lot grocery chain, which has a few stores in California and Nevada.
Supervalue also was awarded two private label excellence awards in two food & drink categories for its Sav-A-Lot store brand products.
First, in the Children's & Baby Foods category, Sav-A-Lot's Coburn Farms MooGurts Lowfat Yogurt Combos store brand garnered the excellence award.
Additionally, in the Dairy Products category its Coburn Farms Creamy Whip Light Cream won the honors.
Southern California-based iconic grocer Trader Joe's grabbed two PLMA excellence awards: one in the Breakfast Foods category, for its Trader Joe's Gourmet Flakes & Chocolate Cereal, and the other in the Pasta & Pasta Sauces category, for its Trader Giotto's Arrabiata Sauce.
Trader Joe's was founded in Southern California in the 1970's - and its corporate headquarters remains there. Southern California has the greatest number of Trader Joe's stores out of the chain's about 314 units nationwide in the U.S.
Discount chain Target, which like Supervalu, Inc. is headquartered in Minnesota and has numerous stores in California, Nevada and Arizona, garnered a private label excellence award in the Mexican/Latin Foods category for its Archer Farms Roasted Salsa Verde.
Last - but far from least - Los Angeles-based Smart & Final Stores Corp. and its Henry's Farmers Market chain was awarded a private label excellence award in the Natural Foods category for its new Sun Harvest store brand Natural Wildflower Honey.
This is a big win for Smart & Final and Henry's because the retailer created the Sun Harvest natural and organic brand just last year, and only completely introduced the brand in its Henry's Farmers Market, Sun Harvest (Texas), Smart & Final and Smart & Final Extra stores this year. The Blog Natural~Specialty Foods Memo detailed the Sun Harvest private label program in this January 2009 story.
Home & Health (non-foods)
Supervalu, Inc.'s Sav-A-Lot scored another private label excellence award, this time for a non-foods item in the Baby Products category, for its Being Well Baby Premium Contoured Nursing Pads.
Arkansas-based Walmart also grabbed an excellence award (Bath & Body category) from the private label trade association, in its case for the retailer's Simply Basic Bath & Shower Gel brand.
Whole Foods Market, Inc., which is headquartered in Texas and has about 100 stores in California, Nevada and Arizona, took the private label excellence honors in the Pet Products category for its Whole Paws Hip & Joint Formula Dog Biscuits.
Rounding out the store brand excellence awards in the home & health segment are two drug chains - CVS and Walgreens. Both drug chains have numerous stores in California, Nevada and Arizona.
CVS won in what the PLMA calls its Kids Corner category for the drug chain's CVS Kids' (dental)Flossers.
Walgreen's, the largest U.S. drug chain, was awarded a private label excellence honor in the Personal Care and Toiletries category for its Studio 35 Beauty 11 Piece Beauty Makeover Essentials kit.
For a complete listing of all the 'PLMA Salute to Excellence Awards' retailer (and wholesaler)winners, along with complete details on how the winners were chosen, click here.
Store Brands: Growth
Private label is a fast-growing trend in the United States. For example, market research firm Nielsen reports that private label sales have increased by 12% in supermarkets, drug chains and mass merchandisers since last summer.
Total U.S. private label sales (retailers and wholesalers) for 2009 reached about $85 billion, and unit market share rose to more than 23%.
Additionally, consumers are taking to store brands, especially (but far from exclusively because of) in the economic recession.
According to a recent survey by the GFK-Roper, more than 60% of all shoppers now say that they purchase store brands frequently, up from 40% just three years ago.
Additionally, Eight out of 10 consumers surveyed said that store brands are as good or better than national brands, and nearly 20% of shoppers said they expect to buy more private label this year.
Further, 91 percent of the shoppers who say they switched from buying name brands to buying store brands during the past year said they will continue buying the store brand after the recession ends.
Most price-comparison surveys conclude that when it comes to everyday prices, store brands are about 20% -to- 30% cheaper than comparable national branded food, grocery and non-foods packaged goods.
Price has historically been the primary consumer motivation for purchasing store brands. However that's changing, as the survey data above, along with other research, suggests. Consumers are increasingly viewing private label products as equal to the quality of national brands in many if not most categories. Store brands have come a long way since the days of generics.
Store Brands: Focus
One of the pioneers in store brands is Trader Joe's, the winner of two PLMA excellence awards. About 80% of all items sold in Trader Joe's grocery markets are branded under one of the grocer's numerous store brands. Store brands are the focus rather than a secondary offering at Trader Joe's.
Tesco's Fresh & Easy, using Trader Joe's as its model, also puts an emphasis or focus on store brands - in its case its fresh&easy brand - in its 141 fresh foods and grocery stores located in California, Nevada and Arizona. About 60% of the SKUs sold in Fresh & Easy stores are under its fresh&easy store brand (called own brand in Britain where Tesco is based), with about 40% being national and regional manufacturers' brands.
Store Brands: Growth among Top Food Retailers
The top five (by annual sales volume) food and grocery retailers in the U.S. - Walmart Stores, Inc., Costco Wholesale, Kroger Co., Supervalu, Inc. and Safeway Stores, Inc. - all have extensive store brand offerings across nearly every consumable and non-foods product category, ranging from discount brands to (in the case of Costco, Supervalu, Kroger and Safeway) specialty, natural and organic offerings.
Safeway Stores is even marketing its O' Organics organic foods' line and 'Eating Right' healthy foods' brand to other retailers, both in the U.S. and globally.
Store Brands: Fresh, Prepared Foods
As we've written extensively about in Fresh & Easy Buzz, there's also a growing trend by retailers to create and merchandise their own brands in the fresh, prepared foods category.
Tesco's Fresh & Easy offers an extensive line of ready-to-eat and ready-to-heat fresh, prepared foods under its fresh&easy brand, for example.
Walmart has thus far introduced two fresh, prepared foods items under its 'marketside' brand: a line of ready-to heat-pizzas and most recently a line of 'marketside' fresh, refrigerated ready-to-heat soups. [See: January 9, 2010: Walmart's 'marketside': What's 'In-Store' for 2010?]
Safeway Stores, a leader in store brand fresh, prepared foods, has developed an extensive line of its own brand fresh, prepared foods under its 'Signature Cafe' brand. These items include dozens of ready-to-eat and ready-to-heat prepared foods products.
And of course, as Fresh & Easy Buzz has most recently reported on and written extensively about, the Walgreens drug chain is working on a fresh, prepared foods program of its own. The focus of the fresh foods program will primarily be on ready-to-eat, grab-and-go items, along with some ready-to-heat foods, branded under a store brand. (Note: We think one of the Walgreens' prepared foods brands will be under its existing 'Cafe W' store brand.)
Store Brands: Blue Sky
These food retailers represent just a small example of what's happening in the fast-growing store brand fresh, prepared foods arena, as do those mentioned represent a mere slice of what's going on in the industry in terms of overall private label or store brand development.
We see only continued innovation and growth in the development, merchandising and marketing of store brands by retailers.
In addition to the fast-growth fresh, prepared foods segment, we also see strong, continued store brands' growth in the natural and organic foods categories, as well as in the lower-end, value-based categories, both in consumables and in non-foods.
It would be a mistake as well to see private label as a mere reaction to the current, and now two-plus year old economic recession.
There's no doubt the recession has been a force to increase sales of store brands over the last two years. However, private label development and merchandising was going strong before the recession hit - and it will remain strong once its over - in our analysis.
Meanwhile, look for those retailers honored by the PLMA to be among those innovating and leading the store brands charge this year and in the years to come.