Tesco's Fresh & Easy Neighborhood Market has gone decidedly niche and specialty products-oriented with three new food and drink items it recently introduced, pegged to the November-December holiday season, under its fresh&easy private brand.
The three new fresh&easy brand products fall clearly into the specialty food and drink category because they are niche-oriented consumer packaged goods items and feature gourmet or organic product attributes, and in case of the coffee also offer a fair trade attribute, along with the organic.
Below is our rundown on the three new items, followed by some analysis on Fresh & Easy's current private brand development focus:
Holiday Blend Coffee
The fresh&easy Holiday Blend coffee - pictured here - is a seasonal item introduced by the grocer for the November-December-New Year holiday period. The special blend coffee features both organic and fair trade coffee beans. [You can read about fair trade here. There are different definitions of what is considered fair trade, along with different certifications. In other words, it's somewhat buyer beware when the words fair trade are used on products.]
Pumpkin Pecan Waffle & Pancake Mix
The recently introduced fresh&easy Pumpkin Pecan Waffle & Pancake Mix is designed to be merchandised in the store all year but has a clear fall and holiday season focus to it, which is why Fresh & Easy Neighborhood Market has introduced it when it has.
The quick-prepare-and-cook product (pictured above) contains the dry mix and pecans, and requires adding eggs, milk, oil/or butter. The private brand specialty pancake and waffle mix is made without artificial colors or flavorings, is free of trans-fats, and contains no high-fructose corn syrup. It currently retails for has $3.99, based on store visits this week.
Cranberry Walnut Loaf
The new fresh&easy brand Cranberry Walnut Loaf specialty bread (pictured below) is made for Tesco's Fresh & Easy by its bread vendor Il Fornaio. The 16 ounce loaf contains cranberries, walnuts, raisins, pecans and citrus.
Analysis: Niche, specialty private brand focus
In a recent Private Brand Showcase piece - December 13, 2010: House (Sparking) Cider Rules at Fresh & Easy Neighborhood Market - we noted that based on our ongoing research and analysis, Tesco's Fresh & Easy Neighborhood Market this year has been putting the majority of its consumables private brand development and new item introduction focus in the specialty foods, natural-organic and healthy foods' niche categories rather than into the development of more mainstream or mass market types of packaged food and grocery products. The three items featured in this piece lend further evidence to our observation and analysis.
Its our further analysis the grocer will continue with this niche-oriented specialty products focus in the consumables category next year.
That doesn't mean Fresh & Easy Neighborhood Market won't introduce any new mainstream packaged goods items. Rather it means the Tesco-owned 155-store fresh food and grocery chain will put its focus on the specialty, natural-organic and healthy foods' categories, looking even more and more like Trader Joe's, for example, when it comes to retailer brand development and merchandising.
A key reason we believe Fresh & Easy has been and will continue to put a majority focus on niche and specialty oriented categories with its private brand development is two-fold.
First, the grocer believes doing so will help it to build a larger and stronger customer following based on its private brands and products.
Second, Tesco's Fresh & Easy Neighborhood Market hopes a focus on the specialty-premium, natural-organic, and healthy foods' categories, where the items tend to have higher price-points and gross margins, will help it to achieve two essential goals: increase the average market basket sales in its stores and increase Fresh & Easy's current negative-38% overall margin.
Tesco says it will break-even or show a slight profit with Fresh & Easy by the end of its 2012/13 fiscal year. In order to achieve that it must raise the negative-38% margin to at least something close to plus-20%. That's a tall order for any grocer.
[Private Brand Showcase is a regular feature of Fresh & Easy Buzz. In it we report on, write about and offer analysis and commentary on the fast-growing private or retailer brand (sometimes called private label) movement, along with featuring various private brand products being offered by Tesco's Fresh & Easy Neighborhood Market, along with those of other grocers and retailers operating various types of formats. Below is a selection of 2010 stories in our Private Brand Showcase]
Below is a selection of 2010 stories from our 'Private Brand Showcase'
December 21, 2010: New 'Marketside' Brand Fresh Food Items From Walmart - Part Deux
December 18, 2010: Walmart Launches New 'Marketside' Fresh Food Lines - Plus A 'Fresh' Campaign to Create Brand Buzz
December 13, 2010: House (Sparking) Cider Rules at Fresh & Easy Neighborhood Market
October 30, 2010: Raley's Launches New 'Raley's TO GO' Pre-Packaged, Refrigerated Fresh-Prepared Foods Line
October 16, 2010: Fresh & Easy Neighborhood Market 'Bags' the Humble and Nutritious Plantain For A New Snack Chip Item
October 16, 2010: Fresh & Easy Neighborhood Market's Private Brand Kids' Cereal Wins Bronze 'Pentaward' in 2010 Packaging Design Competition
October 9, 2010: 'Use Me': Should Reusable Packaging Be Part of Tesco's Sustainable Private Brand Offering? A Student-Designer Thinks So
September 27, 2010: First Items in Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Foods Line Arriving in Store Freezer Cases This Week
September 4, 2010: Fresh & Easy Neighborhood Market Unveils New fresh&easy 'goodness' Brand Items and Packaging
August 29, 2010: Fresh & Easy Neighborhood Market Expanding its fresh&easy 'goodness' Co-Branded Line; Launching Numerous New Items
August 18, 2010: Fresh & Easy Neighborhood Market Extending 'eatwell' Healthy Foods' Private Brand Into Dry Grocery Category
July 21, 2010: 'Sipsational' & 'Quenchtastic': Safeway Introduces New 21-Flavor Line of Soft Drinks Under 'refreshe' Private Brand
July 17, 2010: New Fresh & Easy Neighborhood Market Clock-Shaped Private Brand Candy Line Hits the Shelves at Fresh & Easy
July 12, 2010: Tesco Launches Private Brand 'Lasagne Sandwich' in the UK Today...With No Apologies to The Earl of Sandwich
June 24, 2010: New Fresh & Easy Clock Logo-Shaped Candies Are A Pretty Sweet Idea
May 11, 2010: Tesco Might Want to Get 'fresh & naked' at 'fresh & easy'
April 2, 2010: Fresh & Easy's New 'EatWell' Healthier Fresh, Prepared Foods Brand to Hit Stores on April 7
April 11, 2010: When it Comes to Fresh, Prepared Foods, New York City's Duane Reade is Simply 'deLish' for Walgreens
February 22, 2010: Food, Drug Retailers With Stores in California, Nevada & Arizona Honored for Private Label-Store Brands' Excellence