Monday, February 7, 2011

Getting There First...Plus, Are Tesco's Fresh & Easy and Safeway Traveling Down A Similar Private Brand Aisle?

Private Brand Showcase

One of our objectives in Fresh & Easy Buzz, and in our Private Brand Showcase feature, is to bring our readers "fresh" information, analysis and commentary about Tesco's Fresh & Easy Neighborhood Market and other food retailers first, which we often succeed in doing.

Three of those firsts, two stories involving the introductions of new private brands by Tesco's Fresh & Easy and Safeway Stores, Inc., along with a third, which involves our being first ongoing coverage of Fresh & Easy's 'eatwell' healthy foods' brand, recently appeared here in 'Private Brand Showcase.'

'Fresh & Easy Kitchen Gourmet'

For example, on January 21, 2011 we reported in detail on a new private brand, 'Fresh & Easy Kitchen Gourmet,' being introduced by El Segundo, California-based Fresh & Easy Neighborhood Market. Read the story here: Tesco's Fresh & Easy Neighborhood Market Introducing New 'Gourmet' Private Brand.

As we detailed in the January 5 story, the first two lines under the new store brand include an assortment of 'Fresh & Easy Kitchen Gourmet' fresh, refrigerated ready-to-heat meals and two SKUs of refrigerated, ready-to-eat soup

This week, Tesco's Fresh & Easy is officially introducing its newest private brand, featuring both the ready meals and soups in its weekly advertising circular. You can view the ad circular and the 'Fresh & Easy Kitchen Gourmet' sale items here.

This week's ad feature is the first public announcement we've been able to discover by the fresh food and grocery chain about the new store brand.

But Fresh & Easy Buzz readers learned about the new 'Fresh & Easy Kitchen Gourmet' private brand and the first two lines under the brand on January 21, 2011, as the products hit the Fresh & Easy Neighborhood Market stores' shelves.

Fresh & Easy's 'eatwell'

In a series of four 'Private Brand Showcase' stories, from January 4 -to- January 20, 2011, about Fresh & Easy Neighborhood Market's 'eatwell' healthy foods' brand, we noted that the grocer is planning to introduce a number of new items across all three categories - fresh foods, frozen and dry grocery - in early 2011, and again later this year.

Tesco's Fresh & Easy by policy doesn't comment on or generally confirm its private brand development efforts or product introduction strategy. For example, Fresh & Easy Buzz was the first publication to report on the development of the 'eatwell' healthy foods brand at Fresh & Easy, along with the introduction of the first items under the store brand, a line of refrigerated ready meals and related items, in these two stories - April 1, 2010: Tesco's Fresh & Easy to Launch New 'EatWell' Brand Lower-Sodium, Fewer-Calorie Prepared Foods Line; and April 2, 2010: Fresh & Easy's New 'EatWell' Healthier Fresh, Prepared Foods Brand to Hit Stores on April 7.

The fresh food and grocery chain didn't announce its new 'eatwell' brand until a considerable time after our reports.

However, confirmation of our January 2011 reports about the planned introduction of a number of new 'eatwell' items has come sooner than we expected, and right from the top at Fresh & Easy Neighborhood Market's corporate buying and merchandising department.

In a rare public appearance - in-person or in print - John Burry, Fresh & Easy Neighborhood Market's chief commercial officer (vice president or director of buying and merchandising in U.S. grocery industry terminology; Fresh & Easy uses the British terminology), said in a brief guest post on the grocer's blog that Fresh & Easy is "working on lots of new and exciting eatwell items for 2011," adding: "I tasted some of them in our development kitchens today."

Burry is one of the original Tesco executives who came across the pond to California with Tesco deputy CEO and Fresh & Easy Neighborhood Market CEO Tim Mason in 2006-2007 to start up the United Kingdom-global retailer's Fresh & Easy chain, which now has 156 stores in California, Nevada and Arizona. During his tenure as the head of Fresh & Easy's corporate buying and merchandising efforts, Burry has seldom spoken out in public, and this is the first time we've seen him take to the blogosphere, where we welcome him as a new blogger, with a post.

By the way, look for the first batch of those "new and exciting" 'eatwell' brand items to start hitting the Fresh & Easy stores soon.

Safeway's 'Open Nature'

In a January 5, 2011 'Private Brand Showcase' story - Safeway Adds 'Open Nature' to its Natural-Organic-Healthy Foods' Private Brand Portfolio - we reported that Pleasanton, California-based Safeway Stores, Inc., was introducing a new natural foods brand, "Open Nature," into its stores, starting with a line of fresh poultry and meats.

In our story about Safeway's new natural products brand, we also offered an analysis of how the brand fits within the supermarket chain's healthy foods' private brand portfolio, which prior to the introduction of 'Open Nature,' consisted of two brands in the consumables segment - 'O' Organics' and 'Eat Right.'

Additionally, in our January 5 piece we offered a detailed analysis of the various product attributes Safeway Stores is touting with its 'Open Nature' brand.

Safeway announced its new 'Open Nature' natural foods brand on January 26, 2011, three weeks after we first reported on the development.

In its announcement, Safeway also said it plans to eventually use the 'Open Nature' brand name on more than 100 products. In addition to the fresh poultry and meat categories, the grocer said the other categories will include: bread, yogurt, ice cream, salad dressing, frozen foods and others.

In our January 5 story we said this would be the case. We also included a list of the various categories Safeway received trademark protection under for brand 'Open Nature.'

Additionally, since we published our story, Safeway has rolled out a couple additional items under the brand, which it mentions in January 26 press release announcement. Those items are packaged fresh bacon and hot dogs. Additionally, Safeway has branded some varieties of fresh, packaged Angus Beef and pork under 'Open Nature.' (See here.)

In the announcement, Safeway Stores, Inc. also tied its new natural foods brand into its other two health and wellness-oriented consumables brands, 'O' Organics' and 'Eating Right,' which is something we did in our January 5, 2011 piece, offering an analysis of the private brand synergies Safeway Stores, Inc. is trying to create between the three brands - one being organic ('O' Organics'), the other a "healthy foods" brand ('Eating Right'), and the newest private brand, 'Open Nature,' a natural foods brand. From a branding standpoint, each fits into a classical model of category differentiation within the larger health and wellness brand segment.

Here's what Safeway's senior vice president of consumer brands, Joe Ennen, said in the grocery chain's January 26, 2011 press release:

"Open Nature is a great addition to Safeway's portfolio of health and wellness brands joining O Organics and Eating Right. It's another demonstration of Safeway's commitment to providing our customers the best possible experience when they prepare and eat meals for themselves and their families. Open Nature is Safeway's way of providing shoppers access to simple, flavorful food made from all-natural ingredients that is as close to nature as possible."

[You can read Safeway's January 26, 2011 press release here. Also read our January 5, 2011 story: Safeway Adds 'Open Nature' to its Natural-Organic-Healthy Foods' Private Brand Portfolio.]

In conjunction with introducing its new 'Open Nature' natural foods' brand on January 26, Safeway has also set up a special page on its website devoted to the brand, which you can view here. The page introduces the new brand and offers information about it.

Based on information we recently received from a Safeway Stores, Inc. source, the grocery chain plans to aggressively roll-out new 'Open Nature' brand lines and items throughout this year. The first batch of new items under the private brand are set to hit Safeway stores at the end of this month or in early March, according to the source, who's in a position to know the roll-out schedule.

Private brand strategy - Safeway Stores

With the introduction of its 'Open Nature' brand (natural foods), Safeway Stores has now nicely and strategically divided its health and wellness private brand portfolio into three brands, each offering key attributes and price points to shoppers.

The primary attribute and focus of the chain's 'O' Organics' brand, which now has about $1 billion in annual sales, is just as the name suggests - organic ingredients. And, along with being organic, the brand's focus is on being "healthy."

Safeway's 'Eating Right' brand, which has sales of about $700 million annually, is positioned as a non-organic, and not specifically "nature" but healthy foods' brand.

The Pleasanton, California-based chain, which is the fourth-largest seller of food and groceries in the U.S., offers products across all consumables categories under the two brands.

'Open Nature' fits in between the two brands as Safeway's natural products private brand. Like O' Organics" and 'Eating Right' it's part of the healthy foods' brand trifecta. But unlike O' Organics, products under the brand aren't comprised of organic ingredients. But all of the ingredients in the items branded "Open Nature" are "natural," as defined by Safeway. (See our January 5, 2011 store and the Safeway links above for details.) Not all of the 'Eating Right' brand items have "natural" ingredients, however.

In terms of everyday price points, "O' Organics" items tend to be the highest priced, with "Eating Right" products being lower at the shelf. Based on our analysis, 'Open Nature' looks to fit in between the two - the brands' everyday prices on similar items will be lower then "O' Organics, and slightly lower or about the same price as the similar 'Eating Right' items.

Private brand strategy - Tesco's Fresh & Easy

In a May 18, 2009 story - Strategy Session: Tesco's Fresh & Easy Needs to Move From its One Store Brand Fits All Strategy to A 'Three Brand' Store Brand Strategy - about Fresh & Easy Neighborhood Market's private brand development, we suggested the retailer should create a new brand for its natural and organic foods items, which then and currently are branded under its flagship 'fresh&easy' store brand.

Since our piece was published, Tesco's Fresh & Easy has created two new brands - 'eatwell' and 'fresh&easy goodness,' which is more correctly a co-brand since it uses fresh & easy as part of the brand name, but has continued to use 'fresh&easy' for its organic and natural foods consumable products, despite the fact the grocer uses that same brand for all of its conventional food and grocery items, along with using 'fresh&easy' on fresh produce (organic and non-organic) and fresh meats.

As we suggested in 2009 - and suggest here again today - doing so is a branding mistake in our analysis because using 'fresh&easy' as a brand for both conventional, organic and natural foods products allows for zero differentiation between, for example, a 'fresh&easy' packaged food item containing items grown with the use of pesticides compared to an identical (say a rice dinner mix) or similar 'fresh&easy' items that contains all organic ingredients.

Additionally, but to a lessor degree than with organic, there are various attributes that distinguish a product as being "natural," although unlike "organic" there aren't U.S. government regulations on the books guiding the use of the term, using the 'fresh&easy' brand name on "natural" products also fails to allow for brand differentiation between the conventional items and those that fall into the natural foods category.

Therefore, from a private brand perspective, it's our analysis that Tesco's Fresh & Easy is missing a good opportunity to improve sales of natural and organic foods items in its stores because it continues to use the same brand - 'fresh&easy' - on products in the two respective "healthier foods'" categories as it does on all the conventional consumable products it offers in its stores. About 60-65% of all the SKUs in Fresh & Easy stores are under the grocer's private brands. The remaining percentage, of what's about 4,500-5,000 SKUs offered in the markets, are national and regional manufacturers' brands - Coke, Pepsi, Heinz, Kraft, ect.

The metaphorical cart in the private brand aisle

Fresh & Easy followed Safeway's introduction of its 'Eating Right' healthy foods brand, which was introduced in 2008, with its own similar brand - 'eatwell,' which the Tesco-owned chain introduced in 2010.

Were we calling the shots at Fresh & Easy when it comes to private brand development, we would follow a similar path in the natural and organic categories, but instead of two brands - 'O' Organics and 'Open Nature' - we would take all of the current 'fresh&easy' brand items that fall in the organic and natural foods categories, along with all future items, and put them under a new brand at Fresh & Easy Neighborhood Market. The new private brand would be used exclusively for all consumable items in the organic and natural foods categories at Tesco's Fresh & Easy Neighborhood Market.

Note to Our Readers - You Can Play Too

[Readers, feel free to help Fresh & Easy Neighborhood Market out by offering suggested names for what would become the grocer's new organic and natural foods private brand. 'O Organics' and 'Open Nature' are both already taken. So you can't go there. The brand name Wild Oats,' which we talked about in our May 2009 piece, was sold by Whole Foods Market last year to a Southern California-based private brand food company. So you can't go there either.

But you shouldn't let those three taken names restrict you. Just click on the "comments" link below. Then leave your suggested name for the hypothetical organic and natural products brand. There is one restriction: You can't use 'fresh&easy' as part of your suggested brand name.]

Recent 'Private Brand Showcase' Stories

Additionally, Click on this link - - for a selection of past 'Private Brand Showcase' stories.

1 comment:

Anonymous said...

Two names I like for a combined natural/organic store brand are Wild Harvest or Pure Harvest. A little harder to name a combined brand compared to a just organic one, where you can use "organic" as part of the brand name.