Fresh & Easy Neighborhood Market's fresh & easy Store Brand Organics Beat Safeway's O' Organics Brand in Price Comparison

As we reported and wrote about here on May 2, Fresh & Easy Neighborhood Market is touting 12 of its fresh & easy store brand organic food and grocery items at everyday low-prices for the month of May.

In this piece, we had Fresh & Easy Buzz corespondents in Southern California and Arizona do price comparisons on some of the 12 items at competing supermarket chain stores in the two market regions. The fresh & easy store store brand organic products our correspondents compared came in first place in terms of having the overall lowest prices.

This week, Safeway Stores, Inc., which operates over 700 supermarkets under the Vons, Vons Pavilions, and Safeway banners in California, Arizona and Nevada--which are the three regions in the Western U.S. where Tesco has it current 61 Fresh & Easy grocery stores--is promoting and advertising a number of its popular O' Organics brand organic food and grocery products in its weekly advertising circular and in its stores for reduced, promotional prices.

Three of the O' Organics items are the same as three of the 12 fresh & easy store brand items Fresh & Easy Neighborhood Market is touting as being everyday low-priced affordable organics in its stores this month.

Below is a price comparison between the three fresh & easy store brand and Safeway O' Organics brand items:

Category: Peanut Butter
Item: fresh & easy brand organic creamy peanut butter, 16oz @ $2.98
Item: O' Organics organic creamy peanut butter, 18oz @ 2-for-$5.00 (or $2.50 each)
Winner: Safeway's O' Organics brand by 48-cents per unit
Comments: Keep in mind the fresh & easy organic peanut butter is at an everyday price, while the Safeway O' Organics peanut butter is at a one week promotional price. That means the O' Organics brand will increase in price next week when the promotion ends. Also: the O' Organics brand does contain two more ounces than the fresh & easy brand.

Category: Cheese
Item: fresh & easy brand organic shredded cheddar and Monterey Jack cheese, 6oz @$2.39
Item: O' Organics shredded or chunk cheese, cheddar & Monterey Jack plus other varieties, 6-8oz @ 2-for-$7.00 (or $3.50 each).
Winner: fresh & easy organic brand by $1.11 per-unit. fresh & easy brand is a clear winner on this item by a city mile.
Comments: A savings of $1.11 a package for the cheese is a "big" deal. This is especially true because the fresh & easy brand cheese is at an everyday retail price, while the Safeway O' Organics brand cheese will go back to its regular price after the promotion ends early next week.

Category: Organic Eggs
Item: fresh & easy brand medium organic and cage-free brown eggs, 1 dozen @ $1.99
Item: O' Organics organic large brown eggs, 1 dozen @ $4.19
Winner: fresh & easy organic eggs by a whopping $2.20 per 1 dozen eggs package.
Comments: Not only does the fresh & easy brand of organic, cage-free eggs beat out the O' Organics brand by a city mile, it does so by an added country mile.

The fresh & easy brand eggs also are cage-free, while Safeway's O' Organics brand doesn't include that attribute in the ad circular.

Additionally, while the O' Organic brand brown eggs are the large grade, which is the most popular among Western USA consumers, at a savings of $2.20 per dozen package, we think most shoppers would be motivated to go with the fresh & easy brand organic medium grade eggs. In fact, a consumer could purchase two dozen of the fresh & easy brand eggs, which equal far more egg yolks by volume than a dozen large grade eggs, and still save 21-cents.

We wanted to include one additional category, coffee, in the price comparison.

The reason we're separating it from the above three organic items, is because the Safeway brand coffee we will compare to the fresh & easy brand organic coffee isn't organic. Rather, Safeway is advertising its premium quality Safeway Select brand coffee this week in its advertising circular. You will see why we are including it in the price comparison below.

Item: fresh & easy brand organic breakfast blend ground coffee, 12oz package @ $4.99
Item: Safeway Select Premium Coffee, 10-12oz packages @ $5.99
Winner: fresh & easy brand organic breakfast blend coffee by $1.00 per-package.
Comments: Despite the fact the Safeway Select coffee isn't organic coffee, fresh & easy brand organic coffee still wins the price comparison by a whopping $1 per package. This is even more impressive from a price standpoint because the fresh & easy brand coffee is organic coffee and the Safeway Select brand item is not.

Further, some of the varieties of the Safeway Select Organic coffee priced at $5.99 package are 10oz, while all of the fresh & easy brand organic coffee is 12oz.

Lastly, keep in mind the pricing for the fresh & easy brand organic coffee is an everyday price, while the Safeway Select coffee is at a one-week promotional price. In other words, after this week, the Safeway Select brand coffee will be price higher than the $5.99 package in Safeway-owned stores, while the fresh & easy brand organic coffee will remain at $4.99 for the 12oz packages.

Note: We've seen the Safeway Select brand coffee everyday-priced at $6.49 -to- $6.99 in various Safeway stores. The reason for the variance in the price is because Safeway operates on zone pricing, depending on where its stores are located.

Analysis

Despite the fact the pricing on the fresh & easy brand organic items is on an everyday basis and the Safeway O' Organics items are promotional-priced this week--which should give the advantage to O' Organics--the fresh & easy brand cleans O' Organics' retail pricing clock on two of the three organic grocery items compared--and even on the one fresh & easy organic item (the coffee) compared against a Safeway (Safeway Select) store brand coffee that is premium but not organic.

The only item of the three organic grocery products Safeway wins on with the O' Organics brand is the peanut butter. The O' Organics brand is 48-cents cheaper than the comparable fresh & Easy brand, as well as containing two more ounces of peanut butter in the jar. However, keep in mind that the Safeway price of 2-for-$5.00 or $2.50 unit is a one week promotional price, while the fresh & easy organic creamy peanut butter sells for $2.98 in the stores everyday.

On the other two organic items however--the organic cheese and organic cage-free brown eggs, the fresh & easy brand wins over O' Organics brand by both a city and country mile combined.

The fresh & easy brand organic cheese is a full $1.11 per-package cheaper than the comparable O' Organics brand organic cheese, and the fresh & easy brand medium grade cage-free organic brown eggs are a whopping $2.20 per-dozen less than the O' Organics large grade organic brown eggs are.

We make no claims as to the relative quality of the two retailer brands compared, although both are certified organic under the U.S. department of Agriculture's laws. Our purpose in this piece is merely to show the price comparisons on the two brands.

Additionally, we wouldn't normally conduct a comparison of one brand at an everyday low-price compared to another brand's items offered at a promotional price. However, as you can see, the fresh & easy brand still does far better overall despite this advantage going to Safeway's O' Organics brand because its respective items are on promotion. Even more so is the fact the fresh & easy brand organic coffee beats out the non-organic Safeway Select coffee by a full $1 per package, as the data above shows.

Conclusions: Going Forward with a plan at Fresh & Easy

Based on this analysis, along with the price comparisons we had our correspondents do previously as reported here, plus another price comparison we currently have in the works, it's clear to Fresh & Easy Buzz that Tesco's Fresh & Easy Neighborhood Market has a compelling story to tell in terms of its low everyday (and affordable) price on the respective 12 organic grocery items--and maybe more.

We know this, and those of you reading this piece now know it as well. However, very few consumers in the Southern California, Phoenix, Arizona Metropolitan and Las Vegas Metro markets know it. It just might be one of the best kept organic food and grocery product affordability at retail secrets in the three respective marketplaces.

As a way to share this organics affordability secret, we suggest Tesco's Fresh & Easy run a two-week print advertising campaign devoted exclusively to these 12 affordable organic food and grocery items.

We would run a full page ad--an attractive but minimal looking one--in the food sections of the major newspapers in each market: The LA Times, Orange County Register and one other paper food section in the Inland Empire region for example in Southern California; the two main papers in the Phoenix, Arizona region; and the top newspaper food section in Las Vegas.

The theme of the full-page food section newspaper ad would be something like: "Fresh & Easy: Organics For Less." Or..."Affordable Organics...A Fresh & Easy Choice." We would include pictures of a few of the 12 affordable, everyday low-priced organic items, along with a listing of all twelve items and their respective everyday prices.

We also would do a price comparison between the 12 fresh & easy brand organic items and the everyday prices of 12 identical or similar Safeway O' Organics items and Whole Foods Market's store brand organic products, and include that price comparison in the ad. Fresh & Easy will have the lowest everyday retail prices on the 12 items compared to Safeway and Whole Foods. (Yes, that's the other project we currently have in the works.)

Based on our analysis, we believe Tesco's Fresh & Easy Neighborhood Market has a compelling story to tell about the affordability of organic food and grocery items in its stores compared to the competition in its three market regions. However, unless that story gets widespread publicity, it will remain a secret discovered only by the few.

Affordable organics could be a major drawing card for Fresh & Easy, especially in the current recession in the Western USA. However, in order to create the level of consumer awareness to make a difference (that is shoppers buying the items in the stores), Fresh & Easy needs to do more than send out press releases about it and rely on the good will of the consumer press to write about it, although we agree that's a good strategy along with the ad campaign we described above.

Good stories like being the potential low-price leader in the organics category require a selective advertising campaign, in conjunction with a PR-oriented one, that a retailer can control. It's your message, who can tell it better, is how we view it.

We think the limited newspaper food section print campaign is a good one for a couple of reasons.

First, it targets consumers in the key organics category. The most "food-interested" consumers regularly read newspaper weekly food sections; and these are the people a retailer wants to target when it comes to organics.

Second, the full page newspaper advertisements best allow (of all media) for both the visuals, the pictures of some of the 12 items, as well as the text--the price comparison data between the fresh & easy, Safeway O' Organics and Whole Foods Market store brands (the 12 items).

Lastly, right now a retailer can get a very good buy on full-page ads in the food sections of daily newspapers. Newspaper ad revenue is at an all-time low, and space is available at a discount.

Meanwhile, if the prices of the 12 items Fresh & Easy Neighborhood Market is touting as "affordable organics" this month in their stores are indicative of the overall retail prices of all of the items in its organic food and grocery products category, the grocery chain should prepare another press release for June, with 12 new and different organic items at affordable, everyday low prices. There is a story to tell in our analysis.

Editor's Note: We suggest Tesco's Fresh & Easy Neighborhood Market post some pictures of its fresh & easy brand organic items up on its website so that if and when the consumer press writes about the products the photos are there and handy for them to use.

There are a total of four photographs in the "Newsroom" section of Fresh & Easy's corporate website: two shots of store interiors, one photo of an in-store produce department, and one picture of a store exterior.

Since the central focus curently of Fresh & Easy's store brand marketing campaign is to reach out to the consumer press via a public relations effort, it might want to include a few pictures of those store brand items on the website. Doing so would make much good sense.

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.

[Read the stories - January 4, 2011: Fresh & Easy Neighborhood Market Kicks Off 2011 With an Appeal to 'eatwell'; January 20, 2011: Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Meals Take Center Stage In-Store This Week; January 18, 2011: Fresh & Easy Neighborhood Market Launches 'Extra-Low Every Day Low Price' Merchandising Program; and January 6, 2011: Fresh & Easy Neighborhood Market Hopes 'eatwell' Makes For A Healthy 2011.]

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.

We also were the first to report on Fresh & Easy's extension of its 'eatwell' brand into the dry grocery - August 18, 2010: Fresh & Easy Neighborhood Market Extending 'eatwell' Healthy Foods' Private Brand Into Dry Grocery Category - and frozen foods categories. [See - September 10, 2010: Fresh & Easy Neighborhood Market Extending its 'eatwell' Healthy Foods' Brand Into Frozen Food Category and September 27, 2010 - First Items in Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Foods Line Arriving in Store Freezer Cases This Week.]

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

January 21, 2011: Tesco's Fresh & Easy Neighborhood Market Introducing New 'Gourmet' Private Brand

January 20, 2011: Fresh & Easy Neighborhood Market's 'eatwell' Brand Frozen Meals Take Center Stage In-Store This Week

January 18, 2011: Fresh & Easy Neighborhood Market Launches 'Extra-Low Every Day Low Price' Merchandising Program

January 6, 2011: Fresh & Easy Neighborhood Market Hopes 'eatwell' Makes For A Healthy 2011

January 5, 2011: Safeway Adds 'Open Nature' to its Natural-Organic-Healthy Foods' Private Brand Portfolio

January 4, 2011: Fresh & Easy Neighborhood Market Kicks Off 2011 With an Appeal to 'eatwell'

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

Safeway Adds 'Open Nature' to its Natural-Organic-Healthy Foods' Private Brand Portfolio

Private Brand Showcase

News/Analysis/Commentary

Safeway Stores, Inc. is rolling out a new natural foods private brand, 'Open Nature,' this week, starting with a variety of packaged products in the fresh poultry and meat categories.

The first 'Open Nature' brand items, which the grocer bills as "100% natural," are in the fresh poultry category, and include fresh boneless/skinless chicken breasts and a line of 12 ounce packages of chicken sausage, in a variety of flavor combinations.

Safeway Stores, Inc. was issued a U.S. trademark for 'Open Nature' - which as a non-organic natural foods brand fits in-between its popular 'O Organics' brand and its 'Eating Right' healthy foods' brand from a positioning standpoint - in June 2010, for use on products in the meats and processed food products; staple food products; and light beverage products segments, according to the filing with the federal trademark office.

Among the product categories included under the brand trademark include: soups; jams; jellies; potato-based and vegetable-based snack foods; and frozen entrees consisting primarily of meat, fish, poultry or vegetables, which means Safeway likely plans to extend the brand into categories beyond fresh meat and poultry.

The "100% natural" designation Safeway is using for 'Open Nature,' which is a brand claim used by numerous brand marketers and retailers, unlike the term "organic," which is regulated by the federal government, has no official or 100% agreed upon definition, although there's a consensus of sorts in the food industry as to what "natural" products should contain, nebulous as that definition may be.

Consumers though, with the exception of those very savvy in food product labeling and ingredient knowledge, have little concept as to what "natural" or "100% natural" means when they see it on a food label, which makes sense because as noted there's no officially regulated or objective definition as to what the attributes actually mean. It can be buyer beware.

Safeway, however, provides it own definition of "100% natural" on the labels of its new 'Open Nature' brand fresh poultry items. That definition includes the following attributes:

>Raised without antibiotics
>No added hormones
>All vegetarian fed
>No artificial ingredients
>Minimally processed

Keeping 'Open Nature' and '100% natural' honest

Let's take an evaluative look at each of the five brand product attributes as they pertain to the fresh boneless/skinless chicken breasts and the line of flavored chicken sausage.

1. Raised without antibiotics

This is a positive "natural" product attribute, since antibiotics are used in the raising of chickens by many farmers and processors. As such, it's an attribute that adds value.

2. No added hormones*

The U.S. federal government doesn't allow hormones to be used in the raising of poultry or pork. Therefore, while this attribute might serve to communicate to consumers who aren't aware of this law that the chicken breasts and the chicken in the sausage line are free from hormones, we can't call it a positive brand attribute of 'Open Nature,' since it's merely a marketing message because federal law doesn't allow hormones to be used in raising poultry or pork in the first place.

To Safeway's credit, it puts an * at the end of this attribute, and offers a label note communicating that federal law prohibits the use of hormones in the raising of poultry and pork.

3. All vegetarian fed

It's not clear by "all vegetarian fed" if Safeway means no grains of any type are fed to the chickens branded under the 'Open Nature' "100% natural brand."

Since grain is the primary feed for chickens, we doubt if the birds are vegan. Therefore, since vegetarian diets can also include grain, the attribute is positive only in so far as communicating to consumers that the birds aren't fed a diet that also includes meat-based feed.

There's some validity in this because some lower-end chicken is raised using various feeds, mixed with grains, that at times has been know to contain meat-by-products. But it's a fairly meaningless product attribute in our analysis.

4. No artificial ingredients

This is a good attribute in that many chicken products are injected with water or a saline solution to plump the birds up. In fact, this is a major issue in the poultry industry.

For example, the California Poultry Industry Federation, which represents the majority of poultry companies based in California, has been trying to get the federal government to prohibit the use of the term "natural" on whole chickens, chicken parts like breasts, and value-added chicken products that have such added artificial ingredients.

The California companies don't inject water or saline solutions into their birds. However, most other states allow it. The "no artificial ingredients" attribute is also valid in the case of value-added items like the 'Open Nature' chicken sausage because some brands include artificial ingredients in the product.

5. Minimally processed

This attribute has little meaning in our analysis. It suggests a semantic "naturalness" but in the case of fresh poultry and even the value-added chicken sausage line, one wouldn't expect the products to be highly-processed in the first place, would they?

Additionally, in terms of consumer information, there's really no definition of what "minimally processed" means. Rather, the definition is somewhat subjective, although a good rule of thumb, for example with chicken sausage, is that if the price of the product is extremely low, the product itself is most-likely more highly-processed than a more expensive product of the same kind. But even that rule of thumb is subjective.

Brand strategy: 'Open Nature' and the LOHAS consumer

Safeway's development of the 'Open Nature' natural foods brand, which in our analysis and opinion is an evocative and potentially strong brand name, is part of the retailer's strategy to appeal to and target what the Natural Marketing Institute (NMI) has identified as the LOHAS - (Lifestyles of Health and Sustainability) consumer.

These "ethical" shoppers, which the NMI says comprises about one-fifth of all U.S. consumers, have a high degree of concern about health and the environment, and the ways the two are related. It's a lifestyle attribute rather than a demographic metric, like income, education-level and so on, although various demographic attributes like "college educated" and "higher income" do tend to correlate highly with those identified as LOHAS consumers.

The grocer's 'O Organics' and 'Eating Right' food and grocery brands, along with its 'In-Kind' brand of health and body care products, which was introduced in late 2010, and now its 'Open Nature' natural foods brand, are all part of the portion of Safeway Stores' private brand portfolio that's driven by the LOHAS consumer segment.

Safeway's other numerous private brands serve different positioning and marketing purposes, such as price-focused ('Safeway') and premium-focused ('Safeway Select').

In its private brand development and marketing department at corporate headquarters in Pleasanton, California, Safeway Stores' marketers and merchandisers working on the brands noted above talk often about appealing to what's also referred to as the "in me, on me, around me" consumer. These are folks, basically the same cohort as the LOHAS consumers, who care to a very significant degree about the types of foods they eat, the kinds of products they use on their bodies, the social and environmental issues surrounding how foods and non-food packaged goods are made, and how those combined factors or variables integrate with the communities they live in.

Safeway's fast-growing organic and locally-grown produce program, along with its across the board sustainability programs, are also targeted from a marketing positioning perspective to these LOHAS, "ethical" or "in me, on me, around me" consumers, who on a mass scale are the bread and butter customers of Whole Foods Market, Inc., for example.

As part of Safeway's LOHAS consumer-targeted private brand portfolio, brand 'Open Nature' fits a niche between 'O Organics' and 'Eating Right.' 'O' Organics hits both the organic and natural attributes; 'Eating Right' the healthy foods' hot button and; by virtue of that attribute also the natural foods hot button in most cases. 'Open Nature' focuses on the natural-foods-but-not-organic segment, which allows for a lower price point than the 'O Organics' brand items but still appeals to many aspects of the LOHAS consumer's values.

For example, Safeway currently has the 'Open Nature' "100% natural" boneless/skinless chicken breasts on promotion in its western U.S. stores, for $4.49 per pound. In contrast, when it runs its 'O Organics' organic boneless/skinless chicken breasts on ad, the promotional price-point is usually $5.99 pound, at the lowest end. Not all of the LOHAS-typed consumers can afford to pay $5.99 a pound for organic chicken breasts. But perhaps many of them can afford to pay $4.49 for the 'Open Source' "100% natural" version, trading off the organic attribute for the price savings, while still satisfying many of their values and needs.

Expect to see Safeway roll-out additional 'Open Nature' brand items, first in the fresh poultry and meat categories, but also in other product categories, throughout 2011.

Also expect to see the grocer add numerous new items to its other LOHAS consumer-focused brands - 'O Organics,' which with sales of over a $1 billion annually is the highest-grossing organic foods brand in the U.S., 'Eating Right,' and 'In-Kind' - throughout this year.

Recent and 2010 stories in 'Private Brand Showcase'

January 4, 2011: Fresh & Easy Neighborhood Market Kicks Off 2011 With an Appeal to 'eatwell'

December 23, 2010: New Items Show Fresh & Easy Neighborhood Market's Niche-Specialty Category Private Brand Development Focus

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 IdeaMay 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

Competitor News: Safeway Stores, Inc. launches its Own Commercial Real Estate Development Division; CEO Burd Says Bad Times Offer Opportunity

Pleasanton, California (San Francisco Bay Area)-based Safeway Stores, Inc., which operates about 1,750 supermarkets under various banners in the U.S. and Canada, including over 500 supermarkets under the Safeway and Vons banners in California, Nevada and Arizona where Tesco's Fresh & Easy Neighborhood Market has its stores, has created a new real estate development division and business that has so far reviewed 36 projects for possible development and is working actively on a handful of the projects, company CEO Steve Burd (picture at top) told analysts during an investor conference last Thursday at Safeway headquarters.

"The opportunities [to develop undervalued real estate] are pretty extraordinary right now for people who can step up to the table", Burd said at the meeting. In other words, Safeway sees the current economic downtown as an opportunity in the commercial real estate space for the company.

The Safeway CEO offered an example of the type of projects Safeway is reviewing. For example, one project "might be" Safeway developing a shopping center where it operates a grocery store, and leasing or selling the retail space surrounding the store. Safeway Stores, Inc. would retain ownership of its grocery store in that center, according to Burd.

The new commercial real estate development business is part of Safeway's expansion beyond its core food and grocery retailing business under Burd's leadership as CEO.

For example, the company created its Blackhawk gift-card business, which started as a small in-house gift card marketing business, selling Safeway store and third-party gift cards in the chain's supermarkets. Blackhawk has now grown into one of the largest gift-card marketing companies in the U.S., marketing and selling third-party gift cards to retail chains nationally as well as via the Internet.

Additionally, earlier this year Safeway created a brand marketing and distribution arm in which it is marketing its O' Organics and Eating Right store brand food and grocery products to other retailers and grocery wholesalers in the U.S., as well as globally.

O' Organics has sales in Safeway supermarkets in the U.S. and Canada of about $500 million. Eating Right is approaching that same sales volume. To put that in scale compared to Tesco's Fresh & Easy in the Western U.S., sales at the grocery chain's about 103 grocery markets are currently in the $400 million range, which is about $100 million less than the 2008 sales of Safeway's O' Organics store brand in its supermarkets. That's not a knock on Fresh & Easy -- it's a start up venture. Rather its merely a comparison in scale to on of the big chains it is competing directly against.

France's Carrefour chain, the number two global retailer after Wal-Mart (Tesco is number three globally) already is selling many of the O' Organics branded items in its stores in Asia. Safeway will soon announce additional retailers outside the U.S., along with some in the U.S., that will offer the brand, along with the Eating Right brand, in their stores.

This summer Safeway created a corporate health care subsidiary based on the programs the retailer has implemented within the company that have resulted in substantial health care cost savings for Safeway, which offers health care plans to all of its employees.

Add the commercial real estate division to this fast-growing non core retailing aspect of Safeway Stores, Inc.

Safeway owns lots of real estate, especially in California and elsewhere in the Western USA. The grocery chain also develops lots of real estate by virtue of the fact its supermarkets generally serve as retail anchors in shopping centers. As a result, it makes logical sense for the company to get into the commercial real estate business since the synergies with its core supermarket retailing business are obvious.

As Burd mentioned at the analysts meeting last Thursday, part of the motivation for getting Safeway into the commercial real estate business has to do with the numerous undervalued properties available at present, with the financial crisis and economic recession in full bloom. Additionally, the residential foreclosure crisis has spread significantly into the commercial sector, particularly in the Western U.S., which means there currently are numerous properties on the market at deep discounts.

Big supermarket chains like Safeway, Tesco, and others are at an advantage because the business generates lots of cash flow compared to other types of businesses, as well as compared to other forms of retailing. Therefore this cash flow makes it easier for the big chains to have cash available to invest in areas like commercial property development.

Further, having its own commercial real estate arm offers some real cost savings for Safeway in terms of developing new retail store sites and now in creating new shopping centers in which it can anchor with its supermarkets.

At The 'Brand Factory': Safeway Stores' Launches Newest Private Brand - 'Safeway Kitchens'

Some of Safeway Stores' new 'Safeway Kitchens' bread. Top two shelves, 100% Whole Wheat. Third shelf from top, Oats & Nuts. Bottom: two varieties of white bread. [Credit all photos to Fresh & Easy Buzz.]

Private Brand Showcase

The late Californian Walt Disney liked to call his entertainment and theme park empire the "Dream Factory," as a way of putting an emphasis on the larger imaginative and creative processes of what the Disney Company did, rather than merely describing the products it produced, marketed and sold. 

We'd like to suggest a similar, although less lofty, moniker for Pleasanton, California-based supermarket chain Safeway Stores, Inc.

That moniker, the "Private Brand Factory," is based on the fact Safeway keeps churning out new private brands in a way similar to how Disney continues to create dreams, even without Walt.

Exhibit A: Safeway's latest just-out new brand is "Safeway Kitchens," the second new private brand the grocery chain has introduced this year.

So far the brand is being used on a line of fresh bread, rolls, hot dog and hamburger buns, english muffins, bagels and specialty breads, all of which have just recently been introduced in the grocer/brand-maker's stores.

We've identified about 59 SKUs so far in the "Safeway Kitchens" brand. The SKUs are listed at the end of the story.

The "Safeway Kitchens" brand and bread-bakery items appear to be positioned as mid-range in terms of the price-value equation.

The brand and items are neither upscale bread and bakery SKUs nor are they discount products with rock-bottom retail price-points, based on our observation and analysis.

Instead, "Safeway Kitchens" looks to be positioned directly against mainstream bread-bakery category brands like Oroweat and Natures Pride, as Safeway's private brand alternative.

For example, the 22-24 ounce 100% Whole Wheat and Oats & Nut loaves pictured above and below (along with all the other similar 22-24 ounce varieties) currently retail for $3.29 everyday in Safeway's stores in the particular region of California where the photographs were taken this week. That's slightly below the identical SKUs of the two brands mentioned above. Safeway is currently offering the "Safeway Kitchens" bread varieties at an introductory price of $2.99 each.

Earlier this year Safeway introduced a line of breads and related category items under its "Open Nature" natural foods brand.

The 22-24 ounce bread varieties - Whole Wheat, Multi-Grain and Oats & Nuts, for example - are virtually identical (see the photo above and the one below) to the "Safeway Kitchens" breads, except the "Open Nature" breads don't contain high-fructose corn syrup and artificial additives, colorings and preservatives like the "Safeway Kitchens" breads do.

The everyday price-points we've seen on the "Open Nature" breads are slightly higher than those on the Safeway Kitchens" breads, although this week both brands are being offered in-store for the same promotional price.

A Safeway Stores source told us this week that the grocer - and prolific private brand producer - will eventually selectively extend the "Safeway Kitchens" brand into other categories beyond  bread and bakery but those are the focus at present.

Since the grocery chain already uses "Safeway" as its category-wide (except dairy) value and price-focused brand, such a niche-oriented branding strategy for "Safeway Kitchens" would make sense to us, along with the fact the "kitchens" name in the brand tends to suggest categories like bread and bakery - and perhaps deli and a couple other "foodie-oriented" or comfort categories the name resonates with - rather than being used in an across the board manner.

For example, we doubt if you'll see mouse traps in the store's general merchandise sections under the "Safeway Kitchens" brand, even though the kitchen is probably the primary room in the house where most of us use mouse traps. But doing so would be taking functional branding to its illogical extreme, particularly if the brand name also finds its way to a line of cheese.

Ice cream might be a good category to use the "Safeway Kitchens" brand name on though, as would selected fresh and shelf-stable specialty and gourmet foods items. Spices might be nice as well. Perhaps also comfort-type foods like shelf-stable macaroni and cheese, to name a few.

But for now Safeway Stores' newest private brand, "Safeway Kitchens," is being used on breads, rolls, buns and other bakery category specialty items which are merchandised in the mainline bread sections in the stores and not in the in-store bakeries.

So far this year, Safeway has launched two new brands - "Safeway Kitchens and "Open Nature" - at its private brand factory in Pleasanton, adding to its already extensive product brand portfolio, which includes two brands, "O Organics" and "Eating Right," which the grocery chain is marketing to other supermarket chains and wholesale grocers in the U.S., Canada, Europe and Asia.

French-based Carrefour, which is the second largest food and grocery retailer in the world after number one Walmart, is selling "O Organics" in some of its stores in Asia, for example.

And a number of regional supermarket chains in the U.S., like Albertsons LLC's Southwest division, Big Y Foods, Brookshire Brothers and others, are currently offering numerous SKUs of either "O Organics" or "Eating Right" (healthy foods brand), or both, in their stores.

Safeway Stores has been busy this year developing and launching its new "Safeway Kitchens" private brand and rolling out what we estimate are several hundred new SKUs in the dry grocery, frozen, perishables, fresh meat, and produce categories under its "Open Nature" brand. But the grocer/brand-maker continues to create new private brands at its brand factory in Pleasanton.

Safeway's strategic plan is to develop a core competency at and become a major and serious player in brand development and consumer packaged goods marketing, and we aren't talking just about private brands sold in its stores, although the 1,700-plus supermarkets serve as the obvious major source of sales for all its branded products.

Safeway has already achieved a major milestone in this regard: It's "O Organics" brand is now the number one organic foods brand by annual sales (about $1.2 billion) in the United States. That includes both manufacturers' and retailer brands.

"Safeway Kitchens" is Safeway Stores' newest consumer packaged goods brand - but it's far from its last one.

"Safeway Kitchens" SKUs

• Safeway Kitchens English Muffins, 100% Whole Wheat 6/14 oz
• Safeway Kitchens Bread, Very Low Sodium Multi-Grain 16 oz
• Safeway Kitchens Bread, Texas Toast Enriched 22 oz
• Safeway Kitchens Bread, French Toast 22 oz
• Safeway Kitchens Bread, 100% Whole Wheat 22 oz
• Safeway Kitchens Bread, Enriched White Sandwich 22 oz
• Safeway Kitchens Bread, Enriched White 22 oz
• Safeway Kitchens Bread, Wheat 22 oz
• Safeway Kitchens Bread, Enriched Butter Top White 22 oz
• Safeway Kitchens Bread, Butter Top Wheat 22 oz
• Safeway Kitchens Bread, Crushed Wheat 22 oz
• Safeway Kitchens English Muffins, Extra Crisp, 12 oz
• Safeway Kitchens Hamburger Buns, Giant Wheat 8/18.5 oz
• Safeway Kitchens Hamburger Buns, Enriched Giant 8/18.5 oz
• Safeway Kitchens Hamburger Buns, Giant Sesame 8/18.5 oz
• Safeway Kitchens Hamburger Buns, Potato 8/15 oz
• Safeway Kitchens Hot Dog Buns, Potato 8/15 oz
• Safeway Kitchens Hot Dog Buns, Enriched 8/11 oz
• Safeway Kitchens Hamburger Buns, Enriched 8/11 oz
• Safeway Kitchens Hamburger Buns, Enriched Giant 8/20 oz
• Safeway Kitchens Hamburger Buns, Enriched 8/12 oz
• Safeway Kitchens Hot Dog Buns, Enriched 8/12 oz
• Safeway Kitchens Bagels, Plain Sliced 6/18 oz
• Safeway Kitchens Bagels, Cinnamon Raisin Sliced 6/18 oz
• Safeway Kitchens Bread, 12 Grain 24 oz
• Safeway Kitchens Bread, 15 Grains Plus Omega 3 24 oz
• Safeway Kitchens Bread, Healthy Grains 24 oz
• Safeway Kitchens Hamburger Buns, Crushed Wheat 8/13 oz
• Safeway Kitchens Hot Dog Buns, Crushed Wheat 8/12 oz
• Safeway Kitchens Hamburger Buns, Enriched Sesame 8/20 oz
• Safeway Kitchens Bread, Sourdough Sliced Square Loaf 24 oz
• Safeway Kitchens Bread, Sourdough Sliced Long Loaf 24 oz
• Safeway Kitchens Hot Dog Buns, Wheat 6/14 oz
• Safeway Kitchens Bread, Cinnamon Raisin 16 oz
• Safeway Kitchens Rolls, Brown & Serve Sourdough 8/13 oz
• Safeway Kitchens Bread, Sandwich White 24 oz
• Safeway Kitchens Bread, Sandwich Wheat 24 oz
• Safeway Kitchens Hamburger Buns, Egg 8/12 oz
• Safeway Kitchens Hot Dog Buns, Egg 8/12 oz
• Safeway Kitchens English Muffins, Extra Crisp 10/20 oz
• Safeway Kitchens English Muffins, Cinnamon Raisin 6/12 oz
• Safeway Kitchens Hamburger Buns,Wheat, Premium 8/21 oz
• Safeway Kitchens Bread, 100% Whole Wheat, Country 24 oz
• Safeway Kitchens Bread, 8 Grain 24 oz
• Safeway Kitchens English Muffins, Sourdough 6/12 oz
• Safeway Kitchens Bread, Oats & Nuts 24 oz
• Safeway Kitchens Bagels, Cinnamon Raisin 6/20 oz
• Safeway Kitchens Bagels, Sliced Plain 6/20 oz
• Safeway Kitchens Bread, Country Buttermilk 24 oz
• Safeway Kitchens Bread, 100% Whole Wheat 16 oz
• Safeway Kitchens Bread, Country Potato 24 oz
• Safeway Kitchens Bread, Country Buttermilk Wheat 24 oz
• Safeway Kitchens Bread, Sourdough 24 oz
• Safeway Kitchens English Muffins, Honey Wheat Berry 6/12 oz
• Safeway Kitchens Hamburger Buns, Potato 8/15 oz
• Safeway Kitchens Hot Dog Buns, Potato 8/15 oz
• Safeway Kitchens Hamburger Buns, Enriched Sesame 8/12 oz
• Safeway Kitchens Bread, Enriched Split Top White 24 oz
• Safeway Kitchens Bread, Split Top Wheat 24 oz

Related Stories

January 5, 2011: Safeway Adds 'Open Nature' to its Natural-Organic-Healthy Foods' Private Brand Portfolio

February 7, 2011: Getting There First...Plus, Are Tesco's Fresh & Easy and Safeway Traveling Down A Similar Private Brand Aisle?

July 21, 2010: 'Sipsational' & 'Quenchtastic': Safeway Introduces New 21-Flavor Line of Soft Drinks Under 'refreshe' Private Brand

April 8, 2011: The Branded 'Signature Cafe' in Safeway Stores' Soon to Open 'Social Safeway' in Washington D.C. Should Turn A Few Heads

February 25, 2011: Safeway CEO Steve Burd Says Fresh, Prepared Foods Sales at $100 Million Annually

Additionally, Click on this link - private brand showcase - to read past stories in our 'Private Brand Showcase' feature.

Farms ... at Safeway? Grocer Launches its Newest Private Brand ... 'Safeway Farms'

Private Brand Showcase

Farms ... At Safeway?

The answer to the sentence above is yes, if the specific question is ... What's the name of Safeway Stores' newest private brand.

Pleasanton, California-based Safeway Stores, Inc., which we've nicknamed the "Private Brand Factory" because of its prolific practice of creating new food and grocery brands, is this week launching its newest own brand - "Safeway Farms" - which it's debuting on a line of packaged fresh produce items and salads.

We counted around 17 SKUs in the fresh produce and packaged lettuce/salad categories under the new Safeway Farms fresh produce brand in store visits.

Those items include fresh produce category staples like packaged Red Leaf, Green Leaf and Romain lettuce, bagged spinach, and petite baby carrots (pictured at top and below), along with bagged salad blends - American Blend, Spring Mix and Italian Mix, for example - salad kits, like Caesar and Southwestern Ranch, and ready-to-eat salad bowls in four varieties.

We also spotted one Safeway Farms steam-in-the-bag SKU, which is a steam-and-eat vegetable medley item.

The grocer's new Safeway Farms brand also features a selection of ready-to-eat salad bowls, called "Safeway Farms Cafe Bowl," in varieties including Cranberry-Walnut, Cobb and two others.

A list of the Safeway Farms' SKUs we've identified is at the end of this piece.

Safeway Stores hasn't announced its new private brand to the press via a press release or statement. Therefore it's likely you're reading about Safeway Farms for the first time in Fresh & Easy Buzz.

With the addition of Safeway Farms to its store brand portfolio, Safeway Stores, Inc. now offers three private brands in its fresh produce departments. In addition to the new brand, the others include - O' Organics (for organic packaged produce) and Eating Right, which is the retailer's healthy foods brand.

Safeway Stores' also offers a few packaged produce items under its "Safeway" value brand. The "Safeway" brand will go away in produce however, in favor of Safeway Farms, we're told.

Dual corporate name, no corporate name PB strategy

Safeway Farms is the second new private brand the supermarket chain has introduced this year that includes the the "Safeway" corporate name as part of the brand name.

The other Safeway name-inclusive brand is Safeway Kitchens, which we wrote about here in May. The brand featuring the corporate name was launched earlier this year, featuring a variety of bread and bakery items. The supermarket chain recently extended the Safeway Kitchens brand, which we said in the May 2011 story it would do, from the bread and bakery items into a two or three SKU line of breakfast cereals.

The Northern California-based grocer now offers four private brands featuring the Safeway name. Those brands are: "Safeway" (it's everyday value store brand), Safeway Select (a premium-oriented brand), Safeway Kitchens (so far in the bread/baked goods and breakfast cereal categories), and now Safeway Farms, which it's debuting in the fresh produce category.

At the other end of its private brand spectrum, Safeway Stores, Inc. offers numerous brands that don't include the "Safeway" name as a part of the brand name.

Those brands include: 'O Organics, which has become the leading organic foods brand in the U.S. with over $1 billion in annual sales; Eating Right (healthy foods) and Open Nature, the natural foods brand the supermarket chain introduced early this year with a line of fresh meats and poultry, and has since expanded into multiple categories encompassing perishables (deli, dairy), bakery (including a full line of breads), frozen foods and dry grocery (salad dressings, breakfast cereals, cookies and crackers and more).

Additional non-Safeway labeled private brands include: Signature Cafe (ready-to-eat and ready-to-heat fresh-prepared foods); Primo Taglio (lunch meats, cheese and related perishable deli items); Rancher's Reserve (fresh beef in the meat department); Waterfront Bistro (fresh and frozen packaged fish and seafood); Lucerne (dairy products); mom to mom (a line of baby products including disposable diapers, infant formula and toiletries); Priority Pet Care (pet supplies); and Bright Green, which is a line of environmental-friendly or "green" household product (cleaners, paper goods, light bulbs) and general merchandise items.

In early summer Safeway also introduced a new value-priced and value-positioned private brand called Pantry Essentials.  So far we've seen a handful of consumable items under the new brand, including toaster pastries and pancake mix in the dry grocery category, and packaged hot dogs in fresh meat.

Safeway Stores has also replaced the non-consumable products it previously offered under its Basic Red brand, which before that was called Value Red, with the Pantry Essentials brand. The products are household items - toilet tissue, paper towels, facial tissue, garbage bags, paper plates, plastic cups and a few others.

Safeway sells its 'O Organics and Eating Right brands to other retailers in the U.S. and overseas through an entrepreneurial venture business it created in 2009. It plans to offer its fast-growing (in SKU-count and dollar sales) Open Nature natural foods' brand as part of that brand marketing and wholesaling business in the near future, a source in a position to know at the grocer's headquarters in Pleasanton recently told Fresh & Easy Buzz.

Meanwhile, the addition of the Safeway Farms' brand and the new produce items under it demonstrates that Safeway Stores, Inc. plans to continue extending the "Safeway" product brand name (and corporate name) throughout store departments - it's in the dry grocery, bakery, perishables, frozen food and general merchandise categories under the Safeway and Safeway Kitchens brand names already - along with putting a focus on its various non-Safeway-named private brands, the two most recent being the price and value focused Pantry Essentials brand and the value-added Open Nature, both of which were launched this year.

Below are the Safeway Farms' brand produce SKUs we've identified:

Packaged Specialty Produce
Safeway Farms Petite Carrots
Safeway Farms Steam In Bag Vegetable Medley

Packaged Lettuce
Safeway Farms Romain Lettuce Singles
Safeway Farms Hearts of Romain
Safeway Farms Green Leaf Lettuce
Safeway Farms Red Leaf Lettuce

Safeway Farms (packaged) Lettuce Mixes
Spring Mix
American Blend
Baby Spinach

Safeway Farms (packaged) Salad Kits
Apple, Blue Cheese & Pecan
Southwestern Ranch
Italian Salad
Supreme Caesar

Safeway Farms Cafe (salad) Bowls
Cranberry-Walnut Salad
Chef Salad
Cobb Salad
Spinach Dijon Salad

Related Stories

June 19, 2011: Safeway Has A Picnic in San Francisco Featuring the 'World's Longest Picnic Table' to Showcase its 'Open Nature' Natural Foods' Brand

May 28, 2011: At The 'Brand Factory': Safeway Stores' Launches Newest Private Brand - 'Safeway Kitchens'

February 7, 2011: Getting There First...Plus, Are Tesco's Fresh & Easy and Safeway Traveling Down A Similar Private Brand Aisle?

January 5, 2011: Safeway Adds 'Open Nature' to its Natural-Organic-Healthy Foods' Private Brand Portfolio

April 8, 2011: The Branded 'Signature Cafe' in Safeway Stores' Soon to Open 'Social Safeway' in Washington D.C. Should Turn A Few Heads

July 21, 2010: 'Sipsational' & 'Quenchtastic': Safeway Introduces New 21-Flavor Line of Soft Drinks Under 'refreshe' Private Brand

Click on this link - Safeway Stores Inc. - to read additional stories about Safeway.

Click on this link - private brand showcase - to read past stories in our 'Private Brand Showcase' feature.

Tesco Bringing Fresh & Easy Neighborhood Market's 'goodness for kids' Brand to the UK - With a 'Tesco' Twist

Private Brand Showase
News/Analysis/Commentary

Something we've suggested in Fresh & Easy Buzz that United Kingdom (UK)-based Tesco should do regarding its corporate private brand development strategy in relation to its Fresh & Easy Neighborhood Market chain in the U.S. is to create synergies between its UK proprietary product brands and Fresh & Easy store brands, a number of which, like "eatwell" and "goodness for kids" in the consumables category either don't have ("eatwell") or don't need to include ("fresh&easy goodness for kids") the "fresh&easy" brand name anywhere on them.

Additionally, where "fresh&easy" is used on the brand packaging-label in conjunction with the primary brand name, such as on the "goodness for kids" line, it can easily be replaced with, for example,"Tesco."

Fresh & Easy Neighborhood Market also has a number of proprietary brands of California wine that in our analysis Tesco would be wise to offer for sale in its stores in United Kingdom, which in fact is something we suggested and offered details about in this March 8, 2011 story - Tesco's Fresh & Easy ♥'s California With 27 New Varieties of Proprietary Brand Wines From the Golden State - in relation to the private brand synergies we think Tesco is missing out on between its U.S. Fresh & Easy chain and its flagship operations in the United Kingdom, which accounts for nearly 70% of the global retailer's annual sales.

The Fresh & Easy-developed proprietary brand California wines can be shipped directly from California to the UK, since that's how the numerous brands and varieties of California wine already sold in Tesco's stores in that country get there anyway.

Tesco could also offer the Fresh & Easy proprietary brand California wines in its other divisions in Europe and also selectively in Asia, where it has numerous stores.

Wine consumption in China, for example, is growing by double-digits. Additionally, California wines are popular in Japan. And wine-consumption is also fast-growing in South Korea, were consumers regularly buy and enjoy food and beverage products imported from the U.S., just like the Japanese people do. Tesco has stores in all three nations.

Offering the California wines (at present sold only in the 176 Fresh & Easy stores) in its UK stores would greatly increase the volume for the proprietary brand wines, which in turn would allow Tesco to obtain a lower cost of goods from the California wineries that produce the products for Fresh & Easy. That, in-turn, would allow Fresh & Easy Neighborhood Market to make a higher gross margin on the wines than it does currently. And Fresh & Easy needs all the margin help it can find.

It's important to note that within the brand synergy strategy we describe, care must be taken to create products under the brands that fit the respective nation's food palate. For example, a "goodness for kids" brand cottage pie (fresh-prepared foods category) might be a good product variety for Tesco's UK stores, but we wouldn't suggest it for Fresh & Easy Neighborhood Market in America.

The key proposition behind our analysis and suggestion is simple: Brands are brands. If  Fresh & Easy has one or more brands that have utility in Tesco's UK operations - and like-wise at Fresh & Easy - the retailer should take advantage of this and import and cross-pollinate between the two countries, making sure to follow the provision noted above, along with doing the same thing when it comes to product brand packaging and product labels.

'Tesco goodness for kids' brand - via Fresh & Easy

Apparently Tesco has taken our advice - or come to a similar realization and conclusion on its own - because the retailer is currently preparing to roll out a new brand, "Tesco Goodness for kids," in its UK stores which, accept for substituting the "fresh&easy" name with "Tesco" on the product labels, is identical to Fresh & Easy's "goodness for kids" brand, which we've reported on and written extensively about in the blog. (See those stories here.)

Tesco is replacing its "Disney" brand of food products for kids, which it licenses from the California company of theme park, movie and all around brand fame, with the "Tesco goodness for kids" brand, created by the product development and category management teams at El Segundo, California-headquartered Fresh & Easy, which happens to be a short drive from Disneyland, in Anaheim, California.

We learned about the new brand for Tesco UK a few weeks ago, and expect the retailer to launch the first items in the range in its stores in the next week or two, based on information from our sources.

Additionally, Bryan Roberts, an astute observer of the UK food retailing scene and director of retail insights there for Kantar Retail EMEA, late last week spotted a sticker on one of the Disney brand food items in a Tesco store that mentioned the new "Tesco goodness for kids" brand will soon be replacing the "Disney" branded food products for kids. Roberts took a photograph of the brand sticker (pictured at top), which he shared with Fresh & Easy Buzz, as part of a discussion we had about the brand and its origins at Fresh & Easy.

Venture brands

CEO, Philip Clarke, recently announced a new product brand strategy for Tesco, which it's calling venture brands.

Tesco's venture brands program is very similar to what Safeway Stores, Inc. does is the U.S., which is the development and creation of numerous brands - O Organics, Eating Right, Open Nature, Snack Artist and a number of others - that don't use the chain's name on the product's packages or labels at all.

Instead of being private or store brands, they just happen to be product "brands" that have been developed by a retailer and sold in its stores. And in the case of O Organics and Eating Right, Safeway Stores, Inc. markets the brands to other retailers in the U.S. and globally, which is something Tesco is looking into doing with some of its venture brands once they're introduced into its stores and have a bit of a track-record behind them.

Among the first batch of the numerous planned venture brands Tesco is currently developing include "ChokaBlok" ice-cream, La-thams dog food and NutriCat cat food, according to Sidonie Kingsmill, brands development director for Tesco.

"Our venture brands are very different to own-label; they will never be 'me-too' products," she says. "We look at where the customer opportunities are, where brands are not succeeding and what we can do in addition to brands. We’re in a unique position as the biggest retailer (in the UK), with access to the best suppliers worldwide."

'ChokaBlok' ice cream

One of those first venture brands, "ChokaBlok" premium ice cream (pictured above), was recently launched and is available in Tesco's stores in the UK. The brand, which initially features five flavors of ice cream (listed and pictured here), doesn't carry the Tesco name anywhere on it, in keeping with Tesco's venture brands strategy. The key branding proposition behind the product's name, which was created by UK branding agency Mayday, is that the ice cream is 'chok' full of the best quality ingredients Tesco could find.

The "Tesco goodness for kids" brand isn't part of the venture brands portfolio, since it's taken from Fresh & Easy Neighborhood Market's existing brand portfolio and includes the Tesco name as part of the brand name.

Ice cream is a popular category (and product) in California, Nevada and Arizona, where Tesco has its 176 Fresh & Easy stores.

Fresh & Easy Neighborhood Market also has a private or proprietary brand focus - about 60-65% of the about 5,000 SKUs in the small-format stores are proprietary brands.

In our analysis an opinion, based on the two examples offered above and a few others others, Tesco should  launch the new "Chokablok" brand of ice cream in the 176 U.S. Fresh & Easy stores.

Doing so not only would create the second-leg of the Fresh & Easy-Tesco UK product brand synergy program - Fresh & Easy Neighborood Market-developed "goodness for kids" being the initial leg - it also would give Fresh & Easy an interesting brand exclusive - "ChokaBlok" ice cream -  to its stores in California (127 units), Nevada (21) and Arizona (28).

Fresh & Easy Neighborhood Market's current private brand ice cream supplier in the U.S. should be able to produce the product to Tesco's recipe, making any minor changes needed for the American palate. And its packaging suppliers can create the identical packages using existing art work from Tesco.

If  brand "ChokaBlok" were to do well in the Fresh & Easy stores, the grocer's category management team could create its own line extensions under the brand for the U.S. stores, which Tesco's UK team also will be doing. Each operation -U.S. and UK - could then pick and choose from the other's creations, in terms of which new items to bring into its respective chains' stores.

This is a good example of the power of brand synergy. Having two teams in two different countries working on developing new items under the same brand offers the potential for twice the creativity, which might translate to twice the success. There are also important cost-savings that can be realized, particularly in the long-term.

In fact, we'll even offer a suggestion to Tesco for a "ChokaBlok" brand line extension, in the ice cream novelty category.

The product suggestion: "ChokaBlok Ice Cream Sliders," which would be mini ice cream sandwiches - two cookie-type wafers with various flavors of ice cream "sandwiched" in the middle. In our analysis and opinion such an item would fit well in both the U.S. and UK. And the name - "ChokaBlok Ice Cream Sliders" - plays well off of the super-popular mini hamburgers of the same name (sliders)

A good and logical place to start in developing the ice cream sliders would be to take two or three of the existing flavors of "ChokaBlok" (cost-efficient) and use them as the filling for the "Chokablok Ice Cream Sliders." That's another example of synergy; in this case in product development - taking an existing product, the current available flavors of ChokaBlok" ice cream, and use it to create a new product - the sliders/ ice cream sandwiches.

And that's another way of describing brand synergy, which if done right and well, is something that could help Tesco as it tries to break-even with its Fresh & Easy chain in America between know and February 2013, which is something CEO Philip Clarke, who took over the corner office at Tesco's global headquarters in the UK has pledged he will do.

The 'goodness' in brand development synergies

Meanwhile the launch of the "Tesco goodness for kids" brand in Tesco's stores is an important brand development milestone for Tesco Group overall and for Fresh & Easy in particular, as it is the first example of significant product development synergy between Tesco's U.S. outpost and the mother ship in the UK.

It also should be a confidence builder for the team at Fresh & Easy that developed the "goodness for kids" brand because the parent companies decision to launch a version of the brand in the UK, where Tesco is the leading food and grocery chain, suggests an appreciation for the teams work across the pond in El Segundo.

You should also expect to see some of the venture brands Tesco is developing - and maybe even "ChokaBlok" Ice Cream - on the shelves of the Fresh & Easy stores in the Western U.S. in the future, just as you might see some of those California wines developed by Fresh & Easy, along with one or more of its other proprietary food product brands, in addition to "goodness for kids," coming soon to a Tesco-owned store in the UK, and perhaps elsewhere in Europe and even in Asia, in the not too distant future.