Private label products have been dipping into national brand sales steadily throughout the year by using a variety of promotions featuring big-name personalities and sports organizations to compete with the major labels.
According to data from Information Resources, Inc., Chicago, Ill., total private-label sales in U.S. supermarkets reached $36.5 billion, an increase of 4.3%, for the 52-week period ended July 19, 1999.
One retailer that made strides with its store brand this year is the Pleasanton, California-based chain Safeway. Through October and November, Safeway was selling limited edition boxes of its store brand Toasted Oats cereal with St. Louis Cardinal baseball slugger Mark McGwire on the front for a promotion to benefit the Bay Area Animal Rescue Foundation (SN, Oct. 18).
Another unique private-label strategy has been the use of employee names on packaging. Is that a good way to promote items such as soup and potato chips? Sav-A-Lot, a wholly owned private subsidiary of Supervalu, Inc., Minneapolis, thinks so.
The retailer has been selling custom private-label products through a unique program that puts Sav-A-Lot employee names on the packaging. Lori Caskey, transportation coordinator, is featured on Caskey's Soups. Joe Higgs, vice president of finance, has his name "J. Higgs" displayed on potato chips.
According to Michael Sewell, marketing manager at Sav-A-Lot, 85% of what Sav-A-Lot sells is a custom-label product. "We develop our own name and label," said Sewell. "We have over 1,200 stock-keeping units of our custom-label products." Sav-A-Lot estimated retail sales grew to more than $3 billion in 1999.
Dane Twining, director of public relations and project coordinator for the Private Label Manufacturers Association, New York, says that although he has never really seen the concept used on a wide scale, it does add something new to the growing category.
"It's an interesting wrinkle on private label," said Twining. "We're used to seeing limited edition promotions with private label and public figures. Safeway did a cereal promotion with Mark McGwire and Winn-Dixie is doing something with their private label Check Cola and NASCAR drivers. Using employees is an interesting promotion to tie into their store concept."
Winn-Dixie, Jacksonville, Fla., and NASCAR have made a formidable team. Since 1992, Winn-Dixie has been using the racing giant with private-label products. According to Mickey Clerc, spokesman for Winn-Dixie, the promotion has been done with snacking and "tailgating" items such as chips, colas, luncheon meats and cheese. Although Clerc could not estimate if the growth in sales of those items is due to the promotion, he believes they're "sold on the value and quality of the product."
"Our intent is to show our Busch Grand National drivers on our cola [and products] to help promote our involvement with NASCAR racing," said Clerc. "A lot of our customers are NASCAR fans and we want them to know that we are supporting a sport they are interested in."
According to Twining, employees at the PLMA have heard of other companies putting employee names and faces on their products for the past two decades. Loblaw Companies Limited, Toronto, used former president David Nichol's face on some of their President's Choice private-label products in the early to mid 1980s. Other companies like Finast [before it was part of Ahold USA] used their president's face on some of their Sensational brand line in the early 1990s. Even Dave Schwartz, president of Phar-Mor, a drug wholesaler based in Youngstown, Ohio, was seen on some of their packaging, Twining said.