MINNEAPOLIS -- Nash Finch Co. here is using national brand tie-ins to enhance its signature corporate brands -- a marketing approach that creates a unique point of differentiation for the corporate and independent stores it serves, the company said.
"We're making an investment to create proprietary brands for our customers to create a powerful point of difference, then combining those lines with powerful national brands to pull customers to the stores' perimeters -- something I really haven't seen done before," Jim Dorcy, vice president, marketing and advertising, told SN.
"It's really quite logical to display products on an endcap or on a wall of values, but how often do we create solutions for consumers by putting a proprietary brand together with a national brand?
"The consumer might question why we'd put up a coffee display in the bakery department, for example, but if we position it correctly with our line of cinnamon rolls, it works."
Dorcy said he was willing to cite statistics only for a single partnership involving Nash Finch's Cinnfully Good cinnamon rolls with Folger's coffee from Procter & Gamble. During a six-month promotion that began late last year, Folger's sales at corporate stores rose 25% and its share of the coffee category jumped 11%, while sales of the signature line increased 42%, Dorcy said.
Folger's subsequently signed on for a second six-month partnership last March and a third program that will run through the end of the year, he noted.
Other tie-ins involve Coca-Cola with Nash Finch's line of Bernini frozen pizza; Hamburger Helper from General Mills (succeeded during the summer months by Crystal Farms cheese) with Ground Central Station, an assortment of ground beef, ground turkey and ground pork displayed side-by-side in the meat case; Progresso soup from Pillsbury with Nash Finch's hot French bread program; Frito Lay snacks with Subs Plus, a line of deli sandwiches; Quaker's Rice-a-Roni with Nash Finch's line of rotisserie-cooked Chicken-on-the-Go; McCormick's Grill Mates (spice blends) with Our Best Sirloin Filets; Prego spaghetti sauce from Campbell Soup with Country Classic breads; Banquet Homestyle Bakes (entrees) with Kooky Cookie Tuesday; La Choy Asian products with Ready-Set-Go prepared entrees; and Kemp's ice cream, a regional brand, with Center Stage cakes.
Five other signature items have not found partnerships, Dorcy said: Dewy Fresh produce, Fresh Accents (prepared fruits and vegetables), Old World Smokehouse, Our Family Seafood Sensations and Brighten Your Day floral bouquets.
The tie-ins are featured on special display units that remain in place for six months, regardless of whether items are on deal, Dorcy said.
Corporate brands at Nash Finch account for 20% of total sales, excluding military sales, and the 16 signature lines account for 3% of the total, he noted.
There are 16 signature items, and all are available at the company's 111 corporate stores, Dorcy said; most are also carried by about 400 of the company's 1,200 independent retail customers, he added. However, only the corporate stores are involved in the signature partnership program, Dorcy said, although that could change over time.
"We've developed this program only over the last 10 or 11 months, so we're just beginning to make the partnership program available to independent customers now," he said. "But we're pretty pleased that one-third of them are involved after less than a year." While some independent customers may not have room for all the signature items or all partnership promotions, he said he hopes the success of the programs at the company's corporate stores will encourage greater participation among independents. Dorcy said he hopes 70% of independent customers will be on the program by the end of next year.
As Nash Finch developed its signature partnership program, the first consumer packaged goods company it approached was Procter & Gamble, Dorcy recalled.
Once P&G said OK, it gave Nash Finch's program a boost, he added, "because when you have the kind of equity level that P&G has and the kind of marketing programs it's involved in, it gives other CPG companies a level of confidence to look at our program."
"Some of the companies we're talking to now say they're struggling to find the right tie-in products," Dorcy explained. "Given the amount of consumer marketing funds that are available, you've really got to be able to prove to a manufacturer that your program is a good spend for them, so it's very exciting to have them go through that process for our programs."
Dorcy said Nash Finch is moving ahead very deliberately to develop new signature items and new partnerships. "One key to our success has been to avoid creating too many brands or too many line extensions but to create brands, attract the right partners and grow from there -- at the same time we're collecting information on how those programs are impacting center-store sales," he explained.
He said the company is considering adapting the Cinnfully Good name for a line of cookies or upscale desserts. Although all the signature lines have been perimeter-driven so far, Nash Finch is also considering extending the name into the center store on syrup, Dorcy said.