HARRIS TEETER PROMOTIONS ADVANCE PRIVATE LABELS

CHICAGO -- Aggressive introductory promotions early in the decade for two private-label lines have helped the brands become integral parts of the private-label program at Harris Teeter, Charlotte, N.C.The introductions of Hunter All Natural ice cream and President's Choice soft drinks have led to significant increases in the private-label share in their respective categories, according to Fred Morganthall,

CHICAGO -- Aggressive introductory promotions early in the decade for two private-label lines have helped the brands become integral parts of the private-label program at Harris Teeter, Charlotte, N.C.

The introductions of Hunter All Natural ice cream and President's Choice soft drinks have led to significant increases in the private-label share in their respective categories, according to Fred Morganthall, the chain's senior vice president of operations.

For example, said Morganthall, speaking here at a seminar during the annual Food Marketing Institute convention, private-label's share in ice cream at Harris Teeter is more than 50%.

A crucial part of introducing the Hunter line was to educate Harris Teeter employees about the brand, Morganthall said. A coupon for a free half-gallon of the brand was distributed with employee paychecks, and a video and special edition of the company newsletter also touted the brand.

"We felt our associates were going to play a major part because they were the ones who had to tell their customers -- the people they see every day -- about this brand. If they didn't believe in it, we weren't going to go anywhere with the brand."

Employees and customers also had ample opportunity to try the brand in-store.

"We sampled the daylights out of the product," Morganthall said. "For about two months you couldn't walk into a Harris Teeter store without getting Hunter ice cream in your mouth."

Harris Teeter has continued to push the product, something that has translated to market share gains. In 1990, private label accounted for 24% of Harris Teeter's ice cream business. In 1993, Hunter made its debut with a 17.2% share and the Harris Teeter brand controlled 26.3% of the market.

"Today, Hunter All Natural is 28.6% of our business and the Harris Teeter brand is 24.6%," Morganthall told the audience. "Hunter All Natural is the No. 1 selling brand of ice cream in our stores," he added. "Our two brands, Hunter and Harris Teeter, represent over 50% of our ice cream business."

With the introduction of the President's Choice soft drink line, the chain discontinued its Harris Teeter line of sodas, a line Morganthall said never played a prominent role in the company's marketing efforts.

President's Choice, he said, was immediately given a major part.

"We were a very small player in soft drinks with our own brand, maybe a 5% to 8% sales share. We never launched the Harris Teeter brand in the way we launched the President's Choice brand. There was almost an explosion of growth," Morganthall said.

"During the first year we handled this product, it was hard to walk in to Harris Teeter between 4 and 7 in the evening and on the weekend without having a cup of President's Choice soft drinks waiting for you," said Morganthall of the company's sampling efforts.

Vending machines -- the chain's stores don't have machines with national brands -- also spurred trial. "Since you're the only guy in town, at a quarter, the sampling begins," Morganthall noted.

The President's Choice brand has continued to play a prominent role in the chain's private-label program. Market share in 1994 was 20.6%. That number fell to 17.7% in 1995. "The profitability was not always there, so we began to back off of our retails," Morganthall explained.