Grocery retailers from Albertsons to Kroger and Aldi to ShopRite are ramping up their private brands business, with many of these companies taking a premium approach to what has traditionally been a value-driven segment of the store.
For example, this year alone has seen the launch of ultra-premium ice cream from Albertsons, an internationally inspired food brand from ShopRite, a high-end men’s grooming line at Kroger and a slew of healthier, all-natural and organic private brands from a number of supermarket chains.
And retailers are all keeping a close eye on discount retailer Aldi, which has made private label its wheelhouse (90% of Aldi’s assortment is private label), and is adding premium breads, a chainwide rollout of its Earth Grown vegan products and a full line of “never-any” meats as part of its extensive product expansion this year.
According to Doug Baker, vice president, industry relations for the Food Marketing Institute (FMI), “We have witnessed a shift in how consumers are no longer looking for just price, taste and convenience when they grocery shop, which is why private brand owners can create unique experiences for their shoppers. ‘Premium’ carries different definitions for shoppers; while price remains a differentiator, private brands are catering to a shopper who requires a deeper level of personalization. You can see this trend in the new package design, clean and clear ingredients, or new ethnic products available in private brands.”
New product launches
This year Albertsons is on track to launch almost 1,400 new private brand products across its store banners. New items are planned throughout the company’s private label portfolio, which includes the brands O Organics, Lucerne, Open Nature, Signature, Waterfront Bistro, Value Corner, Primo Taglio and debi lilly design.
“With our team’s unique insights across the industry, we can react faster than ever to changing consumer trends. The result is a rapid expansion of high-quality products in every department that are exclusive to Albertsons Cos.,” said Geoff White, president of own brands at Albertsons. “We’ve never been more excited about our ability to meet every shopper’s needs and sprinkle in new and exciting surprises across the store.”
Expanding its lineup of own brands, The Kroger Co. has unveiled Bromley’s For Men, an exclusive line of men’s shaving and grooming products. It’s being positioned as a premium-quality yet affordably priced brand that provides men with grooming and skin care options “for every step of the way,” according to Kroger.
“Bromley’s For Men offers a complete, customizable grooming experience because Kroger knows it shouldn’t be complicated or expensive,” said Robert Clark, senior vice president of merchandising. “This new ‘Our Brands’ product expands our personal care business while simplifying men's shaving and grooming.”
He added, “It’s a collection that’s simple, affordable and accessible. It will disrupt the men’s shaving and grooming category.”
Perhaps more ambitious is Kroger’s launch of its Dip private label apparel brand, which rolled out to 300 Fred Meyer multidepartment stores and large-format Marketplace stores that offer an expanded general merchandise selection.
In developing the brand, Kroger leveraged customer insights from its 84.51° data and analytics arm and recruited fashion designer Joe Mimran, who’s known for the Club Monaco, Pink Tartan and Joe Fresh labels.
“No detail in the fit and finish of Dip has been overlooked,” said Mimran. “Dip is reflective of customers’ true needs and built around a foundation of key modern pieces. It’s fresh. It feels fantastic in your hand. It’s a fun attitude. It’s all those things. These are clothes for really living life in and looking good while doing it.”
On a more traditional grocery front, Wakefern Food Corp. has expanded its roster of store brands with the new ShopRite Trading Co. gourmet and specialty food line.
The retailer-owned cooperative said ShopRite Trading Co, is inspired by international flavors and brings premium, artisanal foods — including imported and domestically sourced items — to its more than 270 ShopRite stores in New Jersey, New York, Connecticut, Maryland, Delaware and Pennsylvania.
So far, 40 ShopRite Trading Co. products have been rolled out, and the Keasbey, N.J.-based company said new items will be added monthly. The affordably priced brand’s offerings are located in nearly every aisle, including frozen and dairy.
“Customers will find premium, imported products, including arugula wood-fired crust pizza and specialty desserts like cranberry panettone and pandoro from Italy, marinated artichoke hearts from Peru and extra-virgin olive oil from Greece,” according to ShopRite spokeswoman Karen Meleta.
Some other ShopRite Trading Co. products now available include smoked Atlantic salmon, tandoori naan, extra-virgin olive oil from California, whole-grain seeded flatbreads, Asian Szechuan sauce, marinated mixed olives imported from Greece, Novello extra-virgin olive oil imported from Italy and red Thai-style chili sauce.
One of the biggest drivers of premium private label products has been the rise of the health and wellness and better-for-you trends across the retail industry.
“All the trends are pointing to an increase in health and wellness offerings,” noted FMI’s Baker. “Natural and organic, fresh-to-go, plant-based eating, sustainability and snacking are all called out as differentiators in private brand portfolios. Notably, IRI suggests that dollar share has shifted in the snacks category to premium, organic and better-for-you options. Most of us can recall a time when 100-calorie packs created a competitive edge for products, now it’s about, ‘what will this snack do for my long-term well-being?’”
Specialty supermarket chain Natural Grocers is heeding the call, unveiling its own Natural Grocers brand encompassing more than 50 products in 15 categories, including grocery, dairy and frozen. Due to roll out this month are a range of organic items, including pasta sauce, olive oil, preserves, bread, apple cider vinegar, tortilla chips, maple syrup, coffee (as well as fair-trade coffee) and frozen fruit.
Products in the pipeline and slated to hit store shelves in 2019 include organic and 100% grass-fed cheese, organic and free-trade chocolate, organic coconut milk, 100% grass-fed beef jerky and organic frozen vegetables, the company said.
“Our name has been defining the highest-quality standards in the natural foods industry since before it really was an industry,” said Natural Grocers Co-President Kemper Isely. “So when it comes time to put our name on products, only the highest-quality products will do, and we make sure that they are priced so that everyone can afford them.”
Meanwhile, Albertsons has leveraged its partnership with online grocery enabler Instacart to launch a virtual store showcasing its organic and natural private brands. Called O Organics Market, the Instacart-powered e-store is designed to make it easier for customers to find and purchase organic, natural and other better-for-you food, beverages and groceries. Offerings include items from Albertsons’ O Organics and Open Nature private labels and products from other brands.
“With nearly 3,800 items from O Organics, Open Nature and other organic and natural brands, O Organics Market is another important step in our strategy to deliver customers what they want, when they want it,” said Shane Sampson, chief marketing and merchandising officer at Albertsons. “With such a broad selection of organic and natural products, customers will be able to order from exclusive items like Open Nature Sockeye Salmon and O Organics Mission Figs to more commonplace products like Dave’s Killer Bread and Annie’s Organic Fruit Snacks.” According to Albertsons, O Organics is the nation’s largest USDA-certified organic brand.
The Aldi effect
A leader in the private brand segment is the discount grocer Aldi, which offers a unique, curated selection of high-quality private label products in a compact store format and attracts customers with hard-to-match, everyday-low prices and a simplified shopping experience that eschews promotional frills. The company recently announced a major product expansion, in which 20% of items in every store will be new versus a year ago.
The product expansion spans Aldi’s range of own brands, including SimplyNature (natural and organic foods), Earth Grown (vegetarian and vegan foods), Specially Selected (gourmet specialty foods), Never Any! (antibiotic-, hormone-, steroid- and animal byproduct-free meat), liveGfree (gluten-free foods) and Little Journeys (baby care).
“Private label is who we are, and it’s who we’ve been for over 40 years,” Aldi U.S. CEO Jason Hart told SN in August. “And [our brands] don’t come with the big, national-brand advertising budgets and inefficient distribution system. By having a carefully and purposely selected number of SKUs, this allows us to have much more volume per product SKU, which makes our suppliers more efficient and makes our cost prices better. Therefore, we can pass that on in lower retails.”
Aldi’s private label approach underlies what Hart said customers like best about shopping at its stores: the ability to save money on their grocery bill without sacrificing quality. It’s an approach and a mission that the grocery industry overall would like to emulate, as noted by FMI’s Baker.
“Brand owners understand that their products tell a unique story about the type of company they are, so clarity and transparency in messaging and makeup will rule in 2019,” he said. “Private brands will position themselves as credible and personal products that make a difference in their shoppers’ lives.”