National Brands on the Run?

cheese_kraftsinglesBrandweek reported on Wednesday, Feb 4, 2009 in an article titled: Private Label Takes Bite Out of Kraft Profits that Kraft reported a 72 percent drop in fourth quarter profits, their profits have taken a beating as consumers have cut back. Kraft CEO Irene Rosenfeld said during the earnings call: “Combined with the spike in unemployment and rapid deterioration of consumer sentiment, it’s not surprising that branded consumption was down and private label picked up share.”

In a research note, UBS analyst David Palmer attributed Kraft’s disappointing quarters to the companies’ vulnerability to private label. “These are two of the more penetrated by private label companies in the food space, and thus, each company’s pricing is more affected by falling commodity costs and more aggressive private label competition,” he said. So the question for the retailer is really will you take advantage of the downturn and grow Private Brand share, investing in quality, marketing and innovation or will you simply defend. The retailers who capitalize on the weakness of both their competitors and the national brands will grow their market share and have the opportunity to drive customer loyalty, create true differentiation and reinvent the way the American public perceives both retailers and the brands they carry.

Lucerne a Safeway Private Brand Featured in their weely flyer.
Lucerne a Safeway Private Brand featured in their weely flyer.
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Christopher Durham
Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.