According to the Wall Street Journal article “Safeway Cultivates Its Private Labels as Brands to Be Sold By Other Chains” published this morning:
Safeway Inc. has reached deals to expand the outside presence of two of its house brands, selling them through other retailers, both overseas and domestically, an unusual approach for private-label goods.
Safeway, the Pleasanton, Calif., grocery-store chain, has said it wants to market O Organics and Eating Right to other supermarket chains and to aggressively advertise the lines. They have deals in progress that will dramatically expand the presence of the two brands both domestically and overseas. Thus turning private brand into a national brand player. The two brands are expected to be sold at 150 ShopRite stores in South Africa and 100 Exito supermarkets in Colombia as well as seven other countries, including Taiwan and Mexico.
In an unrelated agreement, Albertson’s will also begin selling the O Organics brand. In addition to Albertsons three regional grocers will also sell the Eating Right brand. Big Y Supermarkets, Price Chopper and Hy-Vee Inc.
According to the article:
Safeway, believes it can sell the two brands to regional grocers that lack the resources to launch their own organic or healthy lines of private-label products. “We’re an easy way to get more than 300 (products) of organic items onto the shelves in a matter of weeks,” said Alex Petrov, president of Lucerne Foods Inc., a subsidiary of Safeway that helps manufacture and market the two brands.
Although the Wall Street Journal calls this an unusual approach, there is a long history of Private Brands playing in other non competitive retailers including the Loblaw’s brand President’s Choice that was sold at numerous grocers throughout the US in the 1980’s as well as distributor owned private labels from Topco and C&S.