In a 11:00 am conference call with Daymon associates Alex Miller, president of Daymon Worldwide announced today that Edenton, Minnesota based retailer/wholesaler Supervalu will end its strategic sales and marketing partnership on May 15. This announcement will certainly send shock waves rippling from the Stamford, Connecticut home of the Daymon Worldwide headquarters to the more than 15,000 associates in 211 offices and 22 countries worldwide as it is the second such announcement from a major grocer in less than a week. Pleasanton, Ca based grocer Safeway announced it would end its five-year relationship with Daymon Worldwide effective March 28.
Daymon became Supervalu’s Private Brand strategic partner in December of 2005, the then group vice president, Our Own Brands, Michael Witynski said, “Our main goal was to select a partner whose strengths in brand management and retail merchandising can help us to achieve our objectives in delivering revenue growth behind market-leading mega-brands, we are committed to driving our competitive advantage by leveraging scale and innovation while over-delivering on consumer expectations. Daymon’s experience, global industry knowledge and strategic alliances will help us bring this to our consumers.”
Some five years later the Supervalu team has changed dramatically and with the appointment of the former senior vice president and chief operating officer of Walmart International Craig R. Herkert as Chief Executive Officer Supervalu the writing seemed to be on the wall.
Supervalu and Safeway are ranked number four and five respectively on the Supermarket News’s Top 75 Retailers for 2010. Supervalu has 2,450 stores with an estimated 41.3 billion in annual sales and Safeway has 1,730 with an estimated 40.8 billion in annual sales.
According to a statement issued by Daymon Worldwide:
Over the past six years at SUPERVALU and five years at Safeway, we have helped them launch their new portfolio of brands and grow their Private Brand penetration steadily over time. We are proud of the work we did at both of these companies and value our long-standing partnerships. We hope to continue to work with them in a new capacity.
Daymon will continue to operate off-site satellite offices in both regions to cater to its supplier partners. “When one door closes, another one opens and we see this as an opportunity to focus more on our supplier needs in the region,” said President and CEO Alex Miller.
Daymon is a diversified global company with processes and businesses that differentiate us beyond brokerage. We operate in 22 countries and own profitable businesses that include packaging design, in-store activation and c consumer events. While the loss of these two customers is disappointing, they represent only a single digit percentage of Daymon’s overall business.
Other notable Daymon clients include: Wegman’s, 7-Eleven, Ahold, Costco, CVS, Dollar General, Fresh Market, Harris Teeter, H-E-B, Kroger, Rite Aid, Roundy’s, Save-A-Lot, SEARS/Kmart, Topco, Winn-Dixie.
As Private Brands continue to evolve and develop it will be intriguing to see how the Daymon model adapts to retailers who believe that Private Brand must be an in house core competency. The big business of building brands is still a long way from selling groceries so the opportunity to evolve a business from brokerage to brand building is huge. Daymon has certainly diversified over the years and hopefully the latest announcements will spur them to continue to push the bounds of private label and create Brands.
Stay tuned as this story continues to unfold.