Walgreens, Private Brand Strategy in Transition?

My wife is the drugstore shopper so I do not get into our local drug retailers as often as I would like, however this past week we where vacationing and needed to stock up on, sunscreen and the standard accouterments of beach vacationing, so we headed out to find a drugstore. Regular readers will know that my wife is also in retail and my children think it is fun to help me discover new Private Brand news for the website. So we wandered into the nearest corner lot drugstore in this case a Walgreens and began to shop. I quickly noticed an end cap of cookies the Walgreens Private Brand with a new design, and several designs for ice cream and frozen novelties that were brand Walgreens in a vintage-esque package design. A nice nod to the soda fountain heritage of Walgreens and the invention the amazing Private Brand Malted Milk Shake.  The Walgreens website tells the story this way.

The milkshake that shook up America

By 1920, now 20 stores strong and growing quickly, Walgreens was an established fixture on Chicago’s retail scene. Throughout this decade, Walgreens underwent phenomenal growth. By 1929, the total number of Walgreens stores reached 525, including locations in New York City, Florida and other major markets. Many factors contributed to this unprecedented growth: a superb management team, modern merchandising, innovative store design, fair pricing, outstanding customer service and exceedingly high pharmacy quality and service. Yet, one can’t overlook something that may have seemed a minor innovation at the time. This was the invention of Walgreens immortal malted milkshake, an instant classic, by Ivar “Pop” Coulson in 1922. Coulson was a lover of fountain creations and the backbone the Walgreens soda fountain since 1914. His chocolate malted milk was a development for the company that was anything but minor.

Coulson had always been eager to improve on whatever he and his fountain clerks had to offer, and he made generous use of Walgreens extra-rich ice cream, manufactured in Walgreen’s own plant on East 40th Street in Chicago.

Until then, malted milk drinks were made by mixing milk, chocolate syrup and a spoonful of malt powder in a metal container, then pouring the mixture into a glass. On one especially hot summer day in 1922, Pop Coulson set off his revolution. To the basic mixture, he added a generous scoop of vanilla ice cream, then another.

Coulson’s new malted milkshake came with a glassine bag containing two complimentary vanilla cookies from the company bakery.

Response could not have been stronger if Coulson had found a cure for the common cold! His luscious creation was adopted by fountain managers in every Walgreens store. It was written about in newspapers and talked about in every city where there was a Walgreens. But most of all, it was the object of much adoration. It was not at all unusual to see long lines outside Walgreens stores and customers stand three and four deep at the fountain waiting for the new drink. Suddenly, “Meet me at Walgreens for a shake and a sandwich” became bywords as popular as “Meet me under the Marshall Fields clock” at State and Randolph in Chicago.

So in store there is the old Deerfield Farms design and a new Deerfield Farms (Deerfield Farms is named for Deerfield, Illinois the location of the corporate headquarters) design, products brand Walgreens and Café W just to name a few. This leads to several questions of what exactly are they doing with their Private Brands. What is their portfolio strategy and will they take any of the learning’s from the recent Duane Reade acquisition.

To learn more about Walgreens make sure to join me in Chicago for The Private Brand Movement Conference, September 27-29, 2010 at the Hotel Sax in Chicago. Moe Alkemade, Divisional VP & GMM Private Brands at Walgreens will present “From Merchandisers to Brand Managers: How Today’s Retailers are Stepping Out.”

My Private Brand readers are eligible to receive a 20% discount off standard rates when they register using the code MYPBRAND.

New Deerfield Farms Package Design
Old Deerfield Farms Package Design
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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.