The Food Marketing Institute (FMI) Private Brand Summit began today in Chicago, and unfortunately I have commitments, which keep me from attending, however the trade magazine Private Label Buyer is reporting from the summit. The following is a deeply edited excerpt from their coverage:
Sobeys Discusses PL Strategy
Delivering Tuesday’s opening keynote address was Paul Flinton, vice president of marketing at Sobeys, filling in for Bill McEwan, CEO of the Stellarton, Nova Scotia-based retailer. Flinton gave a brief overview of Sobeys’ history and explained the philosophy and development behind Compliments, the retailer’s food focused private brand.
“Today’s consumer is conflicted,” Flinton said, noting that the modern American is looking for polar opposites on his or her grocery-shopping trip. He wants a low price point, but demands quality. She’s looking to cook from scratch, but still wants convenience. He wants to feed his family better, but still has an urge to indulge a little…
…To determine whether a product lives up to customer standards, Flinton said it uses a panel of 100 well-trained, experienced consumers (an idea transplanted from British retailer Tesco). Sobeys trained panelists not to just give a “yea” or “nay” as to whether a product makes the cut or not, but also to judge a product’s taste, texture, aroma and appearance.
Planet Retail’s Berg: Look to Europe for the New Normal!
North American retail might differ strongly from the European marketplace, but that doesn’t mean North American retailers can’t learn new tricks from across the pond. In her presentation, “The New Normal: The Role of Private Brands Post-Recession,” Natalie Berg, research director at London-based retail consultancy Planet Retail, explained that North American retailers will want to pay attention in the coming years to find what will eventually be “the new normal” in North American retail…
… Berg presented the following five key European private label trends in 2010 that have the potential to “make it” in the United States:
- Increasing selection of niche sub-brands (homeopathic drugs, products in response to food allergies, kosher/halal foods, etc.). Some U.S. Retailers are creating sub-brands to serve specific niches, but we have yet to see a “wide roll out” across North American retailers.
- Licensing. Licensing benefits are a two-way street: Retailer benefit by offering unique products that cannot be found at competitors’ stores, and licensees benefit from the growing private label market.
- Transparency. Recently, Wegmans introduced a line of private label Swiss crepes. The retailer actually communicated the name of the line’s Swiss manufacturer.
- Technology. In Europe, many retailers increase the visibility of their private brands through online shopping. In fact, Berg said Tesco will offer its private brands as “cheap alternatives” on its Web site.
- Brand building. Nothing new here, Berg noted. However, some UK retailers are finding strong benefits by putting their own brand products on other retailers’ shelves.