Below is the third segment that I recorded as a commentator for the Private Label Manufacturers Association’s (PLMA) web based video magazine PLMALive! The segment A New Type of Private Label takes a look at the emerging trend of retailers marketing a new breed of better for you” private brands.
[KGVID width=”600″ height=”320″]http://c0000626.cdn2.cloudfiles.rackspacecloud.com/2014_I_Durham.mp4?a[/KGVID]
A New Type of Private Label
Some retailers are now marketing private label products that are “better for you.” Christopher Durham explores this emerging trend.
The last fifty years of private label history has taken us from the black & white generic packaging of the 70s to the cheaper priced national brand imitations of the 80s and early 90s. Today we’re seeing brands that have thrown off the shackles of mimicry and asserted their right to exist beyond “compare and save.”
The latest trend in private brands shifts the focus from merchandising, sourcing and margin goals to solving customer problems and creating lifestyle solutions. These products are designed to make the consumer’s life easier and give a compelling reason to select one store over another. Meaningful and compelling differentiation is the elusive holy grail of this strategy.
The move comes as natural and organic category continues to expand. According to a recent report from Infinite Research Private Brands are driving the natural and organic market in the US. Sales of Private Brand natural and organic products have significantly outpaced the sales of manufacturers’ brands, generating gross margins of more than 35%.
Over the last few years this trend has become evident through the emergence of “Better for You” brands like Simply Balanced from Target, Well for Life from Raley’s, and Simple Truth from Kroger.
Each of these brands is dramatically changing the perception and the potential of Private Brands. They are both aspirational and confident in their positioning, product development and marketing.
Target’s Simply Balanced has been described by the retailer as “a delicious food collection designed to take the guesswork out of eating well. Free of artificial flavors, colors and preservatives, the collection is built on purity, simplicity… and tastiness.”
California-based grocer Raley’s boldly calls its new brand, Well for Life, “Wholesome, delicious foods for your road to wellness.”
And Kroger describes Simple Truth as “a simpler way to shop” that provides “a simple, uncomplicated and trustworthy solution to the challenge of simply better living.”
Each brand engages customers directly and serves as a critical emotional connection to the retailer. The brand, product and the retailer are viewed by the customer as the answer a solution to their problems. That’s the difference between today’s private brands and their natural and organic predecessors. This pushes the new “Better for You” brands beyond the natural and organic private labels of the last twenty years that were sold simply on their product attributes and enables the retailers to expand the market for natural and organic products well beyond the expected “birkenstocks and granola” customer. They’ve managed to cross over to mainstream suburban moms who simply want to make better choices for themselves and their families.
And these retailers are backing the brands up with fully integrated marketing and promotional campaigns that are driving the shopping experience from trial, to purchase and ultimately, brand loyalty.
Simply Balanced can be seen in TV ads, in-store signage, online flyers and now in their new initiative “Made to Matter — Handpicked by Target.” This first-of-its-kind collection from 17 leading natural, organic and sustainable brands positions Simply Balanced as an equal with leaders in the industry like Annie’s Homegrown and Cliff Bar.
Kroger invested in Simple Truth through a fully integrated marketing campaign, which impressively includes dedicated TV, radio and outdoor advertising, as well as in-store, online and social media.
These “Better for You” brands are shaping the modern era of retail owned brands. They boldly proclaim their right to be national brands and they’re redefining what it means to be a private brand.