This is the next in a series of interviews Christopher Durham, founder of My Private Brand and VP of retail brands at Theory House, will conduct with private brand leaders around the world. Today, he discusses retail-owned brands with Scott Williams, VP of Own Brands and Quality at club store BJ’s Wholesale Club.
Christopher: What is your first memory/experience with Private Brand?
Scott: When I was a kid, my parents used to shop at Pathmark which I think in the mid-80’s was really carrying Private Brand products. My dad had worked in a supermarket during high school and I think saw the value in them so we bought them often. I can remember most of our canned goods were Private Brand before I knew what Private Brands were.
Christopher: How did you get into the private brand business?
Scott: I got into in a roundabout way. I started working at a testing laboratory (Shuster Labs) out of college that focused on Private Brands. I then moved from physical testing to building testing protocols, from there to helping clients, and from there to BJ’s as the Quality Assurance person for Private Brands. Nine years later I now oversee Quality and our Private Brands.
Christopher: What does the future of retailer owned brands look like?
Scott: I think the future will really depend on the retailer. One of the great things about Private Brands is that they are real reflection of the retailer. One thing I think you really see in the industry is a stronger divide between the NBE approach and the higher end formulation model. I think that stratification will continue. I would hypothesize a lot of the mid-tier retailer brands will fade away as the fight for space on shelf and marketing grows more important.
Christopher: What private brand accomplishments are you the proudest of?
Scott: I have many, but here are my top 3
Wellsley Farms Brownie Bites – I love this item because it was a lot of pieces coming together. We changed this item to a Fair-Trade product. This product used Fair Trade chocolate form the Ivory Coast and Fair Trade Sugar from Belize. This was one of the first projects we really dug into the supply chain to figure out how we could create a better product for not only our Members but also the farmers.
Wellsley Farms Fruit & Grain Bars / Wellsley Farms Nut Bars – Both items were launched at the same time and they were one of the first I saw from start to finish overseeing the Private brand process. They were also some of the first national brand equivalent items we created under our “Creatively Consistent” program. This was to move our private brands from the brands at BJ’s to the brands of BJ’s. We want the entire basket to look like it came from one company but still echo some of the look and feel of the national brands they emulate.
DNA testing of Seafood. Back in 2011 BJ’s was one of the first (if not first) retailer to DNA test all our private brands seafood to ensure that it was the correct seafood. I was excited because I got to use my seafood background while ensuring the quality of the product. In addition, this was the program that started the long road in building our seafood sustainability program, which kick off our other sustainable and sourcing programs.
Christopher: What keeps you up at night?
Scott: Sourcing is what keeps me up at night the most. I worry that the explosion of certain categories (Organic & Gluten free especially) are putting a strain on the supply chain. Organics have a lot of upsides, but one of the downsides is that it is a limited supply and less efficient. What happens when everyone wants organics? In addition what happens when the consumer normalizes organics and doesn’t want to pay a premium? It seems a smaller and smaller (but more vocal) group of consumers want to know about farms, fishermen and that makes true cost of goods harder for consumers to understand.
Christopher: Is private brand a strategic priority for your organization?
Scott: Absolutely. It is something we are focused on not only growing but growing correctly. Our focus is Member first and our Private Brands is a good way to do that. We can customize the items to fit our Members. As a wholesale club we have really good data on what our Members do and don’t like, Private Brands allows us to strategically focus that data into results.
Christopher: How important is strategy to the success of private brands?
Scott: Strategy is incredibly important for Private Brands especially in a limited sku environment like club. I think more and more items need to earn their spot on the shelf, private brand or branded. An important strategy allows you to determine what the items reason for being is and how it should be positioned. If you have no strategy you are just putting items on the shelf and that isn’t good for the brand, the store, or the consumer.
Christopher: What role should design play in solving private brand/retailer problems?
Scott: I’m going to answer this with a grain of salt, as anyone who knows me knows I am not the design person. That said I think design is important for private brands. I’m a big proponent of what I call “Creative Consistency”, we must establish what the brand not only looks like but stands for. People are busy and while the private brand might be trusted they still need to be able to find the item easily on shelf, understand it’s benefits beyond price, and feel like it fits into the brand. We have to carry one brand across a lot of categories, it is not easy to build consistency from trash bags to dog food to laundry detergent, or bakery to frozen, that’s done with design.
Christopher: What advice do you have for retailers trying to take their brands to the next level?
Scott: Understand what bucket the item falls into, and then create strong process of how you handle that item. For instance, if you are building an item from scratch it might have different sourcing process then an NBE. Design also might differ but again consistency is key. Also in terms of quality “garbage in = garbage out” is a maxim for a reason.
Christopher: What advantages does private brand have over national brands. What disadvantages?
Scott: I’d be remiss if I didn’t mention from a quality standpoint, private brand typically must undergo more testing, auditing and review by the retailer than any branded item.
I would say the advantage to private brands is it allows a retailer to offer what they want and not just what the brands want. Two great examples of offering what we want is our Wellesley Farms Marinara and our Berkley Jensen Shampoo. Both of these formulations have been pretty much the same for the past 9 years I’ve been here, but our Members really like them, in terms of the Marinara they build their recipes and seasoning around that flavor profile which is unique to BJ’s. For the shampoo it started as a brand match NBE, but when the brand wanted to change we stayed in the same formulation because our Members told us how much they liked it. To this day we still have people who have left our area order it online or pick it up when visiting family and friends. That type of loyalty is very important to private brands.
The disadvantage is you typically don’t have the marketing funding to match/beat brands. That means new delivery systems or flavors might not catch on as fast because people must try it, if a brand releases a new chip with a wild flavor people will typically be more likely to try it than a private brand. That means that private brands always has to walk a fine line between “fast follower” and “innovator”
Christopher: How have your private brands evolved over the last few years?
Scott: Over the past few years it has been a bit of a wild ride. We consolidated from 13 to 2 brands two years ago. We did a complete brand redesign for the new items and increased the portfolio by about 20% including getting into categories that we’d never been in. But one of the key evolutions is how much internal support we get, people believe in the brands and that is all someone in my position can really ask for.