No one ever accused Kroger of having modest Private Brand goals.
“We want to have differentiated items that customers can’t live without, that they can only get from us,” said Gil Phipps, Kroger’s vice president of Branding, Marketing and Our Brands, in an energetic and entertaining opening presentation at Velocity: the My Private Brand Conference last week in Charlotte, NC.
That might seem a lofty goal, but Kroger’s track record makes it credible.
The company now has a $22 billion private brands business, with 92% of its households buying its brands, which range from Simple Truth to Private Selection, Phipps said.
This was accomplished through a major revamp of the Private Brands program over a multi-year period. The reinvention included the creation of new and differentiated products and brands. It involved packaging changes that avoided uniform looks by differentiating individual brands and items.
“We just want to continue to drive how much we are the preferred brand.” Phipps said. “In every category we’re in, we want to look like the expert we are.”
Simple Truth Engages Customers
Kroger made big news last year when its Simple Truth brand reached $2 billion in annual sales, some five years after its launch. The brand is positioned as organic, free-from, fair trade and non-GMO, with “plant-based a huge trend,” Phipps said. “Customers look for their needs to be met with a brand they trust.”
Phipps was especially engaging when the retail veteran described traveling the world to source unique Kroger products. He interspersed humor – “I wore neutral colored pants and a white shirt to Rwanda, the most colorful place on the planet” – with serious perspectives. The latter included remarks on how retailers involved in socially progressive activities can make the world a better place.
Kroger gives a lot of thought to how it communicates Simple Truth attributes to customers.
Phipps showed a clip of a documentary video produced from his sourcing trip to Rwanda.
The video relayed the importance of sourcing certified organic and fair trade items for tea, because not only does it provide the best quality product, “but also the best quality of life for the workers.” The video added, “By buying Simple Truth tea, customers help people make better lives for their children in the future.”
Other Private Brands Phipps discussed include Private Selection, Kroger’s culinary brand with global flavors, and HemisFares, featuring regional specialties from around the world.
New Campaign Promotes Unique Private Brand Products
Kroger recently launched a merchandising concept called ‘Treasure EmporiYum,” which is geared to promoting its private brands and “telling the stories of our most unique finds.” This includes an eye-catching Private Brand endcap and a magazine whose first issue highlights items such as Private Selection Imported European Artisan Stone Fired Pizzas, and HemisFares Castelvetrano Olives, dubbed “the meatiest olives in the Mediterranean.”
Despite its current breakout success, Kroger’s Private Brands development over the decades has in some ways mirrored the winding journey taken by the retail industry overall.
Kroger progressed from generics, to knockoffs, to ‘knockouts,’ and is even being ‘knockedoff’ by others, Phipps said.
The key differentiator came when Kroger “started treating our brands like brands, and talking about each brand differently,” he added.
Kroger has also enhanced its relationships with Private Brand suppliers.