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Building a foundation for the future of private brand

\"\"This guest post comes from Paul Woodward, Senior Director, Retail Supply Chain Business of Oracle Retail

As a founder and pioneer of collaborative technical compliance solutions, I thought I would share the necessary steps a retailer and its brands can take to build a strong foundation to leverage new technologies.

Emerging new technologies like blockchain, internet of things (IoT), and artificial intelligence (AI) offer to revolutionize the ability to monitor and trace private brand products. These technical capabilities are available today with Oracle and others investing in developing and delivering platforms. But is the industry ready for it? Maybe not.

The key to the success of these technologies is data, specifically for ingredients, sources and manufacturing locations – data that the private brand grocery business has traditionally lacked. Why? Most grocers outsource the management of their private brand products to their manufacturing partners, co-ops or group purchasing organizations. They in turn rely upon the one up, one down principle, with no partner in the supply chain having complete visibility of all ingredients, their sources, or processing locations. This may be acceptable for simple products with only a few ingredients, but managing a complex product like tiramisu or a ready-made meal with dozens of ingredients, all coming from different sources, needs a different approach.

So how can brands prepare?

Understand your Supply Chain

Create a transparent supply chain map for your private brand products. Collaborate with your suppliers to identify all ingredients and register their supply chains and the journey of each product. This directory will serve as a foundation for new technologies to offer traceability and quality monitoring.

Connect, Share and Collaborate

Acquiring this compliance data is not as simple as asking for it. Each player needs to benefit from being involved; they need to see the value of participating. This will require solutions designed for each player. To leverage this growing global capability, retailers will need to adopt an open platform approach allowing data to be securely imported, augmented, and shared.

Compliance Sells

Today’s consumers demand transparency and the reassurance that the retailer has taken responsibility for their product and their supply chain. In a recent study, 66% of global consumers stated they expect immediate notification of a product recall, and 88% said if a brand immediately informed them of an issue, it would positively impact their trust with the brand.

It is now old practice to put ‘speed to market’ ahead of assessing safety and accuracy. It is now essential that R&D processes incorporate rigid due diligence in the assessment and verification of technical, quality, and compliance standards and claims. This level of pre-launch vigor will reduce error, enable the anticipation of risk, and provide a set of parameters that these new technologies can then test, track and trace against to ensure conformance.

In summary, you can’t test it, if you don’t know what you are testing for, you can’t track it if you don’t know where to look, and you can’t navigate risk if you don’t have a map. To take advantage of these exciting new technologies, retailers must first build a foundation of compliance data.

\"\"Paul Woodward
Senior Director, Retail Supply Chain Business
Oracle Retail

Paul pioneered and founded the first collaborative compliance lifecycle solution in the early 90’s which has gone onto to be the world’s leading application of its type. Over the past 20 years, Paul has worked and collaborated with many of the world’s leading grocery retailers, own brand manufacturers and service organizations to further develop standard solutions, practices and best of breed supply chain engagements. These solutions and practices are now widely used across Europe, North America and Australia for the end-to-end development, assessment and ongoing compliance management of over 750,000 products worth $60 billion per annum. Paul now leads Oracle’s global retail supply chain transparency, collaboration, product safety and Blockchain initiatives.

3 Winning Strategies for Private Brand

\"\"This guest post comes from Doug Baker, Vice President, Industry Relations – Private Brands, Technology, FMI

Succeeding in private brands requires great products, but that’s not all.]

\"\"Increasingly it’s also about pursuing key strategies to accelerate the business. A number of strategies were discussed at the recent FMI Private Brands DC Summit, including:

  1. Powerful branding.
  2. Solid engagement with consumers.
  3. Strong relationships with suppliers.

It’s important to further understand these strategies and how they are playing out today in private brands. The Summit attracted a wide range of private brand retailers, suppliers, and other stakeholders.

Powerful Branding

The importance of branding was underscored during an interactive segment of the Summit. I asked audience members to call out what they consider key attributes of a brand. We recorded the numerous responses on large sheets of paper and hung these on a wall.

Here are attributes the audience used to describe brands: trust; purpose; integrity; emotional connection; safety; loyalty; promise; control; ownership; intrinsic value; consistency; transparent; strategic; and differentiated.

Why was it important to conduct this exercise? In the 2019 FMI The Power of Private Brands: From the Industry report, retailers overwhelmingly used the word “brand” over “label” in describing how they view this business.

All of this indicates “label” is more tactical, while “brand” is more strategic.

Solid Engagement with Consumers

The Summit also spotlighted a number of ways for private brand retailers to solidify relationships with consumers. One of these is by promoting the FMI Foundation’s National Family Meals Month™ campaign. John Evans, director of private brands for Weis Markets, described how his company made private brands a centerpiece of its 2019 efforts around this campaign.

Initiatives included running ads in the retailer’s circular and HealthyBites magazine, showcasing meal solutions, making coupons available, conducting in-store events with dietitians, and leveraging social media, podcasts, and media appearances.

Another Summit presentation relayed how private brands are increasingly driving consumer decisions on which stores to shop. Mark McKeown, client insights principal for IRI, outlined findings from FMI’s latest The Power of Private Brands: From the Consumer researchCiting IRI data, he noted that 46% of consumers say private brands are very or extremely influential in their choice of food retailer, up significantly from 35% in 2016. Moreover, millennials are especially on board with this point – 54% point to a strong connection between private brands and store choice.

“If you’re a retailer, that’s really good,” said McKeown. “Your younger shoppers are saying that your brands are more important. So I would double down on that. What do you need to do with your brands to continue to have them be a critical part of why these consumers shop with you?”

Strong Relationships with Suppliers

The Summit underscored the importance of retailer engagement with private brand suppliers. A new research report on this topic was unveiled by David Taylor, client success director for Solutions for Retail Brands (S4RB).

“Private brands by its very DNA is a collaborative endeavor between manufacturers and retailers,” said Taylor. “Collaboration can become your competitive advantage. Successful supplier engagement means successful private brands.”

This research was based on an industry survey conducted in partnership with FMI. It shows a widespread industry understanding of the value of private brand retailer-supplier engagement, but less than satisfactory levels of current engagement. It also indicates huge opportunities for future partner collaboration, Taylor said.

So, what’s my overall take on the FMI Summit? I’m pleased that attendees gained a lot of insights on branding, consumer relationships, and supplier engagement, among other topics. These will be important areas to pursue as private brands move further along the journey from “fast follower” to innovative leader.

Aldi UK Debuts 2 New Sauce Brands

\"\"Discount grocer Aldi Uk has introduced 2 new premium private brand sauces brands created by U.K. based agency  The Black Eye Project. The move follows their long-held private brand portfolio approach, more brands are better.

\"\"The first brand offers a range of relishes and sauces, perfect for burgers. It launches in-store just in time for the summer barbecue season. The goal was to capture the fun of barbecue, with the realness and honesty our shoppers want from their food. The name ‘Just Good Sauce Ltd’ was developed, as it is simple, down-to-earth and a clear description of the products.

\"\"The innocence of illustration supports this positioning, with hand-drawn lettering and quirky characters in simple, striking colors that stand out on the shelf. The logo appears as a drop and is secondary in size to each product name to make it easy for the customer to quickly find what they’re searching for.\"\"

The second brand was for a range of American-themed sauces and marinades to be used in cooking and barbecuing. For this a Deep South sounding name “Skeeter”, and added a block print effect on single color labels. The effect is a bold aesthetic where the descriptive product name is the first element to catch the eye, ideal for a brand whose primary promotion is on the shelf \"\"\"\"

As an actual Southerner, I have to laugh, Skeeter\’s is not something we would actually name a brand. The range is also distinctly not Southern: New York Steak Sauce, Jerk Sauce, Teriyaki Sauce and American Style BBQ Sauce

Target Kills Archer Farms & Simply Balanced & Launches Good & Gather

\"\"Over the last few years, Minneapolis based Target has dramatically reinvented its private brand portfolio, adding dozens of brands to its portfolio – Cat & jack, Pillowfort, A New Day, Project 62, GoodFellow & Co. The vast majority of these increased the size and relevance of the private brand portfolio, however, Target has never been afraid to make dramatic changes or kill gigantic billion-dollar brands in favor of a new strategy. In 2016, the retailer dramatically rethought its children’s categories with the billion dollar+ private brand and the creation of Cat & Jack in fashion which was followed by Pillowfort in home and Cloud Island in baby.\"\"

The once gigantic Up&Up which itself replaced Bullseye branded products has gradually been whittled away with the introduction of Smartly in low-priced personal care and cleaning essentials, Everspring in natural cleaning and the expansion of Cloud Island into diapers, wipes, and toiletries. It seems like obvious speculation to assume that the folks in Minneapolis may be working on new consumer-focused brands for the remaining Health & Beauty products in Up&Up.

So, it was no surprise today to see the latest announcement from Target. The launch of Good & Gather in grocery: 650 products start rolling into Target September 15, with all 2,000-plus items available by late next year. The idea behind Good & Gather is great food—from dairy and produce to ready-made pastas, meats and more—made for real life. It’s all the good stuff you customer’s without artificial flavors, synthetic colors, artificial sweeteners and high fructose corn syrup. Plus, there are plenty of everyday staples like milk, eggs and other favorites that never have those ingredients anyway.\"\"

However, the move is bigger than that. Buried in the last paragraph of the press release is this statement, “It will ultimately become our “flagship” (read: largest and most prominent) owned food brand, and will include kids, organic, seasonal and premium product lines. Along the way, we’ll make the shopping experience even easier and streamlined by phasing out our Archer Farms and Simply Balanced brands and reducing our Market Pantry line. But don’t worry—we’ll bring most of those favorites into Good & Gather, reformulating many of them with even better ingredients and taste.”\"\"

That’s right Target is dramatically reinventing its private brand portfolio in grocery, killing successful brands Archer Farms and Simply Balanced and moving much of Market Pantry into the new brand. It’s a fearless and refreshing move designed to dramatically change how they are perceived in grocery.

The press release goes on:

\"\"

“Our guests are incredibly busy and want great-tasting food they can feel good about feeding their families,” says Stephanie Lundquist, executive vice president, Food & Beverage, Target. “We saw this as a huge opportunity for Target to help. So our team got to work on our most ambitious food undertaking yet, reimagining our owned food brands to serve up convenient, affordable options that do not cut corners on quality or taste. Good & Gather is our way of helping even the most time-strapped families discover the everyday joy of food.”

Crushing the taste test
Creating an exceptional food brand is no small feat. There\’s guest and trend research, food safety, recipe formulations, sourcing, packaging and so much more to carefully consider. But through the entire process, we knew we’d need to absolutely nail great taste—it’s our guests’ top priority. So our food scientists and culinary experts whipped up some truly special creations, from an avocado toast salad kit and beet hummus to heat-and-serve roasted poblano mac and cheese and everything in-between (yep, it’s all developed and tested right in our own Target test kitchen). And here’s the kicker: every single recipe has to pass a rigorous taste test, or it doesn’t make the cut. Our expectations are so high, in fact, that Good & Gather comes with our money-back guarantee. Even the packaging conveys real, delicious food. And better yet, it’s all an incredible value.

Kroger Reduces Plastic Resin In Private Brand Packaging By 9.1m Pounds

\"\"Kroger announced yesterday that the retailer\’s Zero Hunger | Zero Waste efforts reduced its food waste footprint – the overall food waste it produced – by 9% in 2018, creating measurable improvements in its retail operations and more environmentally-conscious associates. Kroger\’s progress was outlined in its 2019 Environmental, Social and Governance (ESG) report, also released today.

\”We know our customers, associates, stakeholders and investors care deeply about people and our planet,\” said Rodney McMullen, Kroger\’s chairman and CEO, in his letter to ESG stakeholders. \”The world around us is changing too — a warming climate, global population growth, loss of biodiversity, water scarcity and more. These eco-realities affect our collective ability to feed people today and in the future. They are also the force behind Kroger\’s Zero Hunger | Zero Waste plan. We know 40% of food produced in the U.S. is thrown out, yet one in eight people in our country are food insecure — perhaps even someone we know. Redirecting just one-third of the food wasted in the U.S. every year would more than feed those struggling with hunger.\”\"\"

\”Today doing the right thing for society and being environmentally sustainable are table stakes for corporations,\” said Jessica Adelman, Kroger\’s group vice president of corporate affairs and chief social impact officer. \”That\’s why we\’re proud to go above and beyond with our Zero Hunger | Zero Waste social impact plan. Our progress in each of the environmental, social and governance aspects of sustainability are a direct result of these innovative and intentional efforts.\”

Kroger\’s ESG report details progress in 2018 on Kroger\’s Zero Hunger | Zero Waste social impact plan as well as it\’s 2020 Sustainability Goals.

Private Brand Highlights include:

  • Progress on Packaging and Plastics: Kroger reduced the amount of plastic resin in their private brand packaging by 9.1 million pounds so far – well on its way to reaching its 10-million-pound goal by 2020.
  • Sourcing Sustainably: Kroger sourced 88% of wild-caught fresh and frozen seafood in supermarket seafood departments from certified sustainable sources. The company also purchased more than 17 million pounds of Fair Trade-certified ingredients for private brand products.
  • Reduced Food Waste Footprint 9%: Kroger\’s food waste generated by retail stores decreased 9%, reducing both food waste and the greenhouse gases resulting from it.
  • Improved Food Waste Diversion 13%: Kroger achieved a 13% improvement in supermarket food waste diverted from landfill, moving from 27% diversion in 2017 to 40% in 2018.
  • Expanded Fresh Food Rescue: Kroger associates rescued 10% more food from its stores, plants and distribution centers – that means 100 million pounds of wholesome, nutritious food went to feed food-insecure families in America.
  • Supplier Inclusion: Kroger spent more than $2.6 billion with women- and minority-owned businesses in 2018.

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