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COVID-19 Driven Purchases Create Private Brand Trial

Below is the next guest post in our campaign to help the Private Brand community during these trying times. The post comes from Wesley Bean, SVP, Global Retail Network, Catalina.

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In this post, he previews some of the insights he will present next week during our FREE webinar, “COVID-19: Leading with Private Brands.”

MY PRIVATE BRAND FREE WEBINAR:
COVID-19: Leading with Private Brand
Wednesday, May 6, 2020
2:00 – 4:00 pm Eastern

REGISTER NOW!
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New categories of commodities are driving impressive growth in private brand purchases during the COVID-19 crisis. Shoppers aren’t stopping at traditional entry points like milk, bread and eggs, but are adding vitamins, flour and breakfast mixes to their carts.  Are retailers prepared to make this new dynamic last?

Forced trial led 38 million new grocery and OTC shoppers to buy private brands in the seven weeks since March 1st. Instead of shifting back to brand names as store shelves restocked, 29% have already returned to buy private brands again, Catalina’s Buyer Intelligence Database shows.

What once looked like lockdown-induced, short-term spikes are evolving into an extended buying pattern. Private brand dollar share surged from 12.9% to 14.7% during stockpiling in mid-March and is now settling at a new plateau of 14.0%. New shoppers to private brands are spending an average of $12.99 per trip on these products for the seven-week period beginning March 1.

To discover the specific catalyst of this trend that was prompted by homebound living, we zeroed in on products in three categories: vitamins, baking and breakfast. Each offers insight for retailers looking to boost their private brands’ basket size.

Getting and staying healthy
People are hypervigilant about their health now and are looking for simple, proactive ways to embrace wellness. Essential vitamins, minerals and supplements are one way that shoppers are looking to boost their immune systems due to the COVID threat. Data shows shoppers are finding such products are a low-risk entry point to private brand. Labels, pill counts, and potency are easy to compare across brands. While the entire category has seen hefty sales increases (up to 189%) versus last year, private brand lift is 26% higher than name brand lift during stockpiling for the three weeks ending March 28.

Over-the-counter categories are an opportune area to earn trust with new private brand shoppers. Private brands can use simple “compare and save” messaging to educate shoppers about the product quality at a low price. Building trust in this category may create a halo effect on shoppers more willing to try higher risk categories such as baby and pet.

Seeking comfort
Baking has become a panacea for these times. It’s a low-cost way to fill time, channel creativity and feed the family economically.

Baking includes a lot of commodity products such as flour, sugar and flavor extracts that typically have little to no distinction in ingredient quality or composition from name brands. Because they are primarily recipe ingredients instead of the main attraction, they are another low-risk category that’s enticing new private brand buyers. During the two major stock-up weeks ending March 21, sale of flour increased 142%, with an average lift 35% higher for private brands than name brands.

New shoppers in your baking aisle create an opportunity to educate shoppers about the breadth of brand categories across the store.

The new breakfast table
Until recently, breakfast was gravitating toward grab-and-go items, but now consumers are cooking this meal at home before multi-tasking between Zoom calls and home-schooling kicks in. For retailers, breakfast may be the most likely mealtime to win with private brands. It’s already full of low-risk products like milk, bread and eggs that have long been staple private brand categories.

Pancake and waffle mixes are commodity-plus products that are enjoying a renaissance. Previously stagnant, sales of these mixes have shot up, with private brands posting an average lift 84% higher than name brands during stockpiling the three weeks ending March 28 with a peak of 287% lift during the week ending March 21.

Think of the pancake as a center-of-the-plate item that may bring along other complementary opportunities to encourage promotion of private brands as a meal solution. By adding juice, syrup, meat products, and even coffee, you can bring together a quality meal solution for the private brand-curious in a value-driven way.

There is now enough weekly data for retailers to see how these new commodity-driven buyers behave differently than the average pre-COVID-19 private brand shopper. Capitalize on this free trial period that’s normally part of a costly conversion. Moving forward:

  • Understand the buyer profiles of your brands and categories to identify scaled segments.
  • Engage shoppers in a relationship with a reward or value to purchase again ahead of the next buying cycle.
  • Look for ways to effectively manage future inventory to keep these new buyers interested.
  • Start to prepare campaigns that will hold their loyalty when name brands unleash their trade dollars later this year.
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About Wes Bean

Wes Bean oversees Catalina’s global retail network and is an expert on private brand strategies. He brings vision, strategic insight, and an analytical focus to the buyer intelligence company’s offerings and partnerships. Was has held several leadership positions at Walmart and led Southeastern Grocers’ private brand business. He also has extensive global experience, working in more than 20 international markets.

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Supporting Consumers with Strong Private Brands

Below is the next guest post in our campaign to help the Private Brand community during these trying times. The post comes from Aimee Becker, Senior Vice President, Global Strategic Advisory of Daymon.

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Aimee Becker,
Senior Vice President,
Global Strategic Advisory,
Daymon.

The COVID-19 pandemic has transformed the grocery shopping experience, with budget restrictions becoming a top priority. Roughly one-third of all US households have experienced an income decrease, either through the loss of employment, reduced hours or pay reductions. We know that, in these extraordinary times, Private Brands see increased trial and growth as affordable options that consumers pick up to help stretch their smaller budgets. What many consumers may not have yet fully realized is the shift that has taken place in Private Brands over the past decade – while lower prices may incite trial, Private Brand quality, breadth, and innovation will be what makes them valuable. Retailers have a unique opportunity to utilize and strengthen their Private Brands to offer short-term assistance and long-term support as consumers adjust to this new normal.

Private Brand growth has expanded exponentially during this unprecedented time, assisting consumers when they need it the most. With the initial shopping surge from the virus, consumers pantry-loaded and stocked up on critical categories such as frozen and grocery as they purchased for longevity. With this huge demand influx onto the system, consumers are forced to be brand agnostic, with the option of only buying what was available rather than the usual broad selection. Nearly 70% of shoppers are purchasing different brands due to decreased wages and limited stock. Private Brands have grown as consumers are forced to try products and brands that they have never purchased before.

The forced trial provides a crucial opportunity for retailers to engage consumers with the Private Brands more broadly, shifting this trial into loyalty.

The forced trial provides a crucial opportunity for retailers to engage consumers with the Private Brands more broadly, shifting this trial into loyalty. With 81% of shoppers currently buying Private Brand products, research shows that trial today will lead to long-term conversion. Heavy Private Brand shoppers are spending around 50% of their grocery budgets with one retailer, reinforcing the notion that well-rounded Private Brand portfolios increase shopper engagement. Retailers must think ahead to ensure that their Private Brands are best-positioned to provide consumers with continued relief through and beyond the current crisis. Retailers must consider the mindsets and needs driving consumers’ new shopping habits to strengthen their Private Brands in three ways: having the right items at the right prices; adjusting marketing and merchandising to engage consumers, and driving innovation to expand solutions across the store.

Maintaining Quick Solutions

Center Store departments are not to be overlooked during this time, as shoppers will continue to search for quick meal solutions. While this space has seen an increased threat from e-commerce and other services, such as autoship subscriptions, the pandemic has interrupted the convenience and availability of these solutions, allowing grocery retailers to reassert themselves as destinations for these options. Shelf-stable options will continue to be crucial as consumers look to keep pantries stocked, spread their budget as far as possible, and prepare for continued unknowns. 

Creating Inspiration

With dining out restrictions in place, consumers have increased their number of at-home meals, driving them to seek out creativity in daily meal planning. In the short-term, this may especially include the reality of making meals from a limited selection of ingredients, or of not having strong culinary skills. As trusted experts, retailers should provide educational tools to show consumers how to prepare and cook a spectrum of meals, as well as inspiration for how to create new family favorites or swap out easy substitutions to best use what they have on hand. Incorporating Private Brands into these recipes and tips will raise awareness, showcase breadth and versatility, and inspire new purchases for their home meals.

In-store, the perimeter will be especially important as consumers seek out ingredients and food service options to diversify their meals. Value-added meats and proteins, for example, can provide alternatives to more standard options without requiring shoppers to be the experts themselves. These fresh items can also be a crucial part of inspiration post-cooking – assisting consumers in creating social media-worthy dishes to be shared with friends and family. 

Generating Normalcy

While shoppers are focused on budgeting their shopping trips, Private Brand growth in discretionary categories signifies consumers are actively looking to treat themselves with small indulgences. Offering affordable luxuries such as chocolate, beauty products, and alcoholic beverages can help shoppers establish a sense of normalcy in shopping routines. Private Brands should also continue to innovate, even in expected categories, to provide new and exciting options for consumers to try; this will also drive stronger loyalty as they continue to try new items within the brands.

Retailers should also consider the shifts in consumers\’ personal lives that will define what \”normalcy\” means. With many children stuck at home, or friends celebrating birthdays far away, non-foods categories should also not be ignored. Private Brands that extend into these seasonal and non-foods categories can play a leading role in creating fun or unexpected solutions for consumers from an assortment standpoint. Marketing and merchandising should also play a role in rounding out these cross-category ideas and solutions.

The COVID-19 pandemic has upended many aspects of consumers\’ lives already, with an economic downturn set to change not only the way consumers shop in the future but challenge retailers\’ approaches to meeting these needs. Where Private Brands had already started to resonate with consumers, these new uncertainties call for retailers to ensure their Private Brands are focused on the right things to provide support and inspiration where consumers will need it the most.  

Aimee Ferreira Becker
Daymon, Senior Vice President, Global Strategic Advisory

Aimee started her career with Daymon in 2010 and currently serves as the Senior Vice President of Global Strategic Advisory. Under her leadership, the Strategic Advisory team works with retailers and manufacturers globally to build Private Brand programs that are positioned and managed for long-term growth. Consisting of six key verticals — Insights & Analytics, Retail Transformation, Brand Strategy, Category Solutions, Quality Assurance and Creative Services — the team works collaboratively to bring insights to actions quickly, with a constant line of sight to flawless execution.

Aimee possesses over 20 years of CPG industry experience in branding, marketing and analytics.  She joined Daymon from Boom! Creative Development, where as a Marketing Director she managed all product development and branding initiatives for several domestically and internationally distributed beauty product lines. She also has prior marketing strategy/brand management experience from her roles at Relvon, Jane and Company, and Coty Beauty. In her early career, Aimee built strong analytical and category management skills from working at Information Resources Inc. and Motts. Aimee earned her Bachelor of Science degree in Entrepreneurial Studies and Marketing from Babson College.

Aimee is an expert in Private Brand strategy and regularly provides the industry with perspective on the state of Private Brands. She is frequently recognized for her expertise, most notably as a Griffin Report Women of Influence in the Food Industry inductee (2015) and Progressive Grocer Top Woman in Grocery (2014, 2017, 2019).

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Is the New Nutrition Facts Panel the Wild West

Below is the next guest post in our campaign to help the Private Brand community during these trying times. The post comes from Maria Dubuc, President, MBD. 

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Ashley Smits,
Marketing by Design (MBD)

Once referred to as The Wild West by MBD’s head production artist, the new nutrition facts panel (NFP) mandated by the FDA has come a long way from its implementation in the summer of 2016. With any new initiative it takes time to understand the new rules and regulations, but MBD has been doing it for private brands for years now. So, as the old Cowboys on the block, I’m going to give you a rundown of some of the main things we’ve learned as we came head-to-head with the New Guy in town.

First and foremost, we like it! Although MBD and our private brand clients are focused on the packaging-side, we’re consumers as well and we think that the new nutritional facts table is a really smart adjustment to food packaging. Important information for consumers is now made very clear. Calories is now enlarged and bold while the serving sizes are getting closer to realistic amounts that individual humans probably consume in one sitting. See below for a visual of the new table versus the old one.

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Now that you’ve seen the visual differences, let’s get down to the nitty-gritty! Here’s a couple of key findings my team has learned over the years about the new nutritional facts panel:

1. Rounding rules: One of the gray areas of the new NFP!

The FDA has rounding rules for each nutrient on the panel. Sometimes manufacturers or suppliers provide us new nutritional sheets with values unrounded. These are usually scientific amounts from lab analysis but since the rules around rounding values allow for some variety, you have to decide (most likely with your retailer) on consistent rounding rules. See below an example of a rounded NFP versus an unrounded one. And here’s a link to those rounding rules as well: http://drupaltesty.foodlabels.com/pdf/foodlabels.com_2016-rounding-rules.pdf

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2. Size: One of the challenges with the new NFP!

The new label is larger than the old one, so one of the biggest issues can be fitting it on an existing label where there is not enough space. There are specific rules when it comes to sizing of the overall footprint of the panel, each element that makes up the panel, and the text within the panel. It’s not as simple as scaling the entire element to fit or knocking down the text a few point sizes to make it work. It requires systematic design shifts that allow the new panel to fit while remaining compliant.

3. Pure Sugar: One of the nerdy things we find interesting!

After we started using the new panel, there was debate on products that are naturally sugar-based (i.e. honey, agave, maple syrup). These specific industries fought the new panel’s “added sugars” line since it would suggest that refined sugar was also added to their products when they weren’t. The resolution was that this line can be eliminated from natural sugar-based products but that the labeling still needed to convey the Daily Value percentage plus an explanation in the footnote. See below example of an original NFP label for honey versus the newly approved version.

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With large changes to packaging regulations, there’s always growing pains but MBD has been proud of its private brand clients who were proactive in updating their labels, learning the new rules, and even taking advantage of updating their designs at the same time they implemented the new NFP. As we say in The Wild West, they did a “bang-up” (first-rate) job!

For the past 5 years, Ashley has worked as an Account and Project Manager for Marketing by Design (MBD), a branding and packaging design agency specializing in high volume retailer programs. At MBD, Ashley’s main experience is in high-volume production rollouts and creative designs for private brands. She has experience with both agency and in-house teams, which helps her to anticipate the expectations and needs of both parties. In addition to management skills, she has a strong foundation in graphic design and natural knack for creativity.

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How will the coronavirus outbreak impact private brands?

Below is the next guest post in our campaign to help the Private Brand community during these trying times. The post comes from Rick West, President, Field Agent. 

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Rick West is the CEO and
Co-Founder of Field Agent,

Admit it. It’s on all our minds right now.

How will the coronavirus outbreak change shopper behavior and what will be the impact on private brands?

At Field Agent we regularly help private brands understand in-store conditions and shopper attitudes and we recently set out to understand the question about the impact of Coronavirus on their current shopping trips.

We started with the shoppers themselves. On March 24, 2020, we first asked 300 shoppers to describe ways they’re shopping differently as a result of COVID-19. Field Agent then sifted through all their free form responses and identified about 50 themes, which then became choice options on a much broader quantitative survey of 1,509 U.S. adults.

It’s worth noting that very few respondents to the initial survey mentioned private or store brands specifically.

So what did we learn that might have a bearing on private brands in the coronavirus age? Two things primarily:

First, 33% of respondents to the larger survey told us they have become somewhat less brand conscious since fears of the coronavirus—and resulting out-of-stocks, crowds, etc.—became a regular part of their lives. In other words, in many instances, shoppers are just grabbing whatever’s available in stores.

On the surface, this change could bode well for store brands—as shoppers right now may be less hung up on names than they were prior to the pandemic.

But, hold on. Let’s consider our second primary learning vis-à-vis private brands: 23% of shoppers surveyed said they’re less price conscious in the here and now. In other words, given the present retail environment, there’s less reservation about spending more money on purchases of groceries and household consumable.

Which, unlike the first finding, bodes less well for store brands and their traditional advantage over name brands: a better price.

So, for private brands, the crux of the matter may lie somewhere at the intersection of these two key learnings. How might less concern over brand and less concern over price combine and play out among shoppers in the wake of the coronavirus?

Time will tell.

Rick West is the CEO and Co-Founder of Field Agent, a global Work-On-Demand Platform. Prior to starting Field Agent, Rick worked 16 years with Procter & Gamble in various assignments in the United States, Hong Kong, and Bangkok Thailand. Since leaving P&G, he has been a start-up entrepreneur for 18 years. Rick has co-founded multiple start-ups, including the Northstar Partnering Group, CORE4 Research, JOYN and most recently Field Agent.

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The New Nutrition Facts Label is Law – Private Brand Opportunity!

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Maria Dubuc, President, MBD. 

Below is the next guest post in our campaign to help the Private Brand community during these trying times. The post comes from Maria Dubuc, President, MBD. 

Apply to guest post or participate in the FREE banner program 

We live in challenging times, with the talk of COVID-19 overshadowing our everyday lives, our business, private brand has been at the center of the retail response to the pandemic. With shoppers flocking to stores to fill their carts with private brands from every aisle. Whether they are a long time, private brand fans, or shoppers left with no choice, private brand products are now in their pantry and on their dinner table.

2.03.2020 UPDATE: The Food and Drug Administration is temporarily relaxing some nutrition labeling rules to facilitate the distribution of some food products during the COVID-19 pandemic. The temporary rules apply to restaurants selling packaged food to consumers, food manufacturers with inventory intended for food service, and for manufacturers when retail packaging for certain foods is unavailable. The FDA will also work with manufacturers through the end of 2020 in the use of the updated Nutrition and Facts labels and will not focus on enforcement.

Earlier this month, the U.S. Food and Drug Administration (FDA) issued the long-awaited updated Nutrition Facts label on packaged foods and drinks. The FDA requires changes to the Nutrition Facts label based on updated scientific information, new nutrition research, and input from the public. The move is the first significant update to the label in over 20 years. The change has been in the works for many years, so it should not come as a surprise.

After reading the post from earlier this month on My Private Brand, The New Nutrition Facts Label  I reached out to my network of retailers, manufactures, and vendors, I asked a simple question, “Are you ready for the Nutrition Label Change?” Many of you are ready or have a plan in place. However, there was a surprising contingent who have been dragging their feet.

The Deadlines

The FDA extended the compliance dates for the Nutrition Facts and Supplement Facts label final rule and the Serving Size final rule, from July 26, 2018, to January 1, 2020, for manufacturers with $10 million or more in annual food sales. Which means if you are dragging your feet, you are late.

Manufacturers with less than $10 million in annual food sales have an extra year to comply – until January 1, 2021. Manufacturers of most single-ingredient sugars such as honey and maple syrup and certain cranberry products have until July 1, 2021, to make the changes. Manufacturers of certain flavored dried cranberries have until July 1, 2020, to make the changes.

The Opportunity

Take advantage of the change. A positive perspective will shift this from a burden to an opportunity. I believe there are two significant opportunities

  1. Embrace the Nutrition Facts Label change as an opportunity to serve American consumers better.
  2. Take advantage of the transition to make a change.
  3. Does your private brand or packaging need a refresh? Is it keeping up with competitors or taking advantage of current trends? Is it a design follower or leader?
  4. Is your packaging meeting today’s consumer expectations for sustainability? Is it the best packaging material? Can packaging be reduced or optimized? Is the packaging recyclable? Etc.

The Federal Nutrition Facts label is now the law, are you ready?

Maria Dubuc
President, MBD; Vice President, Big Red Rooster

A 25-year pioneer in creative management, Dubuc’s key talent is to combine a career’s worth of branding experience into something personal and unique for every client. 7-Eleven, B.J.’s Wholesale Club, Natural Grocers, Smart & Final, The Home Depot, and PetSmart are among the retailer programs she currently runs.