grocery The Hartman Group

Brand Leads Change at Top Food & Drug


Retailers take note, the story told in this article from The Seattle Times details the evolution of Top Foods and their breakthrough commitment to change. Successful retailers will be required to embrace change over the next five to ten years and leverage it to create relevant consumer brands. This account details how Bellingham, Oregon based grocer Top Food and Drug with the help of the Hartman Group, has radically reinvented itself and created a new BRAND that includes every aspect of the customer experience from the name on the front of the store, to the in store experience, to its Private Brands. “CEO Gabriel said his goal is for private-label products to move from 17% of sales to 30%. In that area, he said, Haggen has become \”way more hands-on about quality, to make sure we offer very high quality at really good value.”

Goodbye Top Foods, hello Haggen groceries
Rick Haggen paused while recounting his family\’s long history in the Northwest grocery business.

\”I wish Don were here,\” he said, meaning his brother who was older by 14 years, and who died last summer after a sudden illness.

Don would remember early details, like their parents closing a Bellingham market in the 1950s that was losing business to their uncle\’s store nearby, and opening their first Thriftway across town.

He also would enjoy the renaming of the chain\’s Top Food & Drug stores to Haggen — something the brothers often considered — and the new look and product mix that debuted at the first renamed store in Bellevue this month.

\”It would have been harder for us to move on some things,\” Rick admitted.

He and Don could debate at length about how far apart to place cash registers, he said, and never get around to bigger matters like moving the pharmacy to a less central location or putting a life-size ornamental cow in the dairy aisle.

Not that they shirked innovation or hard decisions.

Over the years, Haggen has been first on many fronts, including becoming the first grocery store with an FTD floral department and an in-store Starbucks.

But more recently, Haggen has found itself in a situation similar to that of Larry\’s Markets, a large-format traditional grocery chain in Seattle that filed for bankruptcy in 2006 and went out of business. The old-style grocery model — big spaces, lots of products, not-great prices — was butting heads with discount players and high-end grocers, and losing. When the recession hit, Haggen\’s 34 stores in Washington and Oregon stopped generating enough money to reinvest for the future.

It was the toughest time the company — founded during the Depression — had ever seen.

\”We didn\’t think we had to be competitive, and we were wrong,\” Rick said. \”We needed to be educated.\”

Although more people are cooking at home, already-thin supermarket profit margins have fallen in recent years. Supermarket profits fell to .98 percent of sales in 2010, down from 1.2 percent a year earlier, according to the Food Marketing Institute.

With the help of former Starbucks CEO Jim Donald, Haggen began slashing prices and closing a handful of stores.

A necessary sale
Early this year, before Don died, the Haggen family gave majority ownership to Comvest, an investment firm in Florida, for injecting an undisclosed sum into the chain — enough for remodels and other investments in Haggen\’s future.

Haggen now has 28 stores, about 400 fewer employees — and that cow in the dairy aisle of its Bellevue location.The cow is part of a face-lift that includes an updated look and new product mix tailored to Northwest customers. The overhaul took six months, and the Bellevue remodel cost far less than $5 million.

It started when new CEO Gabe Gabriel hired the well-regarded Bellevue consulting firm Hartman Group to help with its corporate brand, from its mission to a marketing and communications plan.

\”When I saw the data, I realized it\’s bigger than that,\” Gabriel said.

The folks at Hartman agreed, and said, \”If you have the courage, follow us.\”

Gabriel followed, and for a while dragged longtime Haggen employees with him.

At first, they resisted the Hartman Group\’s ideas, things like offering more meat pies at the deli counter and mixing organic produce with nonorganic.

\”They thought I was from Mars,\” Hartman Senior Vice President Michelle Barry said of the meat-pie suggestion.

Then, a Haggen employee vacationed in Europe, where savory pies have caught on, and that idea was embraced — along with many others.

\”We\’re not often given permission to create what we know the consumer wants,\” Barry said.

Read the entire story.

A&P Cott Beverage Daymon Worldwide HEB Private Label Impact Supervalu The Hartman Group United* DSN

Private Brand Impact Conference – Day One

The first day of the Private Label Impact Conference has come and gone, and I am happy to say it has been a rousing success. A attentive crowd of decision makers from OfficeMax, Supervalu, A&P, Daymon Worldwide, Cott Beverage, Kraft, Pepsi, Interbrand, Coleman Brand Works, T. Marzetti, United, Cliffstar and the Hartman Group just to name a few. The morning started out with a fascinating presentation from Michelle Barry, Senior Vice President of The Hartman Group. Her presentation entitled Private Label: Redefining the Meaning of Brand was a intriguing look at the research and insights the Hartman Group is bringing to Private Brands. Her assertion that “There is no value customer” caused a palpable gasp in the audience.

\"viaroma\"This was followed by a joint presentation from Doug Palmer, Vice President Own Brands, A&P and Perry Seelert, Partner, united* on the “Changing Face of Retail” The presentation included case studies for the new A&P Private Brands, Via Roma, Hartford Reserve and Greenway. Doug was refreshingly honest with the history of A&P and its well-reported ups and downs. Going so far as to say that part of the impetus for these new and innovative Private Brands came from those challenges.

“Sometimes you think about things differently when you (A&P) are near death”

\"tul\"“Retailer Driven Innovation and Branding” was next on the roster with Mike Kitz, Vice President, OfficeMax Brands presenting the evolution of the OfficeMax retail brand as well as case studies on the product innovation and brand development of the writing instrument brand T­ul brand, the organization brand In Place and Infuse the brand developed for fashionable white boards.

The afternoon included presentations from Yasmin Saddiqi of Dupont, “How good Packaging Will Strengthen Your Brand; Trudi-Ann Webster of Cott Beverage, Brand, Price and Packaging Architecture: The Right Mix for Your Customer and a extensive presentation from Thomas Ewing of T Marzetti, Director, National Accounts, Private Label & International, who spoke on, “How Branded and Private Label Can Work Together To Achieve Category Goals.”

The highlight of the afternoon was the presentation from Patrick McCarthy, Senior Director of Strategy and Marketing for Daymon Worldwide. Patrick presented, “The Retailer Private Brand Strategy: What Are they Doing, Why Are they Doing IT and How Your Brand Will Be Impacted.” Patrick called on his experience with HEB, SuperValu and Daymon to address the concerns of both Private Brand and National Brand listeners in the audience. He sounded my now familiar refrain of Private Brand instead of Private Label and told the crowd that best in class retailers where placing Private Brand as a strategic pillar in their enterprise strategies. Exciting, challenging and correct.

The day ended with networking drinks and a great Chicago deep dish pizza at Geno’s East.