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Kellogg\’s Fights Private Brands With Tattoo\’s

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In what is either the bizarre truth or an elaborate hoax, Kellogg’s in England announced on Twitter that it is testing a laser that would brand corn flakes with the Kellogg\’s logo. The following article from the English daily \”The Telegraph\” shows the lengths to which the CPG will go to in order to combat Private Brands.

Kellogg\’s to laser-brand individual Corn Flakes

The new technology enables the firm – which makes 67 million boxes of Corn Flakes every year – to burn the famous signature onto individual flakes using lasers.

Kellogg\’s plans to produce a number of one-off trial batches of the branded flakes to test the system.

Bosses will then consider inserting a proportion of branded flakes into each box to guarantee the cereal\’s origins and protect against imitation products.

If the system is successful it could be used on Kellogg\’s other best-loved brands including Frosties, Special K, Crunchy Nut and Bran Flakes.

The laser uses a concentrated beam of light, which focuses the energy within the beam, down to a very small spot on the Corn Flake.

Mirror galvanometers are then used to steer the beam creating multiple vectors that reflect the laser from different angles and ultimately make up the image.

The energy density within the laser spot diameter is sufficient enough to give the surface of the flake a darker, toasted appearance without changing the taste.

Kellogg\’s embarked on the project to reinforce that they don\’t make cereals for any other companies and to fire a shot across the bows of makers of \’fake flakes\’.

Yesterday Helen Lyons, lead food technologist at the company, said: \’\’In recent years there has been an increase in the number of own brands trying to capitalise on the popularity of Kellogg\’s corn flakes.

\’\’We want shoppers to be under absolutely no illusion that Kellogg\’s does not make cereal for anyone else.

Read the entire story.

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Motley Fool Bullish in Private Brands

\"Motleyfool\"The Motley Fool has a nice piece evaluating Private Brands and their credibility as investment opportunities, and don’t miss the chart comparing the Private Brand unit share and dollar share with the unemployment rate.

Store Brands Killing the Competition

Think you can hide from slumping U.S. consumer spending behind shares of traditionally steady staples companies such as General Mills (NYSE: GIS) and Johnson & Johnson (NYSE: JNJ)? Perhaps, but it could pay to think outside the proverbial box.

At this point, the cat should be out of the bag: Grocers and other retailers are pushing their own labels as value alternatives to the pricier brand names on the next shelf down. The trend isn\’t limited to low-income shoppers, either. From Wal-Mart Stores\’ (NYSE: WMT) Great Value brand to Whole Foods\’ (NYSE: WFMI) 365 products, consumers have trade-down options across the price spectrum.

Read the entire story.

The post closes with this prophetic statement:

Ultimately, investors who casually dismiss private label as a one-hit recession wonder could eventually find themselves wishing that their thinking hadn\’t been, well, quite so generic.

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SKU Rationalization Benefits Private Brand?

\"LIGHTBULB\"

According to the September issue of Competitive Edge, a monthly newsletter from Barrington, Illinois based consultants Willard Bishop:

\”In the past,\” the report said, \”reducing assortment was not considered an option. However, this is a different retail environment, and reducing store-level assortment will become an increasingly viable option for retailers.\”

This has the potential to be great news for Private Brands, which can benefit from the SKU rationalization, they are ideally placed to fill consumer needs in a rationalized assortment. Further they can be created at any level to fill the exact needs of the retail assortment.

Here is the teaser from the Willard Bishop website:

SKU Rat is Coming, Do You Know Where You Stand?

Better holding power on big brands. Fewer out-of-stocks and lost sales. Sections that are easier to shop. Fewer unsaleables and returns. Less store labor and more than $100,000 per store in freed-up capital. These are the key benefits of getting assortment right and eliminating a large amount of duplication and underperforming sections in our stores. Retailers who continue to struggle in this current economic climate and other leading chains who are looking to put some distance between themselves and their competitors see an opportunity to do a better job with rationalizing assortment to improve their current financial position.

This issue of Competitive Edge looks at the SKU rationalization movement and how this is likely to impact retailers, suppliers, and categories.

Read the entire report.

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Private Brand is Delish with Duane Reade

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According to a Press release from PR/Newswire the ubiquitous New York drug chain is launching a new Private Brand food and beverage brand DR Delish

Acccording to the press release:

\"DRIn keeping with this aim, the company launched its own exclusive brand of delectable food and beverage items under the DR Delish this week. DR Delish debuts with an outstanding array of delectable items, including all natural and gluten-free trail mixes, vitamin-enhanced teas without artificial colors or flavors, 100% juices, all-natural baked potato crisps with zero cholesterol, and soy snacks made without trans fats.  In all, Duane Reade will debut 25 high quality –and delicious — new products. Joe Magnacca, Chief Merchandising Officer, commented,

\”We know New Yorkers want and need their drug store to offer convenience and value.  But they also want more interesting, unique and high-quality food products and beverages that taste great.  We believe we\’ve achieved a fantastic combination of these attributes with our DR Delish line and we\’re delighted to begin offering it to New Yorkers, a particularly tough audience.\”

Compared with national brands, DR Delish products have a decided advantage:  the Chocolate Chip with Pecan cookies have more than 20% more chocolates and pecans than a comparable product from Pepperidge Farms; and the DR Delish Chocolate Chip Classics cookie has 60% more chocolate chips than the Nabisco Chips Ahoy brand.   \”Perhaps the best part of this new offering is the excellent value that DR Delish offers when compared to national brand products,\” Magnacca continued. DR Delish products will be offered at low introductory prices: Four different varieties of cookies priced at $1.99 for a 12-ounce package. Six varieties of juices and four varieties of teas are available in one-gallon containers and priced at $2.99; Trail Mix Crunch items are priced at 2 for $5.00

A selection of Brownie Bites, Drizzles (Cinnamon Streusel, White Chocolate Multigrain and Chocolate Multigrain), and Spudzz baked potato products (Sea Salt Baked Potato Crisps, Barbecue Baked Potato Crisps, and Sour Cream and Onion Baked Potato Crisps) are priced at $0.99 per package.

The September launch will be followed by an expanded launch of products in time for the 2009 holiday season, and by the end of 2009 more than 100 products will be available under the DR Delish brand. Upcoming products will include Organic Lemonade, Belgian Chunk & Chip Cookies, Soy Crisp Caramel Chips and a variety of unique, 100% Arabica coffee blends.

This launch comes on the heels of the recent rebranding of Duane Reade, with new logo and prototype stores. The new branding work could not come at a better time for Duane Reade who is seeing increased competition from national drug chains including the opening of a flagship Walgreens in Times Square.

If Duane Reade can use their Private Brands to engage New Yorkers in a relevant and meaningful way they have a significant opportunity to build loyalty among traditionally fickle New York customers.

\"DRstore\"

Thanks to Amy Kritzer for the product shots. Good Eye.

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Private Brand Drugs Continue To Grow.

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Reuters featured this article on Private Brand manufacturer Perrigo. If you have purchased over the counter Private Brand medication there is a good chance Perrigo was the manufacturer.

Tough economic times help Perrigo medicine sales

NEW YORK (Reuters) – Hard economic times may spell good times at Perrigo Co, the largest U.S. maker of store-brand generic medicines, as consumers hunt for savings.

\”The economy is certainly an important influence for making the case for store brand,\” Perrigo Chief Executive Officer Joseph Papa said in an interview.

\”(Consumers) still have a headache,\” Papa said. \”They\’re trying to figure out how they can save a dollar, and they\’re moving more and more to store brands.\”

With a 70 percent market share, Perrigo dominates store-brand or private-label medications which are sold with generic names under the labels of drug chains and other stores. For example, a Perrigo-made product might be sold under as acetaminophen instead of the brand name Tylenol.

The store-brand market in the United States has been thriving, says Papa. While total over-the-counter and nutritional sales have climbed 2.8 percent in 52 weeks through June, store brand sales jumped 13 percent, he said.

Read the entire story.