Categories
FMI

Private Brands Surge Among Hispanics

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Many Hispanic shoppers are buying more private brand products, a trend expected to continue in the future based on research by the Food Marketing Institute (FMI) Private Brands Group presented in the report Se Habla Isn’t Enough: Private Brands Among Hispanics 2009, which was released here today.

In fact, the research found that 37 percent of Hispanic shoppers are purchasing more private brand products this year and 25 percent plan to buy more in 2010.

“Hispanic people are discovering the value and quality of private brands. This is a welcome finding since food plays a central role in their culture,” said Patrick Walsh, FMI vice president of industry relations and collaboration.

More than seven in 10 Hispanics (73 percent) agree that “store brands are a great value for the money,” including over half (52 percent) who “strongly agree,” according to the report. Nearly as many (64 percent) agree that “store brands are just as good as national or international brands,” with more than four in 10 (42 percent) holding this view strongly.

“This emerging trend has tremendous sales potential for food retailers,” Walsh said.

The report found that private brands account for 31 percent of household grocery expenses among Hispanics, averaging $85.94 every two weeks out of a total of $266.63.

Hispanics at All Income Levels Buying Private Brands
Household income does not affect the amount spent. In fact, Hispanics earning $50,000 or more per year spend the most at $92.67. Retailers that offer multiple tiers of products, from basic to premium, can effectively market private brands to Hispanics at all income levels, according to the research.

Other findings bode well for the future of private brands, notably that the youngest shoppers, 18-24, spend more than any other age group at $99.41 every two weeks. In addition, 42 percent of Hispanics entering their prime earning years, 25-39, have increased spending on these products this year.

Contributing to the positive outlook is that the current U.S. Hispanic population is 45 million, a number projected to grow to 64 million — one in five Americans — by 2020, according to the market research firm Synovate. Their buying power is expected to double over that time span to $2.2 trillion.

The most popular private brands among Hispanics, defined as items bought when shopping “every time” or “fairly often”:

  • Dairy products, 54 percent.
  • Paper products, 41 percent.
  • Carbonated beverages or soda or bottled water, 35 percent.
  • Cleaning supplies, 34 percent.
  • Hot or cold cereals and other breakfast products, 34 percent.

How to Increase Private Brand Sales Among Hispanic Shoppers
The report found opportunities for retailers to increase sales of private brand products among Hispanics. Among all Hispanic shoppers, 10 percent never buy these products and another 48 percent do so sometimes or rarely. This is especially the case among the less acculturated, defined as Hispanics who have resided in the U.S. less than half their lives and speak Spanish as their dominant language.

The study explored how retailers can encourage Hispanics to buy new private brands. The top five factors rated “very influential” in moving them to try out a new product:

  • Quality and healthy ingredients, 64 percent.
  • Price lower than the alternative national brand, 63 percent.
  • Discount coupons and sales, 59 percent.
  • Same ingredients and characteristics of the alternative national brand, 49 percent.
  • The store would donate a percentage of private brand sales to the community, 48 percent.

Although it is well recognized that having Spanish signs, labels, ads and bilingual employees is essential to reach out to Hispanic shoppers, these factors rated much lower in influencing them to buy new store brands.

Methodology and Purchasing Information
The data for this report are based on telephone surveys by New American Dimensions of shoppers in the top 10 Hispanic markets — Chicago, Dallas, Houston, Los Angeles, Miami, New York City, Phoenix, San Antonio, San Diego and San Francisco — which together account for about 60 percent of the Hispanic population.

To purchase the full report, contact the FMI Store at (202) 220-0723 or visit www.fmi.org/store/.

Categories
Daymon Worldwide FMI Trade Associations

Private Brand: Our Time is NOW!

\"OurThe buzz coming out of last weeks FMI Private Brands Summit was on the closing presentation of Andres Siefkin, vice president of marketing and consumer insights at private brand broker Daymon Worldwide. His presentation “Our Time is Now” featured that urgent and inspiring message. According to his presentation:

There are 3 things I want you to remember from this meeting

  1. The Consumer is boss!
  2. Private Brands are not a trend. They are here to stay.
  3. It’s in our hands to make Private Brands the Brand of Choice!

Below is the presentation, check it out and let me know what you think.

View more Microsoft Word documents from Myprivatebrand.

\"SiefkenFor those of you unfamiliar with Andres Siefken he is VP of Marketing for Daymon Worldwide in Stamford, CT, responsible for all Daymon Worldwide marketing activities, including domestic and international. He joined Daymon in 2006 as Director of Marketing and was promoted to VP in May 2008. Prior to Daymon, Andres was Marketing Director at InBev USA , in Norwalk , CT , and was head of Latin brands and multicultural marketing, where he developed the company’s first multicultural campaign with both Brahma (Brazilian) and Beck’s (Hispanic).

Categories
FMI Packaging Digest Progressive Grocer Trade Associations

FMI Shines the Spotlight on Private Brand

This past week the Food Marketing Institute held its first ever FMI Private Brands Summit at the Waldorf Astoria in New York City. Unfortunately I was unable to attend, so this post is excerpted from Packaging Digest.

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It\’s private brands\’ time to shine, says FMI speaker

Now is our moment, says Andres Siefkin, of private brand broker Daymon Worldwide, at the FMI Private Brands Summit.
Lauren R. Hartman, Senior Editor – Packaging Digest, June 18, 2009

Andres Siefkin’s presentation at the conclusion of the Food Marketing Institute’s (FMI) first annual Private Brand Summit, June 14 to June 16 at New York’s Waldorf-Astoria hotel, aimed to energize attendees as they headed back to their businesses and began rethinking their private brand strategies. From the buzz in the room at the close of his talk, the executive at Stamford, CN-based private brand broker Daymon Worldwide achieved his aim–and then some.

Through his “Our Time is Now!” presentation, Siefkin, Daymon’s vp of marketing and consumer insights, was eager to instill a “sense of urgency” in listeners as he insisted that just as private labels had evolved into private brands, so executives’ mindsets regarding private brands must evolve.

Read the entire article.

Source: Progressive Grocer, 6/17

Categories
FMI

FMI Report: Private Brand Growth Surges.

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Below is the press release from the Food Marketing Institute (FMI) on their just published report: FMI’s State of Food Retailing 2009. The highlights include significant gains in both Private Label penetration and sales.

FMI’s State of Food Retailing 2009:
Strong Sales Increase Offset by Inflation Companies Accelerate Emphasis on Private Brands
ARLINGTON, VA — May 14, 2009 — Supermarket industry sales increased 5.2 percent in 2008, and identical-store sales rose 4.5 percent, but these gains were offset by the 5.7 percent food-at-home inflation rate last year, according to the 2009 Food Retailing Industry Speaks: Annual State of the Industry Review released today by the Food Marketing Institute (FMI). Adjusted for inflation, sales declined 0.5 percent and identical-store sales 1.2 percent.

Industry net profits decreased to 1.43 percent, from 1.82 percent, as companies competed more intensely for fewer consumer dollars in a recessionary economy. Contributing to this decline were increases in the cost of goods, health insurance and credit card interchange fees, among other expenses.Independent retailers (companies with 1-10 stores) posted the highest net profits and identical-store sales increases at 1.90 percent and 5.11 percent, respectively.

“The industry showed its resilience in the most challenging economy in modern history. Retailers aggressively discounted products and increased their lines of private brands to help American families lower their grocery bills. At the same time, they continued to control costs by improving efficiency and productivity, a hallmark of this industry,” said FMI President and Chief Executive Officer Leslie G. Sarasin.

Concern Increasing Over Strategic Issues, Led by the Economy
Looking at the future, retailers reported increasing concern over the impact of numerous issues — especially the economy, which is having a pervasive impact on the industry. The impact of issues, measured on a 1-to-10 scale with 10 being the highest, increased for nearly every issue, comparing the rating in 2008 with the expected impact in 2009-2010. For the first time in the six years FMI has tracked concern levels, retailers rated the impact of two — competition and the economy — at 8.0 or more. In fact, the economy received the highest rating by a large margin at 8.7 — registering a major jump from the 5.9 rating as recently as 2007 — and six issues had a future impact rating of 7.0 or higher:

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Food Retailers Increase Emphasis on Low Prices, Private Brand Growth Surges
Supermarkets are responding strongly to consumer demand for lower-cost foods in three ways. First, the research found a significant increase in companies emphasizing low prices as a competitive strategy — from 69.9 percent in 2008 to 78.4 percent this year. They now rate the success of this strategy at 7.3, up from 6.9, on 1-to-10 scale.

  • Second, retailers are featuring private brands more prominently, demonstrated by a series of figures: Private brand products now comprise 9.7 percent of the items carried in a typical store — up from 8.1 percent in 2008 and 7.5 percent in 2007.
  • More than nine in 10 retailers (93.3 percent) plan to increase the number of these products in the coming year.
  • They account for 15.0 percent of supermarket sales — up from 14.0 percent in 2008 and 11.5 percent in 2007.
  • Private brand sales increased 10.8 percent in the most recent fiscal year — more than twice the industry’s overall growth rate and well above the 2.5 growth rate for manufacturer brands.
  • Nine in 10 retailers are promoting private brands as a core competitive strategy and report a success rate of 7.1. (FMI is holding a Private Brands Summit June 14-16 in New York to provide industry leaders a forum to explore the growth opportunities for these products.)

Third, half of supermarkets (50.7 percent) offer savings through frequent shopper or loyalty card programs, and rate their success at 7.3, up sharply from 6.4.

Retailers Realign Assortment to Meet Changing Customer Demands
Food retailers made significant adjustments to their product mix in 2008 in an effort to keep pace with changing customer demands in a recessionary economy. In fact, 69 percent of consumers say the recession is affecting their grocery shopping, according to FMI’s 2009 U.S. Grocery Shopper Trends report.

The typical company added 2,000 new products to store shelves and removed the same number. One-quarter of food retailers added and removed at least twice as many items, changing the mix of more than 20 percent of the products in their stores.

These efforts were reflected in improvements in key productivity and efficiency measures as product assortment was better aligned with consumer needs. For example:

  • Inventory turns for the total store increased to 16.43, up from 15.60 in 2007 and 13.50 in 2006.
  • Sales per hour increased to $145.51, from $138.90 and $133.31.
  • Sales per square foot rose to $8.32, from $8.01 percent and $7.32.

Focus on Perishables, Health and Wellness
Supermarkets continue to pursue strategies other than discounting prices. Nearly all (97.3 percent) emphasize perishables to gain a competitive advantage and give it the highest success rating at 8.1, although this figure is down from 8.4 in 2008.

In addition, 68.4 percent are focusing on consumer wellness and family health as a competitive strategy, rating its effectiveness at 5.6. These figures decreased from 84.9 percent and 6.5, respectively.

Ad Spending Stable, More Focused
The recession did not lead to a decrease in advertising as spending remained at a median of 1.00 percent of sales. Retailers continued efforts to spend their ad dollars more effectively, relying less on the mass media and more on targeted campaigns. In fact, newspaper advertising fell below half of ad spending to 48.6 percent, from 52.2 percent the previous year. Radio and television advertising also declined.

Supermarkets increased direct-mail campaigns, including mailbox-delivered circulars, to 18.9 percent of ad sales, from 16.7 percent the previous year. Companies are targeting delivery to specific zip codes to allocate ad dollars to high-potential customers.

Retailers are devoting more ad dollars to community donations, which increased to 5.8 percent of their advertising budgets, up from 3.9 percent.

Methodology and Purchasing Information
The data for this report are based on surveys of 87 companies operating 13,641 stores, filings with the Securities and Exchange Commission and information from the U.S. Bureau of Labor Statistics and Census Bureau. The analysis is also based on other FMI research, including 2009 U.S. Grocery Shopper Trends, Facts About Store Development 2008 and the 2007-2008 Annual Financial Review.

To purchase the 2009 Food Retailing Speaks: The Annual State of the Industry Review contact the FMI Store by calling 202-220-0723 or visiting www.fmi.org/store/.

Categories
FMI

FMI Private Brands Summit

\"fmilogo\"The Food Marketing Institute will hold its first ever Private Brands Summit on June 14-16, 2009, at the Waldorf Astoria Hotel in New York City.

The objectives of the Summit are to engage industry leaders in high-level discussions to address strategic opportunities and to establish an industry platform to address the long-term goals of the private brands community.

The current economic environment provides an ideal opportunity to profitably grow private brands through enhanced levels of trading partner collaboration, leveraging consumer insights and consumer focused product innovation.

This conference will bring together global thought leaders from the retail and manufacturing communities. It will provide an unprecedented opportunity for networking and discussion with the most senior executives from your customers, your peers and your potential customers.

Preliminary sessions include:

  • \"grocery-bag\"What Consumers are saying about Private Brands?
  • Strategic Overview of the FMI Private Brands Initiative
  • A Pivotal Time for Private Brands Retailer CEO Perspective Danny Wegman, CEO, Wegmans Food Markets, Inc.
  • Seizing the Growth Opportunity for Private Brands: Manufacturer CEO Perspective
  • The Brand Perspective: What constitutes a Private Brand?
  • CEO Panel Discussion: Leveraging Retailer & Supplier Relationships
  • Understanding the Next Generation Shopper
  • The Hispanic Shopper and Private Brands: Primary FMI Research
  • Executive Panel: The Impact of Private Brand Growth Keeping the Momentum Going
  • Consumer Trends2009
  • Brand Innovation: CPG Branded Manufacturer CEO Insights Bob McDonald, COO, The Procter & Gamble Company
  • What Consumer Data Is Telling Us about Private Brands
  • A Call to Action; Driving Growth & Innovation through Collaboration

For more info: Food Marketing Institue