Private label brands get premium with new offerings

Dive Brief:

  • Southeastern Grocers announced it will roll out three private label brands this year that will serve as the new store brand portfolio for its Bi-Lo, Fresco Y Mas, Harveys and Winn Dixie retail operations, according to The Shelby Report. 
  • The new brands include SE Grocers Essentials, which includes everyday products; SE Grocers, a mid-tier brand that the company says it benchmarked to be equal to or slightly better than established brands; and Prestige, a premium label that includes gourmet desserts and other products.
  • The company said it tested 2,330 of its store brand products, leading to a reformulation of 2,260 of those items. Many of the products contain no artificial flavors, MSG, trans fats or high-fructose corn syrup.

Dive Insight:

Consumers turned to store brands in droves during the recession, and they’ve stuck with them for the most part because of the price savings and reliability they offer. According to the Private Label Manufacturers Association, shoppers save $30 billion every year by choosing store brands over mainstream brands.

Now, supermarkets want to seal the deal by upping the quality of their private label products even more.

Throughout the industry, retailers are investing in sophisticated store brands that rival mainstream brands on taste and convenience. Whole Foods’ 365 brand appears in hundreds of store categories, while Aldi recently introduced a gluten-free line called liveGfree. Kroger, meanwhile, generates more than $20 billion a year from its private label brands, including the $1.5 billion generated by its natural and organic line, Simple Truth.

Store brands are also competing on visual appeal and marketing. Before it went out of business, A&P rolled out a specialty line called Via Roma with packaging that featured Italian villagers photographed during a special shoot the retailer had arranged.

So what do private label brands deliver for retailers? Higher sales, for one, as well as the ability to drive innovation and increase store loyalty. By offering a three-tiered model, Southeastern Grocers is following in the footsteps of other traditional grocers that want to cover all their bases. By focusing on the quality of these products, including investing in a test kitchen and a sensory laboratory, it’s hoping to make the store brand choice that much easier for shoppers.

A move like this, with a wide range of types of products, also may give shoppers more of a reason to place trust in the quality of the private label brand. A recent study from Trace One found that 44% of consumers don't buy private label brands because they trust the national brands more.

Recommended Reading:

Follow on Twitter

Filed Under: Grocery Corporate Marketing
Top image credit: Real Dietitian