Store brands looking to capture larger market

 

 

NEW YORK — Super­markets including Kroger, Safeway and Whole Foods are improving the image of their store brands with better packaging and more distinctive offerings. But where exactly do these products come from?

It’s a question a growing number of people might have as retailers increasingly develop their store brands as a way to cultivate loyalty among shoppers.

Safeway, for example, offers versions of Doritos, Cheetos and other snacks. Rather than merely imitating the look of their big-name counterparts, the Snack Artist line comes in distinctive, earth-tone bags made to look more like a premium brand. The Safeway logo appears on only a small strip at the bottom.

“In many cases, people are buying some of our brands and think it’s a national brand,” said Diane Dietz, the chief marketing officer for Safeway.

The rise of store brands – known in the industry as private-label products – became apparent last year when ConAgra Foods Inc. said it was buying Ralcorp Holdings Inc. Although it’s not a household name, Ralcorp makes pasta, granola bars and other foods for a wide array of retailers.

ConAgra executives note that there’s still plenty of room for growth, with store brands representing just 18 percent of packaged foods in the U.S., compared with 36 percent in the United Kingdom and 44 percent in the Netherlands.

 

TO MAINTAIN the image of their store brands, supermarkets like to keep the origins a mystery. One reason Whole Foods doesn’t reveal the suppliers for its in-house 365 Everyday Value products is that it might be carrying other branded products made by the same companies, said Brianna Blanton, who manages store brands for the organic grocer.

For a shopper, tracking down which company made a particular product can also be challenging because the store-brand industry is fragmented.

Supermarkets often work with a network of suppliers to produce their store brands. These include national name-brand companies that make store brands on the side as well as businesses that specialize in making store brands.

The store-brand specialists often focus on certain product categories as well, said Mike Minasi, Safeway’s president of advertising and marketing. Overhill Farms, a company based in Vernon, Calif., for example, is known for making frozen foods, he said.

Not all store brands are made by outside companies. Kroger, for instance, has 37 plants that churn out about 40 percent of its store brands.

 

STORES ARE pushing to offer more distinctive products. So the process for developing new store-brand items has gotten more sophisticated and mirrors how name-brand products are conceived and marketed, said Jesse Spungin, the general manager for ConAgra’s store brands business.

 

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