A Century Of Quality
Progressive Grocer's Store Brands congratulates Weis Markets on its 100th birthday and examines the secrets behind the retailer's — and its store brand program's — success.
It seems quite fitting that the first word in Weis Markets' name is pronounced like the word "wise" (instead of like "weiss" — the German word for "white" — as commonly thought). The Sunbury, Pa.-based retailer — which celebrates 100 years of operation this year — has consistently displayed a deep understanding of how to stay relevant to its customer base throughout changing times.
Everything began in 1912, when brothers Harry and Sigmund Weis opened the first Weis Markets — known then as "Weis Pure Foods" — on Sunbury's Market Street. From the get-go, the two men were pioneers when it came to offering quality products at the lowest prices possible.
Case in point: While most grocers at the time sold goods on credit, Weis took a cash-and-carry approach to doing business, says Dennis Curtin, Weis' director of public relations.
"By going cash-and-carry, they were able to offer lower prices," he explains. "They anticipated the changes in the economy, and … that's where they made their first mark."
Also, in the late 1920s, Weis became one of the first retailers to go self-service, allowing customers to browse the store and place items in their shopping carts. Doing so helped to lower prices even more, Curtin says.
"When they first did that, it was kind of a struggle for a year or two," he points out. "But then the Great Depression hit, and people appreciated the fact that they were saving money."
Weis prospered and grew over subsequent decades, opening stores and entering new markets. One-hundred years later, the retailer boasts 159 stores in five states: Pennsylvania, Maryland, New Jersey, New York and West Virginia. It is completely debt-free, and although it is listed on the New York Stock Exchange, the Weis family still owns a majority of the shares.
The family also continues to be involved in Weis' day-to-day operations — Robert Weis is the retailer's chairman, while his son Jonathan is the vice-chairman, Weis said.
Self-reliance and store brands
Since its first store opened, Weis has been known for its self-reliance. And nowhere does the retailer demonstrate that quality better than within its store brand program, which Regina Tator, Weis' director of private brands, says has played an important role in the company's operations since day one.
"From the day they opened, Harry and Sigmund Weis were grinding their own coffee, bagging locally grown potatoes, making their own salad dressings — [those were] very much the foundational products for the private brand program," she explains. "And that sort of self-reliance — those are things that you continue to see at Weis Markets today."
Bruno Garisto, Weis' vice president, center store, agrees, noting that the retailer operates a dairy, an ice cream plant, an ice facility and a meat plant — all on its headquarters' property. These facilities allow Weis to have much more control over product quality and consistency.
Weis also has run a quality-assurance lab since 1964 — back when it operated only 35 stores. Five full-time people work in the lab, Tator says.
"And my office is right down from the lab," she explains. "So if there is anyone that has any kind of questions, I'm right down there, and we're all looking at it together. I think that differentiates us from a lot of retailers."
But although Weis produces many of its own-brand products in-house, it relies on outside suppliers — 270 of them, to be exact — to supply the rest. And according to Tator, every product supplied by an outside vendor is examined the moment it arrives at the loading dock.
"We have samples pulled and sent to our QA lab," she says. "And then if there's any question, we go back and pull more samples."
A three-tier approach
All products — whether manufactured in-house or by outside suppliers — are merchandised within a three-tier program with a few niche brands, Garisto says. Value-tier products are sold under the Valu Time brand (supplied by Skokie, Ill.-based Topco Associates); national-brand-equivalent (NBE) products are sold under the Weis Quality (food) and Top Care (non-food, also supplied by Topco) brands; and premium-tier products are sold under the Weis Five Star brand. Niche brands include PAWS Premium (pet care, also supplied by Topco), Full Circle (organic, another Topco brand) and Market Street (sliced deli meats).
Until recently, Weis also had a number of sub-brands throughout various categories. Each sub-brand was named according to its category, Garisto says.
"Like Weis Quality Bare Essentials for our diaper line," he notes.
However, to make brand communication as clear as possible, the retailer decided to eliminate the sub-brands.
"For the customer, you want to give them a clear message: 'Weis Quality [offers] national brand quality at a value,' " Garisto explains. "I know that there had been a time where it was very in vogue to sub-brand and try to develop a deeper connection at the category level. We're watching that pendulum swing the other way."
Quality is key
Regardless of the brand, each product communicates the exact same message: quality.
"You don't have to be afraid to buy it — we [provide] a 100 percent satisfaction guarantee," Tator notes.
Weis is so confident in the quality of its products, it once offered a free carton of Weis Quality ice cream to anyone who signed up for a loyalty card in any one of its newly opened stores in Binghamton, N.Y.
"We sent them to the ice cream section — where they had 64 items to choose from — because we were proud of the quality, and we think it stands toe-to-toe with the national brands," Garisto says.
Weis has several good reasons to be proud of its private brand ice cream. Garisto notes that Weis Quality is the top-selling brand in the ice cream category within Weis' stores. And at the Private Label Manufacturers Association's 2011 Salute to Excellence Awards competition, Weis Quality Peanut Butter Banana Chip Premium Ice Cream took the prize in the Ice Cream $ Frozen Desserts category.
Another product Weis has good reason to be proud of is its Weis Quality Greek All Natural Nonfat Yogurt. Launched in October 2011, the product is Tator's favorite of all of the retailer's newest own-brand products — she said it "did a lot of things" to help the category.
"We beat a lot of our competition to it," she explains. "We got a great NBE-quality product, and we were able to trade our customers up. The typical yogurt is 50 cents. This is a dollar."
Loco for local
Weis also has good reason to hold its head high with its salty snacks and sweet goods. The retailer has been fortunate enough to conduct exclusive private label business with two well-known national brand manufacturers that specialize in these areas.
The first is Utz Quality Foods Inc., a salty snack powerhouse based in Hanover, Pa. Since 2007, Utz has supplied Weis with a line of Weis Five Star salty snacks bearing the caption, "Made for Weis by Utz," Garisto says.
"[The products arrive through] full-service direct-store delivery," he points out. "So when that Utz driver comes into our store, he services his brand, and he services our Weis product. We deliver value in a highly consumable category. And the quality's exceptional."
The second is Tasty Baking Co., the Philadelphia-based manufacturer of Tastykake brand sweet goods. Since 2010, Tasty Baking has manufactured roughly 11 Weis Quality sweet goods, which also are delivered through full-service direct-store delivery, Garisto explains.
"Again, it makes us a more valuable stop for that driver," he says. "And we get to leverage some insight from a regional manufacturer that helps differentiate us in the eyes of our customer."
Speaking of local manufacturers, having a locally focused product assortment has been critical to Weis' store brand success. If a Weis store doesn't carry store brand items its clientele in the surrounding community desires, then it could lose its relevance, Garisto believes.
That's why, he says, Weis stocks Weis Quality Teaberry Ice Cream in its Central Pennsylvania stores, but doesn't in its New York market.
"Customers don't care that we have 159 stores in five states — they shop at one store," Garisto says. "[We] have to make sure that we're in touch, that we're listening, that we're responding to customers in [every] area. They're diverse. We go from Binghamton to Baltimore — from Altoona to New Jersey. And one size won't fit all."
Remaining relevant
Still, it takes more than a fine-tuning of product selection for a retailer to be relevant. Tator says Weis also prints nutritional callouts on packaging to appeal to health-conscious consumers. In addition, it offers recipes on packaging for time-strapped consumers seeking meal solutions.
And wherever it can, Weis keeps packaging as sustainable as possible for eco-conscious consumers. Tator explains that in February 2011, Weis became the first supermarket operation in the country to offer its water in 16.9-ounce bottles made from 100 percent recycled PET.
"Our gallon water ships from a local supplier, so we're very green with our miles for traveling," she says. "We produce the bottles for them in our milk plant; they fill and supply us with water, using a local corrugated producer to supply 100 percent recycled cardboard boxes. The packaging's sustainability is communicated on the side of the packs."
Weis also updates its package designs every three years to keep products looking fresh and relevant, Tator says. For example, all Italian-style products recently got a fresh white background with banners that change color from item to item.
"Another good one is our salad dressing program," Garisto says. "So when we walk over to that aisle, you'll see the dressings, the croutons — any items that tie into the salad program — have the same look and feel."
And in the new design for Weis Five Star products, Tator says the retailer incorporates quick-response codes that direct smartphone users to a webpage with a recipe and other information.
2012 and beyond
So having worked hard to remain relevant over the past 100 years, how will Weis be kicking off the next 100 years in the private brand business? Tator says the plan is to develop in areas where Weis determines a need.
"We do not say that we have to hit a certain penetration rate; we want to do what's right for the overall business," she notes. "So our development is keeping it where we need to be to make the whole store expand and to improve overall sales."
Kurt Schertle, Weis' senior vice president, sales and merchandising, agrees, noting that he would much rather have 28 percent private label penetration in $500,000 a week stores than 30 percent penetration in $300,000 a week stores. (Store brands now account for 28 percent of the company's dollar sales.)
After all, Garisto says managing a successful store brand program isn't about hitting a target penetration number.
"We want … to use private brands as a strategic tool to build loyalty, deliver value to the category, drive sales and stay close with changing consumer trends," he says. PGSB
weis
PHOTO COURTESY OF CAPTADAM AT EN.WIKIPEDIA
Weis Markets Inc., at a glance
Headquarters: Sunbury, Pa.
Top Executive: David Hepfinger, president and CEO
Grocery Retail Banner: Weis Markets
No. of stores: 159 in Pennsylvania, Maryland, New Jersey, New York and West Virginia
Store Brands: Weis Quality, Weis Five Star, Valu Time, Top Care, Paws Premium, Market Street, Full Circle
No. of Store Brand SKUs: 6,300 (250 to 300 introduced in 2011)
A good ambassador
PHOTO COURTESY OF WEIS MARKETS
It's not easy for a retailer with 159 stores in five states to make sure every store is educating patrons about store brands. So two years ago, Weis Markets started an internal marketing initiative called the Private Brand Ambassador Program.
According to Bruno Garisto, Weis' vice president, center store, the program trains one person in every store to act as a private label liaison between corporate headquarters and the store. To educate the ambassadors about Weis' store brands, Garisto had a cartoon short developed.
Made in the style of U.S. propaganda cartoons from World War II, the short stars a young soldier named "Private Brands," who introduces viewers to the four main Weis brands (Weis Quality, Weis Five Star, Valu Time and Top Care) and explains the role they play in overall operations.
The ambassador heads a number of store-level private label initiatives, including promotional events and competitions. For example, Weis began holding Facebook competitions in the spring of 2011. For a hot dog contest, the retailer posted a question asking fans to name their favorite style of hot dog and the products needed to make the dog.
"Of course, they would be Weis Quality products," Garisto says. "The best recipe would be chosen; they'd win a gift card; and then the ambassador of that store would reward that winning customer."
While private brand ambassadors work very hard to learn about and support the retailer's store brand program, their job is not a thankless one. Regina Tator, Weis' director of private brands, says Weis awarded three stores in March for their "above and beyond" private brand growth over the past year. The No. 1 store received a catered lunch, and the ambassadors at the stores received gift cards.
New kid on the block
It's pretty normal for members of a community to welcome new residents into the fold with warm greetings and thoughtful gifts. But on a number of occasions, Weis Markets has done the opposite. Through its Weis Brand Giveaway program, the retailer has gifted bags of groceries and coupons to existing residents in neighborhoods surrounding a newly opened or reopened store to celebrate its introduction — or reintroduction — to the community.
One such event took place in March 2011. While many Americans were celebrating Mardi Gras, Weis was celebrating the grand reopening of its store in the Upper Allen Township of Mechanicsburg, Pa. As part of the celebration, the retailer said it sent the store's team into the surrounding neighborhoods to give away 4,000 reusable shopping bags — one to each household.
Each bag — which was hand-delivered over the course of nine days — contained $50 worth of goodies, including coupons and nine of the top private label products sold in Weis stores, the retailer said.
And instead of leaving the bags on the front porch, the associates chose to make a real connection with each resident, notes Kurt Schertle, Weis' senior vice president, sales and merchandising.
PHOTO COURTESY OF WEIS MARKETS
"The doorbell was actually rung, and [we] waited and handed the folks that bag of groceries with coupons inside and asked them to please come try the new Weis Markets," he says. "We want to be a great neighbor to them. And it's no coincidence that the entire bag of groceries was [full of] Weis Quality products."
Schertle says he was very happy with the results.
"It was very successful for us," he says. "We made a lot of friends and earned a lot of loyalty — not just to our stores, but [also] to the Weis Quality brand."
And throughout the delivery process, Weis' marketing associates were able to see what recipients were saying — and respond to any questions or comments they had — via Facebook and Twitter, Schertle explains.
"With all the social media tools we have now — and the whole marketing department going through that — it was really interesting to find what folks were saying," he says.
