Faithful To Its Heritage

In its 127 years of operation, Nash Finch has grown tremendously. But the company hasn't wavered in its commitments to supporting family grocery businesses and creating only the highest-quality private label products.

Former British Prime Minister Benjamin Disraeli once said, "One secret of success in life is for a man to be ready for his opportunity when it comes." Well, when brothers and retail store owners Edgar, Fred and Willis Nash came across a railcar of peaches without a buyer more than 125 years ago, they most definitely were ready for their opportunity.

Borrowing money from a local bank, they bought the peaches and took to the road to sell the fruit. That single seized opportunity quickly led to new opportunities, and the Nash brothers found themselves running a thriving wholesale fruit business. They brought on Harry Finch as their first non-family employee and eventually adopted the Nash Finch Co. moniker. The company also became one of the first U.S. businesses to develop a private brands program, first putting the Nash name on select quality products before ultimately introducing its signature Our Family brand in 1904. And Nash Finch long has been a proud supporter and distributor of the IGA brand.

With a wholesale distribution business that serves both military commissaries and retail grocery stores, including its own corporate stores — and annual sales in the billions of dollars — the Nash Finch Co. of today bears little resemblance to the Nash brothers' early business. But the company's commitments to supporting family grocery businesses and to creating only the highest-quality private label products haven't changed one iota. And those strong commitments make the company a fitting recipient of Private Label ⇒ Store Brands' first-ever Wholesaler of the Year award.

"Our company was started by three brother entrepreneurs, and since that time, we have never lost our commitment and support for family businesses," says Alec Covington, president and CEO of Minneapolis-based Nash Finch. "And the number-one enabler to success for the independent grocer is private label. … When it comes to our company and to our private label products, [Nash Finch] understood from day one that there has to be integrity; there has to be authenticity in what's put in the can."

A competitive advantage

Although Nash Finch long has leveraged its private brand program to help its independent retailer customers succeed, the company took efforts here to a new level in 2012 with the introduction of a new private label marketing initiative. According to John Paul, Nash Finch's vice president of sales, marketing and advertising, the new program is Covington's vision to help independent retailers thrive and grow.

"Looking at the tough competition retail grocers face from big-box stores, drugstores and other nontraditional channels, we saw that a strong private label program is critical to the success of independent grocers; without a strong private label program it is near[ly] impossible for independent grocers to achieve a competitive price impression with their consumers," Covington says. "We asked Paul to figure out how Nash Finch could take its private label program and put it 'on steroids.' From that point, the program redesign began to take shape."

Paul says Nash Finch retooled its program to give its retailers a chance to buy the best seasonal items at the absolute best price.

"We broke the program offerings down into seasonal segments, and we allowed our retailers to buy those private label items at very aggressive prices throughout the entire season," he says. "For independent retailers who participate in this program, we deliver the products without charging any fees, which is a great help financially for the retailers."

The move recognizes the difficulties small retailers have in promoting and advertising seasonal products that are based on three- or four-week deals, Paul says. Essentially, a retailer is forced to advertise the products in a very short window of time, and it must bridge buy or forward buy if it is to have prices on the shelf that come anywhere near to competing with those of large national retailers.

"We looked at it from the consumer's point of view," he adds. "We asked, 'What items are important to consumers in June and July? In August and September?' And we broke our promotional program out for private label into these seasonal locked-down price lists. Once we publish those lists, they are locked down for that entire season."

Seasons span eight to 12 weeks, and Nash Finch's retailer customers are able to buy products within each season whenever they want, Paul notes. Although Nash Finch provides guidance on specific ads retailers should run for each season, they are free to run the ads as many times as they want.

"In addition to the advertising support, we provide our retailers with shelf signs and POP so they have a message they can convey to their consumers that overarches the entire Our Family brand," he says.

Yet another program component is a volume incentive — a chance to earn money at the end of the year — for independent retailers that are able to hit sales hurdles Nash Finch provides to them, Paul says.

To make the program work, Nash Finch had to ask its customers for support, Covington explains.

"We went to our customers and said, 'We need you to support us' — depending on the size of the store, we tell them, 'We don't need you to carry half of [our private label products]; we need you to carry all of them,'" he says. '"We need you to think twice before you have packer labels in your store that diminish the impression of the store brand.'"

The company also had to ask for support from its vendors, Covington says, presenting an opportunity for them to drive product costs down in exchange for potential sales volume increases.

"We contributed to the program ourselves by reducing our margins and eliminating the fees charged to participating retailers," he adds.

Thus far, the new program has been "extremely successful" Paul says. And the program applies to the IGA brand as well.

"We are standing here having filled 39,000 voids in our stores since the beginning of this program with Our Family product that was not on the shelf before we started," Covington says. "So our retailers have really supported it; they have done their job."

The amount of work and investment Nash Finch put into its new private label marketing initiative was substantial, and actually part of an overall corporate investment in Franklin Covey's "4 Disciplines of Execution." In 2012 the redesign of the private label program was one of Nash Finch's wildly important goals (WIGs), Paul notes.

The initiative comes on the heels of another program — a comprehensive category management program completed in 2010 and 2011, Paul says.

"We helped retailers understand that just having more items on the shelf doesn't create a variety perception by consumers," he says. "Having more items on the shelf, when you have a lot of duplicate items due to packer labels, actually confuses consumers, clutters shelves and causes out-of-stocks."

Eye on innovation

Despite having implemented two major programs in a relatively short time frame, Nash Finch has not strayed from its commitments to continued private brand product development and innovation. In fact, part of the WIG for the new private label program was to launch 100 new items to retail this year, explains Michele Murphy, director of the company's product development team.

"To get 100 items out there in the stores — we are very proud of that," she stresses. "And we are always looking for suppliers that can bring innovations to us. We want to be that wholesaler that can provide to our retailers items that are new and innovative and follow the brands — and maybe sometimes even lead the brands in a category."

Murphy points to the November launch of Our Family single-serve coffee packs that are compatible with the Keurig brewing system as the most recent example of the company's commitment to new product development.

"We did that just as soon as the patents came off the brand," she notes, "as we wanted to make sure we were right out there in front with that opportunity."

Also new is a boxed olive oil that features a spout on top to make it easier to pour the oil into small measuring containers. Murphy says it resembles a wine box and helps to set Nash Finch's independent grocer members apart from the competition.

And she is extremely proud of the Nash Finch Our Family cheese program. The program, which boasts a full assortment of shredded, chunk and snack cheese items, is the leader in the private label cheese space across the United States. Nash Finch is so confident in its cheese program, in fact, that it recently opted to differentiate its packaging from the national brands in terms of color.

"We used to be blue," Murphy explains. "And with Kraft being blue and Crystal Farms being blue, we were saying, 'Hey, how do I even see myself on the shelf?' So we [decided] to look different."

Another Nash Finch strength on the product development side is its Nash Brothers Trading Company natural and organic brand, which now graces approximately 250 items. As Paul explains, product development under this brand has been a very deliberate process instead of a rush to simply get something on the shelf.

"When we developed the Nash Brothers Trading Company products, we knew there was a growing need out there for consumers for natural and organic products," he says. "But we saw some people go down the road the wrong way. They really rushed to get into these items quickly, didn't do their due diligence, didn't vet out quality and taste profiles. … We make sure that we start everything out with a very well-thought-out process, including quality and packaging innovation, and then we grow from there."

Nash Finch also solicits input from its independent retailers when it comes to new product ideas, Murphy mentions, using the two food shows it hosts each year as a forum to do so.

Going forward, Nash Finch's retailers can expect the flurry of product development to continue. Murphy is particularly excited about potential opportunities in dairy and frozen, noting that items such as Greek yogurt and iced coffee hold a lot of appeal. And the company is uniquely situated to seize those opportunities.

"We are fully integrated here with all of our different teams," Murphy explains. "We have marketing and sales, our design center and the product development team, as well as a QA department."

Quality still comes first

Nash Finch's emphasis on innovation in product development is secondary, however, to its longstanding commitment to quality, Paul stresses.

"We are very proud of our track record," he adds. "We have not been party to or part of a lot of mass recalls that have happened over time because we're very particular as to the suppliers we choose. … We stay very close to them and what they are doing regarding quality, plant certifications and food safety. We're very tough on ourselves to make sure that we've got the most aggressive quality assurance protocols out there in the wholesale industry."

Retailer feedback: Major component of value proposition

Riesbeck Food Markets operates 15 stores in Ohio and West Virginia that are sprinkled over a 100-mile area near the eastern border of Ohio. Like Nash Finch, the family-owned retailer boasts longevity. The company was founded in the 1920s by Margaret Schumacher Riesbeck, the grandmother of Richard L. Riesbeck, who now is president.

According to Riesbeck, Nash Finch and its private label program have been instrumental in the company's recent sales gains. And customer demand and support for the Our Family brand in Riesbeck stores continues to grow instead of hitting a plateau.

"We count on Nash Finch's private label program as a major component of the Riesbeck's value proposition," he says. "The high quality of Our Family products and Nash's strong promotional support create opportunities for differentiation, reflected by continuing increases in both movement and market penetration."

And when it comes to product innovation, Riesbeck says Nash Finch often goes above and beyond his expectations.

"Nash continues to look at adding categories of Our Family products, not just in consumables, but also in non-consumables like personal care items," he says. "And they make it feasible for us to promote these products through activities that call attention to the products for customers. In a company like ours, if we can differentiate with private label products, then the more of a chance, you might say, we have of competing against our national competitors."

Riesbeck stresses that Nash Finch is "quite deserving of the recent award and industry recognition," adding that the company continues to demonstrate a "never-satisfied attitude" when it comes to improving the appeal of its Our Family products and helping his family business grow each year.

Retailer feedback: A partnership with a history of success

Hugo's Family Marketplace, a Grand Forks, N.D.-based family-owned grocery chain boasting nine stores in Minnesota and North Dakota, has carried the Our Family brand from Nash Finch since its first store opened up for business in 1939. According to CEO Kristi Magnuson-Nelson — who uses products under the brand herself — the chain's customers perceive the brand's products to be comparable to their national brand counterparts.

"Our customers get quality and consistency with Our Family, at a great price," she says. "The Our Family brand is very well-recognized in the Grand Forks area."

And over the years, Nash Finch has made sure the brand has kept up with the times by performing a number of packaging and label refreshes that resonate with Hugo's customers, Magnuson-Nelson notes. Nash Finch also has partnered with Hugo's to help drive sales of the Our Family brand.

"The Labels for Learning program has been a well-received sales program" in the Grand Forks area, she says. "The quality of Our Family products is exceptional, and the Our Family brand gives money back to schools."

But the Our Family brand isn't the only Nash Finch brand that helps Hugo's meet its customers' wants and needs. The retailer also looks to Nash Brothers Trading Company items for innovation in the frozen food and natural and organic arenas, Magnuson-Nelson says. The brand appeals to Hugo's natural and organic consumers, and they recognize it as a value, too.

"We appreciate the partnership we've had with Nash Finch for over 74 years," she adds.

Retailer feedback: Perfect partner for retail concept

Jeff Maurer — a 30-year grocery industry veteran — realized a dream in 2010 when he opened his own grocery store in Madison, Wis. Dubbed the Fresh Madison Market, the store is no cookie-cutter operation. It not only boasts a two-story design, but also is situated directly on the University of Wisconsin campus.

Mauer says he approached Nash Finch three years ago, and that the company was willing to take a leap of faith with him and his new format. Since then, he says he's been "shocked" by the volume of private brand products people are buying in the store.

But it's not just the Our Family brand that holds appeal for his store's shoppers. With so many college students freguenting the store, the Nash Brothers Trading Company brand also is extremely important, Maurer says.

"We sell a lot of that product to those people who are looking for more of a natural and/or organic offering at a lower price point," he says. "That has been a very successful brand for us."

And Nash Finch's new private label marketing program has been a boon to his operations as well.

"It definitely [delivered] greater sales, he says.

Retailer feedback: Proof is in the sales

As owner and CEO of four Wally's Food Pride locations in northwest Iowa, Randy Joersz has been a Nash Finch member since 1997. But he says the wholesaler has "really answered the call" when it comes to its private label program in the last few years. Nash Finch not only reduced the cost of goods, but now helps the small retailer promote those goods better.

"I would recommend them to anyone," Joersz says.

Private label concentration was 14 percent just two years ago across the Wally's Food Pride stores, he notes. Since then, with the help of Nash Finch's new program, that number has increased to 25 percent. And sales of private label products have risen 7 percent in the last two years, while total sales are up 8 percent.

Quality is very important to Joersz, who says Nash Finch excels here. He is not afraid to cut open a can of Our Family product right in front of shoppers and put it up against the comparable national brand. And he also gives Nash Finch credit for a continuous focus on product development and putting new items on the shelf.

"That's what I love about them," he says.

Retailer feedback: Initiatives encourage customer acceptance

When Leevers Foods, an eight-store grocery store operation in North Dakota, became a Nash Finch member, it needed to find ways to spur consumer acceptance of the Our Family brand. And Nash Finch was instrumental in helping them do so.

"The Nash Finch team took the time to do cutting tests and grocery giveaways, which was really exciting to us," says Beth Leevers, executive vice president, Leevers Foods. "Getting employees to taste product was important. "

She notes that The Our Family Challenge also was a great tool to get customers to try private brand products. And, with Nash Finch's support, the retailer recently gave away 150 bags of Our Family products for its anniversary sale.

The "Our Family brand is new to market; acceptance has been great," says Frank Mack, a store manager at the chain's Devils Lake location. "We see it in the movement on shelves all the time. The brand is supported very strong in weekly ads by Nash Finch."

Dave Brustad, also a store manager at the Devils Lake location, adds that Nash Finch has done a great job supporting the brand via pricing, promotions and ads.

But perhaps the strongest attributes Nash Finch brings to the retailer are its emphasis on caring and its follow-through in relation to needs, Mack suggests.

"Nash stands behind and promotes Our Family," he says. "It won't be at competitors' [stores], and it's a great differentiator for us."