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02/02/2021

Private Label Week day 2 keynote: Albertsons addresses suppliers

Dan Ochwat
Executive Editor
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Be flexible in pack sizes and minimum orders, provide quality products, and be ruthless when helping to eliminate costs — these are just a few tips for suppliers looking to work with the Albertsons Own Brands team that were shared at the keynote for day two of PLMA Live! Presents Private Label Week. 

Store Brands’ Retailer of the Year in 2020, Albertsons and members of its Own Brands team, spoke with Suzanne Caputo of the Private Label Manufacturers Association on Tuesday. The panel included Alice Chan, vice president of sales and marketing; Chad Coester, senior vice president; Nancy Cota, vice president of product innovation and product management; Don Davidson, vice president of strategic sourcing; and Beto Galvan, vice president of innovation and product management.

The group shared their paths to Albertsons and retail experiences — from setting up in-store displays at a young age to working with prominent CPG companies — as well as how private brand suppliers can collaborate and innovate with them. 

Coester said Albertsons works with 650 suppliers and is looking for more to help develop products that serve its 2,300 stores. The company is structured like a CPG within a $60 billion retailer, he said.

Galvan added a glimpse at how the cross-functional teams work together to develop a product, saying it starts with the consumer Insights team, identifying consumer needs, then working with product development teams to hone in on a product. Next, the sourcing team identifies suppliers and how to build the product, which then goes to the finance team for pricing, and then over to sales to bring the product to life in stores.

Once that product gets to sales and marketing, Chan offered tips on how suppliers can be great partners, leading with being flexible around minimum orders, as the range of retailers under Albertsons are small and large, so there are different needs. Other ways to help include offering pack size flexibility, efficient store packouts, as labor gets tighter and tighter, and offering pre-packed shippers that also hit a minimum order.

Chan also said beyond that, they’re looking for partners who can come to the table with insights and technology. Albertsons is a consumer-centric company, she said, so bringing consumer insights to help develop product is a plus, and the retailer wants to see new technology and innovation, too. “Use Albertsons as a test pilot,” she said.

Davidson added more tips from a sourcing perspective, saying suppliers need to know who Albertsons is and how they work first. “Understand what we expect as bare minimum requirements as what it takes to do business with us,” he said. “Understanding what does it take to have a plan audit qualified, what does it take to approve a product, what are our case markets, what do we expect from sustainability, really understanding all of those business requirements.”

Beyond that, he said it is important or suppliers to know the company structure and its local needs. From there, it is easier to identify the right person to work with, know the different price points and assortments and, ultimately, keep cost in mind.

“We want people to have a ruthless pursuit of cost improvement,” Davidson said. “We’re constantly trying to take cost out of the system, it allows us to compete against the brands and our competitors.” Of course, cost shouldn’t impact quality of products, too, the Albertsons team reminded.

As the company eyes the future, executives said that they see diversity as a differentiator for Albertsons' private brands and organization as a whole. Coester said Albertsons still believes it can get to its goal of 30% market penetration and to meet that goal by working alongside its current and new suppliers.