Retailer of the Year 2020: Albertsons
Around the corridors of Albertsons’ corporate headquarters in Boise, Idaho, the supermarket chain’s Own Brands team is making quite a name for itself.
In fact, Albertsons’ Own Brands team, which sits in the Pleasanton, Calif.-based office, has four brands under its umbrella that have amassed $1 billion in sales each. In all, Albertsons Own Brands garnered $12.8 billion in sales in fiscal year 2019, and in a pandemic year, sales could juice that number in 2020.
In its first quarter earnings call, the company reported that its O Organics sales were up 31%, comparing the periods, and Open Nature was up 28%. The latter could be the latest brand to join that $1 billion club, taking a seat with Signature Select, Signature Cafe, O Organics and the 115-year-old brand Lucerne.
And, as phenomenal as the numbers and results have been last year and this year, it’s the people that are worth recognizing with a Retailer of the Year honor because the truth is that for the last few years Albertsons has been a shining example of private brand success — creating entire owned brands that go beyond the staid image of a private label offering.
Just ask its most veteran leader, Nancy Cota, who has been with Albertsons for 44 years, 21 of them in store brands. She’s not only witnessed this transformation to brand, but helped drive the evolution for 12 of the Albertsons 13 store brands.
“We are no longer private label products,” Cota said. “We are brands. And we’re proud of them, and we want our shoppers to think of them as their own brands,” Cota said. She currently operates as the company’s vice president of innovation and product management, with a focus on fresh areas on the perimeter.
To her, the beauty of Albertsons Own Brands is the excitement they bring to every store under the Albertsons umbrella. Banners include Albertsons, Safeway, Jewel Osco, Amigos, Vons, Randalls, ACME, Pavilions, Shaw’s, Star Market, Carrs, Tom Thumb, United Supermarkets, Albertsons Market, Andronico’s, Albertsons Market Street, Market Street, Haggen, United Express and Lucky.
Cota said Albertsons has the advantage to launch new products very quickly to stay on top of trends and do so without needing to spend millions of dollars on marketing. “We can be on top of what shoppers are looking for and bring that excitement."
Cota said it is a huge advantage for the team to recognize that everything starts with the shopper and that they can lean on internal teams for insights and not be dependent on external teams or suppliers.
“We really look at ourselves as truly a CPG inside of a $60 billion retailer,” Coester added.
Operationally, the team is structured with Coester, who has 25 years in at the company, at the helm since September 2019. Cota leads innovation and product management for fresh foods and Beto Galvan leads innovation and product management for the center store.
Jesser runs the finance, planning and analytics, a center of excellence within the company. Elizabeth Strydom leads the many technical and quality regulatory teams, another center of excellence.
Alice Chan oversees sales and marketing, designing the growth strategy, driving visibility of store brands in the banners, and influencing the shopper journey. Don Davidson is the point person for the strategic sourcing, using data and his relationships to find the most unique items and suppliers to delight shoppers.
In 2019, the Own Brands team launched 932 products and many more followed in 2020, including a line of 13 new ice cream flavors in July. The innovative flavors under its Signature Select brand ranged from a Cinnamon Churro Ice Cream with Honey Bun Swirl to a Lemon Cheesecake Ice Cream. A line of non-dairy flavors launched under its Open Nature brand, too.
Other notable innovative products from the year include the first caffeinated sparkling water under the Signature Select Soleil line, an offering of high-quality wines and Signature Reserve whiskey, and a host of Open Nature free-from meats, foods, oat milk, paper plates and housewares, bamboo toothbrushes and more.
In all, it is a huge arsenal of brands to manage, each with a different identity. However, by comparison to a true national brand, it is the Albertsons lifestyle brands that give it a huge advantage. These brands can be purchased across the store, starting with its Signature Select line that also has Signature Farms, Signature Cafe and premium Signature Reserve offshoots. O Organics and Open Nature are two other thriving lifestyle brands.
“A huge portion of our innovation every year falls under those two brands because they can’t be replicated,” Coester said. “They are lifestyle brands that drive full basket shops in our stores. We’re proud of that.”
Every brand in the Own Brands group has its own persona and target audience. Like a national brand, the teams layer in third party data from Mintel, Kantar and others to join their internal work, studying macro and micro trends, consumption trends and even conduct an annual survey of more than 2,000 households to get a temperature of what they’re looking for in products and to reconnect and ensure the brand positioning is spot on.
Brand and Supplier Love
The other brands under the team operate under a mix of strategies, as they are at varying levels of maturity. Safeway banners, for example, have had more time to build trust with shoppers and gain loyalty, whereas new banners have not.
The oldest brand in the bunch is Lucerne, a destination product that’s family focused, partnering with hundreds of dairy farms for more than 115 years. The brand covers milk, cheese, yogurt products and more. Waterfront Bistro is a newer brand with restaurant quality seafood that earlier this year earned a “Responsible Choice” logo update on its packaging because the products pass Albertsons’ strict Responsible Seafood Policy, a guarantee that the seafood has been responsibly sourced.
Primo Taglio provides high quality deli meats and cheeses. Plated provides a premium meal kit solution. Value Corner reaches the budget-conscious consumers, and debi lilly design is a proud floral shop offering in stores.
To make these brands happen, the Own Brands team works with more than 650 suppliers, and Coester joked that he has probably spoken to all of them in the last six months. Like many organizations, the COVID-19 pandemic has put a huge strain on the supply chain and brought partnerships closer together.
Who’s Who on Albertsons’ Own Brands Team