Say it again
A lot can happen to an industry in the space of one year. Recognizing that reality, Private Label => Store Brands is pleased to bring readers a recap of some of the biggest store brand industry-related news (and news impacting store brands) from the past year (November 2012 through October 2013). Read on for our channel-by-channel, month-by-month \"Year in Review\" report.
Grocery/supermarket channel
In conjunction with America Recycles Day on Nov. 15, 2012, Sunbury, Pa.-based Weis Markets announced a storewide commitment to use 100 percent recyclable modified atmosphere packaging (MAP) meat trays for its fresh meat products. Weis partnered exclusively with Clearly Clean Products, an Orwigsburg, Pa.-based packaging supplier that specializes in custom thermoformed packaging, to develop the industrys first closed-loop recyclable meat tray.
In December 2012, the Salisbury Post website (salisburypost.com) reported that Beth Newlands Campbell would replace Cathy Green Burns as president of the Salisbury, N.C.-based Food Lion chain. Campbell had been president of Scarborough, Maine-based Hannaford Supermarkets.
Also in December, Loblaw Companies Ltd., Brampton, Ontario, said it launched eight Presidents Choice gluten-free products that are fully certified by the Canadian Celiac Associations Gluten-Free Certification Program (GFCP). The store brand bakery products were the first private label items in Canada to meet the requirements for certification and are eligible to display the GFCP trademark of the Canadian Celiac Association.
The Great Atlantic and Pacific Tea Company Inc. (A&P) rang in 2013 by announcing the January launch of a new line of seafood – \"So Fresh, So Healthy and So Easy\" – as part of its rebranded Great Atlantic Seafood Market. The revamped department provides customers with the freshest and highest-quality products in the neighborhood, the Montvale, N.J.-based retailer said, by filling its cases with fresh seafood primarily stocked by North Coast Seafood.
And ALDI Inc., Batavia, Ill., announced the launch of a new store brand natural and organic line in January. Dubbed SimplyNature, the brand covers a number of shelf-stable, refrigerated and frozen food and beverage categories. ALDI said the products are \"made with all-natural honest ingredients and without artificial colors, flavors or unnecessary fillers.\"
Meanwhile, Fresh & Easy Neighborhood Market, El Segundo, Calif., announced in January an expansion of its store brand fresh&easy eatwell products, adding more than 20 meals, soups and side dishes. The products contain no more than 25 percent of the total daily values for calories, fat, saturated fat and sodium.
The biggest news in January, however, came from Supervalu, Eden Prairie, Minn. The company announced a definitive agreement under which it would sell its Albertsons, Acme, Jewel-Osco, Shaws and Star Market stores and related Osco and Sav-on in-store pharmacies to AB Acquisition LLC, an affiliate of a Cerberus Capital Management L.P.-led investor consortium that also includes Kimco Realty Corp., Klaff Realty LP, Lubert-Adler Partners and Schottenstein Real Estate Group, in a transaction valued at $3.3 billion.
As part of the transaction, which includes 877 stores across the banners, AB Acquisition-owned Albertsons LLC would reunite its Albertsons stores with the acquired NAI Albertsons stores. Following the closing of the transactions, Supervalu said it would be headed by grocery retail veteran Sam Duncan, who would become president and CEO, replacing Wayne Sales.
In March, Supervalu announced that it had completed the transactions. Robert Miller, president and chief executive officer of Albertsons LLC, became Supervalus new non-executive chairman of the board, replacing Wayne Sales.
On a sad note, Eddie Basha, chairman emeritus of Chandler, Ariz.-based Bashas, passed away on March 26. According to an Associated Press article, he was 75.
In April, ALDI announced the launch of its Specially Selected premium brand, which comprises a range of specialty products available periodically throughout the year – from German coffees and gourmet pastas to premium meats and cheeses. ALDI said it first launched the Specially Selected brand in its European stores, with many of the products winning awards and attracting a devoted following. In the United States, ALDI is introducing many of the Specially Selected products through its \"Special Buy Program.\"
And H-E-B and Whataburger, both based in San Antonio, said in April that they partnered to sell – for the first time via retail – bottled versions of the Whataburger Fancy Ketchup, Spicy Ketchup and Original Mustard condiments. The companies also announced the planned summer 2013 launch of \"Whatafries\" as an H-E-B exclusive. The product is a potato chip version of the french fry.
Noting that some organizations have raised concerns that unless palm oil is sourced responsibly, it could contribute to deforestation in parts of the world, Cincinnati-based Kroger Co. announced in April that it is committed to sourcing only sustainable palm oil from suppliers certified by the Roundtable on Sustainable Palm Oil (RSPO) by the end of 2015 for all corporate brand products.
And as predicted by many industry observers, UK retail giant Tesco PLC confirmed in April that it would leave the U.S. market, following a strategic review of its El Segundo, Calif.-based Fresh & Easy Neighborhood Market chain.
Also in April, Pleasanton, Calif.-based Safeway Inc. announced that Robert Edwards, the companys president, would succeed Steven Burd as CEO upon Burds retirement on May 14. In addition, Safeway said T. Gary Rogers, the companys lead independent director, would become non-executive chairman.
In May, Fresh & Easy Neighborhood Market said it introduced more than 45 fresh lunch items and frozen entrées to its stores. The lunch selections include a line of special signature salads, wraps and sandwiches created by Fresh & Easys team of chefs.
Fresh & Easy Neighborhood Market followed up in June with the announcement that it launched a dozen gelatos and sorbets to stores. The retailer partnered with Villa Dolce Gelato, a family run business, for the launch.
And Carlisle, Pa.-based Giant Food Stores said in June that it added PA Preferred store brand milk to 200 retail locations. It is the first national retailer to qualify its store brand milk as PA Preferred, meaning 100 percent of the milk is produced in Pennsylvania, the company stated.
Also in June, Wellesley Hills, Mass.-based Roche Bros., a family-owned chain of full-service supermarkets, said it added store brand chicken with no added antibiotics to its stores. The Roche Bros. No Added Antibiotics, 100% Natural Chicken is raised without antibiotics, hormones or steroids and has no artificial ingredients or chemical preservatives, the company said.
Safeway, meanwhile, said it entered into an agreement to sell its Canadian operations through a sale of the net assets of Canada Safeway Ltd. to Sobeys Inc., a Canadian food retailer and wholly owned subsidiary of Empire Company Ltd., for C$5.8 billion in cash, plus the assumption of certain liabilities. The proceeds from this transaction are expected to be used to pay down $2.0 billion of debt, Safeway said, with the majority of the remainder to be used to buy back stock.
Major mergers/acquisitions took over the headlines in July. Kroger and Matthews, N.C.-based Harris Teeter Supermarkets Inc. announced a definitive merger agreement under which Kroger would purchase all outstanding shares of Harris Teeter for $49.38 per share in cash.
Harris Teeter brings an exceptional brand and complementary base of 212 stores in attractive southeastern and mid-Atlantic markets and in Washington, D.C., Kroger said.
And Loblaw Companies Ltd., Brampton, Ontario, and Shoppers Drug Mart Corp., Toronto, announced a definitive agreement under which Loblaw would acquire all of the outstanding Shoppers Drug Mart common shares for $12.4 billion in Canadian dollars ($11.9 billion in U.S. dollars). According to the two companies, Loblaw intends to preserve the \"great strengths\" of Shoppers Drug Mart by operating the chain as a separate division of Loblaw, with its own dedicated management team led by Domenic Pilla, Shoppers Drug Mart president and CEO.
Finally, Spartan Stores Inc., a regional grocery distributor and retailer based in Grand Rapids, Mich., and Minneapolis-based Nash Finch Co., a food distribution company, announced their entry in July into a definitive merger agreement under which Spartan Stores and Nash Finch would combine in an all-stock merger valued at approximately $1.3 billion, including existing net debt at each company.
Together, Spartan Stores and Nash Finch will have 22 distribution centers covering 37 states and 177 retail stores. Dennis Eidson will serve as president and CEO of the combined company, while Alex Covington will remain with the combined organization in an advisory role to help ensure a smooth transition, the companies noted.
August brought with it a flurry of new product news. On its website, West Des Moines, Iowa-based Hy-Vee announced the introduction of Hy-Vee Cool Chicken. Said to be all-natural, tender and flavorful, the chicken is air-chilled, which means its fresh – never frozen – and contains no added water. The 99 percent fat-free product also is raised cage-free on a vegetable diet with no antibiotics.
And Raleys, West Sacramento, Calif., announced the launch of regionally inspired Raleys BBQ Sauces. The retailer invited visitors to its website to experience \"the flavors of Texas, Memphis, the Southwest and even the Carolinas, without leaving town.\"
Safeway, meanwhile, said it teamed up with Food Network host and top-selling cookbook author Marcela Valladolid to create an exclusive brand of products that \"make it easy for shoppers to bring home a real taste of Mexico.\" According to the retailer, the Marcela Valladolid brand comprises dozens of products across the store, ranging from ready-to-cook meats and tortillas to bold and flavorful snacks.
And in a blog post, Whole Foods Market announced the launch of its Whole Paws line of premium pet foods, which replaced the retailers 365 Everyday Value pet food brand. The line is formulated to include chicken, salmon and other wholesome proteins as the first ingredient. All Whole Paws products are made without artificial flavors, animal byproducts, added sugar or grains, the Austin, Texas-based retailer said.
In non-product-related news, Delhaize Group announced in August the appointment of Frans Muller as CEO, effective Nov. 8, 2013. Muller succeeded Pierre-Olivier Beckers, who remains available to advise the new CEO until year-end and continue to serve on the board of directors in a non-executive capacity thereafter.
In September, Fairway Group Holdings Corp., the parent company of New York-headquartered Fairway Market, said it debuted a new \"menu\" of own-brand foods – from single-serve coffee pods to cold cuts and organic turkeys. The new offerings are available at all 13 Fairway Market locations.
Also in September, United Supermarkets LLC (United), Lubbock, Texas, said it agreed to be acquired by Boise, Idaho-based Albertsons LLC, which currently operates more than 600 locations in 16 states. Terms of the transaction were not disclosed.
And the Yucaipa Companies LLC, a Los Angeles-based private investment firm, said in September that it would purchase Fresh & Easy Neighborhood Market from Tesco PLC.
Kroger also announced in September that CEO David Dillon would retire on Jan. 1, 2014, while continuing to serve as chairman of the board, which he will do through the remainder of that year. The company said W. Rodney McMullen, president and chief operating officer, would take his place as CEO on Jan. 1. Dillon is a 37-year Kroger veteran who has been serving as CEO since 2003.
Meanwhile, Weis Markets Inc., Sunbury, Pa., said in September that its president and CEO, David Hepfinger, left the company to pursue other interests. He also resigned from the board of directors. Jonathan Weis replaced Hepfinger as interim CEO and remains the company chairman.
And Dave Nichol, veteran of Loblaw Companies and creator of several of its iconic brands (including Presidents Choice), passed away on Sept. 22, reported Canadian newspaper The Globe and Mail. He was 73.
In October, Safeway announced that it intends to exit the Chicago market, where it operates 72 Dominicks stores, by early 2014. This will result in a cash tax benefit of $400 million to $450 million, which will be available in the short term to partially offset the cash tax expense on the sale of the net assets of Canada Safeway Ltd. The retailer said it expects to use the cash tax benefit and any other cash proceeds from the disposal of the Dominicks properties to buy back stock and to invest in growth opportunities.
Drugstore channel
In a November 2012 entry on its Private Brands Blog, Deerfield, Ill.-based Walgreen Co. announced the introduction of its Ology brand, a line of everyday products that provides customers with \"healthier lifestyle options.\" Covering categories such as baby care, personal care and household cleaners, Ology is said to be the first \"nationally accessible and affordable brand formulated to be a safer alternative\" to leading national brands.
Also in November, Walgreens said it launched Happy and Healthy, Your Guide to Living Well with Walgreens magazine. The magazine will be issued bi-annually, the retailer noted, and available in English and Spanish; Walgreens Duane Reade banner introduced a similar version. According to Walgreens, the magazine also will provide a unique way to highlight Walgreens \"innovative and leading\" store brand products.
In December 2012, Camp Hill, Pa.-based Rite Aid introduced an exclusive line of Forever Fit home fitness products from fitness expert Denise Austin. The 33-product line represents an entirely new approach to fitness that focuses on maintaining and improving ones health and wellness to accomplish lifes daily activities, the company said.
All products in the line are categorized into one of four categories, based on the associated health benefit: balance and flexibility; heart health; fitness and support; and toning and strength, Rite Aid said.
In February 2013, CVS/pharmacy, Woonsocket, R.I., said it made a \"vast array\" of changes to its Gold Emblem brand – which includes a wide variety of snacks, desserts, beverages and groceries – to offer customers more options, better taste and a contemporary look.
And Walgreen Co. and Alliance Boots GmbH, an international pharmacy-led health and beauty group, announced in March that they entered into an \"innovative, long-term partnership\" with AmerisourceBergen, one of North Americas largest pharmaceutical services companies. The relationship will enable Walgreens, Alliance Boots and AmerisourceBergen to benefit from greater scale and global opportunities, and work together on programs to improve service levels and efficiencies while reducing costs and increasing patient access to pharmaceuticals, Walgreens and Alliance Boots said.
In May, CVS/pharmacy announced the official launch of Total Home, a store brand home-care product line built on performance, reliability and premium quality. The Total Home line includes a wide range of products for everyday home care – ranging from cleaning and cooking to organizing – that has \"undergone rigorous quality testing to offer customers exceptional, reliable options at a 15-20 percent savings compared to popular national brands,\" CVS said. The 150-plus items include facial and bath tissue, paper towels, trash bags, food storage necessities, kitchen and bathroom cleaners, bulbs, extension cords and more.
The retailer followed the Total Home launch with the introduction of Gold Emblem Select in June, a brand covering an assortment of items that \"celebrate the exceptional in every day food, beverage and snack products.\" Products bearing the brand new Gold Emblem Select label use premium ingredients, artisanal techniques and distinctive flavors to help make any day a special occasion, CVS/pharmacy said.
Also in June, Walgreens said the No7 Men skincare products, part of the UKs leading skincare brand No7 created by Boots, now are available chain-wide at Walgreens and Duane Reade drugstores nationwide. The products also may be purchased on Walgreens.com, drugstore.com and US.Boots.com.
The debut marked the first nationwide Boots product launch for Walgreens with UK-based Alliance Boots since the two companies formed a strategic partnership last summer to create the first global pharmacy-led health and wellbeing enterprise. No7 is well known for its internationally acclaimed range of skincare products, Walgreens said, which are hypo-allergenic, dermatologically tested and backed by science – and retail at an affordable price.
In September, Walgreens and Raleigh, N.C.-based Kerr Drug, a privately held regional pharmacy chain, said they entered into a definitive agreement under which Walgreens would acquire certain assets of Kerr Drugs retail drugstores and specialty pharmacy business. Financial terms of the agreement were not disclosed.
Also in September, CVS/pharmacy announced new introductions to Essence of Beauty, its No. 1 bestselling fragrance and body care line. The four new fragrances – Secret Woods, Forever Paris, Wind Kissed and In The Tropics – are said to be created by renowned perfumers and feature luxurious formulations made with premium ingredients in beautifully designed packaging. The perfumers drew inspiration from a variety of sources, including the duality of natural wilderness and chemistry, famed cities and exotic locations, and the imagined scents of a special photograph, childhood story or time period in life.
Mass/club channels
Issaquah, Wash.-based Costco Wholesale Corp partnered with Green Mountain Coffee Roasters to manufacture two varieties of Kirkland Signature K-Cup packs that are compatible with Keurig single-cup brewing systems. Announced by the Waterbury, Vt.-based coffee company in October 2012, the partnership resulted in two varieties – the light Breakfast Roast and the dark Pacific Bold – which retail in 100-count boxes that feature the Keurig Brewed seal.
A few months later, Minneapolis-based Target Corp. announced the brands set to launch in its Canadian stores, which began opening in March. The brands named in the January announcement include Archer Farms (premium food and beverages), Market Pantry (affordable food and beverages), up&up (household, health and beauty, and personal care products) C9 by Champion (active wear) Cherokee and Circo (apparel for boys and girls) and several brands based on ongoing partnerships – including Nate Berkus Collection (bedding, bath, rugs, decorative accessories and more), Sonia Kashuk Collection (cosmetics and accessories), Giada De Laurentiis for Target (cookware products) and Shaun White for Target (fashion for young men and boys). Limited-time-only brands announced include Kate Young for Target (womens apparel and accessories) and Roots Outfitters Collection for Target (fashion for men, women, boys, girls and toddlers).
That same month, Bentonville, Ark.-headquartered Walmart unveiled Flower, an exclusive beauty collection made in partnership with New York-based Maesa and actress Drew Barrymore. The collection, which comprises almost 200 eye, face, lip and nail products, offers product formulations and packaging design that are on the same quality level as those of prestige brands.
March saw another big announcement from Target, when the retailer decided to put its Shops at Target concept – in which a number of boutique shops around the United States created merchandise to sell exclusively at U.S. Target stores – on hiatus. Minnesotas Star Tribune reported in a March 8 article on its website that the retailer had not ruled out bringing the concept back, but was focusing instead more on its \"traditional design partnerships.\"
In April, Walmart Canada, Mississauga, Ontario, said it partnered with New York-based Mint-X Corp. to create Great Value Mint-X Raccoon Repellent Garbage Bags. The bags are proven effective at repelling rodents because of an all-natural mint-scented fragrance manufactured into the bags plastic.
Another unique collaboration followed in May, when Walmart partnered with Fatburger to introduce frozen hamburger patties using the Los Angeles-based burger chains branding. The one-third-pound patties hit shelves in boxes of six bearing retro artwork and the Fatburger logo. Coinciding with the rollout, Fatburger held its \"Fatburger Across America\" national tour, in which it visited nearly 1,000 Walmart stores across 35 states from June through July, offering samples of its burgers at each stop.
Also in June, Target announced the debut of its new organic and natural store brand. Called Simply Balanced, the brand replaced two subsets of the Archer Farms brand: Archer Farms Simply Balanced and Archer Farms Organic. The nearly 250 products under the brand – which include snacks, pasta, beverages, frozen seafood, dairy and cereal – are free of high-fructose corn syrup, trans fats and artificial flavors, colors and preservatives.
Meanwhile, BJs Wholesale Club, Westborough, Mass., officially announced in June the launch of Generation Earth, a brand of responsibly sourced and manufactured goods made with fewer resources and without the use of harmful ingredients. Products under the brand fall into two groups: \"good for you\" and \"good for the environment.\" The brand will extend across a number of product categories, including paper, cleaning supplies, laundry care, baby care, pet care, health and beauty, and over the counter.
Two months later, Target agreed to acquire DermStore Beauty Group, a Louisville, Ky.-based online retailer. The retailer said in the August announcement that through the acquisition, it will expand its share of the online beauty market and further differentiate its offerings. DermStore will become a wholly owned subsidiary of Target, and will continue to operate as a separate entity under its DermStore.com online name.
And at its Global Sustainability Milestone Meeting in September, Walmart publicized that it will begin to label its private brand cleaning products in accordance with the U.S. Environmental Protection Agencys recommended Design for the Environment Safer Product Labeling Program (DfE) in January 2014, and will continue to assess the applicability of DfE as it expands the labeling to broader product areas.
Convenience store channel
Chester Heights, Pa.-based Wawa, via a Facebook post in October 2012, introduced Wawa Coffee Single Serve Cups, compatible with Keurig single-cup brewing systems. Two varieties of the cups rolled out – Original and 100% Colombian – at the time of the introduction, and the seasonal Pumpkin Spice variety was added this September.
Wawa took to Facebook again in March to unveil its \"Parched Madness\" competition, which pitted two varieties (16 total) of Wawa brand ready-to-drink teas and drinks against each other every day in a March Madness-style bracket. During the tournament, fans were asked to vote for their favorite of each bracket in the comments section, and the winner of each bracket went up against the winner of another. Wawa Lemonade Iced Tea won the tournament.
Meanwhile, Dallas-based 7-Eleven announced in March that it was taking the first step forward toward a storewide overhaul of its store brand packaging by introducing fresh new graphics with a contemporary dot-grid pattern in shades of lime green on its Fresh To Go sandwiches clear plastic packaging. The retailer worked closely with a color consultant to develop a palette of hues that has been shown to appeal to millennials.
7-Eleven also reported in September that it began offering a broader assortment of store brand and national brand snacks made with premium ingredients and more healthful options, at competitive prices. The centerpiece of the new snack selection is a collection of 13 bulk-type 7-Select snacks, including flavored trail mixes, nuts, dried fruits and veggie chips, all packaged in clear plastic containers with minimal labeling.
Dollar store channel
On Dollar Generals fiscal 2012 earnings conference call – which took place March 25 – Mary Winn Gordon, vice president of investor relations and public relations, said the Goodlettsville, Tenn.-based retailer added more than 200 own-brand items in fiscal 2012, and it continues to expand other private and proprietary brands in consumables.
\"We now carry nearly 2,100 private brand SKUs in consumables, with strong sales growth in food, perishables, candy and snacks, home cleaning and home and beauty,\" she explained. \"We exited 2012 with a private brand penetration of 23.6 percent, and private brands grew faster than overall sales.\"
Then in October, Family Dollar also revealed significant private label expansion during its most recently ended fiscal year. On the fiscal 2013 earnings call, Michael Bloom, president and chief operating officer, explained that total private brand sales for the Matthews, N.C.-headquartered retailer increased 10 percent during the fiscal year, while private brand consumables sales increased about 20 percent. During that time period, the retailer added 500 store brand SKUs to its assortment, and it plans to add another 200 in fiscal 2014.
Bloom also said Family Dollar continues to improve quality and packaging for a number of Family Gourmet products, including nuts, toaster pastries, cereal and more.
\"We will continue to make quality improvements, and we have consolidated our brands to create more uniformity across our assortment, which we believe will help make it easier for our shoppers,\" he explained.