Value brands can be cool with the right packaging and promotion
Nowadays, premium-tier private brands get almost all of the attention in the U.S. grocery sector. Few supermarkets boast about their national brand-equivalent products or their “value” store brand lines anymore.
Even deep discounter Aldi has been rolling out premium-quality albeit competitively priced products, a number of which are winners of Store Brands’ Editors’ Picks Awards, which will be featured in the cover story of our upcoming May issue.
But Switzerland’s largest grocery retailer, Migros, has turned its lowest-tier private brand, M-Budget, into a “college brand” with a “cult following,” as the company’s head of private brands and packaging, Nadine Hess, describes it.
Critical to the brand’s success is the colorful kelly green packaging with “MIGROS” in white lettering repeated in a diagonal striping pattern. This striking design not only makes M-Budget stand out on store shelves; it also makes for appealing and fun logo merchandise such as high-top sneakers, hats, sunglasses and T-shirts.
How many lowest-tier grocery private brands in the U.S. have amazing graphics and an enormous fan base? I can’t think of any.
Migros also supports M-Budget with a robust marketing campaign aimed at young consumers. This includes sponsoring M-Budget Ski Weekends in the Swiss Alps that are bargain-priced at 149 Swiss Francs (just over U.S. $150) and summer music festivals in various locations in Switzerland. The attendees wear M-Budget gear, and the logo is displayed everywhere. Even trains and vans that transport students to the events sport the M-Budget green and white logo pattern.
If you go online and google these gatherings, you will see photos of young adults having the time of their lives. “They think Migros is cool and fun,” Hess says.
When Migros introduced M-Budget in 1996, the company didn’t foresee that it would soon become so popular with college students on tight budgets. “They really were so fanatic about the brand that they started to do M-Budget parties,” Hess shares.
This led Migros to recognize the enormous potential of the brand. But not only that, Migros realized that the cash-strapped young college students who loved M-Budget would one day be able to afford — and could become just as passionate about — the retailer’s higher-tier private brands. To learn more about Migros, be sure to read the cover story in the Spring issue of Store Brands’ sister publication, Private Label International, which will be available online in mid-May.
With Generation Z continuing to enter and graduate from college, U.S. retailers would be wise to keep these budget-minded yet fun-loving consumers in mind. As supermarket chains rethink and reformulate their brands and redesign their packaging, the importance and the potential of the bottom tier should not be overlooked.