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American consumers pocket an estimated $15.8 billion annually by purchasing store-branded products instead of their national brand counterparts, and there appears to be no end in sight to growth for the current $65 billion private label industry, according to the Private Label Manufacturers Association (PLMA).
Fueling that growth is a generation of time-starved supermarket customers who the industry is finding to be less loyal to national brands, and who've come to appreciate the quality and packaging of store brands, which in many cases today exceed manufacturers' brands, says the New York-based trade association of private label vendors.
At the end of the day, many consumers, depending on the product category, are apparently more than happy not to pay the "marketing taxes" levied by nationals to promote their products when they can get the same or better for less money.
Likewise, retailers obviously appreciate the benefits of private label to their bottom lines and self-branding strategies. Not only do store brands found in grocery and increasingly in fresh departments provide an opportunity to differentiate from national chains and increase consumer loyalty, but they contribute substantially to that often hard-to-generate bottom line. In fact, according to PLMA, retailers on average generate 25 percent to 30 percent more profits on sales of store-branded items vs. national offerings.
While many retailers, and especially independents, rely on wholesalers to help them develop and manage successful corporate brand programs, nowhere can store owners and managers learn more about the power of private label than at the annual PLMA Show.
Held each November at the Rosemont Convention Center near Chicago's O'Hare Airport, the show continues to boast record attendance, according to the event's organizers.
Serving PLMA's 3,000-plus members, this year's event showcased thousands of products available from around the world, encompassing the entire store: center store food, nonfoods, health and beauty care, fresh and frozen products, beverages, pet products -- you name it.
Additionally, a number of worthwhile education sessions made the show a must-attend for retailers operating just one store -- or 100.
Among the thousands of companies and products featured at last month's PLMA show that can help to boost supermarket sales and profits were the following:
--Royal Labs Natural Cosmetics, Inc.: Headquartered near Charleston, S.C. and founded in 1983 by company c.e.o. Paul Lieber, Royal Labs produces over 400 brands of natural and organic cosmetics for chains, drug stores, and international retailers.
According to Lieber, the demand for home fragrance products remains strong. Included in the home fragrance category are reed diffusers that serve as a safer alternative to candles, in that no fire is involved in using the products and they can be used 24 hours a day.
"There's also a big demand for natural and organic anti-aging products," notes Lieber. "The category currently generates 10 percent of total company sales and continues to grow."
--Scivolutions: Family-owned and based in Gastonia, N.C., Scivolutions provides retailers such as HEB and a number of mass marketers with a complete line of wound care bandages. Rivaled by nationals Johnson & Johnson and 3M, one of Scivolutions' most popular items is a skin closure kit that may be used to treat skin cuts not requiring sutures. Also a big seller is the company's recently launched line of wet wound-healing bandages.
--Best Health: Dale Acton of Moorsville, N.C.-based Best Health introduced PLMA attendees to a new line of organic cough drops set to launch next year. Best Health, which manufacturers store brands for hundreds of food retailers, including Kroger, Publix, and Food Lion, has also developed a chewable omega-3 supplement that according to Action, "tastes like a Starburst."
Additionally, the company is enjoying enormous success with its Baskin-Robbins sugar-free candy products.
--Webster Industries: Celebrating its 50th year in business, Peabody, Mass.-based Webster Industries recycles over 30 million pounds of plastic annually to produce its branded Good Sense kitchen trash bags, which Wal-Mart recently introduced to customers as part of the retailer's green initiative.
"We've been in the recycling business for 35 years," notes Webster's public affairs specialist, Cindy Drucker. "We operate two manufacturing plants in Alabama, with 50 percent of our products sold to retail channels and the other half sold to institutional users."
Confirms Webster Industries president Jack Shields: "Today consumers are getting bombarded with claims that products are 'green,' or environmentally friendly. Not only is our company SCS-certified (Scientific Certification Systems), but we went one step further and attained EPP certification (Environmentally Preferred Products). EPP certification says that even our packaging for products is environmentally preferred."
Adds Shields: "We're the first to become certified, and hopefully others will follow suit. We believe that certification adds credibility to products and is allowing us to develop a leadership role in the industry. Our retailers can feel good that what they're selling is really green."
--Boreal Water Collection: My best friend, Tammy, always laughs at my method of buying a bottle of wine. If I like the label and the appearance of the bottle, I'm sold. The way I choose bottled water is no different.
Boston-based Boreal Water captured my attention with a number of colorful and uniquely shaped bottles -- pink, lavender, blue, short, tall, and more. I was invited to sample the design of my choice.
Later, as I made my way around the PLMA show floor, I realized that I wasn't the only person who chose the attractive ocean-blue-colored bottle of water to quench my thirst -- but I stopped counting at 50.
--Roba! Dolce Gelato: Grandpa Giacchetta would've declared, "Oh by God, my Janie, itsa the best I've ever tasted!"
Even better than the gelato, perhaps, is the story behind this family-owned Providence, R.I.-based business. Founded by entrepreneur, former rock band member, and author Matthew Olerio, it's one that I look forward to sharing with PG readers in an upcoming Independents Report.
In the meantime, to arrange for a tasting of what I've decided is the world's most fabulous gelato, shoot an e-mail to Roba! Dolce's sales manager, Robert Starr, at [email protected].
--G.K. Skaggs: Headquartered in Irvine, Calif., G.K. Skaggs is a leading importer of specialty beverages. Company president Greg Skaggs discussed with PLMA attendees the increasing demand for private label beverages, especially beer.
On display at the Skaggs booth and available for sampling were a variety of colorfully labeled corporate branded beers, which the company currently distributes to food stores, restaurants, and other businesses.
--The Chocolate Traveler: Well, I devoured the gelato and enjoyed the beer, so then it was time to nibble on some chocolate.
For retailers interested in providing fundraising opportunities for local charities or school groups, I highly recommend The Chocolate Traveler.
The company, operating out of Hollywood, Calif., offers a variety of high-quality European-style chocolates sold in unique travel tins that can be custom-embossed with a company/charity's name or logo.
According to sales manager Raj Madhavan, the tins, if customized, require a minimum order of 2,500 individual units and retail from $3 to $4 each. For additional information, e-mail Madhavan at [email protected].
Finally, seeing truly is believing: A self-proclaimed reading-glasses junkie, I was amazed at the number of companies offering stylish reading glasses. As one vendor, Rich Allen, notes: "Reading glasses are not only a functional item, but they've also become a fashion accessory. Boomers today buy multiple pairs of readers, and we developed our Lifestyles line to suit all of their wardrobe needs, including clean-line readers, professionally styled readers, contemporary designs, weekenders, and more."