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In a sea of sameness, high-visibility proprietary perimeter offerings indisputably remain the most effective device grocers can employ to sharpen their competitive edge. Enough operators have realized this now, however, that the bar for success has been raised and a new round of one-upmanship is in the works.
Without doubt, the past 12 months have given rise to a bumper crop of signature-brand launches by savvy grocers around the country, including Austin, Texas-based Whole Foods, which struck an exclusive alliance with Dakota Beef; Scarborough, Maine-based Hannaford, which trotted out a premium Inspirations line of bread, oil, meat, seafood, sauces, baby greens, condiments, dressings, and spreads; and Minneapolis-based Supervalu, which introduced the Carlita brand of Tex-Mex staples, including diced tomatoes, prepared chiles and jalapenos, taco kits, and beans.
Schenectady, N.Y.-based Price Chopper Supermarkets, which has carried its own label on a fresh produce line including salads, bananas, citrus, and other items for the past eight years, recently intensified its private label produce program to encompass some 25 SKUs and a short list of top-line products under a Premium Select label.
Salisbury, N.C.-based Food Lion similarly applied additional firepower to its signature-brand portfolio with the new Braidenwood Estates wine imprint, in addition to a successful spring debut of its well-received signature line Butcher's Brand Premium Beef.
Perhaps the biggest news of all in the perishables branding derby was made by Pleasanton, Calif.-based Safeway Inc., which earlier this year kicked off a new store-brand positioning effort undertaken in tandem with its "Ingredients for Life" campaign. The $100 million strategy was designed to "highlight the uniquely superior quality of the perishables and proprietary brands" that the national chain offers exclusively to customers, including Sweetest of the Season produce, Rancher's Reserve beef, and Safeway Signature soups, salads, and sandwiches.
Taken as a composite, this latest generation of fresh category strategies clearly revolves around the uniqueness and recognizable characteristics that the operators are hoping to claim as their own. But some observers say such efforts are still works in progress.
Bruce Axtman, president and c.e.o. of the Chicago-based Perishables Group, confirms that the retail corporate branding front has been rife with fresh department activity. "Yet nobody, in my mind, has got it totally figured out," he says. "Some have done some great things, but it's really still a mixed bag."
Signature-store-brand programs were a long time coming. The majority of food retailers had "severely underleveraged themselves in the past," says Axtman, "with regard to capabilities on the supply side to do things differently in terms of, for instance, procurement methods, particular breeds, and specialized processes. A lot of these types of products were already there, but they simply got filtered out because our industry was so focused on the commodity, and contract buy."
Things began to improve "when retailers finally declared the most effective way to compete was to define themselves with signature, exclusive items and brands," he explains. As this evolution continues, however, corporate branding has increasingly become a high-stakes game, and retailers face the tough challenge of figuring out "how to communicate, not what's important to your operation, but instead to your consumers, be it around a premium meat line or a basic bag of potatoes.
"Previously the sole focus centered on a grade [of meat] or where [a vegetable] was grown. The focus is now shifting to what the product specifically offers. What's its usage? What's the nutrition? Those kinds of things are becoming much more pertinent in the signature-store-brand world."
The good news for grocers is that some fresh suppliers are now beginning to work much more closely with their retail partners to co-market and define the signature brand so that it fits the market better. "We're starting to see new value-added processes, varieties," allows Axtman. "It's still a very new model that makes tremendous sense in a lot of places," he says, but while some manufacturers see it as great opportunity, "others see it as prohibitive for their own brands."
Thanks to the considerable lead taken by wholesale clubs and natural food retailers in the signature private label arena, most traditional supermarket retailers have been forced to at least consider how signature fresh brands can fit into their own market strategy. "All of sudden, the stakes have been raised to the next level," says Axtman. "Retailers do need to respond, because having a general private label perishables program that says 'choice' and the retailer's name will no longer suffice in the marketplace."
The devil, as always, is in the details. Axtman says a successful program has to apply the perishables branding effort uniformly by department and category, and requires organizational changes to enable existing resources to be used more effectively. "Many organizations weren't built to do that, and that's a real challenge," he says.
Making the grade
As proprietary offerings go, meat represents a prime opportunity, thanks to the stratification of different USDA grades and the variety of production components, both of which can help a retailer craft a signature offering. Indeed, faced with record-high wholesale beef costs, retailers are hastening to add more marketing punch to their beef programs. A byproduct of the Wal-Mart effect is that many retailers now fully grasp that they can't be the low-price leader in their respective markets.
This requires meat marketers to be more creative in the fresh meat case and aggressive in their branding to keep their profiles high and stay abreast of consumer tastes that are becoming ever more sophisticated.
A textbook lesson in successful signature beef marketing at retail unfolded last summer at Yoke's Fresh Markets, an employee-owned 12-store operator based in Spokane, Wash., with stores throughout Washington and Idaho. (At presstime Yoke's Fresh Markets had begun construction on a new unit in West Richland in central Washington state. The 56,000-square-foot store is slated to open in early 2006.)
The retailer is well known for its work with local growers and wineries, as well as for Certified Hereford Beef, which Yoke's has been offering exclusively for a little over four years. In the rearview mirror Yoke's executives could see competitors scrambling to catch up, so they decided to turn on the juice.
"Everybody's now caught on to the beef branding game," says s.v.p. Denny York. "So we turned to our ad agency to jump-start our own brand-building campaign for our Certified Hereford Beef program, and we couldn't have been more pleased with the results."
In a consumer landscape cluttered with beef programs, where the strongest awareness is of the term "Angus," York says it was clear Yoke's needed to distinguish its high-quality beef by following a natural progression of the line's already solid connection to consumers. Yoke's played up an emotional link to summertime grilling. The unique campaign included strategically placed billboards with photography of juicy steaks, in addition to memorable headlines such as "Gentlemen, start your barbeques."
The campaign also enlisted media that ranged from television, radio, and newspapers to the clever device of stick matchboxes. York particularly enjoyed the eye-catching matchboxes, which were handed out to every customer who bought a steak. "The matchboxes will serve as a reminder for consumers all year long, when they use them in their homes to light candles, and keep them handy by their fireplaces, of the great beef they bought in Yoke's Fresh Markets."
Of course, Yoke's added a dedicated Web site, wowthatsgoodbeef.com, featuring a contest to win a "king of all barbeques" massive stainless steel grill (after answering a few simple questions about the features and benefits of Certified Hereford Beef). The Web site also furnishes the curious with plenty of additional information about Yoke's signature beef line.
The grocer's external advertising agency, Spokane-based Magner Sanborn, developed a campaign that relied heavily on research identifying men as the "authority" on beef. "Guys love the barbecue -- this is their domain," notes York. "For them it's as much about playing with fire as it is about cooking."
York declares that the campaign, which ran through July and August, was "an outstanding success on all counts," despite the fact that it was launched with potentially dubious prospects at a time of near record-setting high prices and a would-be mad cow disease scare. "We were absolutely thrilled with our red-meat sales this summer, particularly steaks. It did exactly what we wanted it to do by pushing up our meat sales this summer. But we've got to give our agency just a ton of credit. All I told them to do was come up with a campaign to promote our Certified Hereford Beef program and teach the public a little more about why it's so special, and they certainly came up with a program that hit the bull's eye dead-on."
While the campaign's sizzling summer efforts are only at a simmer now, marketing of the brand continues at store level and on billboards, says York. The most important result, according to him, is that "our customers now know they can only find Certified Hereford Beef here at Yoke's. We're not a two-tier program; it's the only beef we sell, and proudly so."