SALINAS, Calif. -- Brand names are a familiar sight in the grocery aisles, but they are now also competing for space in the produce department.
While a few notable produce companies have built a brand image around commodity items, it is value-added products that are primarily fighting for customer attention in the produce department.
"A brand is a compilation of positioning, quality and a fresh-tasting product," said Steve Taylor, chairman and chief executive officer of Fresh Express Farms, which bills itself as "The Pioneer in Packaged Salads."
"Coca-Cola stands for more than a soft drink," Taylor illustrated. "It's got history. Coke is 'the real thing.' I believe strongly that branding is critical in gaining the trust of consumers."
Fresh Express is working hard to build a brand image for itself, Taylor said. Besides creating a national television ad campaign, Fresh Express has participated in several co-branding promotions with Hidden Valley Ranch dressing and Perdue Farms chicken.
Currently, Fresh Express is working with Little Caesar's Pizza in a nationwide campaign called "Pizza! Pizza! Salad Special," which includes a free Fresh Express salad with certain pizza takeout orders.
"We're tying in with well-known brands," Taylor said. "It's a way to spread our marketing dollars more. It gives us a legitimacy."
And marketing a brand name is becoming more important for value-added companies.
With the explosion of the value-added category in recent years, retailer shelves have experienced a flood of different brand names and varieties. Too many varieties can confuse customers and dilute the value of a branded product, according to Taylor.
"Now, there are so many new products and new kits that the shelf is getting confused," he said.
Fresh Express recently introduced several new varieties, but the company will probably not bring out too many more in the short term, he said. He would rather allow existing products to find an audience now.
"We're stepping back as a company to see what we can do to give our products a shot," he said. Overcrowding can hurt the entire category, he warned. When a product doesn't get the turns it needs, the shelf-life is affected. If a customer buys a salad that only has one or two days of shelf-life left, that customer may be leery about buying another packaged salad again.
It is up to retailers to judge which brands to keep and which to discontinue, he said. "Our recommendation to retailers is that they need to be careful about how many products they add." There is room in the category for several different brands, though, Taylor said.
"On an item like a Caesar salad kit, retailers may have two different brands. There's an advantage to having a choice for the consumer," he said. "I think we always benefit from competition."
Taylor said he is not overly worried about a shake-up in the value-added industry, as new companies enter the field.
"I don't know if there's going to be a bloodbath. I can't think of a more competitive industry than the one we're in," he said. Taylor said four or five major players have emerged to dominate the packaged salad category, and smaller players are finding a niche for themselves with organic packaged salads or other value-added vegetables. "You've got different companies finding different niches," he said. "They're finding a line they can own." Retailers are responding to new varieties by devoting more linear footage to coolers that can maintain the cold chain and keep packaged produce below 40 degrees Fahrenheit, he said.
"On the upside, retailers are adding space with new builds and remodels," he said. "They are providing better temperature control." While Fresh Express may step back on new product development of vegetables, the company is looking at value-added fruit as the next hot trend.
"We are focused on salads, but we are investigating the possibilities of fruit," Taylor said. Fresh Express is currently test-marketing 5-ounce bags of washed red grapes, as an alternative to chips and other snacks, he said.
Taylor acknowledged that growth of packaged salads may be harming the commodity category. "It depends on who you're talking to, whether you think sales are being cannibalized," he said. "It's win-win for consumers and retailers. I don't know if it's win-win for commodity growers."