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IN MY OPINION

We've heard a lot of talk about the supposed battle between store brands and national brands. There is even a campaign to say that private-label growth is an illusion. All of this fosters the notion of one vs. the other. That isn't the way we see it at the Food Marketing Institute. The consumer of the 1990s will continue to look for value. Consumers have changed since the 1980s and all of us need

We've heard a lot of talk about the supposed battle between store brands and national brands. There is even a campaign to say that private-label growth is an illusion. All of this fosters the notion of one vs. the other. That isn't the way we see it at the Food Marketing Institute. The consumer of the 1990s will continue to look for value. Consumers have changed since the 1980s and all of us need to deal with this reality. The right question to ask is how we, as a total industry, can give the shoppers of tomorrow the right mix of products to serve their needs for value, quality, innovation and variety.

Store brands provide value and quality to a growing group of shoppers, yet national brands continue to provide name recognition, product innovation and store traffic. Indeed, many of the most successful upscale store brands are provided by the national-brand companies. Both types of products have their own niche in the customers' minds, and neither appears to be a perfect substitute for the other.

We need to recognize that store brands will be part of the mix for shoppers throughout this decade, and that the shoppers, not our buyers or salespeople, will tell us when we get the mix right. The right strategy then becomes a cooperative one in which distributors and manufacturers pool what we know about satisfying our different customer segments. We need to tone down the rhetoric and get on with the job. Recent research carried out by FMI and Dr. Pepper-Seven Up indicates that shoppers look for a mix of national and store brands, and the nature of that mix changes from neighborhood to neighborhood, category to category.

Downscale private-label products attract price shoppers, but do little to build store loyalty. The more successful strategies develop store brands with the full expertise and merchandising skill of the company behind them. As a result, upscale store brands are gaining quickly in popularity with both distributors and shoppers. Everyone in the industry needs to understand this trend and to develop an appropriate corporate response.

The drive for efficiency in our industry has led to a full-court press to implement Efficient Consumer Response for the grocery industry. Perhaps the most dramatic change brought about by this initiative has been the development of innovative new partnerships throughout the industry. It is time to remind ourselves that our first job is to satisfy the consumer. If you are not positioned correctly for the shopper, being efficient won't save the business.

We at FMI would like to see the relationships developed through ECR partnerships begin to explore how trading partners can pool their knowledge of shoppers to understand the mix of store brands and national labels in the marketplace. The intelligent use of technology and its data can take us a long way down that road.

Supermarkets, wholesalers and manufacturers are all under attack from an impressive array of new competitors coming primarily from other industries. The way to win this fight is not to battle with each other, but to join forces in understanding as much as we possibly can about the shoppers of tomorrow and how we can continue to serve them better than anyone else. Changes in our product mix and the way we do business are an inevitable consequence of this approach. This is simply part of the reality of the marketplace that all of us face -- together.

Tim Hammonds is president and chief executive officer of the Food Marketing Institute.