(FNS) -- Private label offerings in gourmet guises maintain a comfortable appeal to lure customers into trial. Attractive packaging, premium flair and cohesive lines of private label products draw customer attention, but it is the supermarket operator's main-street merchandising panache that spurs sales.
This strategy often takes an in-unit turn when it comes to promoting product. In-unit promotions -- sampling, special displays and special volume pricing -- are methods operators across the country are employing to promote their new and reformatted gourmet offerings. Gone is the "stack it high and sell it cheap" mentality of generics. Rather, operators - including A&P, Loblaw International, Safeway and Kroger - are focusing promotional attention within the walls of their stores as they seek to capture the high margins in some low volume specialty categories.
"Across the board, whether that be supermarkets, fashion or other hard goods, the returning interest is in creating a singular brand experience and presenting a signature brand so the store itself becomes an extension of all branding," said Nick Sinadinos, president, Nicholas Associates, a Chicago-based design consultancy that has such market leaders as A&P on its client roster.
"The products themselves have to have a quality perception to get consumers to try them," said Merle Hanneken, president, A. Camacho, Plant City, Fla., a specialty item provider. "To get items to move, retailers have promoted the price advantage of private label." But where gourmet items depart from this strategy is in categories -- such as capers, stuffed olives, peppercorns, upmarket jams or specialty oils -- where there is no national brand toehold, he said.
"There is not a lot of volume in gourmet," said Hanneken. "But the margins are good. A reduction of price may not be necessary, but shelf talkers and featuring the item is." Hanneken has seen a simple on-shelf promotion of almond stuffed olives drive case sales from 60 per week to more than 200. "Gourmet items do not warrant the same medium, but a little push goes a long way."
Traditional promotional efforts continue to be the root of the activities for gourmet items, according to industry experts. Shelf position, eye-catching point of sale danglers and hangers and channel strips help these unique items stand out in the crowd.
"Chains will position their own brands into the best place on the shelf," said Richard Wall, sales manager, Riba Foods, a Houston-based company that produces regional Mexican specialties, including a specialty fire-roasted salsa. "That is the best way to advertise their own brand."
For example, Safeway Stores, Pleasanton, Calif., has its value-oriented "S" label line and continues to deepen its offerings in its Safeway Select Premium Quality line with new products and a gourmet line.
The chain employs red shelf channel merchandising aids to draw customer attention to the Safeway Select offerings in a variety of categories. These private label versions are grouped on the shelves with national brands.
Olives, for example, are grouped above the Select shelf tag with stuffed versions, including almond, garlic, jalapeno and pimiento. Gourmet vinegars are likewise grouped with red wine, white wine and seasoned rice. Salad dressings, including the Select Enlighten fat-free versions, cereals, crackers, gourmet mustards, water, and barbeque sauces are also merchandised in this fashion.
The "Select" red bands can also be found in the frozen section. Again these shelf talkers spotlight consumer's attention to the upscale private label offerings Safeway offers. Belgian waffles, cheesecake and a line of ice cream in pint sizes dubbed Select Great Escapes, are each promoted on shelf and adjacent to the bands. The ice cream line, with flavors including Much Ado About Toffee; Rio Banana Mamba; Canadian Moonlight Maple; Maui Maca Mala Roon and Mighty Miss Mud, were feature priced at 2 for $5 during a recent SN visit. On-case signage promoted the special price.
Adjacency may well be these items' best promotional vehicle. "The days of separate sections for store brands have, for the most part, disappeared," said Mike Klanac, vice president of marketing, The Carriage House Companies, St. Louis, Mo.
The Gourmet Club subset of Safeway's Select line was well presented in the frozen prepared meat category. Within a coffin freezer a multitude of offerings were capped with signage promoting the gourmet club offerings within the Safeway Select Premium Quality touting "Ready When You Are!"
These offerings included beef Stroganoff, lobster ravioli, phyllo dough appetizers stuffed with seafood, Southwestern quesadillas, stuffed baked potatoes and Italian style penne pasta.
Gourmet Club offerings were also found in Center Store with a line of Cook 'n Grill Select Gourmet Club items positioned together among national brand sauces. Safeway presented spicy ginger, honey mustard, honey garlic and plum flavors in the units visited by SN.
Another subset of the chain's premium or gourmet private label line is the Verdi line. These Italian specialties have their own Select-tied labeling and are grouped with their own categories. For example, the Verdi Balsamic Vinegar is merchandised in line with the other Select vinegars. Dry and frozen pastas are also included in the Verdi line. In the frozen case, Verdi garlic bread and five cheese ravioli, five cheese tortellini and Portobello mushroom ravioli are grouped together and punctuated with the red Select shelf stripping.
At the Boise-headquartered Albertson's units toured by SN, shelf presentation of gourmet items was paramount. Most items were side by side with national brands. Pizza shells, for example, were predominately displayed alongside the Boboli brand.
Harris Teeter is another retailer that has deepened its commitment to private label through a premium line. The Charlotte-based operator recently expanded its Premier Selection products, replacing items previously sold under Loblaw's President's Choice brand. This culling is expected to be completed this month.
Harris Teeter has also introduced a line aimed at catching customer's wanderlust. This line, dubbed H.T. Traders, includes pasta, sauces, oils, vinegars and bottled vegetables that have been gathered from around the world. Again, it is in-store activities that top the chain's efforts. During the line's introduction, it was merchandised in open crate-like containers to punctuate the unique items. In-store signage described where the items were found, 4bringing a Peterman's Catalog effect to the supermarket aisles.
"From everything we've seen, in-store sampling for premium lines is critical," said Klanac. "Consumers need to see and taste the difference. Most retailers with successful upscale programs do significant in-store sampling. We've also seen cooking demonstrations used in varying degrees, mostly in perimeter departments and tying in with seafood, meat and produce."
At Seattle-area Kroger-owned Quality Food Centers and Fred Meyer stores the parent company's Private Selection line was introduced earlier this year with a huge sampling campaign.
Today, as customers enter the units, placards boast "Private Selection. Everything Premium (but the price)." Brochures are available at the service counters describing the line's premium quality and money saving.
In the Center Store of a QFC unit SN visited, Private Selection salad dressing, such as Tuscan Garden, Creamy Parmesan with roasted garlic and Raspberry Walnut, occupies five facings among nationally advertised brands. Pasta sauces were likewise positioned with three facings. In the frozen food area, Private Selection's Cuisine Supreme line offers premium items grouped together within various categories and adjacent to the national brands. Within an Italian section, Private Selection ravioli with beef or cheese and tortellini with cheese are each merchandised.
