A new contender is entering the brawl for brand-name recognition in the produce department.
It's the retailer.
Grower-shippers have been slugging it out, particularly for the last few years, to establish their brand names in the consumers' consciousness. But now, supermarkets are slapping their own labels -- or that of their suppliers and wholesalers -- on the produce in their stores, altering the dynamic in an already volatile trend.
Produce merchandisers, taking a cue from the grocery side of the store, are approaching private label in a variety of ways.
They are concentrating on value-added produce, such as salad packs or precut vegetables, as a hot arena for private label -- at least
in part since the category's explosive growth is what made fresh produce branding more widespread in the first place.
Several supermarket operators are also testing the water with commodity items, such as apples, potatoes and onions.
Some chains are using their private label as a supplement to their existing assortments of national brands.
For others, the chosen path is to subordinate national brand names in favor of marketing their own brands.
The reasoning behind the movement should be familiar to anyone aware of the rejuvenated interest in private label on the packaged foods side of the store.
"Private label is a way to differentiate," said Wally Stauffer, vice president for Shurfine International, Northlake, Ill., a private-label distributor with a produce program.
Shurfine, a full-line buying cooperative, supplies more than 22,000 grocery stores. According to Stauffer, value-added produce is providing steady sales for Shurfine.
"Produce is growing at 30% a year at Shurfine, and has been for the last four years," he said. Stauffer spoke about the phenomenon during a session at last month's International Fresh-Cut Produce Association convention.
For one thing, store brands generate loyalty, said Stauffer. "It clearly differentiates and uniquely defines the retailer," he said. "We still believe our retailers need a brand they can hang their hat on."
Not surprisingly, retailers with strong private-label programs already in place on the grocery side are moving, slowly but steadily, into the branded produce arena.
The IGA store group, for example, has been leveraging its extensive private-label program into the produce department. The Chicago-based network of independents debuted a line of IGA TableFresh commodities in the Northwest last year, according to Pat Sylvester, director of marketing, IGA.
Sylvester said he plans to display TableFresh items at next week's Food Marketing Institute convention, which he hoped will pique the interest of other IGA retailers.
In store branding, IGA faces some unique issues because its network is nationwide, he said.
"You can't have a fixed specification, since it might not be the same in Portland, Maine, as it is in Portland, Oregon. We're kind of grappling with how we're going to do this," he said.
Roundy's, the Pewaukee, Wis.-based grocery wholesaler, is also expanding its well-established private-label program beyond the center of the store and into produce.
Last year, a line of potatoes carrying the Roundy's name debuted in Wisconsin stores, according to Frank Gillespie, corporate produce director.
"We're doing this to give us our own identity. It will be excellent quality," Gillespie said.
The program has been so successful initially that Roundy's intends to add both commodity and value-added items to the line, he said. "We're looking at some value-added items because that's the biggest, heaviest growth pattern," Gillespie added. While he declined to offer any specifics about plans for value-added, he did say Roundy's is also considering private-label apples and onions.
"We're going to develop it slowly, and walk before we run," he said. For its second foray into private-label produce, retailer Hy-Vee Food Stores, West Des Moines, Iowa, is focusing on precuts.
The chain first tried branding two years ago, working with a local processor, to create a Hy-Vee assortment of carrot sticks, celery sticks, lettuce salads and coleslaw. According to Larry Chance, produce director, the program hit met with powerful competition from national branders.
"We backed out of that because of all the national brands hitting the market with low prices. At that time, it wasn't a good plan," said Chance.
Now, however, the precut market has settled down, and all the major players have staked out their territory. Chance said it is time for Hy-Vee to test its own produce brand again.
"We still feel that there's room for a few private-label items, if we can show the customer a good value," he said. The new line will be introduced later this year.
Chance said Hy-Vee plans to market well-established items with a proven track record, such as carrot and celery sticks, and possibly a one-pound lettuce salad mix and a Caesar salad.
For Hy-Vee, a private-label program offers a chance to increase department margins, as well as the opportunity to wield an effective marketing tool, Chance said.
But not with regard to commodities, apparently. While the chain packs potatoes and onions under its own label, there are no plans to expand the private-label activity further into commodity items, Chance said.
"Some of the major names in the bulk produce business mean a lot to the customer," he said. Retailers and other industry sources agreed that quality should be a major concern when supermarkets embark on a private-label program.
"Many times in the past, the private label had connotations of being a second label," said David Webster, director of sales and marketing for Coronet Foods, Lafayette Hill, Pa.
Coronet Foods processes private-label fresh-cuts for several major chains and wholesalers in the United States, Canada and the United Kingdom.
"We feel that the accounts we're working with in the United States have a philosophy that the product has to be as good or better than the national branded products," he said.
"I think the considerations that we find most chains look for [in a processor] are someone that's been in processing for awhile, someone that has complete Hazard Analysis and Critical Control Point programs in place, someone that's inspected," he said. "These are all safety considerations that clearly have more importance than just the bottom line." At Shaw's Supermarkets, quality is the key to an extensive private-label produce program, according to Bernie Rogan, spokesman for the East Bridgewater, Mass., chain. "Vendors have to be very confident of the quality of their product in dealing with us," Rogan said. "That works to our best interests, and to our customers' best interests."
Rogan said that Shaw's program of private-label produce and floral encompasses 1,017 different items, counting seasonal products. "Except for packaged salads and some notable exceptions, all those items that are out there are own-label," he said, using a coinage for store branding that is popular in the United Kingdom.
In fact, Rogan cited the influence of Shaw's parent company, Sainsbury, in the development of the U.S. chain's private-label program. Private label is a much greater factor in the United Kingdom than it is in the United States, he said.
Meanwhile, a competitor to Shaw's, Quincy, Mass.-based Stop & Shop Cos., has adopted a strategy of edging out national-brand names to solely offer products under its store label. Stop & Shop's new parent company, the Dutch retail conglomerate Ahold, is, like Sainsbury, an aggressive store brander.
Harold Alston, recently retired as Stop & Shop's vice president of perishables, had discussed the strategic importance of the chain's store-brand produce in a roundtable discussion hosted by SN.
"We are expanding the [precut] private label very much. We are heavily into private label, and I'm comfortable in saying that the most recognizable label in our store today is our own brand," Alston said.
"If you've got a question of carrying three different labels, the answer is to go with one, and that is private label." Officials at and Stop & Shop could not be reached for further comment.
However, the emphasis that both retailers are placing on private label was obvious during a visit to a Stop & Shop supermarket and a Shaw's supermarket in Milford, Mass., a suburb of Boston.
Shaw's had the more extensive private-label mix, ranging from a Caesar salad mix to fresh herbs to 5-pound bags of Idaho potatoes to turnips.
Stop & Shop's private-label emphasis was clearly on fresh-cuts, including an Iceberg salad, shredded carrots, coleslaw and a soup mix. Several bagged commodity items, including potatoes, apples and oranges, bore the Stop & Shop label. Neither chain has forsaken familiar brands entirely, though. National brand names -- both commodity and value-added -- were clearly in evidence at both stores.