SAN DIEGO -- Private-label programs are proving their potential to jump-start produce business and build customer loyalty, according to officials from two top chains.
Executives from Stop & Shop Cos., Quincy, Mass., and Harris Teeter, Charlotte, N.C., last week outlined how their private-brand efforts in produce are fueling volume gains and underlined their further expansion efforts. These testimonials are notable because a large number of supermarkets are still without well-established private-label produce programs covering a range of items from fresh cuts to bulk products.
Addressing a workshop at the 46th-annual Produce Marketing Association Convention here, these executives said private-brand efforts are creating an impression of high quality and consistency for the stores and putting the chains in control of their own destinies.
At Stop & Shop, the 74-item store-brand produce program will shortly add products that include precut salads and new salad mixes, and will even introduce specifications higher than those of national brands, according to Harold Alston, vice president of perishables sales and procurement.
At Harris Teeter, the private-label produce effort will embrace more convenience items and attempt to better market products through a variety of approaches with signs, said Mark Hilton, director of produce and floral.
The executives stressed that packaging design and relations with suppliers are crucial factors that can make or break a private-label program.
Others speaking in the workshop, titled "Private Label Packaging," included Don Sieling, value-added marketing manager at Tanimura & Antle, Salinas, Calif.; Greg Flood, vice president of sales and marketing at Fresh Choice Produce, also Salinas, and Andrew Siegel, director of business development at Custom Cuts, Milwaukee. The moderator was Ronnie De La Cruz, president of De La Cruz Consulting and Training, Salinas.
Stop & Shop's Alston stressed that private-label produce is "a subject very high on my list of priorities for a high-quality supermarket."
The chain's 11-year-old private-brand produce program encompasses a wide range of items, including dried fruit and bird seed, bag fruit, prepared vegetables, potatoes and a few salad mixes.
Stop & Shop has achieved its goal of creating a consistent brand look and will now build the assortment and even edge up in quality. "In the future we are looking to expand our offerings even further," he said. "We are presently working on, and will shortly have, two precut salads and a fresh cranberry. Iceberg lettuce will be launched, to be followed by additional salad mixes of the European type.
"We will continue to source additional items and even create items with specs higher than national branded products. I'm talking about premium products that would carry a higher retail and a guarantee of satisfaction."
Alston predicted that industry private-brand programs will reach new heights of quality and take advantage of scientific breakthroughs.
"To achieve a higher quality level, genetic varieties will be developed along with the packaging technology to maintain the high quality level," he said. "This development will be pushed by supermarkets seeking a competitive advantage."
Harris Teeter's program has been boosted by careful attention to detail in product selection and packaging, Hilton said.
"Our items are achieving substantial growth and we'll continue to grow this," he said.
The chain has dubbed its produce program "Harris Teeter Premier Selection." There are currently about 20 products and the chain will add about 10 more in the short term, Hilton told SN.
Among the two-year-old program's products are vine-ripened tomatoes; bags of potatoes; bags of prewashed, ready-to-eat spinach; stickered, tree-ripened fruit, and cider in the juice and melon bars. Also included is the chain's fresh-cut fruit program, executed in-store with a one-day shelf life.
Colors on bags play off the produce inside. Harris Teeter has complete control over what messages are placed on the bags. These include messages about the industry's 5 a Day program, product recipes and Universal Product Codes. The chain will now focus more attention on getting the message out to consumers. "Up to this point we have done a great job with the development of products," Hilton said. "But now we need to work more on marketing."
This new direction will stress use of in-store signs: window banners, hanging signs in the produce departments and stand-up message boards. The latter will stand 6 feet tall with three sides. Two sides will carry messages about the produce and the third will hold a chalkboard that enables the store to change features daily. All of the messages will focus on quality of the product.
Hilton said he admires the private-label execution of European retailers and will borrow from their strategies.
"They do a great job in telling consumers -- right on the package -- how items should be prepared upon getting home. There's no mistaking that quality and convenience are part of their private-label message. So we'll look more into ready-to-go types of items on the convenience and value-added side."
In other presentations, Tanimura & Antle's Sieling predicted that fresh-cut private-label programs will continue to make gains industrywide and feature more sophisticated advertising and promotional moves. Fresh Choice's Flood stressed that stores are getting proprietary products, total control over program design and the opportunity to gain customer loyalty and higher margins.
