My friend loves to cook from scratch, and hosts frequent dinner parties to let others sample her delectable creations.
Her last gathering was no exception: succulent bourbon-glazed tenderloin grilled to perfection; roasted asparagus with Portobello mushrooms; and rice pilaf with almonds and dried mangoes.
As much as I enjoyed the dinner, I was more intrigued by what came at the end of the menu: Simply Enjoy's chocolate-covered cheesecake bites.
I wouldn't have known the frozen dessert was a private label had I not seen the empty package on her kitchen counter. I picked up the box and asked her if she knew it was a store brand.
She told me she surely did, and decided to serve it at the party because she's been pleased with other store brands she buys at her local Stop & Shop.
That proved to me that, at least in this case, Stop & Shop parent Ahold USA achieved exactly what it intended to do with the new specialty brand: reach consumers in search of affordable luxury.
Now more than a year old, Simply Enjoy caters to discerning tastes with a wide spectrum of upscale foods, including vodka sauce, gelato, flavored oils and estate coffee. As for its affordability, an 8.5-ounce jar of balsamic vinegar has recently sold for $5.79, and an 8-ounce bag of coated nuts, two for $7.
Along with consumers in search of specialty food, Ahold taps into other consumer segments with a host of other private-label tiers and niche brands. For pet lovers, there's Companion pet food; natural/organic shoppers, Nature's Promise; and Hispanics, MiCasa.
In doing so, Ahold is reaching shoppers who may not have considered private label before, thereby increasing its private-label penetration.
Other retailers are also realizing the value of the multi-tiered, private-label approach. As discussed in the article "Private First Class" (linked from this story), Food Lion has introduced a new three-tiered approach consisting of value, national-brand equivalent and premium brands.
It's also reaching other targeted consumer segments with its new Healthy Accents health and beauty care and Home 360 general merchandise.
Whole Foods also shows its private-label sophistication with a slate of brands including 365 Organic Everyday Value, Whole Kitchen and Whole Pantry. And Target has carved out a distinct positioning in the market with Market Pantry and Archer Farms.
As detailed in Shifting Sales (linked from the Private First Class article), consulting firm McKinsey & Co. predicts that private label could experience a major share increase.
Tiers and niche brands are part of what's necessary for that to happen. But other aggressive actions are necessary. McKinsey said it also requires Wal-Mart to place greater emphasis on private label, and Kroger, Safeway and other leading retailers continue to expand into more private-label categories.
Whether more retailers can drive higher levels of private-label dollar share remains to be seen, but a growing number are headed in the right direction.
