PREMIUM'S POWER

From cooking wine to canned dog food, premium private-label products are turning up everywhere in Center Store.

Many retailers have embraced the idea of offering products with quality ingredients and upscale packaging. Some retailers are targeting only those categories where a national brand doesn't exist, while others are taking on as many products as they can.

Whatever the strategy, the goal is the same: show consumers that they can get quality products at a lower cost.

For example, Big Y Foods, Springfield, Mass., felt that its upscale World Classics label coffee wasn't the quality it could be, so the company found a better coffee bean. It's now in the process of relaunching the line. The coffee will be sold in both bags and in bulk containers.

"We weren't happy with what we had," said Phil Schneider, Big Y's director of grocery. "We now have a better grade."

In fact, Big Y has recommitted itself to its entire World Classics brand, now three years old. The line is being significantly expanded this year with the addition of 100 stockkeeping units. By year's end, a total of 250 SKUs will be offered, according to Schneider.

Likewise, the retailer is revamping the packaging and design of the line, expected to be out next month, when the company also plans to launch a major promotional program.

Packaging is the first opportunity retailers have to make their premium selections stand out.

Pleasanton, Calif.-based Safeway's Select line, which now has about 400 items, carries the Select premium quality seal, a distinctive graphic.

The line, which is supported with point-of-sale materials, includes several sub-brands, such as Enlighten for healthier foods, Indulgence for dessert and Gourmet Club for frozen, restaurant-quality meal solutions.

Premium packaging can help retailers boost the perception of hundreds of SKUs, said Brian Sharoff, president of the Private Label Manufacturers Association, New York.

"When we put products on the shelf, we have to reinforce brand equity. Retailers can do this by becoming very artistic and creative with how they do premium packaging," Sharoff said.

But this doesn't mean the label's name has to blanket the package, Sharoff pointed out.

"At H.E. Butt Grocery Co., [San Antonio], whether in pasta or cereal, you see a continuity of design. Each product reinforces the [brand] name," Sharoff noted.

Since packaging is the first chance retailers have to get their message across, Grand Union Co., Wayne, N.J., tasked Milton Glaser, a New York design firm, to create a unique look for its Grand Union Premium label. The retailer wanted a logo that would quickly convey to consumers that the product contains premium ingredients.

"We wanted consumers to know, with a blink of an eye, that the content of this package is superior to what you can get in the rest of section," Ned Meara, corporate brands manager, told SN.

Grand Premium, introduced two years ago in beverages, currently consists of 213 SKUs. Although Grand Union's premium line is well established, the chain is considering adding several other products -- possibly maple syrup, chutney or salsa.

All products in the line must meet Grand Union's definition of premium products: unique, different than and superior to, according to Meara.

"We target only those areas where we feel there is a niche," Meara added.

Grand Premium SKUs cover about 16 categories -- mainly specialty foods like fruit spread, honey-roasted peanut butter, barbecue sauces, stewed tomatoes, olive oil and cooking wine.

Other retailers are also focusing on specialty products. Several months ago, H-E-B introduced an upscale salad dressing line in such flavors as robust garlic and toasted pecan blue cheese. The dressings, sold under the H-E-B label, retail for about $2 each.

The success of premium private label depends on the company's commitment to it. Schneider of Big Y, whose three-tier private-label program also includes the Big Y and Value Time labels, said premium private label needs a great deal of attention.

Big Y keeps a watchful eye on its World Classic and Big Y labels in the soda category.

"You have to pay attention with soda," he said. "If Coke and Pepsi are on sale, you have to make sure that your store brand is on sale."

As for trendy categories, pet foods are playing a greater role in the upscale arena. Acme Markets, Malvern, Pa., introduced superpremium dry dog food last year.20And Big Y reports good results with its Paws brand private-label premium pet foods.

Likewise, Oshawa Group, Etobicoke, Ontario, has a sub-brand for pet products in its Our Compliments premium line.

"The Advance line is our answer to Science Diet and Iams," which aren't sold in supermarkets, said Nancy Hall, vice president of product development for Horizon International, Oshawa's marketing arm. She said that the line has done well and has enhanced store-level category performance.

Along with the pet category, upscale private-label products have made an impression on the convenience and snack food categories. For example, Harris Teeter, Charlotte, N.C., added a premium private-label pizza line.

And it is not alone. Many companies are targeting such categories.

"All the fun foods we have do very well," said Frank Rooke, supervisor of private-label procurement at Lanzarotta's Wholesale Grocers, Vaughan, Ontario.

Included under in Lanzarotta's "Our Very Own" label are salty snacks and frozen pizza, frozen onion rings and waffles. Just two months ago, frozen buffalo chicken wings were added.

The wholesaler currently has 78 Our Very Own SKUs, 14 of which are in the frozens department. The line will continue to be expanded until it reaches 100 SKUs, according to Rooke.

Rooke said he continually looks for new products. He is considering frozen meat pies as the next product introduction.

"I look for value-added products at a value price."

Oshawa also has an impressive selection of frozen convenience foods in its premium Our Compliments line.

About 100 SKUs have been added to Our Compliments over the last year, for a total of 500, according to Hall.

One of its most recent promotions was a spring-themed event, which featured private-label frozen appetizers and entrees along with various cleaning products. The chain also ran a barbecue theme, which featured its sauces, marinades and frozen prepared meat.

Hall explained that private-label entries in the frozens category face stiff competition from national brands, since these quick and convenient items enjoy such popularity with consumers.

That is why Horizon strives to develop products that aren't available in national brands. For instance, last year it launched three homestyle casseroles.

Horizon plans to expand the line even further by the end of the year. Though Hall declined to give specifics, she said more products will be added in the fall.

"Our goal is to increase private-label penetration in our market," she said.

Premium private label has come a long way since it was first introduced early this decade. When it debuted, it consisted of a narrow range of products, such as jams, jellies and tea.

Today, however, it is more inclusive, said Sharoff of PLMA, who noted that retailers have recognized that any category can be given premium status.