PRIVATE ENTERPRISE

KELLY GATES

Long established in the Center Store, private labels are starting to have a presence in supermarket fresh foods departments.

In recent years, many retailers have introduced their own branded items into the produce, deli, bakery and meat sections. And while some may only dream of such fresh foods private labels, others like Genuardi's, Price Choppers, Spartan Foods and Bi-Lo, are already reaping the benefits of successful programs.

Two years ago, Genuardi's Family Markets, the 35-store supermarket chain based in Norristown, Pa., launched its first fresh foods private labels. Although the grocer's new private labels premiered in the produce section, the chain now has its own branded items in every department from bakery and deli to produce and meat.

However, Genuardi's approach to fresh foods branding goes beyond the labels on individual fresh food items. Taking a tiered approach to their stores, Genuardi's also branded each department as well. Genuardi's produce section, branded "Fresh From the Farm," offers individually branded items like Fresh From the Farm bagged salads, apple cider and fresh-cut fruit dishes. The retailer's food service departments, including bakery, deli, pizza shop, rotisserie/prepared meals section and sandwich shop, fall under "The Kitchen at Genuardi's" umbrella. Within the deli department, Genuardi's houses a variety of deli meats and cheeses bearing the Genuardi's Own private label.

In the bakery, the chain sells an exclusive line of Sunset Mills artisan breads that are handmade and contain only natural ingredients, a healthy concept Genuardi's consciously integrates throughout the store. The stores also have a specially branded meat department with individual private label meat items.

"Our entire meat category -- beef, pork, chicken and other self-served poultry products -- is labeled 'Up Country,"' said Alan Tempest, director of marketing services for Genuardi's. "And, earlier this year, we introduced a private line of beef in our Up Country department called 'Dakota Reserve.' This beef is an all-natural product like the Sunset Mills breads and many of our other items, staying within the healthy lifestyles of our consumer base and putting us a pace ahead of the competition."

According to Tempest, in its two years of existence, this fresh foods private label program has increased sales and promoted a strong overall brand loyalty for the stores. In fact, Genuardi's expansion into the fresh foods section was a strategic move intended to do just that.

"Part of the formula for increasing sales is to increase the loyalty and bond between your stores and consumers," says Tempest. "Our private labels are what set us apart from the competition. They not only give our consumers great deals for quality products, but they also create a distinctiveness for what we offer -- both from an overall Genuardi's brand standpoint as well as a self-branded product standpoint."

Kansas City's independently owned Price Chopper Supermarkets have also experienced success in the private label arena with a number of exclusively branded items in their fresh foods departments. In 1997, the grocer's 36 Kansas City stores kicked off their own program with the introduction of KC Pride beef in the meat department. As the Kansas City market boasts a solid demographic of beef-eating consumers, private label steak, roast, brisket, ribs and burger were a good starting point for Price Choppers.

In their stores, the supermarkets draw attention to their private label meat items through a conglomeration of ceiling danglers, point-of-purchase signage and circulars featuring their KC Pride meats. To further encourage purchases, the chain provides its shoppers with a 22-page, full-color "30 Meals in 30 Minutes" recipe book. The take-home books include ingredients lists, extensive recipe instructions and color photographs of each menu item. To ensure that every member of the Price Chopper family, from the meat manager to the cashier, helps promote the new KC Pride items, the stores produced an informational training video that was shown to each employee. The video contained detailed information on the cut and quality of the meats as well as samples of the television commercials that would run in the local area.

In 1999, with their private label beef products flourishing, Price Choppers chose to expand their private labels into the deli and bakery.

"Once our KC Pride products were in stores, we took a good look at industry trends and conducted research with our customers to see how far we could take a private label line in the fresh foods departments," said Bill Quade, sales and marketing manager for Price Chopper's independently owned stores in Kansas City. "We found that the category was great for private label and then began introducing other items like our Signature deli meats and Signature pies."

The supermarket partnered with a regional restaurant chain called Tippin's that now supplies the Kansas City Price Chopper bakeries with their new Signature brand pies. In the deli, the stores carry a wide variety of luncheon meats that also bear the Signature brand name. Overall, Price Chopper reports a significant increase in sales and brand awareness as a result of their fresh foods private label program.

"When we kicked off all three programs, the sales and product image went up each time," said Quade, adding the retailer plans to further expand their private labels in their meat and bakery departments by year's end.

Spartan Food Stores, the supermarket chain based in Grand Rapids, Michigan, has a comprehensive private label program, with over 2,000 private label products. Covering every store department, the Spartan name brand program also reaches into the fresh foods sections. The Spartan brand meat products have been in their stores since the early 1980s and Spartan brand deli meats have been on the market for eight years.

"We have about 50 different items in our deli department -- everything from turkey and ham to beef and cheese," said Cheryl Berman, who works in meat purchasing for Spartan Foods. "Overall, in meats we have around 200 different Spartan brand items including bacon, ham, turkey, chicken, sausage, corned beef, beef patties and pepperoni, to name a few."

According to Karen Aylesworth, spokeswoman for Spartan Foods, the chain carries several additional private labels in fresh foods. "We have Spartan brand breads, deli items and meats and another private label called 'Home Harvest' that covers everything from apples to nuts," said Aylesworth.

Along with Spartan's own private label breads, the grocer also owns 32nd Street Central Bakery, which distributes its bakery items to a group of Spartan's and other stores within the Grand Rapids area.

Another retailer that entered the fresh foods private label arena in the '80s is Bi-Lo, the Greenville, S.C.-based grocery chain. The grocer's first entry into this category was with the introduction of a fabricated, produce-inspecting character named Walter. Bi-Lo's produce sections carry Walter's approval and guarantee on a number of fruits and vegetables, creating a sense of comfort for consumers who seek a credible source when purchasing perishables.

"We introduced our Walter brand program in the produce sections in 1987 and followed that a couple of years later with our Gold Star meat program that includes Gold Star branded beef, chicken and seafood," said Joyce Smart-Buchanan, spokesperson for Bi-Lo. "In our deli section, we have Vince's deli meats, salads and rotisserie chickens and in our branded bakery departments -- Southern Hearth Bakery at Bi-Lo -- we sell a variety of Southern Hearth private label breads and cakes."

To promote its fresh food private labels, Bi-Lo has created a fully developed point-of-purchase program for its Walter items in produce. The supermarket's Vince's items are promoted in a variety of ways, including point-of-purchase promotions and even in-store events.

"Vince is a real person who makes personal appearances at our stores," Smart-Buchanan said. "His picture is also posted at the deli, along with point-of-purchase signs for our Vince's brand products."

In addition to signage, Bi-Lo regularly advertises its private label fresh foods in in-store circulars.

In the retail community, enthusiasm for private labels is showing no signs of waning. Last month, the Kroger Co., the nation's largest retail grocery chain, announced the official launch of its own line of private label products. The Private Selection brand can be found in the produce, meat, deli and seafood departments at more than 2,300 company-owned stores in 31 states.

Nearly 300 items are offered under the Private Selection label, and company officials said more products are likely to be introduced in the future.

Though some products have been available in Kroger-owned stores for nearly a year, officials said the company has now achieved the "critical mass" necessary to ensure the long-term success of the brand.

"The Private Selection brand creates value for our customers by offering a wide variety of high-quality products that are an affordable alternative to the leading premium national brands," said Don McGeorge, Kroger executive vice president. "Private Selection is our ultimate loyalty program because customers can buy this premium brand only in our stores."