United Produces First Store Brand

JULIE GALLAGHER

LUBBOCK, Texas — United Supermarkets no longer keeps manufacturing opportunities on ice.

Instead the retailer has moved production of 7- and 20-pound bags of its store brand Kristal ice from a third-party to its new, ice-making facility.

The product is the first of several corporate brands the retailer hopes to manufacture in-house. Production of existing private labels, like Kristal bottled water, may soon follow suit, Edward Kitten, United's director of manufacturing, told SN.

“We will perform due diligence and research other commodity-type products,” he said.

The retailer decided to get its feet wet with ice since it's relatively easy to produce.

“We were looking for a manufacturing opportunity that was not as complicated as other future ventures” might be, Kitten said.

Still, its 9,000 square foot ice plant, located at its distribution center here, doesn't exactly house a simple operation.

The $4 million production facility uses an entirely automated process to produce, bag and palletize ice. The model is so advanced that the first time human hands touch the product, it's being stocked in-store. Seven employees operate the plant's equipment.

Water quality also sets Kristal ice apart, Kitten said.

While most ice producers blend city water with 100% reverse-osmosis water, Kristal is produced solely with 100% R-O water derived through a five-step purification process. “One-hundred percent R-O is more commonly found with bottled water manufacturers,” he noted.

Further mitigating contamination risks are daily internal quality checks. Water used to produce the ice also undergoes weekly testing by an independent lab.

United is so confident in the quality of Kristal ice, it's begun shopping the product around to outside channels.

“We've built this facility for future growth with the the intention of developing new markets,” Kitten said.

Some schools have already expressed interest.

“We've identified opportunities with some major ice users,” United spokesman Eddie Owens, told SN.

Since its currently just producing ice for United stores, the plant isn't running at it's full — 100-pallet per day — capacity. Instead it's producing 140 tons of ice, three days per week.

Bearing new packaging that touts the ice was made with 100% reverse-osmosis water, Kristal ice hit store shelves in late April and early May. Kristal is the only brand of ice sold at the retailer. Seven- and 20-pound bags sell for $1.19 and $3.19.

Due to seasonal trends and the newness of the product, it's too soon to guage Kristal ice's success, Owens said. The chain hopes to obtain a more accurate read by the end of the summer.

“We anticipate that by selling a higher quality product, people will buy more,” Kitten said.

It may also be too soon to measure the full profit potential United will realize by manufacturing its store brand in-house.

“Once our plant is paid for and we're not servicing that debt, we'll be able to make our product cheaper than paying someone else to do it,” noted Owens. He declined to provide specifics.

United has already gotten some help with funding its facility, from a Lubbock Economic Development Alliance grant.