National CPGs look to Chicago's retail space to stoke shopper loyalty

Sky-high grocery prices have fueled growth in private-label brands, but branded consumer packaged goods (CPG) manufacturers are looking to recapture some of that market share as the April Consumer Price Index (CPI) saw grocery prices fall again. And last week, two national CPGs zeroed in on Chicago's retail space to achieve that goal.

Sovos Brands, a CPG collector with an Italian portfolio that includes premium Italian foods brand Rao’s Homemade, last weekend brought its 2,400-square-foot pop-up The Saucery marketplace to 333 N. Michigan Ave. in Chicago, city known for its authentic Italian-American food culture.

“This brand-dedicated market concept is allowing us to go beyond our traditional retail shelves and digital channels to build stronger, more direct connections with our brand fans and food lovers,” Yuri Hermida, chief growth officer of Sovos Brands, told WGB.  

At the pop-up, residents and visitors in Chicago had the chance to “immerse themselves in the Rao’s brand, with the option to sample and purchase a selection that includes new products and our normally online-exclusive, super-premium Limited Reserve line,” Hermida said. 

To spread the Rao's branding message, attendees could take "saucy" pictures to share on social media and they could create personalized labels for their jars of red sauce. 

Chicago is the second city to host The Saucery; the first one was held last year in New York City. 

“Our New York City event was incredibly successful,” Hermida  said. “We welcomed more than 650 consumers in person, and more than 154,000 people visited our virtual marketplace. Right now, our focus is creating the best possible experience for consumers at this location, but we’re always looking to give our customers more opportunities to interact with the Rao’s Homemade brand.”

Launching new CPG products through a limited grocery space format is nothing new to national brands as they look to compete in a crowded marketplace, Ryan Mathews, CEO of Black Monk Consulting and a former journalist, editor, publisher and declared “philosopher of e-commerce” by Wired magazine, told WGB.

“What we are looking at is really a battle of the brands, those offered by CPG companies and those controlled by the retailer,” Matthews said. “Done correctly, pop-ups can bring a bit of excitement and entertainment but, overall, they probably are most effective in terms of seasonal or new items. Trial is only part of the battle. The real payout comes from repeat purchases, and that means CPG brands have to be effectively competitive on the shelve and/or online.”

Mathews added that “as to promotion, retailers see national brand promotion as a way to secure trade funds, and promotions of their own brands as a way to establish differentiation in a market and build consumer loyalty to their stores.”

Vienna Beef Plaza. / Illustration courtesy: Vienna Beef

Vienna Beef Plaza. / Illustration courtesy: Vienna Beef

Vienna Beef is also looking to allow Chicago shoppers the chance to taste new innovations for themselves in real time as the iconic food purveyor announced last Tuesday plans to redevelop its former factory location at 2501 N. Damen Ave. into Vienna Beef Plaza.

The $20 million investment includes a rehab of the property to feature state-of-the-art offices for approximately 50 Vienna Beef employees on the second floor and designated retail space below. The reimagined space will be the go-to destination for a complete Vienna Beef experience featuring a restaurant, outdoor plaza, retailers and Vienna Beef office space.

“Vienna Beef has long imagined what possibilities exist at our former factory location, where Vienna was in operation since the early 1970s. We couldn’t be more excited to see Vienna Beef Plaza come to life,” said Tom McGlade, senior vice president at Vienna Beef. “Vienna Beef is a Chicago company in its heart and at its core, and it only makes sense that there is a place in the city for enthusiasts to come and experience everything Vienna Beef— and Chicago— has to offer through excellent food, fun memorabilia and a thriving retail experience.” 

The 150,000-square-foot development will be home to several other retailers, including a big-box store to be announced at a later date and over 200 parking spaces, the company said in a statement.