Inside Albertsons' 'Powerful' Private Labels

With the goal of showing how “powerful our brands are and how they contribute to our company’s overall success,” Albertsons EVP and Chief Merchandising Officer Geoff White, along with other company executives, participated in a special Albertsons Insights presentation for investors earlier this week, during which the Boise, Idaho-based retailer explained how its own brands portfolio is positioned to drive sales growth.

Geoff White

“Our team’s aspiration is really to be the reason our customers choose to shop with us,” said White, according to a Sentieo transcript. “And we have positioned the portfolio to drive sales growth, and it has done that by outpacing the market for three consecutive years." This translates, White said, to a margin that is 1,000 basis points better than Albertsons’ national brands. “We are absolutely winning with our customers with thousands of high-quality items across hundreds of categories and the key growth driver in many of these categories.”

One reason for the team’s success in building a $14 billion own brands business is that it’s built like a CPG with a customer-first mindset, said White. Additionally, the team is focused on innovation, total omnichannel and providing products for all customer segments and lifestyles.

“We position it as a growth engine vs. just an entry-level price point,” said White of Albertsons' own brands strategy. “And it has incredible breadth and depth to drive that growth.”

The portfolio includes Signature Select, its mainstream grocery brands; Signature Cafe, its deli foodservice brand; Lucerne, its more than 100-year-old dairy brand; and O Organics, a line that recently expanded to include its first nonfood item with the addition of O Organics laundry detergent. The grocer has also expanded into nonfoods with its Open Nature brand, adding pet and health and beauty items like sun care and oral care.

“In the last four years, we have consolidated down to nine power brands, really helping us with brand awareness, and then a full remodel of our packaging from a typical store brand to a design that now competes in every single category,” White said. “And our brands are powerful enough to carry a category.”

Albertsons further reports that its Own Brands represent close to 50% of all categories across the store, with some categories outpacing total market growth.

For example, in packaged salads, Albertsons has close to a 50% share in the produce department. In dairy, the grocer’s store brands dominate, accounting for more than 60% share in its dairy cheese program portfolio. In frozen pizza, where Albertsons offers on-trend options, including Signature Select pizzas and Open Nature Cauliflower Pizza Crust, its store brand is No. 1 in the category.

“Our Own Brands is a key component in driving customer loyalty and satisfaction,” said White, who added that 100% of its most loyal customers have Own Brands products in their baskets. “The Own Brands customer is incredibly valuable to us as well,” he continued. “These shoppers make 16 more trips a year and spend over $560 more during that same timeframe.”

Albertsons is also looking to expand its store brands presence in the meals game. “Own Brands will also play a key role in our meals initiative using our state-of-the-art culinary center, staffed with expert chefs and product developers, driving innovation and partnering with key suppliers to launch meals across every shoppers budget,” said White.

Company President and CEO Vivek Sankaran shared similar sentiments during an investor call last week, saying, “We are going to get into the meals business.”

With plant-based alternatives popping up everywhere from fast food operations to restaurants to grocers’ meat and dairy cases, Albertsons is also keen to extend its options in the category. It currently has more than 50 plant-based items in its own brands stable, with “tons of innovations still coming in the future in dairy, meat and bakery,” said White.

For Albertsons, White said, its own brands portfolio also provides a “key anchor” for its sustainability initiatives.

“We have a robust responsible seafood policy and program that leverages third-party partners and a software traceability system to ensure our products meet our policy,” White reported. “We are well on our way to reaching our goal with our Waterfront Bistro and seafood items that are already 100% in compliance with our policy. These items qualify for our Responsible Choice logo, which we’ve rolled out to help customers identify our most sustainable seafood products.”

But it's not only a focus on the customer and innovation that has accelerated Albertsons’ store brand program. White said the team has also been built for speed, with the ability to launch a product from idea to shelf in just 20 weeks.