Battle of the brands

The symbiotic relationship between national and private label brands helps retailers better market the produce aisle. By Elizabeth Louise Hatt National brands versus private label. The long-term battle continues to play out across supermarkets nationwide. Aisle after aisle, shoppers stand shelf-side comparing the two, making sure they are getting the most for their money. While consumers may not look too closely to many of the brand names in the produce aisle, the national publicity, along with the new product innovations that brands bring makes them key players in driving sales—of both branded and non-branded items. Industry observers say national produce brands also provide consumers with expanded purchase options. “By offering both a private label option and a national brand you are meeting the needs of all types of shoppers instead of a one size fits all,” says Seth Pemsler, vice president of retail/international for the Eagle, Idaho-based Idaho Potato Commission (IPC). “Private label has evolved dramatically in the course of the past 10 or 20 years. Consumers used to buy it because it was cheap but now it can be considered on par with manufacturer branded options a lot of times. However, it still has the halo effect of being perceived as a lesser value. Having a brand gives consumers who are not sold on private label—which I would say is probably half—an option. Brands are critical.” Of course the hardest place in the store to promote national brands is the produce department. Most consumers’ decisions over which piece of produce to purchase are based on ripeness and quality; rarely do shoppers even notice the item sticker, not to mention the brand, say observers. That does not mean brands do not have influence. “It’s always been harder in produce because many of the categories aren’t branded,” says Pemsler. However he believes that grocers are learning that in the produce section brands sell and that offering them has value. Observers say brands also offer the perception of more variety. “Brands give consumers the impression [that their produce comes from] different places and different growers. So if they don’t like one product, they will try another with an open mind,” says Addie Pobst, import coordinator for CF Fresh. The Sedro-Woolley, Wash.-based grower successfully sells under both its Viva Tierra brand of organic produce and private label, supplying organic apples to Trader Joe’s, a store brand as well-known as many national brands. Pobst says retailers offering branded organic apples can help boost the organic genre of products. “It reaches consumers who have brand loyalty and may not have bought organic otherwise,” she says. “Both sides [private label and branded] are growing from what we see. The end result? Retailers and growers sell more apples.” It is no secret that the branded players keep the industry on its toes, leading the way with innovations and ideas. Large R&D budgets and national publicity campaigns provide brand name companies with the opportunity to pave new paths in their product category. “Ninety percent of the innovation is going to be done by branded companies,” says Pemsler. “You can innovate in private label but the companies that do only private label are—because of costs and the drive to reduce costs in order to sell at a cheaper price—less apt to invest in new technologies. They typically follow.” Branded innovation Innovation is typically more difficult to pull off within the produce department. That does not mean innovation is not happening. For example, The Garlic Co. has focused its innovative efforts on convenience. The latest product the Bakersfield, Calif.-based company is promoting is its vacuum-packed, whole-peeled garlic and vaccum-packed, diced garlic, an item exclusive to the company. “It is very convenient because the vacuum-packed product doesn’t have to be cracked or peeled,” says Corinne Pettit, retail sales manager for The Garlic Co. “What we’ve learned in the category is that the consumer uses different forms of garlic for different needs. If they are in a hurry and want some garlic flavor, they like to use a jar of garlic that they can open up and scoop a spoonful out. If they want a stronger flavor, they buy it fresh. Our whole-peeled garlic product has been a mainstay in the food service industry for more than 20 years.” Also designed with convenience in mind are Ready Pac’s Bistro Bowl Salads. In order to stay ahead of their competition, officials for the Irwindale, Calif.-based company say they are continually creating new salad varieties. “Our Bistro Bowl Salads’ are constantly being reinvented with new products and new flavor ideas to keep consumers coming back for more,” says Tristan Kieva, director of marketing for Ready Pac.  “We want to make products that are selling well easily available for shoppers in a hurry.” For example, Ready Pac just launched a new Smokehouse BBQ Style Ranch Salad, which has smoked BBQ chicken breast, Monterey Jack cheese with fiesta peppers, fire-roasted super sweet corn, black beans, shredded carrots, tri-colored tortilla chips and barbecue ranch dressing on a bed of romaine and iceberg lettuce. Without packaging, differentiating between brands and growers becomes a challenge most shoppers do not care to embark on. This is especially the case as more stores are trending toward a fresh-picked look with wooden, nondescript bins. Standing out Segmentation is observers’ number one recommendation for showing off a brand. They say clear descript signage or a standalone bin helps direct consumers to the branded option. “We tell retailers to always put the Idaho seal on their signage. Expect the consumer to search for a sticker and they may not take the time, but they will always glance at the sign because they want to know price,” says IPC’s Pemsler. Some growers are developing brands for particular varieties of fruit—along with standalone displays and branded signage. Colombia Marketing International (CMI), for example, has created brands for each of its Ambrosia, Kiku and Kanzi apple varieties, its Grapple Program, Sweet Julliet Apricots and Daisy Girl Organics. “These programs have done fairly well because they are specifically tuned to consumers looking for a point of difference—different flavor profile, different look, etc.,” says Bob Mast, vice president of marketing for the Wenatchee, Wash.-based company. CMI developed its Daisy Girl brand, created to target “those on the fence,” says Mast. “Retailers’ organic consumers are going to buy [organic apples] whether there are fancy graphics or not. The people on the fence have to be lured in with a fancier, more colorful look.” Instead of maintaining an on-trend all-natural, cardboard look, the brand sports bright blue graphics with the image of a barn in an orchard and a yellow dress hanging on a clothesline. “We tried to make the graphics high color to really catch consumers eyes and appeal to the emotions of the consumer. We never show who Daisy is so shoppers can envision it to be their granddaughter, daughter or wife. We want to show that growing organics is a healthy thing,” says Mast. “The program has worked very well. The program has grown significantly over the last three years.” Ready Pac also depends on its bright color design for brand recognition. The company recently experimented with a graphic redesign on a few of its more popular salad items. Ultimately they decided to stick with the original. “Consumers recognize our bright color palette—and they shop based on color,” says Kieva. “The Ready Pac diamond may be an enduring symbol of quality, but our bag, bowl and container labels provide the consumer with an easy roadmap for finding the fresh-cut produce they want to take home.” Differentiation can also mean finding a new location completely. The Garlic Co.’s Pettit suggests retailers promote garlic closer to tomatoes and avocados in addition to its traditional place next to the potatoes and onions. “Often, if people are buying tomatoes, onions and peppers, they are making salsa or spaghetti sauce and we want them to think of the garlic too,” she says. “It would also be neat to have our vacuum-packed, whole-peeled garlic cross-merchandised in the meat department near the roasts. The packaging is real clean and can stand on its own—there wouldn’t be loose produce lying around.” Playing up the “local” factor has also worked for The Garlic Co., which is known for offering California-grown garlic. “Country of origin is very important to consumers lately. Occasionally we’ll source garlic from Argentina and Mexico to fill in the gaps and people notice. We get letters from consumers saying they are used to buying California from our label and want to know why it changed,” says Pettit.