DARE TO BE DIFFERENT

ROSEANNE HARPER

In a business where differentiation is the name of the game, signature products and proprietary brands in the deli/food-service department can spell success in the blueprint for growth, retailers and industry experts told SN.

More than any other department, the deli can establish the "fresh" theme and build repeat business, they said. A successful program increases total store sales by bringing customers in more frequently, fashioning an image of quality and freshness for the company, and strengthening customers' trust. In addition to all that, these products can command higher retail prices and higher margins.

Grand Union Co., Wayne, N.J., has been very successful with a proprietary Laurent brand brie cheese and a line of tortilla chips under its Grand Premium label, in its deli/cheese shops, officials said.

"They both perform very well for us. Whether it's under the Grand Premium brand or another, like in the case of Laurent, the important thing is we've established a quality product in the mind of the consumer and it's an exclusive for us," said Joe Salvatore, vice president, service departments merchandising, for the 217-unit Grand Union.

"That brings people back," he added.

While the name Laurent doesn't tie into the Grand Union name, customers know it is an exclusive at Grand Union stores, Salvatore said.

"That's because we've developed it over a period of time." He explained that over the years, the brie -- produced in France under Grand Union's specifications -- has been promoted in the chain's ad circulars and in-store as "available only at Grand Union."

The tortilla chips, introduced more recently, carry the chain's Grand Premium private label, which is found throughout the store.

Meanwhile, Morton Williams Associated Supermarkets, Bronx, N.Y., has found a simple logo sticker that says "Morton Williams" has done wonders for deli/food-service products in the self-service case, boosting sales "very significantly." The nine-unit retailer believes it has even affected its catering business.

"[The logo sticker] keeps reminding customers every day that our deli products are fresh, that we make them ourselves. That builds trust, and makes them more inclined to try our catering," said Avi Kaner, vice president of the nine-unit retailer that operates stores in Manhattan.

Some chains, like Haggen, Bellingham, Wash., have reached beyond quality to include exclusive lines that have particular panache. Haggen, for example, has made an arrangement with celebrity TV chef Graham Kerr to sell salads made from his recipes and promote them as such.

A source close to Haggen told SN that Kerr developed the recipes for Haggen and its Tops Markets, and gave the chains exclusive rights in its market area to attach his name to the products. Sales have been so good that the Kerr-created menu was extended just before Christmas to include a dip and a spread, and other items will be added later this year, the source said.

Retailers told SN that their private- or proprietary-label products give them image-building power, since they are made by them or to their specifications by an outside source. But some industry experts said supermarkets are not using the strategy as effectively as they could be.

"Private label in deli is so misunderstood, it's pathetic. It's one of the few ways to get a competitive advantage. You have to balance it against the national brands, but it works," said Jim Riesenburger, managing partner in Riesenburger, Leenhouts & Associates, a Rochester, N.Y., consulting firm.

"There's a price point advantage, too, because you're not paying for the national brands' advertising, and it gives you the opportunity to create your own nutritional profile. The big opportunity for growth is in anything that's 97% to 99% fat free. We're working on an all-natural line of deli meats right now for a chain on the West Coast," Riesenburger said.

The healthy aspects are what brought Haggen and Graham Kerr together. In fact, Kerr -- a Haggen customer -- told SN that he approached Haggen to see if they wanted to offer a line of deli salads that would be lower in fat and still taste good. He subsequently developed recipes that Haggen associates use to make the salads.

Today's consumers want to know that items are made fresh, or at least that they're not filled with a bunch of preservatives, and that creates a hot opportunity to get an edge with a tailor-made product, one retailer said.

"Our prepared foods are great. We want to be sure people know we make them ourselves. So our logo sticker goes on all [foods] that are packed up [for the self-service case]. We rely on repeat business and this brings customers back," said Kaner at Morton Williams.

Morton Williams' customers by now equate the company's name with "fresh," Kaner said. Morton Williams' wrap sandwich program is a case in point. After having an outside source make them for a while, the company started making the wraps in its own kitchens, and attached a gold-bordered logo seal that says "Morton Williams" on each packed sandwich. The response was immediate. Sales soared, Kaner said, and he added that there was no mistaking what caused the difference.

"When we had an outside company making them, we had tried using their name on the package and then we tried it without, but it wasn't until we started making them and putting our logo on them that we saw a very significant jump in sales," he said.

The idea is to keep customers coming back for those items that tickle their taste buds. And the way to ensure that is to see that it's a product they can't get anywhere else, Kaner said.

And Russell Vernon, president of West Point Market, Akron, Ohio, heartily endorses that strategy.

"We work to become -- in the minds of our customers -- the only retailer who does what we do," Vernon said. The actual propriety brand or name of the product is the least of it, he added.

Proprietary brands, yes, but signature products also, even without a brand or a catchy name earn their keep with quality and taste, he said. They definitely have the power to make deli a destination department, and that's what it's all about, Vernon said.

At Quillin's, LaCrosse, Wis., a proprietary label is affixed to only "very select items" because it designates the very top of the quality spectrum, officials said.

"Our private-label Emerald Gold ham is a destination product both in the meat department and the deli. And we expect that when customers come in to get it, they'll buy the mashed potatoes and baked beans and mustard to go with it," said Pat Tierney, meat coordinator, at Quillin's.

Tierney, like Mike Eardley, vice president of perishables and D&W Foods, Grand Rapids, Mich., sees private label signaling quality.

In an earlier interview, Eardley said that "private label is not about price." Instead, it's about differentiating with a high-quality product that a retailer can use to boost its image, he said.

Tierney said Quillin's chose the name Emerald Gold specifically because the two words themselves connote quality.

"We have a lumber company here that's called Brand X lumber. Now that says to me it's a discount store. But Emerald and Gold say just the opposite and we do connect the Quillin's name to it. Labels say Quillin's Emerald Gold."

Tierney said that only three products -- hickory smoked ham, frankfurters and chilled pizzas -- carry that brand designation at this time.

"They're select, the best quality. We don't want too many because then the name becomes almost generic," he said, pointing out that it's not the brand that's so important, but the quality of the product.

Most retailers who talked to SN agreed. They said if their names goes on it, a product has to be one that will enhance the company's image.

"If you're going to put your own brand on it, then you should either make it yourself in-store or at a central commissary or have someone make it to your specifications. I don't believe in opening a tub of salad, putting it in smaller packages, and then putting your label on it. That indicates you had something to do with making the product," said Elton Reid, director of perishables, for Busch's, Ann Arbor, Mich.

"It's an integrity issue. You can make [a proprietary brand product] another way of enforcing the trust you've developed with your guests," Reid said, but he added that it must be a superior product that the customer can't buy anywhere else.

Busch's uses the umbrella label, Josephine's Kitchen, for prepared foods it makes in-store or in its central commissary.

One consultant said the time is particularly ripe for tailor-made products because so many salad companies have compromised the quality of their products to compete better in the price game.

"Not only has the quality been affected, but the constant low-pricing of commodity salads makes it a difficult category. Consumers aren't used to different tiers in salad pricing like they are for deli meats," said Stephan Kouzomis, president, Entrepreneurial Consulting, Louisville, Ky.

He explained that, for that reason, it's difficult to get a decent retail for a signature salad. It requires convincing customers to try it, he said. Whatever the product, it needs to be sampled and advertised, Kouzomis added.

"If it's your own oven-baked turkey, it's necessary to tell customers that in pure advertising fashion. Maybe with four-color photos of a turkey and tell them it's all-natural, like it came from their Thanksgiving table."

Another consultant, Marcia Schurer, president of Culinary Connections, Chicago, said the priorities in developing a brand or a signature product should be quality and consistency. Then, further brand development could be approached.

"It has to taste good and it has to be fresh," she said. "The consumer doesn't care what you call it. Quality is the key. Anytime you have a proprietary brand with quality to match, it appeals to customers, no matter what the product is."