H-E-B LABELS BUILD ON OWN-BRAND POWER

PHIL FITZELL

SAN ANTONIO -- For decades, H-E-B Grocery Co. here has built up a strong customer following with different private-label products. However, this regional supermarket chain, now with some 225 stores, did little to consistently represent its brand quality through packaging. That's all changing. On Dec. 16, 1991, the company retained Landor Associates, San Francisco, to redesign its private-label line. Nearly 40 months later, the job is still not completed. Landor literally has taken on one of its largest packaging revamps, so far redesigning 350 different products under the H-E-B logo in a first-quality line that still has close to 700 more products in the works. Additionally, Landor has reworked the chain's economy line, called Hill Country Fare, having finished 850 items, again with 1,000-plus products in that range.

Peter Knapp, senior creative director at Landor and based at the company's Hong Kong office, spoke of the early results of this work. He reported that the effects on sales after the first three months have been impressive: Canned vegetable market share jumped by 4%, while margins increased by 33%. Similar results have been experienced in dairy, deli and bread -- all achieved with new packaging on the shelf and with no advertising or other promotional support.

Knapp spoke Jan. 25 in Hong Kong at the World of Private Label in Asia trade show, sponsored by the Private Label Manufacturers Association, N.Y.

According to Knapp, customers were reportedly thrilled with the new store-brand look. For dairy items, they felt that "the colors make it seem fresh and clean," or "the white gives the impression of fresh, pure milk." In the canned vegetable range, some of the comments were: "It looks like you went out to your garden and picked them"; "Home grown (or) straight from the farmer"; "It looks fresh off the vine." Knapp said, "A brand represents a product with a promise." H-E-B, he argued, certainly had built up customer equity with its store brands in the past, but failed to leverage that loyalty with a pledge of quality in the packaging statement. In other words, the chain did not have its own distinctive brand, but just another private-label program or a number of unconnected private labels.

Its packaging was dated, said to Knapp. Some commodity food items under the Village Park label, for example, looked like oil products, according to the design firm's critique. This uninspired packaging was provided by suppliers, using stock vignettes, printed in a rubber stamp fashion.

Under the H-E-B brand, the company has become much more sophisticated and savvy about marketing a brand. In fact, its corporate headquarters issues category or design briefs to Landor for each product, describing what the product is competing against and what should be said in terms of a unique or spirited impression. Knapp describes the H-E-B brand as conveying "extra care and differentiation that is 'only available at H-E-B.' Its quality and guarantee leverages customer equity in H-E-B."

Landor indicated that this client is "ruthless" in sourcing the quality it seeks. In fruit items, for example, the company has found only one supplier of canned pineapples that truly reflects the quality of its packaged-design strategy. Sometimes the company goes all out with a unique item, such as H-E-B 100% hardwood charcoal, using no petrochemicals, but natural hickory and oak hardwood in a briquette form. The packaging, too, is superior: a four-color process slick bag, different from the uncoated stock of the leading brand. In fruit preserves, H-E-B has taken quality a step beyond the leading brand, offering H-E-B More Fruit (more fruit content) in a larger, 18-ounce distinctive square jar.

The H-E-B brand is aimed at either matching the quality of national brands or bettering it, but with prices 10% to 20% below category leaders. The design platform includes proprietary branding across all the product categories, making each category appropriate but distinctive, while maximizing shelf impact as well as a "value-fresh" imagery. This is executed where every category tells a story. Each treatment celebrates what the category is all about. It's a stylized, illustrative approach showing, for example, a cow jumping over the moon or a chicken jumping over an egg. The H-E-B name and a racetrack logo link all products in the range, but without a rubber stamp approach.

The chain also has continued its generic line of basic products (vegetables, dairy, bread, etc.) -- which aim to offer acceptable quality at the lowest possible price. The packaging for this line requires no added cost and no added expectation.

The company has begun to coordinate its new packaging with promotional efforts, tying in the look with ceiling danglers and shelf signs to better acquaint its customers with this new trade dress.