SAFEWAY REDEFINING ITSELF IN 'INGREDIENTS' CAMPAIGN

Jon Springer

NEW YORK -- The $100 million re-branding strategy announced last week by Safeway will change not only the message the retailer sends to its customers, but also the nature of advertising and branding among conventional supermarkets, Safeway officials said.

In an interview with SN last week, Brian Cornell, executive vice president and chief marketing officer for the Pleasanton, Calif.-based retailer, said Safeway's "Ingredients for Life" campaign aligns a consumer message with Safeway's ongoing business objective of driving sales through revamped stores featuring enhanced perishable offerings and prepared foods. It represents an evolutionary step, he added, because it highlights the store as a broad lifestyle solution, rather than focusing on "price and item" advertising typical of conventional stores.

"This is more the way a consumer goods company would do to support a brand, as opposed to the traditional price-and-item approach," said Cornell, who joined Safeway a year ago from Pepsico. "This is a bold, new direction for Safeway and a bold, new direction for the industry."

The new branding initiative kicks off next week in all Safeway store markets in the West and in Baltimore/Washington, as well as in Safeway's Von's division in Southern California. (The Dominick's, Randalls/Tom Thumb and Genuardi's markets in Chicago, Texas and Philadelphia, respectively, are not part of the initial 12-month plan, Cornell said.) Included during the launch phase will be television commercials aired during top 10-rated shows, such as "Survivor," "The Amazing Race," "The Apprentice" and "CSI," Cornell said. Elements of the effort include revamped radio commercials, billboards, newly painted trucks and a redesigned Web site.

A new graphic element officials call the "Life icon" -- a series of four panels that spell the word "life" over alternating images of Safeway's products and scenes from everyday life -- will be woven through all communication efforts, Cornell said. In addition, Safeway's familiar "S" shield logo has been redesigned. The Los Angeles-based agency Daily & Associates created the campaign for Safeway.

The new campaign is the retailer's largest such initiative in its history and its first since introducing the "Giving Our Best" campaign in the late 1990s, Mike Minasi, senior vice president of marketing, told SN. The effort accompanies Safeway's ongoing conversion of stores to the "lifestyle" format: 142 such conversions had been completed through the end of 2004, with another 300 expected to be complete by the end of the year.

"Some companies in the past have fallen into the trap of refreshing brand identity on a regular basis, while the core business really hasn't changed dramatically," Minasi said. "Our strategic approach was to be patient, deliberate and do the things necessary to fundamentally reinvent the business, then bring it to life branding and communication."

Minasi said the television commercial introducing the campaign will reach 80% of Safeway's target market seven times.

Cornell said goals of the new branding effort include building awareness of new offerings at Safeway stores, and growing basket size, market share and identical-store sales. He declined to cite specific expectations. Similar to the offers of perishables in Safeway's stores, the branding campaign was crafted after extensive consumer research, Cornell added, and ties those elements together.

"The whole positioning around 'Ingredients for Life' is what the consumer's been playing back to us," Cornell explained. "The reinvention work we've done differs us from the conventional players. We believe this is our step to break out of that conventional mode. When shoppers think about Safeway, they will have a very different experience in mind."

Industry observers contacted by SN said they believe the re-branding is a logical move given Safeway's efforts to differentiate itself, but were taking a wait-and-see attitude regarding results.

"This is a proper brand segmentation strategy that is common in Canada and Europe, but hardly ever happens in America except by accident," Mark Husson, an analyst for HSBC, New York, told SN. "Building a brand can take a long time. The message will be most powerful when all the elements come together -- when the advertising campaign, the service, the product quality and store environment -- all work together."

Husson estimated the $100 million campaign was about twice what Safeway spent on advertising last year and would yield a different kind of result than previous efforts. "Retailers have tracked the success of putting items on a circular and on specials in stores. That's a known science," he said. "When you're trying to change people's perception, the goal isn't so much monetary, but positioning and survival in the long term."

Gary Giblen, director of research with C L King & Associates, New York, said he was skeptical that Safeway could live up to its brand promise, noting that carrying out the effort will require cooperation of union employees that have frequently locked horns with Safeway. "It's a perfectly good idea, it's something they have to do, and it's fraught with risk," Giblen told SN. "Rather than competing on the low end against non-union labor, they've chosen to go up against strong perishable operators who are non-union. They're going to have inherent disadvantages trying to do that, too."