UPDATED PACKAGING BRIGHTENS TOPCO'S DAY

JOEL ELSON

SKOKIE, Ill. -- Topco Associates, the retailer-owned cooperative of private-label products, attributes an 8% to 10% rise in sales of its nonfood lines to newly redesigned packaging.

The company also plans to add 90 stockkeeping units this year, about 75% of which will be new items and the remainder line extensions, said Curt Maki, Topco's vice president of nonfood.

The new packaging and labels were designed to be user-friendly and to draw shopper attention to Topco's 1,700 Top Care health and beauty care items and Top Crest general merchandise. The Top Care name in a green teardrop on the old label has been repositioned more boldly on the carton in an upscale graphic.

Among the packaging enhancements, an e-mail address and a toll-free telephone number to the customer-service department were added for better communication with customers who have questions about the products.

To instill a higher level of confidence in the Top Care and Top Crest brands, Topco repositioned its product-guarantee seal more prominently on the redesigned label. While the products have always had a guarantee, "it was hidden on the back of the packaging," commented Maki.

The new labels also mimic the national brands in color. The Top Care selection of cough and cold and analgesics, for example, "could actually have as many as 20 to 25 different color schemes, because we're going after national brands like Advil, Tylenol, Bayer and others," he added. "We're trying to line up against the national brands."

Maki said the key to building store-brand sales "is making a statement that the products are of a quality level similar to the national brands. Also, the upgraded packaging is no longer plain white and has become more acceptable for a consumer to buy it."

Approximately 75% to 90% of the lines with Topco's new packages are now on retailers' shelves.

"In HBC, we wanted internal analgesics and cough and cold categories completed first in time for the fall cough and cold season. On the general merchandise side, batteries and film were critical since these are pretty big lines for us," said Maki.

In addition to the HBC items, Topco is preparing to launch two new Top Crest disposable-food-storage containers, which will retail for $1.49 and $1.99. They will be introduced as advertised specials for $1.

Maki, who is a pharmacist, said that over the past several years private-label HBC has gained in consumer confidence, especially for internal remedies. This has been partly promoted by the use of generics in the prescription-drug field.

"The health maintenance organizations and third parties dictate the generic version, and this has carried over to the over-the-counter side as well. Consumers are much more accepting of the store-brand HBC," he said.

Also contributing to better sales of store brands, retailers are giving private-label nonfood greater prominence in ads, in-store displays and promotional events that stress value, quality and variety, Maki said.

Topco member chains like Fry's Food Stores of Arizona, Phoenix, and Jitney-Jungle Stores of America, Jackson, Miss., raise awareness for Topco in ads and store circulars that regularly tout the name.

"They carry a very comprehensive selection and promote heavily, including buy-one, get-one-free, 25%-off the whole category and theme events like baby care," Maki added.

Retailers can nearly double their profits on sales of store brands over the national brands. Store-brand nonfood carries 35% to 60% margins, compared with 25% to 35% margins yielded by the national brands, Maki pointed out. Category growth for Topco is projected to come from vitamins, nutritional supplements, herbs and antacids. Another good bet for growth is smoking-cessation nicotine patches, Maki said.

Topco retailers on average typically devote about 160 linear feet of space to HBC, and about 100 linear feet to general merchandise, Maki said.

"Overall, HBC display space seems to be growing as retailers begin to focus on whole-health trends," Maki said. Topco is considering enlarging its offering of Top Care herbals. "When you start looking at vitamins, nutritionals and herbal products, private label has a huge share of that category," Maki pointed out. For the period ended Jan. 3, 1999, private label represented 28.2% of the vitamin category, a 10.2% increase over the previous year, according Information Resources Inc., Chicago.

Maki said store-brand HBC can aid in establishing a retailer's whole-health strategy. "Supermarkets must develop some type of identity in the store, either as a whole-health concept, a natural-store-within-a-store format or a vitamin section with a boutique look," Maki stressed.

He cautioned against just "stacking products on a shelf and letting them sit there like a can of beans. Whole health means a lot of point-of-purchase materials, signage and attractive fixtures."

The vitamin and supplement sections Maki has observed at some retailers "seem a confusing mish-mash."

Topco recently lost two members -- Dominick's Finer Foods, Northlake, Ill., and Buttrey Food & Drug Stores Co., Great Falls, Mont. -- due to industry consolidations. "The buying group is pursuing regional supermarket chains that wish to maintain their identity, but still want to leverage volume and get all the services of the large chains," Maki said.

Currently, 30 supermarket chains own Topco and participate in its nonfood programs.