SpartanNash readies launch of new premium private label

Grocery distributor and retailer SpartanNash is delving deeper into the premium private-brand arena.

Plans call for SpartanNash to launch Finest Reserve by Our Family—a new upscale label in its OwnBrands portfolio—in October, according to Jefferies food retail analyst Rob Dickerson. In a report on his visit last week to SpartanNash’s Food Solutions Expo in Grand Rapids, Michigan, he said a collection of wines from California are slated to be among the first Finest Reserve items rolled out, he said.

“Building on the OwnBrands equity, Finest Reserve by Our Family is the first foray into premium private label, launching categories in October 2023,” Dickerson said in his research note. “Finest Reserve differentiates itself from standard private label through sourcing ingredients such as [those in] national premium brands.”

A spokesperson for SpartanNash confirmed the impending launch of Finest Reserve but said the company doesn’t plan to release more details about the new brand until its official debut this fall.

SpartanNash has positioned OwnBrands as a linchpin of its accelerated growth plan, announced in November at the company’s first Investor Day in Manhattan’s Times Square. The distributor/retailer said at the event that, by 2025, it aims to top $10 billion in total sales (or 12% growth from a 3% compound annual growth rate in 2021)—a target nearly hit in fiscal 2022—and exceed $300 million in adjusted EBITDA (or 40% growth from a 9% CAGR in 2021).

To that end, SpartanNash is looking to grow OwnBrands penetration by more than 20% with the launch of over 1,000 new private-label products by 2025. The company reported at Investor Day that it had boosted private-brand dollar and unit share for 17 consecutive quarters.

Another fledgling brand, Fresh & Finest by Our Family, has continued to expand since its launch in late 2021, the SpartanNash spokesperson said.

Fresh & Finest focuses on fresh and prepared foods—spanning the bakery, deli, meat and produce departments—that offer customers both “indulgence and convenience,” according to the company. The premium brand is distributed throughout SpartanNash’s Midwestern trade area. At Investor Day, the company said more than 480 Fresh & Finest items had been introduced year-to-date.

“In an environment when consumers are time-starved, we are providing solutions that offer value and convenience. We are enhancing the shopper experience by, one, harmonizing banner brands and e-commerce sites to improve shoppers’ omnichannel experience, with an emphasis on digital promotions; two, broadening local vendor relationships to deliver unique homegrown products; three, creating personalized value experiences through loyalty offerings; and four, tailoring our OwnBrands products based on shopper preferences,” CEO Tony Sarsam told analysts in June in a first-quarter 2023 conference call. (Call transcript provided by AlphaSense.)

Sarsam also cited a strong performance by Fresh & Finest. “We are also amplifying our indulgence and convenience offerings,” he said. “I want to provide an example of why I am so excited about these programs: Our freshly prepared, value-added produce sales are up almost 50% year-to-date. This is an incredible accomplishment.”

In his report, Jefferies’ Dickerson said a visit to SpartanNash D&W Fresh Market and Forest Hills Foods stores in the Grand Rapids area showed “aggressive price points” for private label and that Fresh & Finest “has been a great velocity offering for the stores.”

SpartanNash has noted that its core Our Family, Fresh & Finest and Freedom’s Choice (military commissaries) own brands reflect consumer research and loyalty program insights.

“We’re creating solutions that really win for consumers, and that includes things like OwnBrands, our private-label portfolio, which continues to grow at rates that are 50% more than our overall business, or more,” Chief Financial Officer Jason Monaco said in the Q1 call. “We continue to create solutions in our deli and our fresh business, in which we saw 50% improvements in prepared and cut fruits and meals, where folks can come in and have something done for them in lieu of perhaps dining at a restaurant. So we’re looking at the marketplace and finding a way to win.”