Kroger’s Simple Truth better-for-you brand turns 10

The Kroger Co. is marking the 10th year of its Simple Truth own brand with a marketing campaign that will serve up special deals for customers.

But as Kroger celebrates the anniversary of a marquee brand, it may have to tackle some hard own-brand choices later on if its $24.6 billion merger deal with Albertsons Cos. goes through.

Kroger announced the Simple Truth and Simple Truth Organic labels in late 2012, in response to rising customer demand for organic and natural foods and products made without ingredients of concern to consumers. Simple Truth Organic products are certified organic by the USDA, while Simple Truth includes a range of natural products. Both brands are free from 101 ingredients that customers have said they do not want in their foods.

Simple Truth began with 30 product categories—including cereal, frozen pizza, and vegetarian options—and in a phased rollout expanded to more than 40 categories by January 2013. In September 2019, Kroger added Simple Truth Plant Based, sporting a different icon and packaging and including items like fresh meatless burger patties and grinds plus plant-based cookie dough, pasta sauces, sausages, deli slices and dips.

At the time of the plant-based line’s launch, Simple Truth generated overall annual sales of more than $2.3 billion. Now the brand accounts for over $3 billion in yearly sales and encompasses 1,500-plus items, Cincinnati-based Kroger said Wednesday. The supermarket giant describes Simple Truth as “America’s No. 1 Organic & Free From Brand,” with over 30 million households—more than half of Kroger customers—shopping the brand each year.  

“A decade ago, Simple Truth was born when we identified that our customers wanted a simpler way to shop for free-from and organic products,” Juan De Paoli, vice president of Our Brands at Kroger, said in a statement. “The mission we started with 10 years ago remains our promise today—to offer delicious foods that are free from 101 artificial ingredients our customers do not want in their products at an accessible price. During the past 10 years, Simple Truth stayed true to that commitment, making it a customer favorite.”

Kroger's Simple Truth label expanded to include the Simple Truth Plant Based line in the fall of 2019. / Photo: Shutterstock

Simple Truth products are free from 101 unwanted ingredients—including artificial colors, flavors, preservatives and sweeteners—and the brand offers minimally processed meats naturally raised through a 100% vegetarian diet, without antibiotics or added hormones, Kroger noted. Simple Truth Certified Organic products are produced by organic growers and handlers certified by agencies and organizations accredited by the USDA and are free from synthetic fertilizers and genetic engineering. The Simple Truth family also includes household and beauty/personal care products.

To highlight Simple Truth’s 10th anniversary, Kroger is offering customers 10X fuel points on all Simple Truth and Simple Truth Organic purchases with a digital coupon from Jan. 18 to 31. Also planned are Simple Truth special offers, a 5X digital event for natural and organic items, recipes and more new Simple Truth items. Through Jan. 26, customers with a Boost by Kroger Plus membership can get a buy one/get one free on Simple Truth Nuts (6-10 oz., any variety).

Kroger said the “most-loved” Simple Truth items in the brand’s 10 years include organic garbanzo beans, mixed berry granola, organic apple juice, organic creamy peanut butter, organic whole white mushrooms, natural cage-free large brown eggs, organic mixed vegetables, exotic vegetable chips, organic 100% whole wheat penne rigate and organic baby spring mix.

Kroger’s Our Brands roster represents an approximately $28 billion annual business, which executives have said would make Kroger the ninth-largest U.S. CPG company. Overall, the portfolio encompasses nearly 20 brands and offers more than 14,000 items. Four labels are billion-dollar brands, including Simple Truth, Private Selection, Home Chef and Kroger—the latter being the largest by far with sales of $15 billion. Meal kit brand Home Chef joined the billion-dollar club in 2021.

More than 660 new Our Brands items were added in fiscal 2021, followed by another 556 through the fiscal 2022 third quarter ended Nov. 5. And executives say more new items are on the way.

“Our Brands continue to resonate deeply with customers, as sales grew 10.4%,” Kroger Chief Financial Officer Gary Millerchip told analysts in a Dec. 1 conference call on Q3 results. “The outstanding quality and value offered by these exclusive to Kroger products is an important differentiator in our go-to-market strategy, and this is especially true during periods of high inflation,” he said. “Our Brands products are margin accretive and represent a key pillar in our strategy to grow profitability while also delivering greater value for customers.”

Albertsons' O Organics and Signature Select are two of the billion-dollar brands in its 14,000-item own-brand portfolio. / Photo: Shutterstock

In early September, Kroger unveiled a new own-brand line called Smart Way, aimed at budget-conscious shoppers grappling with still-high grocery prices. Described as an “opening price point” brand, Smart Way launched with about 150 products—including food, beverages and household staples—in stores, with more items rolled out in the fall.

“We continue to expand and diversify Our Brands portfolio at every price point,” Kroger Chairman and CEO Rodney McMullen said in the Q3 call. “After launching Smart Way as our opening price-point brand last quarter, we introduced several new Smart Way products this quarter and plan to roll out additional products next quarter. These products are meeting the needs of our customers on a budget, and we’ve already seen 2 million households to purchase Smart Way products.”

Going forward, Kroger may face some tough decisions on Our Brands. The planned merger with Albertsons Cos., announced Oct. 14, would join two strong supermarket own-brand players. If the transaction is approved by regulators, the two retailers would field a combined private-label portfolio of 34,000 products across more than 30 brands.

That could mean some duplication and the need to identify labels to keep and discontinue—potentially including power brands—to realize efficiencies from the merger. For example, Kroger offers Simple Truth and Home Chef in the better-for-you and meal solutions arenas, while Albertsons offers O Organics and ReadyMeals.

The Albertsons Own Brands portfolio spans more than 14,000 items and generated sales of over $15.3 billion in fiscal 2021, when 837 new items were added. The company reported fiscal 2022 Q3 results this week but gave no private-label update.

Albertsons’ roster of about a dozen own brands is led by the Signature product family—including Signature Select, Signature Reserve, Signature Farms, Signature Cafe and Signature Care—as well as O Organics, Open Nature and Lucerne. Of those labels, four are billion-dollar brands: Lucerne, O Organics, Signature Select and Signature Cafe. Open Nature was projected to join that club by the end of 2022. The portfolio also includes the brands Waterfront Bistro, Primo Taglio, Debi Lilly Design and Value Corner.

“At a time when people are increasingly shopping for groceries and eating at home, Kroger and Albertsons Cos. will be better-positioned to relieve the inflationary pressures facing shoppers with a combined portfolio of approximately 34,000 total private-label products across premium, natural and organic, and opening price point brands,” Kroger and Albertsons stated in their merger announcement. “Kroger and Albertsons Cos. have strong track records of providing quality products at great value. The combined company's innovation capabilities, increased manufacturing footprint and expanded national reach will drive improved quality and efficiency, allowing its Our Brands portfolio to accelerate growth and profitability while remaining affordable and accessible to customers.”