SIGNATURE BRANDS REDEFINE SUPERVALU 2004-11-29 (2)

ROBERT VOSBURGH

ROSEMONT, Ill. -- Supervalu is using a new premium tier of private-label products to help redefine itself in a commoditized marketplace.

Craig Espelien, general director of store brand and strategic sourcing for the Minneapolis-based wholesaler/retailer, said moving the company beyond simple "me too" products has entailed a new, devoted top-to-bottom focus on execution and leadership.

Espelien made the comments during the annual convention of the Private Label Manufacturers Association.

"Let's start with being as good as the national brand," he said. "That's been our basic tenet in the store-branding business. We have to be as good as the national brand."

That mantra is no longer relevant, however. Espelien said retailers, including Supervalu, are becoming bolder introducing private labels that fill single-brand categories. For example, some Supervalu stores stock only private label in categories like toothpicks and plastic flatware.

"We have to get to those single-brand categories where we own the game," he said, adding that retailers can also introduce shoppers to private-label commodities like oil, water, salt and sugar by stocking only those under a store label.

"Why is a brand [even] there? You should be providing the consumer with a high-quality [store] brand that ties into the store."

Supervalu has developed a number of identities that cover key categories where its private-label products have an edge, backed up by a brand-like presentation, with sophisticated packaging, colorful names and logos, high quality and strong marketing.

Retailers looking to spur their store position as a destination should invest in signature brands, international products, perishables, organic and health/wellness items and specialty goods, Espelien said.

For example, signature items, "the new premium tier," are consumer-focused, have stand-alone packaging, and have customized quality specifications.

"They're not going to be a 'me too,"' Espelien said. "It's about branding, rather than pricing."

At Supervalu, there are at least nine signature umbrella brands, including Nutriplan (pet food), Cold Cave Creamery (ice cream), and Super Chill (carbonated soft drinks).

"Brands are all about emotional attachment. Is Coke better?" Espelien asked. "Coke and Pepsi are not better than our product called Super Chill. It's the perception that Coke is better, that Pepsi is better."

Each of Supervalu's store names stands alone with a singular identity, and is presented to consumers, on the shelf and in promotions, as a brand.

"So, we don't sell a private-label pet food. We sell Nutriplan," Espelien noted. "We are different, because we have built an emotional attachment."

An identifiable image can often help foster such connections. Supervalu uses Riley, a canine mascot that appears in 40 different guises in Supervalu's private-label portfolio. The icon was developed initially for the company's children's cold cereal line, but has since been adopted by a number of products, such as juice and even over-the-counter medicines.

Supervalu is also building a brand-like approach to promotions. A new campaign scheduled to break, called "I Switched," features the signature brands -- with no mention of price. This breaking away of private label from its me-too lineage takes on new importance as retailers face increasingly hostile competition, from a growing number of venues, including mass merchandisers, club stores, dollar stores and limited assortment banners. While the ideas may be there, as well as the opportunity, the hard part is getting supermarket retailers to implement the changes at the shelf.

"Execution is our biggest challenge," he said. "The single most difficult part is the ground-level execution of any program."

Execution and store-level implementation are based on a number of factors, he added. The product has to be right; likewise, there must be dedicated promotional planning and active price management. Procurement also has to be efficient.

"If we're going to win the game, we have to become more efficient," he said. "It means identifying costs and removing them."