OSHAWA FINDS PRIVATE-LABEL FUTURE BRIGHT

PHIL FITZELL

HONG KONG -- Canadian shoppers' increasing quest for quality products has paved the way for Oshawa Group's premium controlled label, Our Compliments.

Speaking at the World of Private Label in Asia trade show, sponsored here late last month by the Private Label Manufacturers Association, New York, Patrick Kwan, vice president of product development at Oshawa's Horizon International Corp., said shoppers have now "shifted their focus from price more toward quality and value. "Those factors, coupled with vast quality improvements of control label in the past few years, mean that many consumers now find control-label products offer better value than brands.

"They find that because of added value or quality at a much lower price. In Canada, many premium control-label lines also offer unique products, which the national-brand products fail to provide."

Kwan said indications about sales of premium controlled labels in Canada are positive and are likely to continue so in the future because marketing efforts Oshawa [through Horizon] puts behind its labels will be beefed up.

"Many national brands sell not because they have good quality. They sell because of good marketing and extensive advertising. We can do the same thing," he said. In keeping with that outlook, said Kwan, Oshawa treats its Our Compliments label as a national brand: "It's not a private label."

Oshawa's Our Compliments line of 180 stockkeeping units debuted in 1993 and as of late last year became the first controlled-label product sold in every province of Canada, said Kwan. The Horizon operation was established last year with a four-person staff but has now evolved into a 12-member staff.

As of last month, Horizon's efforts have moved from a concentration not just on controlled-label product development and marketing strategies, but also brand marketing on a divisional and national scale. Our Compliments crowns Oshaw's mix of controlled labels, which includes, in addition to the premium label, three brands intended to match national-brand quality -- IGA, Food City and Bonichoix -- plus an economy brand, Smart Choice.

Not all areas of Canada currently have available the full label line, but plans call for full national availability by November.

Oshawa, Etobicoke, Ontario, is a diversified retailer and wholesaler that supplies more than 1,600 stores in Canada, including 716 IGA food stores and 808 independent grocers under other banners. It is also a vertically integrated company with interests in food service, pharmacies, packing, cold storage, dairy and others.

Moreover, Oshawa has 110 corporately owned stores under three banners.