THREE TIERS FOR PRIVATE LABEL

STEPHANIE FAGNANI

This year, retailers and the private-label programs they offered mirrored each other in more ways than one. Three, in fact, was the magic number, as grocers used their store brands to herald self-assigned designations of being a price, value-added or specialty operator.

Certain retailers, like K-VA-T, Abingdon, Va., pushed the affordability factor of price-impact products. In this case it was the Valu Time label, which was designed to fit in with K-VA-T's everyday-low-price format. Others opted to take advantage of their regional pull, producing value-added items. To that end, Food Lion, Salisbury, N.C., began carrying its co-branded Cheerwine Swirl Ice Cream -- Cheerwine being a popular soft drink flavor in the Southeast.

Then there were the retailers who decided to go after a more upscale palate through premium versions of their store-brand concoctions. Albertsons, Boise, Idaho, for example, rolled out a premium private-label line called Essentia early in the year that included several frozen food items, as well as cookies and crackers.

Brian Sharoff, president of the New York-based Private Label Manufacturers Association, told SN these types of hierarchical classifications are perfectly suited for today's consumers, who shop multiple locations to find the items they are looking for. As store brands will no doubt remain a strong point of distinction, retailers are compelled to decide which platform they wish to dominate and then present that message to consumers.

"As the category matures, retailers need to determine where they belong on the private-label spectrum, and tailor their programs to maximize the sales potential," he said.

Yet, even with these multi-tiered procedures, the power of one could not escape notice. Perhaps in a move to soften the blow of plentiful merger and acquisition activity, Ahold USA, Chantilly, Va., expanded unification plans for its private-label products. The retail giant, which owns several supermarket banners including Stop & Shop, Tops Friendly Markets, Bi-Lo and Giant Food, Landover, Md., added its store-brand Acadia bottled water to the list of items made available throughout all of its operating companies this fall.

And in a similar vein, Wild Oats, Boulder, Colo., decided to revamp its entire private-label line this summer, which included some six labels. Consolidating where duplications were present, the retailer also aimed for a consistent, new label design that provided a marketing umbrella .

All in all, 2003 proved that, like so many other facets of business, private-label is strictly a numbers game.