Kroger recasts its brand

Emphasizing its grocery retail heritage, The Kroger Co. has unveiled a new logo and brand identity that the company said reflects its “food first” culture.

Kroger said Wednesday the rebranding is shaped around a new slogan, “Fresh for Everyone,” to convey the supermarket giant’s commitment to providing customers across its 20-plus retail banners with access to “fresh, affordable and delicious food.” The Cincinnati-based company said the “fresh” focus also portrays the Kroger name as a “uniquely egalitarian American brand.”

The redesigned Kroger logo, meanwhile, retains the elongated “K” and “G” of its predecessor but in a more contemporary, streamlined font with blue letters. Kroger said blue will remain its signature color because it “represents the Kroger brand heritage of food savvy and signals safety and trust to customers.” A brighter, modern color palette will accent the new logo in branding efforts, the company added.

"Kroger's new brand launch is a unifying framework for our seamless shopping experience that is designed to deepen our connection with customers and associates today and into the future, support our business transformation and provide an elevated creative approach," Mike Donnelly, executive vice president and chief operating officer at Kroger, said in a statement. "Kroger chose ‘Fresh for Everyone’ as our leading brand message because it is inclusive, clear and memorable and supports our vision of serving America through food inspiration and uplift.”

Related:Kroger projects momentum for same-store sales, improved profit for 2020

Kroger’s rebranding also introduces the “Kroji,” a cast of animated characters that the company said brings differentiation to its brand and is designed to “represent Kroger customers, associates and communities in an inclusive, relatable, optimistic and fun way.” Kroji combines “Kroger” and “emoji,” the digital icons popularized in social media.

The animation will accompany new photography and video productions that spotlight “real, delicious, fresh food” in visual narratives aimed at helping Kroger stand out in the “sea of sameness” of grocery retailing, according to the company.

"Fresh and friendly underpin Kroger's new brand identity because product quality and the total customer experience — across physical and digital — are key to bringing our brand promise to life. Kroger's new brand celebrates our love of people and our love of food, cutting through the 'sea of sameness' that has beset grocery retail advertising for far too long. Having a more consistent and recognizable brand enables Kroger to stand out and engage our customers in an even more compelling way," explained Mandy Rassi, vice president of marketing for Kroger.

Related:Kroger taps DDB as first agency of record

"We know that consumers make 221 food-related decisions a day,” Rassi said, referring to a 2006 Cornell University study,” so Kroger's brand campaign was developed using the deep insights we have about our customers, their needs and how we can help make it easier for them to achieve their food aspirations."

In support of the new branding, Kroger is launching a mass media campaign across retail, television, radio, digital, print and social channels, with advertising also in podcasts, cinemas, outdoor media and video/music streaming services. Kroger said it’s also offering customers free grocery pickup service, which typically carries a $4.95 fee, through Jan. 1 as a holiday season incentive.

Kroger noted that its retail banners across the country will continue to operate under their current names while incorporating the new brand attributes. Through is 20 regional/retail divisions, the company operates 2,759 food stores under such banners as Kroger, Ralphs, Dillons, Smith’s, King Soopers, Fry’s, QFC, City Market, Owen’s, Jay C, Pay Less, Baker’s, Gerbes, Harris Teeter, Pick ‘n Save, Copps, Metro Market, Mariano’s, Fred Meyer, Food 4 Less and Foods Co.

"Kroger believes that everyone deserves to have access to fresh, affordable and delicious food, no matter who you are, how you shop or what you like to eat,” Donnelly added. “Kroger's winning combination of assets puts our team in a unique position to deliver fresh for everyone."

Kroger had signaled this past summer that a rebranding initiative was in the works. In late July, the retailer announced that it retained DDB New York as its first-ever creative agency of record. Plans called for DDB to develop a “refreshed, stronger brand identity” for the company under its Restock Kroger strategic plan to redefine the customer experience. A pillar of the effort was to elevate the Kroger brand amid the company’s transformation into an omnichannel retailer serving customers via physical stores, same-day delivery (Instacart), direct-to-consumer delivery (Kroger Ship) and store pickup.

Kroger said the Kroji animated characters help differentiate its brand and "represent Kroger customers, associates and communities in an inclusive, relatable, optimistic and fun way.”

"Kroger already stands apart from its competitors in terms of quality, loyalty to customers and real-world actions that speak to its purpose to Feed the Human Spirit," Lisa Topol, co-chief creative officer of DDB New York, commented Wednesday about Kroger’s new branding. "Advertising in the grocery space was universally a sea of sameness: generic aisles of groceries and close-ups of people cutting carrots. Yet Kroger is anything but generic. So we wanted to take their inclusive and uplifting promise to their customers and find an effective and creative way to share it with the world."

The rebranding announcement comes a day after Kroger held its annual investor conference, where company executives reaffirmed the Restock Kroger strategy. Chairman and CEO Rodney McMullen called Restock Kroger “the right strategic framework for business growth” in 2019 and 2020 and over the long term, while Chief Financial Officer Gary Millerchip said Kroger’s value creation model is “strong and durable” and the company expects to continue momentum in identical-store sales growth.

Kroger’s updated outlook at the investor event came about a month after the company confirmed plans to lay off hundreds of employees nationwide in its store operating divisions. News of the job cuts, too, had emerged roughly a month after Kroger disclosed that it doesn’t expect to hit its three-year target of $400 million in incremental operating profit by 2020 under Restock Kroger. At yesterday’s event, the company projected incremental operating profit growth of $125 million to $150 million for 2020, driven by alternative businesses such as personal finance, media and data analytics.

Industry observers say growth in Kroger’s core food retail business has lagged and the company’s bottom line has been squeezed by intense competition from Amazon, Walmart and other large grocery retailers as well as from heavy investment in building an omnichannel retail model.

“Assuming Kroger reaches the midpoint of fiscal 2019 EBIT guidance ($2.95 billion) and alternative profits grow $125 million to $150 million in fiscal 2020 (a reduction versus $200 million previously due to certain investments), next year looks to be one of little-to-no growth for core grocery, as total EBIT is expected to be $3 billion to $3.1 billion,” Jefferies analyst Christopher Mandeville wrote in a research note Wednesday. “Given lack of visibility into a stabilizing grocery business, we're currently challenged to reach such a provided range. However, the $2.30 to $2.40 adjusted EPS guidance appears quite attainable, given [share] buyback flexibility ($500 million to $1 billion expected).”

Commenting on Kroger’s new branding, Mandeville and his team at Jefferies said “we’re not entirely convinced of its success,” beyond providing more efficiencies in advertising nationwide across its roster of grocery retail brands.

“While we appreciate the company’s efforts to differentiate itself versus peers, we view this rebranding initiative as somewhat quirky and not likely to meaningfully remedy what has ailed the Kroger brand,” he said.