80 Size Bases
vate label: opening price point, mainstream and premium. That is changing. Synergies such as what Amazon
and Whole Foods have created “will drive a thrust toward
organic, natural, premium and specialty growth where
private label development currently lags,” Stuart says.
The USDA Certified Organic seal will also be a great
equalizer. “Brands will lose marketing power if consumers trust the organic seal. This will help accelerate organic
private labels,” he says.
Takeaway: All growth is on the margins. “Organic,
natural, premium and specialty are stealing share from
traditional products,” Stuart says. “This is where retailers
must focus to drive higher rings and dollar share.”
Innovate and Differentiate
Innovation has traditionally not been private label’s forte.
“Other than a flurry of activity decades ago with Loblaw’s
and President’s Choice, private label has traditionally followed,” Stuart says. However, it’s decidedly changing, as
evidenced by new entrants such Brandless, Boxed and
Uniquely J from Walmart’s Jet.com, he says.
Takeaway: Traditional retailers need to follow the
lead of their more innovative peers and ask themselves
how they can think outside their four walls in terms
of innovation and creating uniquely differentiated
experiences, Stuart says.
Transparency can mean simple, clean or real food,
or it can mean visible products. Ultimately, it is hav-
ing confidence in the ingredients and their sources in
the end product. Fresh or refrigerated products have
a much easier time leveraging transparency, says
Stuart. And blockchain technology ultimately will
play an important role in sourcing transparency, he says.
“Grocery retailers have the added benefit of private label
share in the perimeter that’s double the center store with
two to three times faster growth,” he says. “The more retail-
ers can communicate the simple, clean and real benefits
through transparency from sourcing to table, the more they
will be able to differentiate and insulate their business.”
Takeaway: Having simple, clean and easy-to-under-stand ingredient labels and nutrition information is a first
step. But it won’t be enough. “Tracking products back to
the source will be expected of true leaders within the next
three to five years,” says Stuart.
Penetration of Kroger’s
private label sales vs.
overall sales in Q3 2017.
Tracking top-line trends in store brands Private Label