Long before coronavirus upended our lives and shopping habits, private label brands were trending way upwards, ditching their ho-hum presence on the shelves and making serious strides into e-commerce.
Previously, private labels (also called store brands) were ways for retailers to sell products similar to ones put out by national brands but at a lower price point. Not much thought was given to these private labels aside from a name and very simple packaging. But times, and products, and packaging styles have changed and private labels look just as good as national and challenger brands. To the consumer, that is.
Nearly every retailer and grocer has at least one private label these days. For Target, its main grocery line is Good & Gather. At Walmart, they’ve got Sam’s Choice and Great Value. In Whole Foods (and on Amazon.com), it’s 365. Simple Truth is Kroger’s private label and one of the biggest organic brands in the country. Kirkland is Costco’s OG label; Safeway on the West Coast has O Organics and Lucerne, while Publix in the Southeast has Greenwise. And let’s not forget the ultimate private label brand, Trader Joe’s.
Even the e-tailer Thrive Market has its own brand (simply Thrive Market.) And while Amazon does have 365 on its virtual shelves, the retail giant has a handful of other food brands on offer too. They aren’t as big as Amazon Basics, but they easily could be. Oh and if you hadn’t already heard, Brandless is making a comeback!
So why are private label brands so popular for retailers?
For starters, private labels give them control. A retailer can manage every aspect of their private label from manufacturing down to distribution, marketing and activation. Having a private label also allows a retailer to get a share of the business from national brands and challenger brands, especially in the e-commerce arena.
And when retailers get feedback from customers about products they’d like to see or try, whether it be food or beverage, retailers can quickly act on that feedback by creating what’s missing on their shelves, thus reinforcing loyalty.
For smaller brands, especially those that have just launched in the last year or two, having to deal with store brands in addition to well-known national brands is a tough proposition. Andrew Suzuka, CEO of Otamot Foods, knew that when he was reimagining his tomato sauce to be a nutritious pantry-staple that he would encounter a lengthy list of competitors.
But he also spied a “sea of sameness” that drove him to create a veggie-loaded, nutrition-focused sauce that stood out from the rest. Yet despite having a niche sauce, it was daunting when the pandemic came and many stores restocked the empty shelves with their own brands first.
His advice on how to master walking this line is to simply stick to the roots and the core DNA of your brand.
“You build you true fan base, and work tirelessly to create that connective tissue with your customers,” Andrew explained. “You focus on building your brand, because at the end of the day, almost any product can be duplicated, but the brand is the true asset that drives long-term value. Build your brand, build your customer base, and never sacrifice quality for margins.”
(See how Otamot has successfully tackled digital marketing here.)
Shannon Roddy, an Amazon consultant and founder of Marketplace Seller Courses, said that consistently, obsessively, communicating your brand is going to give you the leg up over private labels, even those put out by Amazon which are often competing by price.
“The way we always tell brands to compete with Amazon in this regard or with any other private labels is to work extensively on branding, telling your brand story, make sure you are branding your product’s image, your branding your content and your feedback emails,” Shannon advised. He also added that advertising defensively on your own brand’s name will help out as well. (See more of Shannon’s Amazon tips here.)
Christina Appleton, founder of Appleton’s Market power veggie bites, also advises makers to stick with what makes them unique since that’s one of the few things in food that isn’t really able to be copied. “Kroger and Target cannot duplicate what makes you unique and what makes YOU the person behind the brand,” she said. “Think about companies like Annie’s, Amy’s, Primal Kitchen, Simple Mills – they all have a great founding story and an individual behind the brand”
Additionally, Christina reminds makers to be on top of their supply chain to ensure their product never goes out of stock. “Shelf space (both physical and digital) is incredibly costly, so once you have secured it it’s incredibly important to make sure you maintain it,” she said. “Do not give customers (or buyers) a definitive reason to switch from your brand.”
Lastly, as a smaller maker your strength is being able to add a personal touch that customers can’t get from a retailer or big brand which Christina said is worth exploiting. “Maybe it’s a handwritten card inside every e-commerce order, or a thoughtful small gift with a personalized note for all of your buyers at the holidays,” she said. (Watch more of Christina’s insights on creating an authentic brand here.)
In other words, you doing you is actually your best asset when dealing with private label competition so put yourself to #werk.
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