Store Brands

APR 2016

Store Brands delivers unprecedented strategic and tactical information needed by retail executives to develop and support compelling, differentiated store brand programs to build customer loyalty.

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Special Report: Responsible Sourcing 3 4 Store Brands / April 2016 / hen it comes to running a business, doing the right thing and doing the profitable thing aren't always the same. Fortunately, when it comes to sourcing store brand products, doing the right thing also makes good business sense. After all, a growing consumer base is looking to spend its money on companies with responsible sourcing commitments. According to Dave Connors, vice president of sales and marketing for Conyers, Ga.- based Pratt Industries Inc., a recent survey from global pulp and paper company Asia Pulp and Paper found that 42 percent of Americans are willing to pay more for sustainable paper or products sold in sustainable packaging. And the younger the consumer, the more likely he or she is to pay for sustainable options. And this group isn't easily fooled. With easy access to information via the Internet on smartphones and tablets, consumers can easily research a company and its products prior to purchase — whether they're at home or in a store, Connors adds. Not only are retailers able to charge more for a sustainably sourced product, they're able to use it to drive brand loyalty. "Recent surveys have found that shared values are overtaking price as a purchase driver among health-conscious consumers," says Liam Hawry, director of industrial design and packaging, Studio One Eleven, the design arm of Chicago-based Berlin Packaging LLC. "Consumers ultimately confer the values they assign these products onto the stores where they find them." Jean Shieh, marketing manager, Sensient Technologies, Sensient Natural Ingredients, Turlock, Calif., agrees. "More and more people are becoming global citizens who care about preserving the ecosystem and the human community," she says. "This creates a new ageless generation of consumers who prefer companies with community-oriented culture, and these consumers are voicing their preference through social media and community channels." Millennials, in particular, are "fiercely loyal" to brands that meet their value equation, states Janice Neitzel, CEO and principal of the Sustainable Solutions Group, Chicago. Retailers with private brands should make it a goal to cultivate them as core customers through sustainable sourcing strategies. An added benefit to responsible sourcing is brand protection, observes Dan Kelly, vice president of sales, Musco Family Olive Co., Tracy, Calif. What though, does it really mean to offer sustainably sourced products? In general, it refers to three main components: social and environmental responsibility, as well as animal welfare. Be socially responsible When it comes to social responsibility, consumers are often most concerned with working conditions for employees harvesting or manufacturing the product, child labor and fair living wages, says Jerry Gilbert, vice president sales, Mother Parkers Tea & Coffee Inc., Mississauga, Ontario. Other considerations could include availability of health care, education support and even agronomy development, adds Clay Dockery, division vice president of corporate brands, Massimo Zanetti Beverage USA, Suffolk, Va. Fair trade and direct trade programs, for instance, seek to ensure farmers are paid prices The business case for responsible sourcing Retailers will find that customer loyalty and profits increase when they source own-brand products responsibly. By Michal Christine Escobar

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