Store Brands

FEB 2017

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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Health & Wellness 3 6 Store Brands / February 2017 / roll out new clean and clear label lines should be based on retailers' knowledge of their customers and long-term goals. "The most important thing is to understand what your corporate strategic objectives are and have a very firm understanding of who your customers are and what their hot buttons are," Lindsay says. "That will help inform the degree to which you want to embrace clean ingredients and avoid certain harmful ingredients." Austin, Texas-based Whole Foods Market and Fletcher, N.C.-based Earth Fare, for example, have been championing wellness and sustainability for years and have customer bases that have long been strict about what they put in and on their bodies, Lindsay notes. Consequently, he is not surprised that these or- ganic food retailers are getting a lot of mileage out of the clean and clear label movement. Whole Foods recently introduced its "Eat Real Foods" marketing initiative, while the Southeastern chain has an audacious new slogan and program: "Live Longer with Earth Fare." It isn't necessary for a chain to mimic Whole Foods and Earth Fare, however. Rather than reformulate an entire product line or launch a new clean label brand, retailers could test the waters by adding clean label SKUs to an existing line, Sheehan advises. "Retailers that have multiple tiers could use one of their existing lines and reformulate a few items in two or three targeted categories," she suggests. "If you have a low-priced line and a premium line, look to the premium line for reformulating or launching the clean label items. Alternatively, if you have a third tier that is organic, maybe that's where you introduce the clean label SKUs." From a cost-benefit perspective, incremental changes tend to be the way to go, Jorgensen agrees. "If you take an established private label line, it's pretty hard to totally reformulate it overnight," he notes. "But if you start a new brand like H-E-B Select Ingredients, you've got a clean slate and you can set new specs for your manufacturers to follow." Retailers should take heart that the barriers to entering the clean label realm are not as significant as one might imagine, Jorgensen says, noting that he was amazed by the ingenuity on display at the Clean Label Conference last spring in the Chicago area. "It was an eye-opening experience for me to see the range of highly effective clean label solutions that ingredient manufacturers have already come up with," Jorgensen shares. "For example, a couple of companies were showcasing ingredients made from plum juice that are just as effective at preserving deli meats as nitrites and nitrates are. "The world of food technology is loaded with extremely intelligent and creative people who are coming up with natural alternatives to the ingredients that consumers object to. Sure, there is a little bit more cost. But many of the companies were demonstrating that the incremental cost per unit of doing this is actually very small." To be clear The transparency aspect of the clean and clear label revolution may actually be more daunting for store brands, which even while disclosing exactly what's in or not in a product may not always reveal the item's provenance, including the contract manufacturer or private label vendor that made it. "Traditionally a private label puts a little bit of a barrier between the consumer and the origin of the product," Jorgensen notes. "But rather than viewing this as a problem, it's really an opportunity for private brands to engage in authentic storytelling. That means telling where a product is made and who made it. What's the story behind the product, and what was the thinking behind it?" Storytelling begins with the package, Jorgensen says. But also playing key roles are the retailer's web- site, its social media presence and in-store merchan- dising, including shelf talkers and digital signage. And in the near future, smart phone apps combined with geolocation technology and SmartLabel bar codes will likely increase in importance. "When retailers operate honestly and transparently — as many already do — consumers have a good under- standing of what those brands stand for," Lindsay says. "They reward those retailers because they trust them." SB Schierhorn, the managing editor of Store Brands, can be reached at [email protected]

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