Bentonville based Walmart has named Andrea Thomas its new Senior Vice President of Sustainability. She will replace Matt Kistler, the company’s current Senior VP of Sustainability, who will now be serving as an SVP of Marketing at Wal-Mart U.S.A.
Over the last year Thomas made news in Walmarts Private Brand business, with the repositioning and relaunch of Great Value as well as being heavily involved in supply chain, product development and brand marketing – all of which are key elements of Wal-Mart’s sustainability push.

Thomas’ background in brand management and innovation has spanned over 15 years, including VP of Innovation at both The Hershey Company and PepsiCo’s Frito-Lay before joining Walmart.

In addition to Thomas’ promotion the Sr. Director of Sustainability Rand Waddoups is set to move from the sustainability group in to the company’s hot private brand ranks, assuming responsibility for the Private Brand small appliances business.

Over the last few years I have written post after post that confirmed and reconfirmed that customers are not only choosing to purchase Private Brands but that they are making them their brands of choice. In an affirmation of that premise Consumer Reports released a study on Tuesday, Consumer Reports concludes that many private brands are as good as or better than national brands.

Private brand products can compete with their name-brand counterparts and save shoppers more than a thousand dollars a year on grocery bills, according to a new study from Consumer Reports. In 21 head-to-head taste match-ups, national brands won seven times, the Private Brand came out on top in three instances, and the remainder resulted in ties.

“The study reaffirms that store brands are worth a try,” said Tod Marks, senior projects editor for Consumer Reports. “For a family that spends $100 a week on groceries, the savings could add up to more than $1,500 a year.”

Consumer Reports‘ price study evaluated five supermarket chains and compared private- and name-brand prices for 30 everyday items at five chains, collecting a total of 283 price quotes.  Consumer Reports found the average savings with Private Brands was 30 percent, but shoppers saved as much as 52 percent on some items.

Private Label stigma
Although the savings are significant, some shoppers are still reluctant to try store-brand products, according to a Consumer Reports nationally-represented survey. The top reasons for those who don’t buy store brands are: “I prefer name brands,” “The name brand tastes better,” and “I don’t know if store brands are as high in quality.” Respondents 18 to 39 years old were particularly likely to question the quality of store brands.

Still, 84 percent of Americans purchased store brands in the past year, and 93 percent of store-brand shoppers said they would keep buying as many store brands after the economy recovers. Nationwide, store brands accounted for almost one of four products sold in supermarkets and a record $55.5 billion in sales last year.

Consumer Reports found nutrition similar for most of the tested products, despite the perception among 17 percent of survey respondents who said that “name-brand foods are more nutritious.” The most notable differences: Mott’s applesauce has more sugar than Publix, Ore-Ida fries have more sodium than Jewel, and Kellogg’s Froot Loops have 3 grams of fiber vs. 1 gram in Stop & Shop Fruit Swirls.

Shoppers are devoted to certain categories as well. Though they’ll purchase store-brand paper goods and plastics, at least half of respondents rarely or never buy store-brand wine, pet food, soda, or soup. But Consumer Reports trained testers found that when it came to products like soup, the name brand didn’t always reign:

• Chicken soup: Food Lion’s (36 cents per serving) Lotsa’ Noodles soup beat out Campbell’s Chicken Noodle (41 cents per serving) for having a little more intense flavor. Campbell’s had oily broth, with fatty pieces of chicken.
• Orange juice: Publix Premium won over Tropicana for having a bit less of a cooked flavor with slightly less bitter taste.
• Hot dogs: America’s Choice (A&P, $2.64 per package) beef hot dogs trumped Oscar Mayer ($3.65 per package) for their juicy and flavorful franks.

Name brands did win in seven of the categories, including mayonnaise, mozzarella cheese, and frozen French fries, but the majority of the match-ups found that the store brand and name brand were of similar quality. A tie doesn’t mean the taste was identical. Two products may be equally fresh and flavorful, with ingredients of similar quality, but taste dissimilar because the recipe or seasonings differ. Some products that tied include:

• Ketchup: Heinz ($2.76 per bottle) is spicier, while Target’s Market Pantry ($1.174 per bottle) brand is more tomatoey.
• Peanut butter: Tasters detected more deeply roasted nuts in Skippy (19 cents per serving), while Albertsons (15 cents per serving) has a hint of molasses flavor.
• Potato chips: Both Lays (29 cents per serving) and Walmart’s Great Value (15 cents per serving) have a nice balance of real potato flavor, fat, and saltiness.

Significant Savings
National brands are generally pricier than store brands, not so much because of what’s in the package but because of the cost of developing the product and turning it into a household name.

There’s no reason store brands shouldn’t hold their own, since some companies manufacture both, including Sara Lee, Reynolds, 4C, McCormick, Feit, Manischewitz, Joy Cone, Stonewall Kitchen, and Royal Oak. Plus, most grocers offer a money-back guarantee if their products can’t meet the consumer’s expectations. (National brands stand behind their products too, of course).

Despite the savings, the price advantage may be narrowing. In recent years, some national-brand makers have lowered prices and stepped up promotional activities. The full results on how all the brands stacked up, Consumer Reports‘ study are available in the October issue on newsstands September 7 and online at www.ConsumerReports.org.

This is the second in a three part series of guest posts from Rob Wallace the Managing Partner, Strategy at Wallace Church, a Manhattan and San Francisco based brand strategy and design firm working with both private and national brands such as Target, P&G, Whole Foods, Nestle, Coca-Cola, Bacardi, Dell and over 40 other clients in every product category. Rob speaks on brand identity issues at Columbia Business School and conferences throughout North and Latin America, Europe and Asia.  He is a published co-author of “Really Good Packaging Explained” and well over 25 articles. The final post in the series will appear the next Tuesday.

Private Brand: What’s the Same, What’s Different, What’s Next?
Growing Brand Hierarchies/ Complex Brand Identity Architectures

Rob Wallace

The cost of creating a successful new brand is daunting. And the chance of new CPG brands surviving beyond one year has dropped in some categories to less than 11 percent. This has given rise to an ever-increasing proliferation of both private and national “mega brands”, or large multiple SKU brands that cover an ever widening array of targets, product offerings and consumer experiences.

What’s Different:  Monolithic Store Brand vs. Multiple Private Brands
The traditional “store brand” architecture, which simply adds a retailer logo to an adaptation of the national brand leader’s identity, is changing. “The days of Store Brands being the generic equivalent is over”, states Gaemer Gutierrez, CVS Design Director. “ Retailers have adopted the strategies that national brands have been doing for years. It is now about brand building but in less time, lower cost, and better quality. This pushes national brands to stay ahead and be more innovative. This ultimately raises the standards of the entire industry.”

The monolithic store brand is now giving way to a series of private retail brands. Because they control the product mix, retailers can simply create a brand by using outside manufactures to produce products to their specifications. This strategy has resulted in some retailers having too many individual private brands. Because they could not all be properly promoted or seeded into the culture, these multiple small private brands have not proven to be the most successful retail branding strategy.

What’s the Same: Brand Justification
Now knowing that fewer brands with stronger relevance is a much more successful strategy, both retailers and CPG’s alike are reducing the number of brands, while still growing their product offerings. Welcome to the age of the “mega brand”.  Target’s Archer Farms, for example, has more than 225 products in three different tiers representing virtually every food category. Crest has grown from its six original toothpaste flavors to more than 80 brand offerings, in value-based to super premium price tiers, covering virtually every oral care need. 

What’s Next: Strategic Brand Identity Architectures
Private and national brands are now often segmented into value-based, value-added, premium, organic, wellness-positioned, consumer segment targeted, and any number of brand proliferations, leading to the question, “how big is too big”?   Melissa Smith Hazen, Director of Strategic Design, Ahold USA states, “A brand can continue to grow as long as it stays relevant to the consumer and true to itself.”  Offer one additional new product beyond what consumers believe the brand can contain and it will betray the integrity of all the products that preceded it. Welcome the age of the complex brand identity architecture.

Effective mega brands are like well run organizations or strong families.  Each member or each product represents its specific benefit, and yet meaningfully contributes to an intuitive and indelible connection that unites them all. The most effective brand identity architectures articulate a balance between individual product benefits and overall brand consistency.  Finding this balance and designing it into the identity architecture is branding’s newest challenge.

The most balanced brand identity architectures are often visually unified by a consistent brand color. Since color is the first and most visceral visual cue, owning a color can be a brand’s most valuable asset.  Owning a shape is equally important. Effective brand architectures dedicate a consistent “staging area” for every package element. Even if the actual elements change with each brand offering, they should always be in the same place on the package.  This creates a consistency of layout or a “shape mnemonic” that further unifies the brand. The most complex brand architectures are also often the most simple.  Reducing the number of brand messages is key.  Perception Research Services reports that consumers can only process three to four elements, and that includes your logo.  Communicating your brand message simply and visually, rather than verbally, is key.

To learn more about the Best Practices of Complex Brand Architectures go to:

http://www.wallacechurch.com/#/news/2

What’s Your POV?
You are invited to participate in this on-going dialog by adding your comments.  Only with shared insights will processes advance. Your insights are critical to its success, so please contribute.

Rob can be reached at rob@wallacechurch.com

Reckitt Benckiser India, the maker of Dettol antiseptic soap and Cherry Blossom shoe polish, has served a legal notice to Bharti Walmart demanding that the cash-and-carry joint company withdraw its Great Value toilet cleaner, as it infringes upon the ‘bottle design and cap’ of Reckitt’s Harpic brand, the domestic market leader in this category.

Though in the past consumer goods companies and big retailers have been involved in spats over trade margins, this is possibly the first time in India that an FMCG company has taken the legal route against a private label brand of a retailer or a cash-and-carry company.

“This is a statement that private brands of organized retailers are increasingly challenging national ones,” said Anand Mour, vice-president-FMCG and retail, at brokerage firm Indiabulls Securities.

Great Value is Walmart’s top-selling Private Brand, with estimated global annual sales of close to $11 billion — that’s bigger than fast-food giant McDonald’s $8.1 billion revenues from the US market. The brand was launched 17 years ago, to offer price-sensitive consumers cheaper products compared to national brands.

In India, it is sold in the three Bharti Walmart cash-and-carry stores and is a Private Brand for categories such as packaged foods and household cleaners. In addition, Bharti Retail runs 59 Easy Day supermarket stores. Both formats stock Wal-Mart’s Private Brand.

A Bharti Walmart spokeswoman confirmed receiving a notice from Reckitt Benckiser and said the company is in the process of evaluating its response. Two persons directly involved with the development said Bharti Walmart has sought Walmart Stores’ advice on how to deal with the matter. Reckitt Benckiser declined comment on ET’s email query on the subject.

Rodney Ryder, a Delhi-based advocate associated with international law firm ANM Global and Scriboard Advocates, which specializes in intellectual property (IP) rights consultancy, said: “In such cases, the muscle power, or advantage, is always with the IP rights holder. But the IP rights have to be relevant to specific jurisdictions.”

Harpic leads the `60-crore toilet cleaner segment with 75%-plus share, but like most national brands, it too is increasingly under pressure from private labels.

Future Group, for example, says that in the toilet cleaner segment, its Clean Mate brand is now neck-to-neck in market share across its 135 Big Bazaar stores with Harpic.

Devendra Chawla, business head, Private Brands, Future Group, said: “We are going aggressive on our private brands and have a strong presence in household cleaning. We are leading in the glass cleaning segment and are a very close second to Harpic in the toilet cleaning category in our stores.”

All modern retailers, including Future Group, Reliance Retail, Spencer and Aditya Birla’s More as well and cash-and-carry chains such as Bharti Walmart are relying on Private Brands to prop up sales and margins.

Retailers manage to sell Private Brands, to consumers at prices 10-20% lower than national brands because they don’t incur overheads like marketing and advertising costs.

Bharti Walmart, the 50:50 joint venture between Sunil Mittal-owned Bharti Enterprises and Bentonville-based Walmart, the world’s largest retailer, can not sell directly to consumers as the Indian government does not allow foreign investment in retail.

The company operates three cash-and-carry stores called Best Price Modern Wholesale stores and these outlets are allowed to sell only to retail outlets and institutional buyers.

Article: The Economic Times

Tesco’s Fresh & Easy Neighborhood Market has expanded its fresh&easy ‘goodness’ Private Brand line of food and drink products for kids the expansion includes new redesigned packaging. The ‘goodness’ sub brand of the fresh&easy Private Brand continues to build their Private Brand portfolio.

New items include: applesauce, cereal, macaroni & cheese, fruit cups, peanut butter, snack chips, raisins and juices as well as fresh-prepared foods for kids, such as the mini meatballs and pasta meal item.

Thanks to the Fresh & Easy Buzz for the tip.