I was visiting the other day with produce consultant Bruce Peterson about the blueberry category, related to pending coverage of the Southeast berry section for The Packer.
He made a point that blueberries, now a powerhouse year-round category, are perhaps ripe for inclusion in more private label programs by retailers.
That got me thinking about where the private label trend is now in relation to fresh produce. I asked the LinkedIn Fresh Produce Industry Discussion Group about the topic:
Here are some thoughtful responses:
M.H. All indications are that private label branding of value added product continues to trend higher. The benefit for the retailer is when they promote their private label products, they are promoting products that can be only purchased in their stores.
For the supplier, additional costs are incurred for printing customer specific packaging and in many cases, boxes. Also, line changes are required for each customer which slows down production. Advantage for the supplier is generally a more loyal customer and a partnership to promote the brand.
K.M. Many suppliers are joining under regional umbrella labels to appeal to the local food trend. This is done with a group commitment to organic farming methods, circumventing the need for costly certification. Regenerative agriculture is the new buzzword, healthy food comes from healthy soil.
F.S. I think in produce that consumers shop quality not necessarily brand. If they have repeatedly good experiences with a brand then they become more brand conscious. I.e. I will buy Driscoll berries first, etc etc (no I don’t work for Driscoll) but I have had good experience with the brand. Private label is difficult to manage and rarely do I see PL brand next to a branded option so that the consumer is actually exhibiting a behavior based on choice. It is usually all PL or nothing in produce. So how do you actually know what the consumer would choose? Also, what happens to ‘local’? with PL there is no local designation, at least that has been my experience. I thought local was important when available? I find that there is a lot of lip service paid to ‘local’ and not a lot of action. On the other hand, I understand that PL on a national scale keeps a consistent look in the department and gives the retailer leverage over the supplier as the supplier brand gets diluted.
K.M. Private Label also gives the retailer the chance to develop their own standards for the product and market off of what the label truly means. Especially if you’re trying to leverage food safety or local produce.
The natural struggle with private label produce I would say is availability/seasonality. You can run into availability issues with any product, but produce is more finicky. One bad storm and your supply could be wiped out. We are lucky to have such instant communication these days, but some customers don’t realize or don’t care WHY something isn’t available, they just want the product right then. That same challenge is the challenge for sourcing local product. Seasonality. But supporting local is a who other topic :)
S.S. I have seen PL work as a great tool for availability during off season or weather issues. There are a lot of companies using PL from multiple farms in multiple areas of the world to have a year round supply. The key with this is maintaining spec at every packing facility. There are companies out there with PL using the word “farm” in their PL branding who aren’t farms at all but merely contracting farms to pack in their label. It is a good marketing idea but not entirely forthcoming....I think the trend will continue at a faster and faster pace. The cost of a label can be far less than a growing operation and can give the same marketing benefits so why wouldn’t companies of all sizes pursue it!
R.P. Private label is cemented in all parts of retail today and isn’t going away. However, in the fresh produce world, brands are building at a faster rate than private label. The farm to table movement is growing at such a rapid rate that telling the story of the farm, the family grower, the product and the locale is a real competitive edge for retailers who do it well. If a retailer has partnerships with a great grower , they should tell everyone who shops their stores. Social media, print and of course the point of sale make great storytelling experiences for the retailer. The stats show that is a big driver for shoppers and we have a community of great family farms in our industry that can drive sales with great grower brands. I love what I am seeing at retail that tells the stories. The big winners in produce retailing will be the once that execute on grower brands and do it well. Story telling can create more value for the retailer and especially for the consumer.
J.G. Private Label for produce will continue to grow. Safeway stores started O Organics in 2005 as a private label and now it is perceived as its own brand. Same with Kirkland Signature from Costco that started private labeling food products 20 years ago. It creates consistent quality and accountability. The private label can tell a story if launched properly.
TK: Lots of good points made in the comments. The power of a strong brand, the ability to tell stories with a brand and variety innovation offered by a premium brand should not be overlooked in comparison with creating a generic private label that lacks a compelling message. Putting a private label on local produce also seems problematic - where is the transparency and authenticity then? Yet there are reasons for private label to grow, such as creating consistency in department appearance and quality, perhaps earning a bigger margin for retailers and offering a better price to consumers.
But it seems to be a play primarily hinged on price appeal.
A new study on the appeal of private label to consumers by Progressive Grocer found that a whopping 89% of baby boomers and 88% of Gen Xers buy private label because of lower or comparable prices compared with brands.