SAN FRANCISCO — How does a company respond when, after all the time and effort its marketing team spends building its brand, a retailer wants to sell the product under a private label instead?
Three chief marketing officers in the produce industry took up the question during a panel Feb. 22 at BrandStorm, a United Fresh Produce Association event.
Chris Pruneda, chief marketing officer of Austin, Texas-based Cece’s Veggie Co., noted that to receive such a request from a customer is not particularly surprising.
“Produce has often been an unbranded category in general,” Pruneda said. “You go to shop at Wegmans’ produce department, you go to shop at H-E-B’s produce department — oftentimes they really kind of take ownership of the brand of produce that they present.”
Cece’s has been approached about producing its veggie noodles and other value-added items for private label, but the company is still deciding whether it wants to go that direction.
“Brands are important,” Pruneda said. “They engage consumers. They educate consumers. They build loyalty with consumers. They help change categories and invent new categories within the grocery store, right? So brands are important, and I think it’s really important that we try to protect those brands.”
Even so, there are certainly reasons to pack in a private label upon request.
“It’s been a real struggle for us to decide what to do,” Pruneda said. “We want to do the right thing — we want to make sure that consumers have access to our products in whatever form or fashion or brand it comes in, that’s part of the overall mission we all need to get behind, but it’s definitely a financially challenging decision to make. We haven’t quite made that decision yet.”
Chris Veillon, chief marketing officer of Leamington, Ontario-based Pure Hothouse Foods, also characterized the private label question as one that puts companies in a tough position.
“There’s two schools of thoughts — sales versus the marketing,” Veillon said. “Sales (says) yeah, great, it’s guaranteed business, you have a program, it’s guaranteed week-over-week, month-over-month for a six-month contract. Marketing’s like, whoa, timeout. What happens to all the work and effort we put into this (brand)? Do we still put into play our geotargeted programs we have in place in the marketing already?
“So it’s a challenge to take part in but you can’t say no to the dollars,” Veillon said.
He also noted that produce departments of certain banners are saturated with brands to the point that having one’s label on the package is going to be unlikely to capture much shopper interest anyway.
While selling product under the company is much preferred, packing in private label can sometimes open new doors, Veillon said.
Marc Oshima, chief marketing officer of Newark, N.J.-based AeroFarms, said his company has not encountered the private label versus branded question to the same extent as the other organizations represented on the panel.
“Fundamentally retailers have come back and said, no, this is your story, it’s so authentic, you’re the only one who can really tell it, and that’s what’s going to really connect ultimately with their consumer,” Oshima said. “ ... We’re in a unique position at this point in time.”
The panel also discussed marketing budgets, the structure of their departments, working with outside contractors and agencies, and other topics.
The United Fresh Produce Association hosted its annual BrandStorm event Feb. 20-22.