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SPRING 2019 | www.storebrands.com

category updates on: coffee and tea oil and vinegar paper products pasta and rice

WHERE THE

World of Private Label MEETS INTERNATIONAL SHOW, WHICH DEBUTED IN 1986, EXPECTED TO ATTRACT 16,000 ATTENDEES

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PLMA’s 2019 Private Label Trade Show

Store BrandsMake Things Happen Wizards beware. PLMA’s 2019 Private Label Trade Show is coming. All the top supermarkets, drug chains, mass merchandisers, and specialty and online retailers. All the food, snack and beverage suppliers. Plus, health and wellness, household and kitchen, and more organic and natural exhibitors than ever before. Find out more about how your company can take advantage of PLMA’s great annual event. Telephone (212) 972-3131 or email exhibit@plma.com.

Nov.17-19 • Chicago Presented by the Private Label Manufacturers Association Visit www.plma.com

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Business Intelligence for an Evolving Market

8550 W. Bryn Mawr, Suite 200, Chicago, IL 60631 (773) 992-4450

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Lawrence Aylward

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COVER STORY

Where the ‘World of Private Label’ meets

International show, which debuted in 1986, expected to attract 16,000 attendees

Pat Wisser pwisser@ensembleIQ.com

REPRINTS, PERMISSIONS AND LICENSING Please contact Wright’s Media at ensembleiq@wrightsmedia.com or (877) 652-5295.

CATEGORY UPDATES 7

Trend Watch

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Endcap

EVENTS • MARKETING • DIGITAL • RESEARCH • CIRCULATION CORPORATE OFFICERS Executive Chairman - Alan Glass Chief Executive Officer - David Shanker

A look at current movements in key product segments that could create private label opportunities for coffee and tea, oil and vinegar, paper products, and pasta and rice

Chief Financial Officer - Dan McCarthy Chief Operating Officer. - Joel Hughes Chief Innovation Officer - Tanner Van Dusen Ann Jadown – Chief Human Resources Officer Executive Vice President, Events & Conferences – Ed Several

The Modern Consumer

Store Brands (ISSN-0190-9851; USPS # 0488-370) is published monthly by EnsembleIQ, 8550 W. Bryn Mawr, Suite 200, Chicago, IL 60631. Subscriptions: One year, $95; two years, $146. One year, Canada $112; two years, Canada $150, One year, foreign $175; two years, foreign $285. Payable in advance with a bank draft drawn on a US bank in US funds.Single copies $10, except foreign, where postage will be added. Reprints, permissions and licensing, please contact Wright’s Media at ensembleiq@wrightsmedia.com or(877) 652-5295. Canada Post: Canada returns to be sent to IDS, P.O. Box 456, Niagara Falls, ON, L2E6V2. Periodicals postage rates paid at Deerfield, IL and additional mailing offices. Printed in USA. POSTMASTER: send all address changes to Store Brands PO Box 1842 Lowell MA 01853. Copyright 2018 by EnsembleIQ. All rights reserved, including the rights to reproduce in whole or in part. All letters to the editors of this magazine will be treated as having been submitted for publication. The magazine reserves the right to edit and abridge them. The publication is available in microform from University Microfilms International, 300 North Zeeb Road, Ann Arbor, MI, 48106. The contents of this publication can not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for claims and representations.

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COVER STORY

Where the ‘World of Private Label’ meets INTERNATIONAL SHOW, WHICH DEBUTED IN 1986, EXPECTED TO ATTRACT 16,000 ATTENDEES By Lawrence Aylward

●●● t’s called the “World of Private Label” International Trade Show for a reason. This year’s event, organised by the New York-based Private Label Manufacturers Association (PLMA), will feature nearly 2,700 exhibiting companies from around 70 countries and about 16,000 attendees. Also, representatives from 120 nations — there are 195 countries in the world — will attend the show, which is set for 21-22 May at Amsterdam’s RAI Exhibition Centre. This year marks the 34th year of the show, which de4

buted in Paris in 1986. The World of Private Label trade show has experienced significant growth over the years. In 1995, it reached 1,500 stands, in 2007 it reached 3,000 stands, and in 2015 it achieved 4,000 stands.

E-commerce in the spotlight

According to the PLMA, the growing importance of private label for retailers as online shopping becomes more popular will be in the spotlight at this year’s show. In Europe, the impact of e-commerce is different from country to country. But in China, the largest country

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COVER STORY to Excellence Awards. The awards honour retailers for excellence in private label products and packaging introduced within the past year. In addition, a special trade show attraction is PLMA’s Idea Supermarket, where visitors can see displays of the products from retailers around the world as well as the products recognised in PLMA’s 2019 International Salute to Excellence Awards. Nearby will be PLMA’s New Product Expo, which will display more than 600 products presented for the first time on the trade show floor. When the show opens on 21 May, attendees can visit 14 exhibit halls divided over two main complexes that

Representatives from 120 countries are attending the show, which will feature nearly 2,700 exhibiting companies. One of the show’s attractions is the Idea Supermarket.

in Asia and the most populous country in the world, e-commerce continues to grow, led by companies like Alibaba Group, a multinational conglomerate specializing in e-commerce, retail, internet and technology. More than 40% of the world’s e-commerce transactions currently take place in China. On 20 May, the day before the World of Private Label trade show opens, the PLMA will offer two seminars addressing e-commerce. Lidia Palubina, senior consultant of e-commerce and omnichannel for Kantar Consulting, will discuss Alibaba’s new retail concept that may have an impact far beyond China. Ben Miller, global insight director for UK-based grocery research organisation IGD, will examine the new strategies traditional retailers need to succeed against online competitors. Also on 20 May and before the seminars, the PLMA will announce the winners of its 2019 International Salute

will display fresh, frozen and refrigerated foods; dry grocery; beverages; and non-food categories including cosmetics, health and beauty, household and kitchen, auto aftercare, garden, housewares and DIY.

PLMA celebrates 40 years

This year’s show coincides with the 40th anniversary of the PLMA, which began in 1979. That year, America was plunged into recession, there was double-digit inflation and interest rates soared to 20 percent. Consumer confidence was in the pits. But that didn’t stop a group of about 50 industry suppliers from meeting in New York to set the stages for forming an association for private label products. And in 1980, that group staged its first Private Label Trade Show in the basement of the Ramada Inn near O’Hare Airport in Chicago. The first show featured about 40 vendors, who disSPRING 2019 | PRIVATE LABEL INTERNATIONAL

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COVER STORY

World of Private Label at a glance • The Private Label Manufacturers Association’s (PLMA) 2019 World of Private Label International Trade Show begins on Monday 20 May at the RAI Exhibition Centre with a series of seminars. The show itself is set for Tuesday 21 May (from 09.00 to 18.30 hours) and Wednesday 22 May (from 09.00 to 16.30 hours).

The exhibition area covers 14 exhibit halls divided over two main complexes.

played 40 small tables. Most of the vendors sold health and beauty aid products. But the vendors were more interested in educating retail attendees about how private label could benefit them, not selling their products. At the time, most retailers didn’t accept the premise that private label could be an inherent part of their merchandising strategies. The association struggled early on, as did its trade shows. There was resistance from people in the food industry to join PLMA because they belonged to other associations and didn’t think they needed another trade show. But PLMA’s members, which had grown to about 200 in 1980, kept knocking on the door and reiterating the message to retailers that store brands could offer them quality products to increase their profit margins. Their persistence began to pay off. In the 1980s, the Private Label Trade Show saw tremendous expansion, as did PLMA’s member base. In 1988, the Private Label Trade Show, which is held annually in Chicago, featured 1,000 exhibit booths, an increase of 2,400 percent from 1980. Last year the show featured 2,770 exhibit booths. Brian Sharoff, who was hired as PLMA’s president in 1981, has been credited by many for leading the PLMA’s growth. Under his leadership, the PLMA has grown from 200 member companies to about 4,200 member companies. Bob Anderson, who began Bentonville, Arkansas-based Walmart’s Great Value private brand in 1992 and managed the retailer’s Sam’s Choice brand, says the PLMA was instrumental in bringing retailers and suppliers together to create quality private brands. “For 40 years, the PLMA has been the marketplace for growth and collaboration for manufacturers and retailers,” Anderson says. “One only needs to look at the advancement of private label products in areas of quality, innovation and packaging to see this.” PLI 6

• Nearly 2,700 companies are exhibiting, including manufacturers and suppliers of private label fast-moving consumer goods (FMCG) in food and non-food from more than 70 countries. • Nearly 60 national and regional pavilions will be presenting their products with new pavilions from Israel, Dubai, Egypt, Latvia, Canada and South Africa. • More than 16,000 trade professionals from 120 countries are expected to attend, including retailers representing supermarkets, hypermarkets, discounters, drugstores and department stores, as well as importers and exporters, manufacturers, consultants, sales agents, and packaging and design experts. • The exhibition area covers 14 exhibit halls divided over two main complexes. The Europa Complex is devoted to food products, the Holland Complex has exhibitors displaying non-food products, and the Park Complex accommodates both food and non-food exhibitors. • PLMA’s Idea Supermarket will comprise a special area that displays private label ranges of 62 retailers in Europe, United States, Latin America, Africa and Asia. • PLMA’s New Product Expo will showcase more than 600 products of the latest innovations from the private label industry in various production fields from product to marketing to packaging. • PLMA’s 2019 International Salute to Excellence Awards including Wine Awards will recognise and honour retailers for innovation and quality in the creation of their private label programmes. The award-winning products will be displayed in PLMA’s Idea Supermarket area.

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CATEGORY UPDATES

Trend Watch A LOOK AT CURRENT MOVEMENTS IN KEY PRODUCT SEGMENTS THAT COULD CREATE PRIVATE LABEL OPPORTUNITIES

Coffee and tea, oil and and vinegar, paper products, and pasta and rice are key private label categories for retailers internationally. Here’s a look at what’s trending in those categories:

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COFFEE AND TEA

Searching for the best flavours, experiences By Dana Cvetan

s an affordable luxury and allaround lovely experience, tea and By Dana coffee are hard to beat. The potential for tea category growth is in the premium and health sector, and that potential has not yet been tapped in private label, declares Holger Lohs, CEO of Häelssen & Lyon North America Corp., a family-owned, fourth-generation global producer and distributor of teas, flavoured blends, tea extracts, instant-powder blends and ingredients sourced from 130 countries that was founded in

1879 and is based in Hamburg, Germany. Retailers don’t need to play it safe by limiting themselves to the tried-and-true products they know will sell, Lohs cautions. Mintel Senior Innovation Analyst Amrin Walji agrees. Writing in a 10 Sept. Mintel Blog post headlined “5 Tea Trends to Look for in 2019,” she observes that consumers are seeking unexpected flavours and functional benefits from their tea. The trends Walji identified include: adapting bold flavoors to lure consumers away from sugary drinks and even alcohol; vegetable infusions to satisfy rising

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CATEGORY UPDATES demands for plant-based foods and interest in vegetarian and vegan diets; herbal teas that impart relaxing effects, such as tulsi (also known as Holy Basil), chamomile, ashwagandha, brahmi and ginseng; teas with functional ingredients such as turmeric, aromatic lemon verbena and ginger; and teas with ingredients that promote healthy gut function. “Herbal teas and wellness teas with a benefit are still the fastest-growing segment in this category,” Lohs says. “Pyramid tea bags and full leaf — including colorful blends — are on the rise for sure and this trend is going to continue.” Lohs sees future movement toward top quality, premium tea in the private label universe, but it may require educating consumers about the benefits. “If you think about it, tea is such an affordable luxury there should be room for more premium in that category. I believe that retailers are ready to go for premium and quality; however, the need for [affordable] products is still dominating the grocery world. [Still], it pays to buy good tea — it is a great indulgence which you can get for just a tiny bit extra” cash, Lohs points out. In the coffee segment, premiumization of the singleserve segment is the most important current trend, says Olivier Garrigoux, sales manager for Euro Caps BV in Rotterdam, The Netherlands. Euro Caps was the first company to make compatible pods for Nespresso and Dolce Gusto machines, starting in 2012, and the company produces the most pods for coffee brands and store brands — more than a billion a year, according to Garrigoux. Euro Caps offers single-serve pods for Nespresso compatible machines for different styles of coffees: Ristretto (25ml), Espresso (40ml) and Lungo (110ml). For Dolce Gusto compatible machines, Euro Caps offers multiple coffee flavors (espresso intenso, espresso, lungo, café au lait and cortado) and coffee/milk combinations (latte macchiato and cappuccino.) Continental Europe (particularly France, Spain and Germany,) makes up the second-largest market for single-serve coffee pods after the United States, according to Garrigoux. “This has to do of course with the popularity of singleserve beverages — and at the core of this popularity are high-intensity beverages like espresso,” he adds. Garrigoux says the full maturity of the [coffee capsule] market yet hasn’t been realized yet. “The market has evolved strongly in different ways. People are consuming many other types of coffee [such as] single-origin and organic, and usage has increased for single-serve, high-intensity coffees,” he notes. Single-serve machines of the future will be capable of producing many different types of beverages, both hot

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and cold, for adults and for children, Garrigoux says. “These new multi-beverage machines will be the thing of the future, and will lend themselves to allday use,” he states. As far as further developments in tea, babies constitute an emerging market for fruit- and herb teas in Germany, reports Katya Witham, a senior food and drink analyst for Mintel, writing in a 21 May blog. Private labels, as well as brands, offer a range of fruit- and herb-based teas suitable for infants and toddlers that are aimed at German parents seeking healthy, less-sweetened drink alternatives for their young ones, Witham writes. Citing the Mintel Global New Products Database, Witham reports that baby/toddler tea launches more than doubled in Germany between 2014 and 2017. In Asia, the butterfly pea flower (distinctive for its blue shade, color-changing properties and purported health attributes,) is popping up in tea, reports Michelle Teodoro, Mintel’s global food science and nutrition analyst based in Singapore. Rich in the potent antioxidant anthocyanin (which is thought to have anti-inflammatory properties that fight the effects of aging and support brain health), butterfly pea flowers change color to purple when mixed with acidic substances such as lemon juice. This intriguing characteristic is making the flower a trending ingredient to use in food and drink, Teodoro writes in an August 8 Mintel blog. More beverage companies are employing the sensory appeal of color in their offerings, Teodoro notes, pointing to Starbucks’ Asian launch of Butterfly Pea Lemonade Cold Brew, featuring butterfly pea flower tea layered with lemonade and topped with coldbrew coffee. Visual appeal, new flavors and high-quality ingredients are transforming the Chinese tea drinks market, Daisy Li, an associate director with the Mintel Food and Drink team, writes in a March 26 Mintel blog post. New drinks made with premium tea, fresh milk and fresh fruits are emerging and the market is growing quickly, Li states. Cold-brew tea and creamy, indulgent brown sugar milk tea are proving popular in Asian foodservice channels, making them a prime product trend for retail brands to tap into for ready-to-drink (RTD) offerings, writes Sam Moore, a global food and drink analyst with Mintel, in a 12 Feb. Mintel blog post. In the United Kingdom, young consumers are turning to specialty, fruit and green teas, and a quarter of tea drinkers aged 16 to 34 are interested in trying dessertflavored teas, according to food and drink analyst Julia Buech, writing in a 1 May, 2018 Mintel blog post. PLI

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CATEGORY UPDATES

OIL AND VINEGAR

Health, quality and package size are more prominent sales triggers By Richard Mitchell

nterest in edible oils knows no boundaries. Consumers in myriad regions are embracing a range of selections as they sharpen their focus on well-being. Record sales growth, for instance, is set to continue in Germany, with more consumers seeking plant-based oils in lieu of animal fats, reports market research firm Euromonitor International. Revenue increases will also occur as shoppers trade up from other edible oils to olive oil and within olive oil to higher-value offerings, such as organic and premium products, Euromonitor states, noting that olive oil is the best performer in the edible oil category. Private label products, meanwhile, are forecast to remain dominant, Euromonitor reports, stating that “for everyday purposes, many German consumers find edible oils offered by private label more than adequate.” A growing number of health-conscious Australian shoppers, meanwhile, also are seeking organic options, including almond oil and coconut oil, and are increasingly demanding new flavours and items in smaller containers. “This has led to an increase in bottle sales and a decrease in the number of tinned packaging,” Euromonitor reports. Chinese consumers are seeking small pack sizes of edible oils as well, an outgrowth of developing fewer meals at home. A 2017 Euromonitor survey found that only half of Chinese consumers prepare their own meals at home daily, down from 70% in 2013. In addition, wellness issues are strongly influencing how shoppers choose oils in Brazil.

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“While soy oil still dominates Brazilian edible oils, it is slowly and consistently losing share to other varieties, such as rapeseed oil and olive oil due to consumers’ increasing concern with health and wellness,” Euromonitor reports, noting that “consumers are choosing healthier options across major food categories whenever they can.” Though private label vegetable and seed oils are growing steady in Brazil, they still comprise a small share of overall category revenues. “Consumers generally perceive private label as lower in quality, and even during economic recession prefer to trade down to cheaper brands instead of experimenting with private label,” Euromonitor notes. While many North American consumers are focusing on health and wellness, they also seek wider selections of oils with different price points and flavours. More Canadian shoppers, for instance, prefer higherquality products, including cold-pressed, organic and single-origin olive oils, Euromonitor states, adding that “there have also been more blends coming into the market catering to price-conscious consumers.” A desire for variety and interesting experiences is fueling the growth of specialty edible oils, particularly from younger shoppers. “Edible oils is one of the categories in which consumers are willing to pay more for smaller quantities of highquality, premium offerings,” Euromonitor states. “This, combined with the latest health and wellness trend, has offered ample opportunities for value growth.” Indeed, IBISWorld notes that olive oil has been found to boost the immune system, protect against viruses and fight such disorders as cancer, heart dis-

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CATEGORY UPDATES ease, diabetes, high blood pressure, obesity, rheumatoid arthritis and osteoporosis. Olive oil’s health benefits separate it from other types of oils, such as canola and coconut, and the antioxidant, anti-inflammatory and anti-clotting properties “will continue to provide an opportunity for the industry,” IBISWorld states. Along with a greater overall demand for olive oil, interest in organic and certified extra-virgin olive oil is on the upswing, IBISWorld notes. Virgin olive oils are the oils that producers obtain from the fruit of the olive tree by mechanical or other physical means under conditions, and particularly thermal conditions, that do not lead to alterations in the oil and which have not undergone any treatment other than washing, decantation, centrifugation and filtration. Olive oil receives an extra-virgin grade if it is found to be fruity, has no defects and contains a free acidity, expressed as oleic acid, of not more than 0.8 grams per 100 grams. Virgin grades are given to olive oil with minimal defects and a free acidity of between 0.8 and 2.0. “Consumers are gravitating towards quality, as well as traceable oils,” says Salvatore Russo Tiesi, general manager and director of Bono USA Inc., a Fairfield, N.J.based olive oil supplier. He states that because olive oil flavours can vary in

accordance with the region of origin, it’s important for merchandisers to include such data on labels and to “line shelves with regionally certified oils from multiple regions and countries.” Effective retail displays may feature two SKUs each from Italy, Spain and Greece, he notes. “That would allow for six oils with vastly different olive varietals and flavor profiles,” Russo Tiesi says. More vinegar shoppers, meanwhile, also are seeking higher-quality selections, along with value-added private label products, states a spokesperson from Acetum, a Cavezzo, Italy-based vinegar supplier. Such consumers are focusing on product origin, the raw materials that companies use in production and packaging elements. “Globalization has made shoppers appreciate products from other countries and cultures, but they demand guarantees of quality and origin,” the spokesperson says. “The healthy eating trend also is resulting in the strong performance of traditional products, such as apple cider vinegar, and all types of organic vinegars.” To add appeal to private label, merchandisers should leverage a marketing mix that takes into account cost and variety, while understanding the dynamics of each sales market and tailoring products to the unique shopper needs in the different regions, the spokesperson adds. PLI

PAPER PRODUCTS

Consumer interest growing for sustainable and quality items By Richard Mitchell

he traditional ways of merchandising paper are becoming outmoded. With more consumers around the globe seeking wider varieties and eco-friendlier selections, and evolving shopper demographics resulting in new buying habits, it’s vital that marketers leverage relevant operating strategies if they are to sustain and increase activity. In the U.S., for instance, stagnant birth rates are impacting the need for such items as baby wipes and paper diapers, while a growing elderly population is fueling demand for incontinence products, including adult diapers, reports market researcher IBISWorld.

Environmental concerns over both the production and disposable nature of products, meanwhile, are leading more consumers to seek sustainable options, which could reduce demand for some paper selections. “Due to their sustainability and cost-effectiveness, reusable sanitary products, such as menstrual cups and cloth diapers, will become more popular among consumers,” IBISWorld states. Yet, an international focus on eco-friendly products also is creating sales opportunities for paper marketers, reports global market researcher Mintel. “The United Kingdom is already considering banning wipes with polypropylene, and the regulatory move to reduce plastic waste is a global one,” Mintel

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CATEGORY UPDATES states. “In the household paper category, brands have launched some highly innovative paper towels that are intended for robust scrubbing, and/or are infused with cleaning formula.” Mintel adds, however, that such products, which are expensive and in some instances designed just for cleaning tasks and not for contact with the hands, face or foods, are not selling well in some countries. “Yet the day for this type of innovation may still come,” Mintel notes. “Paper-based cleaning products that compete more directly with nonwoven cleaning wipes can be pitched as a plastic-free alternative, and that might make all the difference if nonwoven wipes become the next category of demonized product.” Indeed, many consumers around the world want paper products to be sustainable, but without a compromise to performance, says Steve Schoembs, executive vice president of sales and marketing for

Royal Paper Converting Inc., a Phoenix, Arizonabased paper goods supplier. “That includes maintaining softness, durability and absorbency,” he notes. The popularity of specific paper items, however, varies among regions, Schoembs states, noting that bath tissues and paper towels have close to a 100% penetration in the U.S., but are less popular in other countries. Yet, because core category activity is increasing at a rapid pace in many regions, there is a “large opportunity for companies to focus on these trends and create products that consumers are looking for in all paper segments and markets,” he says.

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In the Czech Republic, for instance, paper products are undergoing “a dynamic performance” as suppliers respond to greater consumer demand for both higher-quality selections and bigger pack sizes, notes Euromonitor. Private brand revenues and market share, meanwhile, are increasing in the Czech Republic, the result of “low brand loyalty in the category, together with the perception of private label as offering good quality for a satisfactory price,” Euromonitor notes. While two-ply products remain the most popular selections, interest is increasing for higher-quality three-ply and four-ply alternatives. “Rising demand for quality products is also visible in the growing interest in products with various additives, extracts, balsams or added plant fibers,” Euromonitor adds. A move to innovative options is occurring in Costa Rica as well, a country where paper products have the reputation of being standard generic goods, Euromonitor states. “The development of more sophisticated retail lines that include toilet paper, paper towels and napkins is expected to gain relevance,” Euromonitor reports. Assortments are likely to include more effective and reliable value-added products, such as ecological alternatives; options with additional quilting, softness and durability; and paper goods containing natural gels, such as aloe, and essential oils, including lavender and chamomile. Retailers will be offering such options to target more economically advantaged consumers, and additional premium items will “open new development opportunities for major players,” Euromonitor states. Price, meanwhile, is becoming a major merchandising element in Kenya, with households increasingly preferring jumbo packs of toilet paper that are equal to four normal toilet paper rolls but offer cost savings, while lasting longer and limiting unnecessary shopping trips, Euromonitor notes. The popularity of paper towels and its use for multiple purposes, including the cleaning of surfaces and drying of liquid spills, utensils, wet hands and oily food, is leading more manufacturers to offer two-roll packs, Euromonitor states. In addition, increasing urbanization is contributing to the greater interest in paper pocket handkerchiefs in Kenya, Euromonitor reports, adding that “working-class consumers prefer to have pocket handkerchiefs in their bags for convenience, as well as to fit in with their busy lifestyles.”

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CATEGORY UPDATES Yet another movement altering the merchandising landscape is the interest by many younger consumers in finding substitutes for tissues and napkins. In a Mintel survey of U.S. consumers, for instance, 30% of respondents, and 36% of those between ages 18 and 34, indicate that they are using toilet paper instead of facial tissue. Nevertheless, there still are opportunities to mitigate the trend. “Facial tissue brands have an opportunity to highlight that tissues are more sanitary because they have better wet strength than toilet paper and, accordingly, provide a better barrier to protect the hands and the people in the vicinity of a sneeze from germs,” Mintel notes. While younger consumers also are less likely to use paper napkins, with many instead opting for paper towels, “they are the most enthusiastic about customizing these products for specific events,” Mintel adds. “Still, it will take a significant change in consumer behavior to reverse these trends and bring these categories back to growth.” To help boost total sector activity, merchandisers need to focus on quality so consumers see benefits in all paper product segments, Schoembs says. “Those manufacturers that make their own parent rolls of paper have an advantage in ensuring consistency,” he adds, noting that a major consumer dissatisfier occurs when quality varies during initial and subsequent product purchases. Because the majority of private label buying decisions occur at the shelf, it also is important for merchandisers to list product attributes on packages, Schoembs states, including sustainability claims and certifications. PLI

PASTA AND RICE

Breathing new life into tried-andtrue staples By Dana Cvetan

The best private label pasta opportunities are in the mid- to premium and organic segments, where retailers and consumers alike are focused, says Lino Laudiero, president of GHIGI Food Industries LLC. “There is still a lot of market share to be taken from the national brands. What we’ve seen is that customers who purchase pasta in these segments and are happy with the product tend to come back into stores searching for the specific product,” Laudiero adds. While the entry-level pasta programs are where the majority of the volume has been and will continue to be, the mid-level, premium and organic segments are where retailers are seeing the most growth, Laudiero says. The reasons are because they offer retailers the opportunity for higher margins and to better connect with and retain customers through a well-sourced, high-quality product offering at a competitive price in a nicely designed private label package merchandised correctly, he explains. Keen consumer interest in product traceability, transparency and sourcing integrity is pushing retailers to develop a strong vision for their brands, which Laudiero believes will build private label equity and further cement shopper loyalty. “Consumers, especially millennials, aren’t as loyal to brands as they are to social issues such as sustainability, traceability and authenticity of product,” he adds. A farmer-owned, vertically integrated company founded in 1870 in the Emila-Romagna region of Italy, GHIGI’s pasta products are made from durum wheat grown in Italy in the company’s own fields. Ingredients are 100 percent traceable, GMO-free and the pasta is made in an egg- and nut-free facility. The company has Certified Organic capabilities. Gluten-free, fresh-frozen gourmet, artisan pastas are the specialty of Montreal, Canada-based Oggi Foods Inc. The company’s gluten-free pastas are based on the founding family’s nonna’s (grandmother’s) traditional Neopolitan recipes, says President Joe Turturici. Serving Canadian and U.S. markets, the company makes fusilli, cavatelli, four-cheese ravioli and ricotta and lemon ravioli with no preservatives or artificial flavours that cook in less than five minutes. “We’re part of the natural, healthy category. People are looking for gluten-free pastas,” Turturici says. Well thought out and designed packaging is an important component of private label success, and retailers have been investing more into developing the design of their packaging, as well as the story and vision of their brand to attract and retain customers, Laudiero says. “Coop and

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CATEGORY TREND WATCH UPDATES

Conad in Italy (the Coop Italia grocery chain and the Conad supermarket chain) are good examples of this and the success retailers can have when [these strategies are] executed correctly,” Laudiero says. “We’re seeing retailers focusing on premium cellophane and paper packaging for their pasta offerings and [showing] increased interest in shelf ready packaging,” Laudiero says. “With low-cost competitors like ALDI and Lidl entering more international markets, we think retailers will start placing a stronger emphasis not only on their private brand quality and packaging design, but also on more cost-efficient packaging,” Laudiero says. “We’ve just started seeing retailers become more interested in shelfready packaging, similar to ALDI. We think this could be an interesting area for retailers to gain efficiency at the store level and from a cost perspective.” In pricing, Laudiero says, “We’re seeing more and more retailers focus on sourcing product as efficiently as possible. Retailers need to spend time understanding costs throughout the supply chain process so they can effectively source product, but also keep suppliers honest and viable at the same time.” In order to convert consumers to their private label, retailers need to spend time developing a uniform strategy for their brand across the store, Laudiero says. Have a clear brand-management strategy, Laudiero recommends. “Some retailers are all over the place with their private brands across different categories,” he adds. “We think they should set a clear vision and strategy for the brand first and then execute that strategy uniformly across the different categories. It shows consistency and integrity across the brand when consumers are purchasing.” In terms of assortment, retailers should start with a focus on the best-selling pasta items and then think of expanding to lower-volume cuts, Laudiero advises. Pay proper attention to merchandising and promotion

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to help support the store brand and convert customers from national brand equivalent products, Laudiero adds. The staple food for more than half the world’s population, rice provides more than one-fifth of all calories consumed by humans worldwide, and is the predominant dietary energy source for 17 countries in Asia and the Pacific, nine in the Americas and eight in Africa, according to Wikipedia. Yet, new-breed and ancient grains have been drawing consumer attention as alternatives for a while now, notes Michelle Teodoro, Mintel’s global food science and nutrition analyst based in Singapore. Riceberry rice, Teodoro writes in a Sept. 12 Mintel blog post, is the latest “super grain” drawing attention. Black/purple in color, riceberry is a new rice variety grown in Thailand. Aromatic, light and fluffy in texture when cooked, its nutty flavor is similar to Thai jasmine rice, and its color gives it significant visual appeal, Teodoro writes. Riceberry rice is increasingly used in foodservice as an ingredient in salads and as a side dish accompanying meats. It also has the potential to be used in desserts as an alternative or substitute for white rice, Teodoro notes. Teodoro advises using the vibrantly colored rice to make packaged products “Instagram-worthy” and taking advantage of its healthy properties in marketing the grain. Rich in immune-system supporting antioxidants, high in fiber and bran oil, riceberry rice’s wholesome nutritional profile makes it a candidate for “super grain” status, Teodoro says. According to the website organicfacts.com, bran oil has numerous health benefits. It is thought to lower cholesterol and protect heart health, boost the immune system, improve skin health, promote weight loss, relieve menopausal symptoms, increase cognitive strength and provide protection against cancer. PLI

PRIVATE LABEL INTERNATIONAL | SPRING 2019

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ENDCAP

The

Modern

Consumer ●●●

Earlier this year, global market researcher Euromonitor International unveiled a white paper highlighting the top global consumer trends to watch in 2019. Clearly, these trends will impact how retailers and manufacturers approach private label. While some of these trends may cause disruption, they also present opportunity. Check out the trends listed below and see which ones could mean opportunities for your private label products. Age agnostic Boundaries of old age are shifting. As people live longer and take better care of themselves, older consumers feel and want to be treated as younger. Back to basics for status Shoppers are searching for authentic products and experiences, moving away from overt materialism to simplicity. But they also desire higher quality products. Conscious consumer What used to be the domain of ethically positioned, niche producers is now being embraced by conventional companies through higher welfare products. Digitally together As our digital capabilities and comfort using new

technologies grows, so will the potential of what can be created or experienced together, but remotely. Everyone’s an expert Whereas previously shoppers relied on a certain brand or information source, now companies must constantly innovate to entice more inquisitive shoppers. Finding my JOMO The Fear Of Missing Out has now given place to the Joy Of Missing Out. Consumers want to protect their mental well-being, disconnecting from technology and prioritizing what they truly want and enjoy doing. I can look after myself As people become more self-sufficient, they take preventive measures against illness, unhappiness and discomfort without consulting a professional. I want a plastic-free world The push for a plastic-waste-free society has gained momentum, creating a virtuous circle where businesses gain by improving sustainability. I want it now! Consumers seek instant gratification and frictionless experiences that mesh with their lifestyles. PLI

SPRING 2019 | PRIVATE LABEL INTERNATIONAL

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Store Brands PLI - May 2019  

Store Brands PLI - May 2019