Store Brands-1222

THE PULSE OF PRIVATE LABEL

DECEMBER 2022

Dewayne Rabon, Southeastern Grocers

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Private Label Assortment a Key Component of Southeastern Grocers’ Success

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VOLUME 45 NO.7

COVER STORY

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Retailers To Watch The 10 You Should Be Watching In 2023

20 Impact Awards

Store Brands Honors Retailers & Suppliers For Their Efforts With Charities, Sustainability and More

Private Label Assortment a Key Component of Southeastern Grocers’ Success

Dewayne Rabon, Southeastern Grocers

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Editor’s Note

Store Brands (ISSN-0190-9851; USPS # 0488-370) is published monthly, except January, March, May, July and September by EnsembleIQ, 8550 W. Bryn Mawr, Suite 200, Chicago, IL 60631. Subscriptions: One year, $100; two years, $182. One year, Canada $118; two years, $215 One year, foreign $135; two years, $225. One year, digital $70; two year, $130.Single copies $14 US, Canada & foreign $16. Payable in advance with a bank draft drawn on a US bank in US funds.Single copies $20. Foreign, $85. Canada Post: Canada returns to be sent to IDS, P.O. Box 456, Niagara Falls, ON, L2E6V2. Periodicals postage rates paid at Chicago, IL and additional mailing offices. Printed in USA. POSTMASTER: send all address changes to Store Brands PO Box 3200 Northbrook, IL 60065-3200. Copyright 2022 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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OPPORTUNITY IS KNOCKING CONSUMERS’ EDUCATION ABOUT PRIVATE LABEL PRODUCTS VITAL TO FUTURE GROWTH Opportunity.

That was the word I heard most frequently at PLMA’s 2022 Private Label Trade Show in Chicago. Inflation has led more consumers to seek private label product alternatives to higher-priced national brands, and this is providing retailers additional opportunities to showcase quality items and shift market share toward storebranded products.

Currently, there are two generations of consumers shopping in stores and online who have never experienced this level of inflation. Now, with prices up year-over-year and expected to remain at or near current-day levels heading into 2023, shoppers continue looking for quality products that allow them to save some money.

This once-in-a-generation opportunity to grow sales and expand the consumer base for private label products should not be met passively. Key to this effort is education. While a percentage of shoppers understand and are loyal to store-branded products (talk to a Trader Joe’s shopper), there are still many that turn their nose up at items that don’t carry a name familiar to them.

Changing hearts and minds of consumers calls for a strong marketing strategy. This endeavor is one that falls to retailers. Nearly every national and regional chain is spending time, energy, and money on expanding their store-branded assortments. We know these products are not merely generics or knock-offs, they are items that have been researched and developed, are equal in quality to national brands and are less expensive.

Why not tell shoppers about the hard work that goes into developing a new assortment of private label products? Let them know these are not lesser items. Talk about the quality.

Share with them the better value and money saving aspects of these products. Ask them why they continue to spend more of their hard-earned money on national-brand products.

When ShopRite launched Bowl & Basket, it rolled out a marketing campaign that positioned these products as high-end, quality items that also offered a strong value. They didn’t mention private label, but did talk about their exclusive availability at ShopRite stores.

This is an approach other retailers should learn from.

Any marketing effort should also take a page from Costco. The warehouse club has reinstated sampling and shoppers are enjoying a host of tasty treats as they walk the retailer’s oversized aisles. Other retailers should replicate this idea and give customers a taste of their latest private label offerings.

Shoppers love the opportunity to nosh while they shop, and this could lead to additional sales and more opportunities to expand private label assortments.

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The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

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COVERSTORY STORY COVER

As Consumer Demand Quickly Evolves, Southeastern Grocers Meets New Challenges Head On B Y

G R E G

For Southeastern Grocers (SEG), the past three years required the company and its 37,000 associates to be nimble and respond quickly to the ever-changing needs of its shoppers.

From concerns about health issues related to the pandemic, to supply chain challenges and this year shoppers facing inflationary pressures not seen in decades, consumer shopping habits have been something akin to a roller coaster at a major theme park. While not easy to deal with, having strong connections to the communities it serves has been a major advantage for SEG, which has been named Store Brands’ 2022 Retailer of the Year.

“We are devoted to listening to our customers throughout the communities we serve,” said Dewayne Rabon, chief merchandising officer with Southeastern 8

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S L E T E R

Grocers, the parent company of Winn-Dixie, Fresco y Más and Harveys Supermarket. “Our people – customers and associates alike – are our No. 1 priority and we rely on those who live and work in the areas we serve to help us to consistently deliver a shopping experience that meets the needs of each unique community.”

Just prior to press time, a report in the Wall Street Journal indicated that Southeastern Grocers may be up for sale. An SEG spokesperson told Store Brands, “We do not comment on market rumors. With that said, we are always reviewing ways to enhance shareholder value, and to the extent that credible strategic or other shareholder value enhancing transactions emerge, we have an obligation to consider them. While the potential for any such transaction remains ever present in our industry, we will remain focused upon advancing our transformational

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COVER STORY

“Our increased penetration in own brand products shows us customers have found Southeastern Grocers products offer quality as good as or better than national brands with a significantly lower everyday price guarantee.”

Across its three retail brands, Southeastern Grocers’ private label assortment consists of a host of brands including SE Grocers, SE Grocers Prestige, SE Grocers Naturally Better, and SE Grocers Essentials. It also carries private label items such as Fisherman’s Wharf, Lip Lickin Chicken, Chek Soda, Hickory Sweet and Whiskers & Tails.

Private Label Growth strategy, supporting our associates and delivering a world-class shopping experience for our customers.”

Noting the unique set of challenges presented by the pandemic, the global health crisis also provided a unique opportunity for shoppers to test new methods of shopping and also sample new products.

For example, SEG launched an online shopping and delivery service in more than 375 Winn-Dixie stores and Harveys Supermarket locations throughout Alabama, Florida, Georgia, Louisiana and Mississippi. Using an app or the website for either supermarket, customers today are able to shop for their groceries online while still having access to the weekly deals and promotions offered in stores. Orders are ready in as little as two hours.

While safety and convenience were top of mind for shoppers in 2020 and 2021, the focus this year shifted to price as inflation led to significant increases in the cost of groceries. Again, SEG was prepared to handle another challenge and provide its customers an expanded assortment of money-saving private label products.

In 2021, SEG introduced more than 400 new store brand products, and followed that effort this year with an additional 500 new private label products on its shelves.

“Our award-winning own brand products have quickly excelled as household favorites over the past two years as customers have had to reduce discretionary spending in order to pay for core consumables in the face of inflationary pressures,” Rabon said.

As with other retailers, SEG, across its three retail banners, has seen an increase in customers choosing products in its SE Grocers line over comparable national brand products. Most notably, categories such as cheese, eggs, frozen potatoes, water, shortening and oil, salty snacks, coffee, bleach and toilet tissue have seen the greatest activity.

Additionally, SEG has met the demand increase for basic pantry necessities by offering more products to provide shoppers with additional savings.

“Over the past year, we have seen an increase in own brand shopping preference among our customers as they discover they can save an average of 20% compared to national brands without compromising quality,” Rabon said. “With thousands of quality own brand products in all of our stores our customers are

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COVER STORY

constantly finding value within our SE Grocers line of products.”

The jump in demand for private label products has seen some retailers take a second look at their product development processes to identify new opportunities in an effort to grow their selection of store branded products. SEG, Rabon noted, has also reviewed its internal processes and revamped its product development process as part of an effort to get items to the shelves faster.

“We constantly look for ways to offer customers the best products at great value,” he said.” We often do this through line extensions of established products and categories, such as by expanding our own brand char-

WE ARE DEVOTED TO LISTENING TO OUR CUSTOMERS THROUGHOUT THE COMMUNITIES WE SERVE. OUR PEOPLE – CUSTOMERS AND ASSOCIATES ALIKE – ARE OUR NO. 1 PRIORITY AND WE RELY ON THOSE WHO LIVE AND WORK IN THE AREAS WE SERVE TO HELP US TO CONSISTENTLY DELIVER A SHOPPING EXPERIENCE THAT MEETS THE NEEDS OF EACH UNIQUE COMMUNITY. – Dewayne Rabon, Southeastern Grocers

coal offering during summer grilling months, or by offering completely new and unique products that are not found in our stores today. We are also looking at ways we can offer better value through our package sizes, for instance by offering value packs.”

SEG also takes several steps to highlight the quality of its private label products, which includes offering a money-back guarantee on its assortment that numbers more than 6,000 items. The grocer enters its store brand products in national competitions to be judged against items from national brands, and those results are shared with shoppers through its social media accounts and in-store signage.

Rabon sees opportunities for future growth with SEG’s private label assortment.

“We are constantly looking for ways to improve our assortment and on-shelf availability as the preferred neighborhood grocer in the communities we serve,” he said. “We are also in a very unique time in the retail space where shopper preferences are evolving like never before. Today’s shoppers are more educated in product selections and value, which makes it a really exciting time for own brand products.”

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COVER STORY Sustainability Efforts

Despite the challenges faced over the past three years, sustainability has maintained its spot as a significant point of action across the retail world.

SEG has also stepped up its efforts in a multitude of ways and private label products are playing an important role in the effort.

SEG was recognized by Store Brands for its commitment to innovating sustainable products and received multiple 2022 Game Changer Awards for its SE Grocers Prestige 100% Ground Single Origin Coffee, SE Grocers Naturally Better Cage-Free Eggs, SE Grocers Prestige Chocolate Bars, SE Grocers Naturally Better Paper Products and SE Grocers BAP Certified Seafood.

The grocer also responsibly sources 100% of its tuna and increased sustainability in its own brand line of products through its support of

fair labor practices, responsible cocoa sourcing and creation of fiber compostable and biodegradable single-use products.

To enhance sustainability efforts, SEG is currently partnering with How2Recycle to update its own brand packaging to communicate recycling instructions to customers and working to make its own brand packaging reusable, recyclable or industrially compostable. This year, all of SEG’s stores also implemented the ability for customers to select paperless receipts to reduce the use of paper throughout its footprint.

The sustainability effort also includes packaging. Rabon noted that in response to feedback from its customers, associates, and community members, SEG has pledged to increase the sustainability of its own brand packaging by the end of 2028.

Community Support

Southeastern Grocers is also heavily involved in a host of charitable

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endeavors. The company works in partnership with its charitable arm, the SEG Gives Foundation, to actively support the communities it serves across the Southeast.

To date this year, SEG has donated more than 12 million meals to alleviate hunger, funded more than 250 educational scholarships to the legacies of fallen and disabled service members through its partnership with Folds of Honor and awarded $300,000 to 30 recipients of its Romay Davis Belonging, Inclusion and Diversity Grant to help address racial disparities in education, health care and food insecurity and much more.

“As a preferred neighborhood grocer, it is important to us to give back to our associates and customers who support us and better the lives of our associates, customers and neighbors because we know we are stronger together,” Rabon said. “Our charitable pillars are vital to the strength of our communities.”

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RETAILERS TO WATCH

TO WATCH IN 2023

HERE ARE THE RETAILERS YOU SHOULD KEEP AN EYE ON IN THE NEW YEAR

By Greg Sleter and Zachary Russell

Each year brings with it a new set of challenges to the nation’s retailers, and 2022 was no exception. Consumers evolving their shopping habits while also facing inflation rates not seen in a generation required retailers to be nimble to meet the needs of their customers.

As 2022 comes to a close, Store Brands has put together a list of 10 retailers we think are worth watching closely in the New Year. From leading grocery chains to growing e-commerce players, the coming 12 months will see retailers face new challenges, revamp product assortments and provide consumers with new options to meet their ever changing demands.

The profiles of the 10 retailers Store Brands has selected will provide you an overview along with our thoughts on why each is worth watching in 2023.

KROGER AND ALBERTSONS OVERVIEW: In putting together our Top-10 Retailers to Watch for 2023, including Kroger and Albertsons on the list as a pair was the biggest nobrainer of all time. In mid-October, the two grocery behemoths shook the retail world when announcing they would be merging. The combination as-is would create a retailer with more than 5,000 stores spanning the U.S.

By comparison, Walmart stores in the U.S. number about 4,800 locations.

Clearly, everyone will be watching the outcome of this rather intriguing retail marriage.

WHAT TO WATCH: Well, a lot. From a macro perspective, the impending merger that is likely to get an extensive review from federal officials, will be a major talking point in the New Year and could have significant implications going forward.

But until the merger gets its review, both chains continue their normal daily operations, and private label products are playing an ever-increasing role on their respective shelves.

When announcing mid-year financial results, Kroger officials highlighted the success of its own-brand assortments, with sales in the second quarter up more than 10%. Driving that growth was its namesake Kroger brand along with the Home Chef

brand and the addition of 170 new items under its Our Brands portfolio.

Unwilling to rest on its laurels, Kroger then launched Smart Way that combined 16 of its legacy brands in an effort to “ensure customers searching for opening price point items will be able to easily find what they are looking for on the shelves.”

We’ll also be watching Kroger’s Our Brand Innovation Summit that will be held in January. Announced in September, the initiative gives product suppliers the opportunity to meet with Kroger merchants through a virtual platform to showcase new product ideas. It will be interesting to see which new items end up on store shelves as a result of this initiative.

Albertsons, too, has been active with its private label assortment. The grocer had several items included in Store Brands’ annual Editors’ Picks competition, and also launched several new collections. Most notably, the company debuted the Vinafore Collection, a private label assortment of wine that includes several highly rated selections. The assortment is being offered at banners across the company.

Additionally, Albertsons relaunched its Waterfront Bistro private label seafood brand. Launched in 2009, the brand is approved by the third party group Responsible Seafood Policy.

How Albertsons builds off these private label launches will also be watched in the New Year.

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RETAILERS TO WATCH

TRACTOR SUPPLY In January, Tractor Supply hit a significant milestone as the retailer opened its 2,000 location. And since that major announcement to start the year, the news has kept coming. Hitting and eventually surpassing this impressive store count is noteworthy for a retailer that was founded in 1938 as a mail-order business focused on providing tractor parts to farmers at fair prices. Today, the retailer provides a broad array of products to communities across the country.

WHAT TO WATCH: Private label products are no stranger to Tractor Supply, and the retailer this year continued to expand that assortment with the launch of an exclusive apparel collection from Carhartt. A portion of the proceeds from every item purchased will be donated to SkillsUSA, a nonprofit that serves students from middle school through college/postsecondary institutions to prepare for careers in the trade. Given the strong demand for store-branded products from consumers, the opportunity for Tractor Supply to take advantage of this is there.

In addition, the retailer has also enjoyed substantial growth in the pet category, and private label products are playing a significant role in the expansion. Among the steps it has taken includes the rebranding of Petsense to Petsense by Tractor Supply. Company officials said this move was done to OVERVIEW:

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deepen relationships with existing customers and also attract new customers seeking pet products.

During its third quarter investor conference call, officials with the retailer reported making substantial gains in the pet category despite some saying sales in the segment are moderating. Key to Tractor Supply’s growth and success in the category has been a combination of customer service, being in-stock, pricing and a strong private label selection.

Going forward, officials with the retailer expect the category to continue growing. How Tractor Supply further augments its pet product assortment and if it attracts new customers will be worth watching in the coming year.

PEAPOD DIGITAL LABS OVERVIEW: It’s been a busy 2022 for Peapod Digital Labs. As the digital, e-commerce and commercial entity for Ahold Delhaize USA’s private brands and store banners, it plays a vital role in developing private label products for several banners including Food Lion, Giant, The GIANT Company, Hannaford and Stop & Shop. With sales of private label products expected to grow again in 2023, this will have an impact on new product development for Peapod.

WHAT TO WATCH: In July, Peapod efforts to give the company’s private label assortment a boost were on display with the launch of its Incubator Program. Designed to bring diverseowned suppliers further into the conversation, the effort chose five companies as finalists, four of which were certified minority-owned (one also certified LGBT-owned) and one veteran-owned. The winner, Whole & Free Foods, is owned by Trish Thomas and Nichole Wilson, and manufactures various items that are free from the top-14 allergens, corn and sugar.

The initiative is indicative of the effort

by Peapod and its parent company Ahold Delhaize to further broaden its private label assortment and give smaller companies an opportunity to work with and learn from one of the nation’s major grocery chains. It also provides an opportunity for a womenowned company to grow, which speaks to Ahold Delhaize’s focus on issues of diversity and inclusion.

From a sheer business perspective, the Incubator Program also speaks to the growing importance of privatebranded products across the company and the need to continue innovating.

Understanding the need to differentiate assortments and provide shoppers something unique from what’s on the shelves of the competition, initiatives such as the incubator launched by Peapod show the willingness of grocers to seek input from product suppliers, even those they currently don’t do business with.

This effort by Peapod is good for the retailer and new suppliers looking to get a foot in the door and ultimately products on the shelves. It’s also good for the consumer as the selection of private label products continues to grow. We’ll be watching the next steps with this initiative at Peapod.

MISFITS MARKET OVERVIEW: Misfits

Market has quickly become a major player in the online grocery market. Founded in 2018, the company delivers organic produce, high-quality meats and seafood, plantbased proteins, dairy, bakery, wine

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and other grocery items to nearly every zip code in 48 states. This was a landmark year for the company. With 2023 around the corner, Misfits Market is poised to continue growing.

WHAT TO WATCH: After launching the Odds & Ends line of private label products in April of this year, Misfits Market has positioned itself to greatly increase its own brand offerings following the acquisition of Imperfect Foods in September.

Another online retailer, Imperfect Foods offers private label products that are made from repurposed food items that are deemed lessdesirable to have been sold in stores.

The acquisition put the combined business on track to cross $1 billion in sales and reach profitability by early 2024.

While still operating as separate companies, the acquisition of Imperfect Foods shows that Misfits Market is aggressively making moves to grow in an increasingly competitive e-commerce market.

“The strengths of the Imperfect Foods organization, from its in-house delivery fleet and robust private label program to its sustainability commitments and innovation, add immediate scale and depth to what we’re building at Misfits Market,” said Misfits Market CEO Abhi Ramesh at the time of the acquisition.

The company’s private label debut featured pantry items like coffee, dried fruits, nuts and snack mixes. Following the acquisition of Imperfect Foods, Misfits Market could potentially look to bolster its private label offerings with more fresh options in 2023, similar to Thrive

Market, which offers a wide selection of private label items. This makes Misfits Market one of the retailers Store Brands is keeping an eye on.

H-E-B With nearly 120 years in business under its belt, H-E-B has become arguably the most dominant retailer in the Lone Star State. With more than 420 stores in Texas and Mexico, the chain has grown to rival Walmart in the country’s secondmost populated state. H-E-B’s continued growth makes it a model for other retailers looking to dominate in a specific region or state.

WHAT TO WATCH: H-E-B’s takeover of its home state has been nothing short of fascinating. To put it simply, the retailer has mastered the art of dominating its home market.

The San Antonio-based retailer, which offers private label grocery along with home items, serves more than 150 communities in Texas and continues to expand its presence in the major metropolitan areas. In November, H-E-B even opened three stores on the same day: one in the Dallas-Fort Worth area, and two in the Houston area.

To keep up with its growing store count, H-E-B announced expansions of its supply chain over the summer.

The retailer will grow its Temple distribution center by 325,000 square feet, adding an automatic frozen distribution line. H-E-B opened its newest e-commerce fulfillment center in Leader over the summer, marking the fifth facility to open since 2018.

Through high-quality private label products and a customer-favor-

ite e-commerce service, H-E-B has quickly become one of America’s fastest growing retailers. As a sign of its customer popularity, H-E-B recently debuted its first collection of branded merchandise.

With Texas becoming one of the fastest growing states in the country, H-E-B will have plenty of opportunity to continue growing its store count and reaching new customers in 2023, with the ability to potentially add states nearby to its footprint.

Watching H-E-B grow and how it impacts its retail competitors will be closely watched in the New Year.

OVERVIEW:

MEIJER OVERVIEW: A beloved Midwestern re-

tailer with stores in six states, Meijer has had a successful 2022 with plenty of opportunities to continue growing next year. Headquartered in Grand Rapids, Mich., the family-owned and operated chain expanded private label offerings in 2022 and continued to create new store formats.

WHAT TO WATCH: Like Hy-Vee, Kroger and other grocery chains, Meijer is synonymous with the Midwest. Operating approximately 500 superstores, markets and express locations in the region, the retailer centered its private brands as a part of its growth strategy in the past year.

In 2022, Meijer announced a search for new “Midwest made” products for its Fredrik’s premium brand, launched the Crafted Market brand of convenient heat-and-eat meals, and in the clothing department, launched the Tranquil & True

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ADVERTORIAL

The Profit Potential of Private Label Pulses:

HOW PL LEGUMES CAN DRIVE CATEGORY SALES Growth prospects for the legumes market are promising — and so is the profit potential for retailers who add private label options to their inventory in the category.

That is the takeaway from industry data, which shows consumers are embracing legumes for the healthy ingredient profile they deliver.

“North America is expected to account for a significant market share during the review period owing to the increasing demand for food containing high protein and fiber,” the Legumes Market Research Report from Market Research Future, which covers the forecast period 2022-2030, says.

What private label legumes bring to the table is the value that today’s budget-stretched shoppers seek.

According to the Power of Private Brands 2022 report from FMI–The Food Industry Association, 41% of shoppers are buying more store brands, while savvy retailers and manufacturers are working to accelerate private label growth. As the report notes, “71% are working with suppliers to optimize price and availability, which aligns with consumers mostly choosing private brands because of lower costs, deals or perception of good value.”

A RETAILER-MANUFACTURER PARTNERSHIP High consumer demand is prompting retailers and manufacturers to set bold targets for private brands, according to Doug Baker, vice president of industry relations at FMI. As Baker told Store Brands in September, “To reach these goals, retailers and manufacturers are looking at several tactics including private brands outside the U.S. that have higher shares for approaches to growth, including innovation, strategies to accelerate growth and enhanced e-commerce availability for private brands.”

The La Doria Group, a southern

Italy-based producer of private label pulses, is one of those outside brands.

“Continuous product innovation in private label is one of our strengths.

We work constantly alongside our customers to provide them with a product range that is increasingly complete and close to market needs,” says Diodato Ferraioli, La Doria’s Export Sales Director.

“We offer our customers specialized know-how in the production of private label products and high flexibility in customizing recipes, packaging and service. We’re more than suppliers — we’re true partners with our retailers with whom we maintain a constant and long-lasting dialogue.”

When it comes to canned vegetables, that innovation is seen in a selection of boiled beans, chickpeas, lentils, peas, and baked beans, all packaged in tins or polybags.

“One of our most popular products in this category are La Doria’s Chickpeas that come from carefully selected dried chickpeas, which are rehydrated and boiled naturally to preserve their flavor,” says Ferraioli, who adds that La Doria carefully identifies international market trends so the company can turn them into opportunities for its customers.

The increasing popularity of organic products is just one example: Organic has reached a share of 12% in value and 8% in volume in the legume market, a share that has grown steadily over the last 4 years.1 “As private label producers, we have

BY THE NUMBERS The legumes market could anticipate growth at a rate of 5.3% between 2022 and 2030.

By 2030, the overall market size shall be around USD 17.25 billion, which indicates promising growth prospects.

—Legumes Market Research Report, Market Research Future

“Continuous product innovation in private label is one of our strengths. We work constantly alongside our customers to provide them with a product range that is increasingly complete and close to market needs… we’re true partners with our retailers with whom we maintain a constant and long-lasting dialogue.”

— DIODATO FERRAIOLI, La Doria embraced this trend by developing new products that aim to expand the range of organic legumes as well as vegan and free-from legumes without salt in the preserving liquid,” Ferraioli says.

Sustainability is another trend La Doria is watching closely. The company is focused on sustainable packaging and control along the supply chain to ensure full traceability of products, Ferraioli notes. “ISO 22005 quality certification attests to La Doria’s transparency to the market thanks to its ability to reconstruct, at any time and quickly, the history of the certified product,” he reports.

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RETAILERS TO WATCH

line of intimates and sleepwear.

Not only has Meijer’s private label enhancement been impressive, but so has its evolution towards new store formats. The retailer debuted its small-store format in 2018, with the fourth location opening in fall of 2021 in Downtown Detroit. While the neighborhood markets offer shoppers a slimmed-down experience featuring local goods, Meijer has plans for a new format in 2023: a store smaller than its supercenters, but larger than its neighborhood markets.

The first two Meijer Grocery formatted stores are slated to open in Michigan next year, giving customers a “simplified” shopping experience.

The stores will offer fresh produce and dry grocery, a fresh meat counter, a bakery and more in a condensed, “quick-to-navigate” layout.

Between expanding private label offerings in the food section and beyond and launching new store formats that fit the needs of different communities, Meijer is on track to continue growing in 2023. The retailer last entered a new market in 2015 with its first store in Wisconsin, and could be well-positioned to expand into new territory in the near future.

THRIVE MARKET OVERVIEW: Thrive Market continues to, well, thrive, and 2022 was another strong year for the membership-based retailer. The company continues to expand its customer base and on the product side, private 18

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label remains a focus with sales of its own-branded products topping $100 million. The company has more than 500 Thrive Market branded products in its assortment and that number continues to grow.

WHAT TO WATCH: From a macro perspective, the continued growth of Thrive Market will be something we’ll continue to watch into 2023. The company has struck a nerve in a positive way with consumers and it continues to expand its product mix utilizing feedback from its shoppers.

The other story that hits closer to home is the continued growth of its private label assortment. The initial step into the world of own-branded products started with about a half dozen items that were viewed by the company as being innovative and offering its shoppers something different.

With its private label selection having expanded significantly, Thrive is continually searching for opportunities to bring to market something that is unique, but that is also offered at a strong value.

One example is the late summer debut of its f.a.e. proprietary beauty care line. The line was designed to bring to market an assortment of products accessible to a broad range of consumers. The line’s name f.a.e. means “for all, everywhere” and its goal is to take care of “every face, every race, and every age.” More than two dozen products in hair care, skin care and body care are included in the assortment.

All items are priced $6.99 and lower.

Christine McNerney, senior director of Home, Health + Beauty, for Thrive Market, told Store Brands just after the launch of f.a.e., “The beauty industry is notorious for being exclusive, whether it’s pricepoint, branding or shade ranges. Beauty and wellness should not be a privilege and f.a.e. takes the privilege out of wellness.”

Future growth proprietary product assortments such as f.a.e. along with the additional private label product expansion will be something we’ll be watching in the year ahead.

GNC OVERVIEW: When it comes to the health and wellness category of retailers, GNC is in a league of its own. Through a “science-based” approach to crafting its portfolio of own brand products, along with launching retailer-exclusive collaborations on a seeminglyweekly basis, the retailer is primed for another strong year in 2023.

WHAT TO WATCH: Founded in 1935, GNC has grown to become the leading health and wellness retailer with a wide variety of private label products and brands. Since the COVID-19 pandemic hit the U.S. in March of 2020, consumers have gravitated towards a number of products with added benefits in order to stay healthier, including physically and mentally.

Products like zinc, vitamin D, vitamin C, elderberry and more all saw rises in popularity as consumers looked to avoid getting sick. As the pandemic waned, consumer interest changed, and GNC had to continuously evolve.

The retailer has followed the trends closely, particularly to best serve its customers with private label products. According to GNC’s leadership, listening to customer feedback and figuring out what kinds of products are trending has been crucial for the retailer’s success.

“We also recognize our consumers have expectations for the products and experience at GNC,” said Rachel Jones, MS, RDN, senior vice president and chief product innovation and science officer, in a recent Q&A with Store Brands. “We continue to focus on providing products that are science-backed, high-quality and efficacious (regardless of the

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trends) while also ensuring consumers are able to work with our associates and coaches to work towards their unique wellness goals.”

Another one of GNC’s biggest strengths has been its ability to roll-out fun and unique exclusive products at a dizzying pace. Whether it be fitness product exclusives seen with collaborations alongside Girl Scouts of America, GHOST, G Fuel and Bucked Up, or wellness product exclusives like its offerings form The Honest Company, GNC continues to offer something for all of its customers.

In 2023, look for GNC to continue building its private label and exclusive product portfolio while staying on top of trends and dominating the health and wellness category.

ALDI Aldi remains a leading retailer in the private label space and during 2022 continued to push the envelope on a host of issues ranging from new product development to issues pertaining to sustainability. Its focus on private-branded products and providing value to shoppers has seen strong traffic growth as consumers look to make ends meet.

WHAT TO WATCH: There are many things to keep an eye on at Aldi in 2023, but we’ll highlight a couple at the top of our list. With inflation remaining top-of-mind for consumers, the discount grocer could see its customer count continuing to grow. More shoppers today regardless of their socioeconomic status are turning to private label products to save money and also because the quality of these products OVERVIEW:

are at least equal to the higher priced national brands.

While certainly good news, this could provide some challenges given the small footprint of its stores, labor shortages that are impacting all retailers, and the need to keep stores well-stocked with items shoppers want and expect to see. How Aldi responds to these challenges will be something we’ll keep an eye on in the year ahead.

Sustainability is also a major issue being addressed by Aldi. With some 2,200 stores across the United States, the company continues to evolve its corporate culture as it pertains to sustainability. During the year, Aldi CEO Jason Hart penned a letter to customers to highlight the company’s initiative to phase out plastic shopping bags from all of its stores by the end of 2023.

Additionally, the retailer has taken steps to limit the impact of its packaging on the environment. In an interview with Store Brands, Joan Kavanaugh, vice president of National Buying at Aldi, said more than 60% of its exclusive packaging is reusable, recyclable, or compostable. It also educates consumers with its easy-tolocate How2Recycle logo.

Aldi has also taken other steps and works with organizations such as Fair Trade USA to certify its products are sustainably sourced to allow shoppers to know they are buying products that are not harmful to the environment.

This effort will continue into 2023 and we’ll be watching what comes next.

GOPUFF OVERVIEW: Since

its creation in 2013, Gopuff has grown from Philadelphia to serving major markets across the U.S. through its unique business model of micro-fulfillment centers. In 2022, the delivery platform released its first two private brands, signaling a forward trajectory for the company in the coming year.

WHAT TO WATCH: It’s no secret that the COVID-19 pandemic revolutionized the grocery/retail industry, with convenient shipping and delivery options becoming front-of-mind for many consumers. In recent years, Gopuff has grown its delivery footprint and exclusive product partnerships, and in 2022, it made the leap into the world of private label, offering customers everyday product staples made readily available.

Gopuff’s first private brand, Basically, debuted in January, and featured snack items like pretzel bites and almonds along with household staples like batteries, toilet paper and dishwasher packs. In October, Gopuff launched Goodnow, its brand of OTC medicines and more, with plans to expand the line in the future.

“As consumers become increasingly interested in private label products, Gopuff is uniquely positioned to develop new brands curated specifically for our customers,” said Jessica Glendenning, director of private label at Gopuff at the time of the Goodnow launch.

In 2022, the chain also unveiled its prepared pizza business through its Gopuff Kitchen installations, The Mean Tomato, giving customers in select markets the option to order hot food. Offering more prepared foods could be one specific way that Gopuff expands in 2023.

It looks like convenience is one pandemic trend that is here to stay.

As long as consumers are seeking fast and convenient ways to receive daily items, Gopuff will continue to grow its fulfillment network and product portfolio.

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IMPACT AWARDS

IMP CT STATEMENT STORE BRANDS’ 2022 IMPACT AWARDS HONORS COMPANIES FOR THEIR EFFORTS TO ENHANCE THE LIVES OF LOCAL COMMUNITIES

By Greg Sleter and Zachary Russell

Retailers, product suppliers and service providers across the private label industry work on a daily basis to provide consumers quality products that offer great value and enhance their lives. But many companies go above and beyond, and take steps daily to protect the environment, enhance diversity programs, implement unique workforce initiatives, support needed community programs and more.

To honor the work of companies across our industry, Store Brands’ 2022 Impact Awards features several leading organizations that throughout the year have taken steps to support their customers and communities beyond the walls of their stores or manufacturing facilities.

The following profiles showcase the work of companies in several important categories: Sustainability and Resource Conservation; Diversity, Equity, and Inclusion; Ethical Sourcing and Supply Chain Transparency; Workforce Development and Employee Support; Community Service and Local Impact; Educational Support and Learning Advancement; Food Security, Safety and Nutritional Leadership; and Philanthropic Innovation and Corporate Giving Initiatives.

COMPANY: Walgreens IMPACT AWARD: Diversity,

Equity, and Inclusion

As the topic of Diversity, Equity, and Inclusion (DEI) continues to gain more attention from retailers and suppliers, the steps companies take to address this issue vary. One unique approach was taken by Walgreens in the bandages category.

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operates more than 8,800 stores in the U.S., District of Columbia, Puerto Rico and U.S. Virgin Islands selected the most popular bandage, the Flexible Fabric Bandage, to carry all three colors and ensure this solution was of the highest quality.

Historically, the bandage marketplace has primarily offered tan colored bandages and focused product innovation on usage rather than color. Over the years, product lines have evolved to include fun character bandages for kids. Throughout this evolution, and in talking with customers and monitoring trends, Walgreens realized there was an opportunity to develop products in the category for people with darker skin tones.

Positive customer feedback and community support, such as online reviews saying, “I’ve never had a bandage match my skin so closely,” demonstrate how the new bandage colors were important to Walgreens shoppers.

Walgreens said it will continue to evolve its offerings to meet customer needs and ensure that they are readily available and accessible to all.

While this long-standing product segment may not initially be top of mind when thinking about DEI issues, Walgreens identified an opportunity to expand its product assortment to address what was viewed as a glaring unmet need, especially for shoppers with darker skin tones.

In an effort to provide value and convenience while making shoppers feel included, Walgreens introduced a line of Flexible Fabric Bandages available in three shades: light, medium and dark. The drug store chain that

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IMPACT AWARDS

COMPANY:

Grocers

Southeastern

Community Service/Local Impact

IMPACT AWARD:

Giving back to and supporting the communities it serves across the southeastern United States is a focal point of Southeastern Grocers (SEG).

Throughout 2022, SEG has supported numerous charitable organizations and causes that help support those in need. For example, the grocer has donated hundreds of thousands of dollars into the communities it serves as part of grand opening celebrations, with each grand opening highlighting a local community partner that received a donation.

Additionally, SEG stores annually support local heroes, including firefighters, police officers and first responders who protect and serve local communities; veterans organizations that honor and support those who have fought and continue to fight for the country’s freedoms; educational professionals who help nurture students inside and outside of the classroom; and food banks committed to providing families in need with hunger relief.

In 2021, SEG completed nearly 80 store improvements and gave back more than $5.5 million to local communities.

SEG also offers Community Bags with a Giving Tag to help reduce the

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use of plastic bags while supporting local organizations. For every bag sold, $1 is donated to a local nonprofit organization selected by each store. Since the launch of the program in 2019, SEG has donated more than $402,000 to 7,496 local nonprofit organizations.

The grocer also remains dedicated to the fight against hunger and eliminating food insecurity in local communities. Through the retail donation program, stores are paired with a local Feeding America food bank partner to pick up donated products weekly.

In 2021, SEG donated more than 18.6 million meals through retail donations to support food bank partners and community members in need.

SEG associates are given multiple opportunities to volunteer year-round, including at mobile food pantry events during Hunger Action Month in September and throughout the holidays.

Associates throughout the Southeast have also built multiple houses with Habitat for Humanity, donated to various local LGBTQ+ organizations through internal fundraisers, supported women’s shelter organizations with critical items and activated their own volunteer work through local company-sponsored volunteer opportunities.

Associated Wholesale Grocers

COMPANY:

Community Service/Local Impact

bonus of $30 when they send in their first label submission of the year.

The funds have helped a variety of organizations in different ways such as providing blankets for children who are ill or in need, preserving a historical museum, helping students attend field trips and more.

Through a monthly email newsletter, AWG Brands communicates with participants highlighting an organization of the month, sharing fundraising tips and other information. AWG retailers promote the Save-A-Label program in their stores, reaching shoppers and helping organizations in their communities.

AWG’s Save-A-Label program is a perfect example of the good that can happen when a retailer partners with the community to give back.

IMPACT AWARD:

COMPANY:

Southeastern Grocers Through its Best Choice Save-A-Label program, Kansas City-based Associated Wholesale Grocers (AWG) was able to donate $116,850 to schools and non-profit organizations in the AWG trade area in 2022. Participating organizations and schools collect AWG Brands labels and send them in for funds. In addition, AWG Brands will give each organization a

IMPACT AWARD:

Workforce Development/ Employee Support

The COVD-19 pandemic has sharpened the focus on employee health, both physical and mental, and many companies continue implementing new

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IMPACT AWARDS programs to support their workers.

At Southeastern Grocers, the company recognizes the importance of education and fosters advancement opportunities for associates by offering training programs, scholarships and GED completion programs. In addition, SEG promotes work-life balance with paid time off, paid holidays and paid parental leave, as well as a casual dress code, a flexible work schedule and a culture of belonging and social responsibility.

Additionally, SEG offers eight diverse resource groups for its associates, including African Americans F.O.C.U.S. (Fostering Organizational Culture to Unite SEG), ASPIRE (Asians & Pacific Islanders for Resource and Education), Emerging Leaders, Military Families, Pa’lante (Hispanic Associates and Allies), SEG Pride, the Women’s Development Network and the Working Parents Network.

To provide education and encourage constructive conversations among associates on belonging, inclusion, and diversity, SEG offers a number of training sessions. SEG University, its corporate leadership development platform, provides personal and professional development resources to help associates advance their careers through leadership courses, lunch-andlearns and other engaging workshops.

The Retail Leaders program provides leadership training for SEG’s current and future store leaders through a series of interactive workshops and onthe-job training.

The grocer has also implemented a program to support associates in need during unexpected hardships.

The SEG Cares Foundation Inc. is a 501(c)(3) associate-funded nonprofit that has supported thousands of associates since its inception in 2013.

With these efforts, SEG has been

certified as a 2021 Great Place to Work for two consecutive years and was the only grocer featured in Newsweek’s Most Loved Workplaces list for 2021, ranking at 48 among the top 100 companies recognized for employee happiness and satisfaction at work. Company officials said SEG remains dedicated to its culture of belonging and fostering an inclu-

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IMPACT AWARDS sive environment to support local communities, celebrate differences and empower everyone to be their true, authentic selves.

COMPANY:

Hy-Vee

IMPACT AWARD:

Food Security/ Nutritional Leadership Fighting hunger in the communities it serves is an on-going commitment at Hy-Vee. During the past year the grocer’s hunger-fighting efforts were particularly important as federal Supplemental Nutritional Assistance Program (SNAP) benefits were reduced to pre-pandemic levels, coupled with rising inflation across the U.S.

In 2021, Hy-Vee launched its “Scan Out Hunger” campaign by leveraging its reimagined Hy-VeeDeals.com site.

Hy-Vee developed a series of tailgatingthemed commercials featuring popular celebrities who encouraged viewers to scan Hy-Vee’s “H” QR code to make a monetary donation directly to Feeding America via Hy-VeeDeals.com.

Hy-Vee and its customers and suppliers raised enough money to fund more than 9.3 million meals — surpassing the retailer’s original goal of 5 million meals. As a result of its efforts, Hy-Vee was named a Leadership Partner by Feeding America.

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Throughout 2022, the grocer led several other hunger-fighting initiatives including Hams for the Holidays that included the distribution of 5,000 hams to families in need across 16 cities prior to Easter. Approximately 2,400 hams were also donated to food banks in Hy-Vee’s future markets including Indianapolis, Louisville and Nashville.

Its Unite for Ukraine efforts included a partnership with Meals from the Heartland that provided 30,000 meals to war-torn areas of the Eastern European country.

More recently, Hy-Vee launched its “Food Bank Fridays” campaign to provide immediate assistance to families in need. Through “Food Bank Fridays,” Hy-Vee customers are able to make a $1 or $5 donation at their local Hy-Vee or Dollar Fresh Market store. Since April 2022, more than $2 million has been raised to support local food banks.

In September, Hy-Vee was among a select group of retailers invited to attend the 2022 White House Conference on Hunger, Nutrition and Health – the first conference held of its kind since 1969. At the conference, Hy-Vee announced its commitment to provide 30 million meals to vulnerable communities by 2025, as well as deploy its registered dietitian team to educate 100,000 Americans in areas of low food access on healthy eating and nutrition by 2026.

COMPANY:

Grocers

Southeastern

IMPACT AWARD:

Sustainability/Resource Conservation Sustainability has evolved from a trend to an important way of doing business for retailers and companies including Southeastern

Grocers (SEG) has taken steps to enhance their efforts with the goal of protecting the environment.

To continue building a sustainable future for years to come, SEG has aligned goals and objectives with six specific United Nations Sustainable Development Goals to address hunger, health, education, inequalities, responsible consumption and production, and ocean conservation.

In 2021, the company prioritized waste management by recycling nearly 50% more food than the year before, recycled 134 million pounds of cardboard to save more than 1.1 million trees and introduced digital receipts as an eco-friendly option for its customers to support the planet.

Additionally, SEG transitioned 87 stores to energy efficient LED light bulbs and added three Tesla Supercharger stations to support electric vehicle transportation and reduce emissions. The company also decreased the use of more than 2.3 million plastic bags while supporting more than 3,200 local nonprofits through its reusable Community Bag and Giving Tag program.

To support the sustainable disposal of e-waste products, SEG deployed EcoATMs at 27 stores across the Southeast. Through this initiative, customers are able to sell their unwanted cell phones, tablets and MP3 players to be properly deconstructed and repurposed, resulting in 4,000 devices appropriately disposed of in 2021 alone.

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IMPACT AWARDS As SEG moves forward, company officials said they are focused on continuing to put people first and constantly find ways to improve. As a large retailer with stores across several states, the company said it understands its responsibility to respect the planet and support local communities.

COMPANY:

green’, particularly at its Ottawa, Ill. manufacturing facility.

This year, Garcoa transitioned all paper materials to Sustainable Forestry Initiative (SFI) and Forest Stewardship Council (FSC) certified suppliers. The company also transitioned all labels for polyethylene terephthalate (PET) materials to Avery Dennison’s Cleanflake technology, allowing for easy removal when the PET bottles enter the recycling stream.

Garcoa also recently completed installation of a filter press at its

Garcoa

IMPACT AWARD:

Sustainability/Resource Conservation Garcoa, a California-based packaging manufacturer, earns the Impact Award from the supplier side in this category for its approach to ‘going

Ottawa, Ill., flagship facility that has reduced the amount of sludge that is hauled by 90%. The company also replaced all of the lights at the production facility with LED fixtures, and the company says it is in the process of transitioning to renewable energy where possible.

Other initiatives by Garcoa include launching an initiative to ensure each component features some percentage of post-consumer recycled material (PCR) where possible, installation of a best-in-class USP Water System that features a circular loop for efficient heating and cooling, and purchasing RSPO credits to offset non-sustainable palm oil usage.

The company’s changes and initiatives show the steps that are being taken by manufacturers to create a clean product in a clean way.

Together, we can make a difference.

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COMPANY:

TXB

IMPACT AWARD:

Philanthropic/Corporate Giving

TXB (Texas Born) is a regional convenience chain with nearly 50 locations in Texas and Oklahoma, and while its store footprint isn’t as large as some of its competitors, the company has centered corporate giving as part of its corporate mission, aiming to do good in the communities it serves.

For more than 12 years, TXB has been a supporter of CASA (Court Appointed Special Advocate), an organization that supports and promotes volunteer advocacy for children in the foster-care system who have experienced abuse or neglect. While serving on the jury during a case, TXB CEO Kevin Smartt says he was able to see firsthand the effects being in the system can have on children.

To continue their support of CASA, Smartt and TXB hold multiple campaigns throughout the year to continue their support including a Round Up for CASA campaign, where TXB guests could round up their purchase at the register to go towards a donation. TXB also recently launched its new app that gives guests the option to donate their loyalty points for cash to their choice of more than 10 nonprofits, including CASA. At a recent groundbreaking ceremony for an upcoming TXB loca-

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tion in Kyle, Tex., the company presented CASA with a $5,000 check, which was followed by president and general contractor of Cheyenne Construction Group, Brett Richardson, matching the donation, presenting CASA with a total of $10,000.

Through all the continuous initiatives, TXB has raised more than $682,000 for CASA. TXB says it is a community-driven brand, recognizing and emphasizing the importance and value convenience stores hold in these spaces, especially in rural areas. During the Texas snowstorm in 2021, which left many without power for days, a TXB team member drove six hours to ensure the store stayed open so the community could have access to food and other necessities.

Other initiatives the retailer takes part in include an annual Golf and Fishing Tournament, 24/7 Day with National Association of Convenience Stores (NACS) to honor hometown heroes, Texans Helping Texans/ Oklahomans Helping Oklahomans and more.

For its commitment to helping communities in its home state, TXB earns the inaugural Impact Award honor for philanthropy.

COMPANY:

Topco

IMPACT AWARD:

Ethical Sourcing/Supply Chain Transparency Retailers of all sizes are continuing to build sustainability programs in an effort to be better stewards of the planet while still offering high-quality products to customers. Through its Full Circle Market private brand, Topco Associates member stores sell ethically sourced seafood at a time when supply chain transparency is

becoming increasingly important to consumers.

Along with being Fair Trade Certified and Best Aquaculture Practice (BPA) certified, Topco utilizes technology to provide transparency for its fish products. Full Circle Market was the first grocery brand to adopt Wholechain, a traceability system that links suppliers, processors, food brands and grocers, across every product in the seafood product line. In partnership with Envisible, the sustainable sourcing company that created Wholechain, Full Circle Market created the first retail-ready product line of seafood to be entirely traceable from source to sale.

Wholechain allows Topco to track its tuna, salmon and other products by accumulating data as products change hands along the supply chain.

A digital record follows the product from the source to the store, and the data can be utilized for planning and analysis, allowing the retailer to reduce food waste and improve seafood quality. Full Circle Market can now communicate important product data and information through a scannable QR code experience for shoppers at the point of sale.

With overfishing becoming increasingly important within the realm of sustainability, Topco’s efforts should not go unrecognized. The company’s initiative can be a blueprint for others

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IMPACT AWARDS looking to make strides with sustainable private label offerings.

COMPANY:

Dollar General

IMPACT AWARD:

Award: Educational Support/ Learning Advancement One of the nation’s top value chains, Dollar General’s support of educational support and learning advancement programs is deeply rooted in the retailer’s history. Dollar General’s co-founder, J.L. Turner, was functionally illiterate and never completed a formal education. In 1993, J.L.’s grandson, Cal Turner, Jr. who was Dollar General’s then-CEO, founded the Dollar General Literacy Foundation (DGLF) to honor him and support others’ educational journeys.

With the belief everyone deserves an equal opportunity to receive a basic education, the DGLF has invested in and provided financial assistance to literacy programs increasing access, enhancing the quality of instruction, and inspiring and advanc-

ing innovation. To date, DGLF has awarded more than $219M to support literacy and learning, enabling more than 16.1 million people to achieve their goals.

DGLF supports programs in Dollar General’s hometown, often rural, communities and helping individuals take next steps toward a bright future. A few of the grant programs include: • Adult Literacy Grants: Programs provide direct services to adults in need of literacy assistance in adult basic education, high school equivalency preparation and/or English language acquisition.

• Family Literacy Grants: Programs support the whole family including adult education instruction, children’s education and parent and child together time (PACT).

• Youth Literacy Grants: To implement new or expand existing literacy programs, purchase new technology, equipment, books, materials or software at schools, and fund public libraries and nonprofits who help students below grade level or who are having trouble reading.

As the COVID-19 pandemic created challenges for many children and their learning, Dollar General

stepped up this year to help young students get back on track. In March, DGLF announced approximately $5 million in grants across five national organizations to further support students and educators: • Save the Children: Providing support for in-school and afterschool programming for K-3 students, inclusive of digital book access, training and technical assistance and support for the Rural Library Network.

• Barbara Bush Foundation for Family Literacy: A two-year commitment to support implementation of the National Action Plan for Adult Literacy, with a focus on boosting literacy organizations, advancing professional development for teachers and identifying opportunity gaps.

• DonorsChoose: Matching donations on all book-related projects posted by teachers across the U.S. on DonorsChoose.org and expanding on a 2021, $1.45M partnership provided much-needed tools and resources in underserved schools that was celebrated on World Teacher Day on The Kelly Clarkson Show, including a surprise $50,000 donation to Read Aloud West Virginia in honor of teacher Jennie Fitzkee.

• Discovery Education in Partnership with National Afterschool Association: Launching a no-cost, nationwide literacy platform focused on supporting teachers with research-based micro-learnings, providing standardsaligned resources to advance the application of new strategies, and create equitable access to tools and resources for under-resourced communities, both in and out of school.

• Children’s Defense Fund: Funding the southern expansion of the Children’s Defense Fund’s Freedom Schools program, which provides highquality, culturally responsive academic enrichments to K-12 grade students nationally.

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