Grocery shopping has become increasingly complex during the past two years due to pantry loading, supply chain disruptions, inflation causing higher prices and more. With these issues persisting throughout the coronavirus pandemic, even for short periods at a time, consumers have often needed to expand their buying habits to new brands — and a popular choice is often to reach for the grocery retailers’ private-label brand offerings.
In fact, private-label brands’ dollar share in 2021 was 17.7% and sales reached an all-time high of $199 billion throughout retail channels in the US, according to the 2022 Private Label Report by the Private Label Manufacturers Association.
In September 2019, Target launched its flagship food and beverage line, Good & Gather. Now, the brand is the retailer’s top-selling grocery brand with $2 billion in sales in 2021 alone.
“We spent a lot of time listening to guests, and what their wants and needs are in shopping for groceries,” Rick Gomez, Target’s executive vice president and chief food and beverage officer, said to Progressive Grocer. “And what guests told us is they were looking for a brand that could offer affordable, high-quality, easy options.”
Albertsons Companies owns 10 private-label brands across its many grocery chains. These products have “become a go-to for our shoppers who are frequently seeking high-quality ingredients, meals and snacks,” said Katie Ceclan, vice president of brand management and innovation for Own Brands at Albertsons.
Grocery product innovation
While private-label products often focus on grocery basics and essentials, many retailers have started to branch out and introduce more unique specialty items. Ceclan shared that one of Albertsons, which added more than 837 new products last year, is seeing great demand for its Open Nature Cauliflower Crust Pizza.
“We are constantly innovating using consumer insights and internal and external data, to provide new products and seasonal solutions that reaffirm our commitment to adapting alongside the ever-changing lifestyles of our shoppers,” she said, adding that throughout 2022, the company plans to launch several new products in trending categories such as plant-based, convenient meal solutions, taste experiences, value packs and more.
Target’s Good & Gather brand has debuted almost 2,500 products with several line extensions including plant-based, organic and seasonal items. The retailer also introduced another internal brand in 2021 – Favorite Day – which focuses on indulgent foods such as ice cream, candy, baked goods and beverage mixers. All of the products are less than $8 and a majority are under $5.
Gaining and retaining customers
As many people have begun to reach for private-label brands more often while grocery shopping, retailers are making efforts to retain these customers.
Albertsons is attracting and keeping Own Brands shoppers “by driving exceptional omnichannel presence and experiences that all shoppers can navigate seamlessly,” said Ceclan.
The company has prioritized data that depends on audience targeting and personalization and focuses on loyalty marketing for Albertsons customers. Ceclan cites examples such as exclusive offers on the Safeway for U mobile app as well as the FreshPass Perks with 5% off O Organics and Open Nature products.
Target employs a similar approach that focuses on both grocery brick-and-mortar and e-commerce sales. The retail chain’s order pickup, drive-up and same-day Shipt delivery services allow all Target grocery products, but especially its Good & Gather items, to be accessible to many different consumers.
“Target created Good & Gather for guests who want convenient, high-quality food options that taste great, with affordable options they can feel good about buying and serving to their families,” according to a company fact sheet about Good & Gather.
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